The Federal Circuit held that district courts may refuse to hear a declaratory judgment action filed while licensing negotiations are ongoing.
According to Contec, CTDI filed a declaratory judgment (DJ) action in Pennsylvania during active licensing negotiations after inducing Contec to refrain from filing an infringement action in New York. The CAFC ruled that the dismissal of the DJ action by the district court is not abuse of discretion and that the departure from the first-to-file rule (which generally favors pursuing only the first-filed action where multiple lawsuits relating to the same claims are filed in different jurisdictions) is warranted.
Read the case here.
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