• Judge Farnan Denies Defendant's Motion to Dismiss and Sua Sponte Raises Issue of Transfer
  • June 17, 2009
  • Law Firm: Richards, Layton & Finger, P.A. - Wilmington Office
  • In Dish Network Corp. et al v. Tivo, Inc., C.A. No. 08-327-JJF (D. Del. Mar. 31, 2009), Judge Farnan denied defendant TiVo, Inc.’s motion to dismiss plaintiffs’ (collectively, “Echostar”) declaratory judgment action and raised sua sponte the issue of transferring the case to the Eastern District of Texas. In 2004, TiVo successfully sued Echostar for infringement before Judge David Folsom in the Eastern District of Texas. Echostar then redesigned its products and argued that the redesigned products no longer infringed TiVo’s patents. TiVo disagreed and moved for contempt in the Eastern District of Texas. Echostar subsequently initiated a declaratory judgment action in Delaware to remove any uncertainty surrounding its redesigned products. TiVo argued that the issues to be decided before Judge Farnan were “indistinguishable” from those to be decided in the Texas contempt proceedings, and asked that the Court exercise its discretion under the Declaratory Judgment Act to dismiss the case. In response, Echostar argued that the Delaware action was independent of the Texas action and presented new issues that could not be resolved in the Texas courts.

    The Court centered its analysis around whether the dispute was, under the law, properly handled through the ongoing contempt proceedings in Texas. The Court noted that such a determination necessarily required the Court to compare the accused product with the original infringing product, finding that if there was more than a colorable difference between the two such that substantial open issues with respect to infringement existed, contempt proceedings would be inappropriate. Judge Farnan found that, on the current record, the Court was unable to make a concrete determination as to whether the redesigned products presented more than a colorable difference over the infringing products, and stated that, based on the evidence, the Court was unable to conclude that there was not a colorable difference. The Court further found that, given the Texas court’s familiarity with the case, the issue of whether TiVo would ultimately be able to make the required showing was best left to the Eastern District of Texas. The Court found that such a consideration was not a proper basis to dismiss the case, but rather was most appropriately considered in the context of a transfer. Judge Farnan ordered the parties to brief the issue.