Free Case Transferred In - District Transfer - District Court of Delaware - Delaware

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CASREF, CLOSED, JURY, PATENT, STAGE1

U.S. District Court [LIVE] Eastern District of TEXAS (Sherman) CIVIL DOCKET FOR CASE #: 4:06-cv-00486-MHS-DDB

Luv N' Care, LTD. v. Bamed AG Assigned to: Judge Michael H. Schneider Referred to: Magistrate Judge Don D. Bush Cause: 35:145 Patent Infringement Plaintiff Luv N' Care, LTD.

Date Filed: 12/01/2006 Date Terminated: 04/10/2008 Jury Demand: Plaintiff Nature of Suit: 830 Patent Jurisdiction: Federal Question

represented by Morris E Cohen Law Office of Morris E Cohen, PC 1122 Coney Island Ave. Ste 216-217 Brooklyn, NY 11230 718/859-8009 Fax: 718/859-3044 Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED Joe D Guerriero Joe D. Guerriero Luv N' Care Ltd 3030 Aurora Ave Monroe, LA 71201 318-338-3603 Fax: 318-388-5892 Email: [email protected] ATTORNEY TO BE NOTICED

V. Defendant Bamed AG represented by P Branko Pejic Greenblum & Bernstein - Reston 1950 Roland Clarke Place Reston, VA 20191 703/716-1191 Fax: 703/716-1180 Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED Lance Lee

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Young Pickett & Lee 4122 Texas Blvd PO Box 1897 Texarkana, TX 75504-1897 903/794-1303 Fax: 19037945098 Email: [email protected] ATTORNEY TO BE NOTICED Michael J Fink Greenblum & Bernstein - Reston 1950 Roland Clarke Place Reston, VA 20191 703/716-1191 Fax: 703/716-1180 Email: [email protected] ATTORNEY TO BE NOTICED Neil F Greenblum Greenblum & Bernstein - Reston 1950 Roland Clarke Place Reston, VA 20191 703/716-1191 Fax: 703/716-1180 Email: [email protected] ATTORNEY TO BE NOTICED

Date Filed 12/01/2006

#

Docket Text 1 COMPLAINT with Jury Demand against Bamed AG (Filing fee $ 350. Receipt #4-1-1332) , filed by Luv N' Care, LTD. (Attachments: # 1 Civil Cover Sheet)(ttm, ) (Entered: 12/04/2006) 2 CORPORATE DISCLOSURE STATEMENT filed by Luv N' Care, LTD. (ttm, ) (Entered: 12/04/2006) 3 CASE REFERRED to Magistrate Judge Don D. Bush pursuant to Standing Order. (ttm, ) (Entered: 12/05/2006) 4 Magistrate Consent Form emailed to attorney for Luv N' Care, LTD with (Attachments: # 1 Notice of Case Assignment form) (ttm, ) (Entered: 12/05/2006) 5 Form mailed to Commissioner of Patents and Trademarks with copy of complaint. (ttm, ) (Entered: 12/05/2006) Notified Attorney, Joe D Guerriero, Per GO 04-12, this court no longer accepts pleadings in paper form. The Clerk will no longer mail or fax notices or orders to parties. All notices and orders generated by this court shall be sent electronically. (mailed original pleading back to attorney is SASE) (ttm, ) (Entered: 04/24/2007)

12/01/2006 12/05/2006 12/05/2006

12/05/2006 04/24/2007

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04/24/2007

6 MOTION Extension of time to have summons issued and served. by Luv N' Care, LTD. (Attachments: # 1 Text of Proposed Order)(Guerriero, Joe) Additional attachment(s) added on 4/24/2007 (ttm, ). (Entered: 04/24/2007) 7 ORDER granting 6 Motion extension of time for 90 days from the date of this Order to obtain summons and make service on Dft Bamed AG. Signed by Judge Don D. Bush on 75/07. (ttm, ) (Entered: 07/06/2007) 8 E-GOV SEALED SUMMONS Issued as to Bamed AG and emailed to attorney for service. (ttm, ) (Entered: 07/26/2007) 9 MOTION for Extension of Time to File Service by Luv N' Care, LTD.. (Attachments: # 1 Text of Proposed Order)(Guerriero, Joe) (Entered: 10/04/2007) 10 Supplemental MOTION Extension of Time for making service upon Defendant by Luv N' Care, LTD.. (Attachments: # 1 Text of Proposed Order)(Guerriero, Joe) (Entered: 11/06/2007) 11 ORDER granting 9 Motion for Extension of Time to File, granting 10 Supplemental Motion for extension of time to obtain summons and make service upon Defendant Bamed AG. IT IS ORDERED that Luv n' care, Ltd. be GRANTED thirty days from date of this order within which to obtain summons and make service upon Defendant Bamed AG. . Signed by Judge Don D. Bush on 11/09/07. (lhj, ) (Entered: 11/09/2007) 12 E-GOV SEALED SUMMONS Returned Executed by Luv N' Care, LTD. Bamed AG served c/o Nicklaus Schertenleib on 10/26/2007, answer due 11/15/2007. (kls, ) (Entered: 11/28/2007) 13 MOTION to Dismiss by Bamed AG. (Attachments: # 1 Declaration of P. Branko Pejic# 2 Exhibit A to Pejic Dec.# 3 Exhibit B to Pejic Dec.# 4 Exhibit C to Pejic Dec.# 5 Exhibit D to Pejic Dec.# 6 Exhibit E to Pejic Dec.# 7 Exhibit F to Pejic Dec.# 8 Exhibit G to Pejic Dec.# 9 Exhibit H to Pejic Dec.# 10 Exhibit I to Pejic Dec.# 11 Exhibit J to Pejic Dec.# 12 Exhibit K to Pejic Dec.# 13 Text of Proposed Order)(Lee, Lance) (Entered: 01/15/2008) 14 CORPORATE DISCLOSURE STATEMENT filed by Bamed AG identifying none as Corporate Parent. (Lee, Lance) (Entered: 01/18/2008) 15 APPLICATION to Appear Pro Hac Vice by Attorney P Branko Pejic for Bamed AG, Michael J Fink for Bamed AG. (Attachments: # 1 PHV Michael J Fink# 2 RECEIPT 5-1-1216 for Michael Fink & Branko Pejic) (rml, ) (Entered: 01/18/2008) 16 APPLICATION to Appear Pro Hac Vice by Attorney Neil F Greenblum for Bamed AG. (Attachments: # 1 RECEIPT 5-1-1215)(rml, ) (Entered: 01/18/2008) 17 RESPONSE in Opposition re 13 MOTION to Dismiss filed by Luv N' Care, LTD.. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C# 4 Exhibit D# 5 Exhibit E# 6 Exhibit F# 7 Exhibit G# 8 Exhibit H# 9

07/06/2007

07/26/2007 10/04/2007

11/06/2007

11/09/2007

11/26/2007

01/15/2008

01/18/2008 01/18/2008

01/18/2008

01/30/2008

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Exhibit I)(Cohen, Morris) Additional attachment(s) added on 1/31/2008 (kls, ). (Entered: 01/30/2008) 02/11/2008 18 REPLY to Response to Motion re 13 MOTION to Dismiss REPLY OF BAMED IN SUPPORT OF ITS MOTION TO DISMISS filed by Bamed AG. (Attachments: # 1 Declaration of P. Branko Pejic# 2 Exhibit A to Pejic Declaration# 3 Exhibit B to Pejic Declaration# 4 Exhibit C to Pejic Declaration# 5 Exhibit D to Pejic Declaration# 6 Exhibit E to Pejic Declaration)(Lee, Lance) (Entered: 02/11/2008) 19 Joint MOTION for Entry of an Order Transferring Case by Bamed AG. (Attachments: # 1 Exhibit A# 2 Text of Proposed Order)(Lee, Lance) (Entered: 03/11/2008) 20 ORDER granting 19 Joint Motion for Order Transferring Case. ORDERED that this matter is Transferred to the District of Delaware. It is further ORDERED that any and all pending Motions are DENIED. Signed by Judge Michael H. Schneider on 3/13/2008. (kls, ) (Entered: 03/17/2008) Interdistrict transfer to the District of Delaware. (kls, ) (Entered: 04/10/2008)

03/11/2008

03/17/2008

04/10/2008

PACER Service Center
Transaction Receipt
04/14/2008 15:11:10 PACER Login: Description: ud0037 Docket Report Client Code: Search Criteria: Cost: 4:06-cv-00486-MHSDDB 0.24

Billable Pages: 3

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS

MAGISTRATE REFERRAL CIVIL ACTION NO. 4:06cv486 Luv N' Care, LTD v. Bamed AG

Pursuant to a Standing Order, certain civil suits are referred at the time of the filing equally among magistrate judges. Therefore, the above-entitled action has been referred to:

Magistrate Judge Don DBush

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS __________________ DIVISION SHERMAN

Luv N' Care, LTD
vs.

Bamed AG

§ § § § §

CASE NO. 4:05cv486

CONSENT TO PROCEED BEFORE UNITED STATES MAGISTRATE JUDGE In accordance with the provisions of 28 U.S.C. Section 636(c), you are hereby notified that a United States magistrate judge of this district court is available to conduct any or all proceedings in this case including a jury or nonjury trial, and to order the entry of a final judgment. Exercise of this jurisdiction by a magistrate judge is, however, permitted only if all parties voluntarily consent. You may, without adverse substantive consequences, withhold your consent, but this will prevent the court's trial jurisdiction from being exercised by a magistrate judge. An appeal from a judgment entered by a magistrate judge shall be taken directly to the United States court of appeals for this judicial circuit in the same manner as an appeal from any other judgment of a district court. NOTICE In accordance with the provisions of 28 U.S.C. 636(c), the parties in this case hereby voluntarily consent to have a United States magistrate judge conduct any and all further proceedings in the case, including trial, order the entry of a final judgment, and conduct all post-judgment proceedings. Signatures Party Represented Date

Dated:

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS
NOTICE OF CASE ASSIGNMENT

Judge Michael H. Schneider CAUSE STYLE: Luv N' Care, LTD. V. Bamed AG CAUSE NO: 4:06cv485

This is to advise you that the above cause has been filed/transferred and bears the above case number and style. All future instruments should be referred to by this number and filed with the appropriate divisional office of the Eastern District of Texas. You are further advised that this case has been assigned to the above named judge.

Date: December 5, 2006

DAVID J. MALAND, CLERK

Case 1:08-cv-00213-SLR
2 AO 120 (Rev. 3/04)

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TO:

Mail Stop 8 Director of the U.S. Patent and Trademark Office P.O. Box 1450 Alexandria, VA 22313-1450

REPORT ON THE FILING OR DETERMINATION OF AN ACTION REGARDING A PATENT OR TRADEMARK
G Patents or

In Compliance with 35 U.S.C. § 290 and/or 15 U.S.C. § 1116 you are hereby advised that a court action has been filed in the U.S. District Court DOCKET NO. PLAINTIFF

Eastern District of Texas 12/1/2006

on the following

G Trademarks:

4:06-cv-00486

DATE FILED

U.S. DISTRICT COURT DEFENDANT

Eastern District of Texas

Luv n' care, Ltd.

Bamed AG

PATENT OR TRADEMARK NO. 1 2 3 4 5

DATE OF PATENT OR TRADEMARK

HOLDER OF PATENT OR TRADEMARK

6,514,275 B2 D441,083 S

2/4/2003 4/24/2001

In the above--entitled case, the following patent(s)/ trademark(s) have been included: DATE INCLUDED PATENT OR TRADEMARK NO. 1 2 3 4 5 INCLUDED BY

G Amendment DATE OF PATENT OR TRADEMARK

G Answer

G Cross Bill

G Other Pleading

HOLDER OF PATENT OR TRADEMARK

In the above--entitled case, the following decision has been rendered or judgement issued: DECISION/JUDGEMENT

CLERK

(BY) DEPUTY CLERK

DATE

12/5/06

Copy 1--Upon initiation of action, mail this copy to Director Copy 3--Upon termination of action, mail this copy to Director Copy 2--Upon filing document adding patent(s), mail this copy to Director Copy 4--Case file copy

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION LUV N' CARE, LTD Plaintiff, v. BAMED AG, Defendant. ORDER Considering the above and foregoing Motion for Extension of Time (Dkt. No. 6), IT IS ORDERED that Luv n' care, Ltd. be GRANTED ninety (90) days from the date of this Order within which to obtain summons and make service upon Defendant Bamed AG SIGNED this 5th day of July, 2007. . ____________________________________ DON D. BUSH UNITED STATES MAGISTRATE JUDGE JURY TRIAL Civil Action No.: 4:06cv486

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION LUV N' CARE, LTD Plaintiff, v. BAMED AG, Defendant ORDER Considering the above and foregoing Motion for Extension of Time (Dkt. No. 6), IT IS ORDERED that Luv n' care, Ltd. be GRANTED ninety (90) days from the date of this order within which to obtain summons and make service upon Defendant Bamed AG. JURY TRIAL Civil Action.: 4:06cv486

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION LUV N' CARE, LTD Plaintiff, v. BAMED AG, Defendant ORDER Considering the above and foregoing Motion for Extension of Time (Dkt. No. 9), IT IS ORDERED that Luv n' care, Ltd. be GRANTED thirty (30) days from the date of this order within which to obtain summons and make service upon Defendant Bamed AG. Defendant's answer shall be due in accordance with the Rules of Civil Procedure.
SIGNED this 9th day of November, 2007. . ____________________________________ DON D. BUSH UNITED STATES MAGISTRATE JUDGE

Civil Action.: 4:06cv486

JURY TRIAL

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION

LUV N' CARE, LTD., Plaintiff, v. BAMED AG, Defendant.

) ) ) ) ) ) ) ) )

C.A. No. 4:06CV486

JURY TRIAL DEMANDED

MOTION TO DISMISS PURSUANT TO RULES 12, 19 AND THE FEDERAL DECLARATORY JUDGMENT ACT Defendants move to dismiss pursuant to Rules 12(b)(1), (b)(2), (b)(4), (b)(5), (b)(7) and/or 19 of the Federal Rules of Civil Procedure, and/or the Federal Declaratory Judgment Act. I. Introduction This case should be dismissed for lack of jurisdiction, insufficient process and failure of service, and/or failure to join a necessary and indispensable party. The Court should also decline to exercise jurisdiction over the instant declaratory judgment action under the broad discretionary powers of the Federal Declaratory Judgement Act. In the alternative, the Court should consolidate this declaratory judgment action with the patent infringement action pending in Delaware, involving the same parties and patents.1 Plaintiff Luv n' care, Ltd. ("Luv n' care") filed the present declaratory judgment action in bad faith. Upon assertion of the patents, Plaintiff Luv n' care feigned interest in negotiations, and suggested that involvement of counsel was not necessary. Simultaneously, Luv n' care
1

The pending action in Delaware also includes another accused infringer, Munchkin, Inc., who has answered. As such, the Delaware action will go forward regardless of this Court's ruling on Bamed's Motion to Dismiss. 1

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consulted counsel, and surreptitiously filed the present declaratory judgment complaint ("DJ complaint") seeking a finding of noninfringement, invalidity and/or unenforceability of United States Patent No. 6,514,2752 ("the Bamed '275 patent") and United States Patent No. D441,0833 ("the MAM `083 design patent") ("the Texas DJ action"). Luv n' care's declaratory judgment action, however, suffers from multiple fatal defects. Bamed AG ("Bamed") does not manufacture or sell products into the State of Texas, has no contacts with the State of Texas and is not subject to personal jurisdiction in this District. Moreover, Luv n' care failed to join a necessary and indispensable party to the case; namely MAM Babyartikel, GmbH ("MAM") the owner of the MAM `083 design patent. MAM has no continuous, systematic or ongoing contacts with the State of Texas, and is, likewise, not subject to personal jurisdiction in this District. Thereafter, while Bamed was negotiating in good faith, Luv n' care engaged in a pattern of deceit and inexcusable neglect in failing to serve the DJ complaint. After filing suit, on December 1, 2006, Luv n' care allowed the 120 day period to lapse. Luv n' care did not seek a summons until July 6, 2007, eight (8) months after filing the DJ complaint. At that time, Luv n' care also requested a first extension to serve the complaint. Despite citing the Hague Convention as a basis for seeking its first extension and the passage of eight (8) months within which to prepare the service papers, Luv n' care's first attempt to serve the DJ complaint failed to comply with the requirements of the Hague Convention. Rather than translate the papers into German as required in the Canton (Swiss state) where Bamed is located, Luv n' care inexplicably translated the DJ complaint into Swedish. As

2

The `275 Bamed patent is assigned to Bamed AG. The MAM `083 design patent is assigned to non-party MAM Babyartikel, GmbH. 2

3

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such, the Swiss authorities properly returned the Swedish language DJ complaint to Luv n' care without serving it. Luv n' care then filed a motion seeking a second extension, on October 4, 2007, the very day the first extension expired. Luv n' care then compounded its bad faith by misrepresenting the basis for seeking a second extension. Luv n' care asserted that the attempted service was refused because Luv n' care inadvertently translated the DJ complaint into Swiss, instead of German. Luv n' care attributed this defect to Luv n' care4 being unaware that the Hague Convention required German language service papers in the Canton, where Bamed is located. These statements are simply not credible. Luv n' care had ample time to familiarize itself with the Hague Convention rules, and properly prepare the necessary papers. Moreover, these requirements are readily available, inter alia, on the U.S. State Department's web page. But more importantly, there is no such language as Swiss. The official languages of Switzerland are German, French, Italian and Romansh. Bamed discovered Luv n' care's bad faith in seeking negotiations as a pretext to gain an improper advantage as a result of Luv n' care's attempted service of the Swedish language DJ complaint. Bamed promptly contacted counsel, and a patent infringement complaint was prepared and filed in the U.S. District Court for the District of Delaware ("Delaware complaint" or "action") on October 4, 2007, upon the expiration of the time for proper service of the Texas DJ complaint. The Delaware action mirrors this action including all claims asserted by Luv n' care herein, such that all disputes may be fully litigated in Delaware. But there are important differences. The Delaware action includes all necessary and indispensable parties: both Bamed

4

Luv n' care also asserted, without any supporting documentation, that Process Forwarding International, a professional process server, was unaware of this requirement, which is suspect. 3

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and MAM, who are both subject to personal jurisdiction in Delaware, unlike this District. In addition, the Delaware action includes another accused infringer, Munchkin. Furthermore, service of the Delaware complaint on Luv n' care was perfected before the Texas DJ complaint was served on Bamed. Service of the Delaware complaint was perfected, on October 5, 2007, three weeks before the Texas DJ complaint was served on Bamed. (Delaware Notice; Ex. A). Moreover, the DJ complaint was served after the first granted extension of time had expired, and before the second extension was retroactively granted. After Luv n' care was served, in-house counsel for Luv n' care requested a sixty (60) day extension to respond to the Delaware complaint. Luv n' care then continued its pattern of deception by filing a misleading supplemental motion for a second extension on November 6, 2007. In the supplemental motion, Luv n' care failed to disclose the Delaware action, and the Court, without knowledge of Luv n' care's charade or the pending Delaware action, retroactively granted Luv n' care's second request for an extension to serve the Texas DJ complaint. In view of the lack of personal jurisdiction and of Luv n' care's continuous bad faith throughout the eleven (11) months prior to serving the DJ complaint, the Court should dismiss the Texas DJ action, or in the alternative, consolidate this DJ action with the Delaware action. II. The Texas DJ action should be dismissed because Bamed has no contacts with the State of Texas and is not subject to personal jurisdiction in this District As the declaratory judgment plaintiff, Luv n' care bears the burden of establishing that the Court has personal jurisdiction over Bamed. Arriaga v. Imperial Palace, Inc., 252 F.Supp.2d 380, 383 (S.D. Tex. 2003)(citing Kelly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841, 854 (5th Cir. 2000)). Here, the acts giving rise to Luv n' care's claims did not occur in the State of Texas. As such, Luv n' care must establish that the Court may properly exercise general jurisdiction

4

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over Bamed. Jones v. Petty-Ray Geophysical Geosource, Inc., 954 F.2d 1061, 1068 (5th Cir. 1992); Williams v. Wilson, 939 F.Supp. 543, 547 (W.D. Tex. 1995). Here, Bamed has no contacts with the State of Texas, let alone continuous, systematic and ongoing contacts with this District. Electric & Gas Tech., Inc. v. Universal Commun. Sys., 2003 WL 22838719 *5 (N.D. Tex. 2003). Bamed does not manufacture or sell products in the State of Texas; does not maintain an office or other business establishment in the State of Texas; does not own property in the State of Texas; does not have any bank accounts in the State of Texas; and has no registered agent in the State of Texas. (Peter Röhrig Declaration; Ex. B). As such, the Texas DJ action should be dismissed because Bamed is not subject to personal jurisdiction in this District. Electric & Gas Tech., 2003 WL 22838719 *5; McZeal v. Fastmobile, Inc., 2006 WL 801175 *1 (S.D. Tex. 2006). III. The Court should dismiss Luv n' care's Texas DJ complaint and allow the Delaware action to go forward because Luv n' care filed and concealed the Texas DJ complaint While a first-filed action should normally proceed, the Court upon finding "compelling circumstances" may "choose to dismiss the first-filed action allowing instead the second-filed action to proceed." Chapa v. Mitchell, 2005 WL 2978396 *2 (W.D. Tex. 2005)(citing Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403, 407 (5th Cir. 1971); Igloo Prods. Corp. v. The Mounties, Inc., 735 F.Supp. 214, 217 (S.D. Tex. 1990)). "'Compelling circumstances' exist, inter alia, where a party engaged in bad faith conduct, by inducing an opposing party to delay filing of a lawsuit, so that [it] could file a preemptive lawsuit, Amerada Petroleum Corp. v. Marshall, 381 F.2d 661, 663 (5th Cir. 1967), and/or where desirable parties are absent from the first-filed lawsuit, but are present in the

5

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second-filed lawsuit." Chapa, 2005 WL 2978396 *2 (citing Genetech, Inc. v. Eli Lilli & Co., 998 F.2d 931, 938 (Fed. Cir. 1993)). Assuming arguendo that the Court may exercise jurisdiction over Bamed here, both categories of "compelling circumstances" are present warranting dismissal. Luv n' care induced Bamed into negotiations in bad faith to delay Bamed from bringing suit, while Luv n' care simultaneously filed the Texas DJ complaint. Moreover, a necessary and indispensable party, MAM (the owner of the MAM `083 design patent), is absent from this DJ action, and, like Bamed, is not subject to personal jurisdiction in this District. MAM, however, is a party to the pending Delaware action. A. Luv n' care induced Bamed to negotiate and filed the Texas DJ complaint in bad faith

In letters dated November 6 and 22, 2006, counsel asserted the Bamed `275 patent, and the MAM `083 design patent, against Luv n' care. (November 7 & 22, 2006 letters; Ex. C). Thereafter, Luv n' care induced Bamed to enter into negotiations as a pretext to gain an improper advantage by preventing Bamed from filing a complaint in a jurisdiction of its choosing. (Hakim November 24, 2006 letter and February 5, 2007 letter; Ex. D). As Bamed prepared to negotiate in good faith, Luv n' care preemptively filed the DJ complaint, but did not serve it. Rather, Luv n' care concealed the pending Texas DJ action for months. Indeed, a full five (5) months after filing the DJ complaint and after expiration of the 120 day period for service, Mr. Hakim, CEO of Luv n' care wrote that: We also believe that it is quite clear that the patents would be declared invalid if litigated in the U.S. **** We would withdrawal our objection to [Bamed's] European patent as per our previous agreement and also we would not move to invalidate [Bamed's] US

6

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patents ... Luv n care would simply let [Bamed's US patents] stand here in the USA rather than moving to invalidate it. (Hakim April 11, 2007 letter; Ex. E) (emphasis added). These statements are demonstrably false. Luv n' care's preemptive Texas DJ complaint, inter alia, challenging the validity of the Bamed `275 patent and the MAM `083 design patent had been pending for months. Moreover, Bamed did not learn of the Texas DJ action until Luv n' care's attempted service of the Swedish language complaint in September 2007. (Peter Röhrig Declaration; Ex. B). As such, Luv n' care's bad faith conduct is indisputable. B. MAM, a necessary and indispensable party, is absent from the Texas DJ action and, like Bamed, not subject to personal jurisdiction in this District

"The presence of the owner of the patent as a party is indispensable, not only to give jurisdiction under the patent laws, but also in most cases to enable the alleged infringer to respond in one action to all claims of infringement for his act, and thus either to defeat all claims in the one action, or by satisfying one adverse decree to bar all subsequent actions." Schwarz Pharma, Inc. v. Paddock Labs., Inc., 504 F.3d 1371, 1374 (Fed. Cir. 2007)(citing Independent Wireless Telegraph Co. v. Radio Corp. of America, 269 U.S. 459, 468 (1926)). Here, necessary and indispensable party MAM, the owner of the MAM `083 design patent, is absent. (USPTO Assignment Records, Ex. F). Luv n' care inexplicably failed to name MAM as a party despite, inter alia, challenging the validity and enforceability of the MAM design `083 patent. More importantly, MAM, a private Austrian foundation, has no continuous, systematic or ongoing contacts with the State of Texas, and is not subject to personal jurisdiction in this District. MAM has made a total of seven (7) sales into the State of Texas. (Susanna Wagner Declaration; Ex. G). These unconnected and isolated sales are insufficient to establish jurisdiction over non-party MAM. Hanson Pipe & Prods., Inc. v. Bridge Tech., LLC, 351

7

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F.Supp.2d 603, 6140 (E.D. Tex. 2004)(quoting International Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)("isolated items of activities in a state ...are not enough to subject it to suit on causes of action unconnected with the activities there.")). C. Dismissing the Texas DJ action in favor of the Delaware action would serve the interests of judicial economy

The interests of judicial economy would be served by dismissing the Texas DJ action and allowing the Delaware action to proceed. Unlike the present action, both Bamed and MAM are subject to personal jurisdiction in Delaware. Moreover, both the Bamed `275 patent and the MAM `083 design patent are directed to baby pacifiers (one is a utility patent and the other a design patent), such that the resolution of any dispute involving either patent necessarily involves issues relating to the other. For example, the accused products are the same, the accused infringer (Luv n' care) is the same, and a majority of the alleged prior art would be the same. However, the two patents are owned by different parties, both of whom are necessary and indispensable to any action involving these two patents. Schwarz Pharma, 504 F.3d at 1374. As such, this Texas DJ action can only resolve issues relating to the Bamed `275 patent (assuming arguendo that the Court may exercise jurisdiction over Bamed) because MAM, the owner of the MAM `083 design patent, is not subject to jurisdiction in this District. As such, all issues relating to the MAM `083 design patent would be left unresolved, should the present DJ action go forward. By contrast, allowing the pending Delaware action, with both Bamed and MAM as parties, to proceed instead would permit all pending claims asserted herein by Luv n' care to be fully litigated. Moreover, the Delaware action includes another accused infringer, Munchkin, who has answered. As such, the Delaware action will go forward and address both patents independently of this Court's ruling on the instant Motion to Dismiss. This DJ action should

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accordingly be dismissed in favor of the Delaware action because following the first-filed rule would result in duplicative litigations in two separate courts. Texas Instruments v. Micron Semiconductor, 815 F.Supp. 994, 997 (E.D. Tex. 1993)(the purpose of the first-filed rule is to promote judicial efficiency).5 IV. The Chapa court's reasoning is instructive in dictating that this DJ action should be dismissed in favor of the Delaware action In the Chapa case, the court found "compelling circumstances" under the precise scenario present in this DJ action, and properly dismissed the first-filed action in favor of the second-filed. In Chapa, the declaratory judgment plaintiff Chapa, like Luv n' care, "as evidenced by the parties' correspondence, ... preemptively [filed] the First-Filed Action by inducing Defendants into believing that he was committed to resolving [the] dispute out of court. Specifically, when threatened with a lawsuit by Defendants, [Chapa and Luv n' care both] expressed [a] desire to settle." Chapa, 2005 WL 2978396 *2. Based upon these actions, the Chapa court found, as this Court should, that "relying on Plaintiff's expressed willingness to settle, Defendants [like Bamed] obliged Plaintiff [while] Plaintiff took advantage of Defendants' deferral and filed [the] preemptive declaratory judgment action." Id. A necessary party was, likewise, absent in Chapa. Id. Based upon the Chapa plaintiff's bad faith conduct, which is identical to Luv n' care's conduct, the Chapa court dismissed the declaratory judgment action. Chapa, 2005 WL 2978396 *4. In so doing, the Chapa court observed, as this Court should, that "in determining the
5

In this regard, Bamed notes that Luv n' care has filed a motion to dismiss in the Delaware action challenging jurisdiction and venue. Although Bamed expects the Delaware court to deny Luv n' care's motion, Bamed submits that, to the extent this Court exercises jurisdiction over Bamed, the Court may condition a dismissal of Luv n' care's Texas DJ action, upon the Delaware court properly exercising jurisdiction over Luv n' care 9

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applicability of `first-filed' rule, some courts consider an action for declaratory relief filed preemptively as a `red flag' signaling the existence of `compelling circumstances.'" Id. (citing Boatmen's First Nat'l Bank of Kansas City v. Kansas Public Employees Ret. Sys., 57 F.3d 638, 641 (8th Cir. 1995); Northwest Airlines, Inc. v. Am. Airlines, Inc., 989 F.2d 1002, 1007 (8th Cir. 1993)). V. This DJ action should also be dismissed in favor of the Delaware action pursuant to the Court's broad discretionary powers under the Federal Declaratory Judgment Act The Chapa court also addressed the issue of whether the declaratory judgment action should be dismissed under the Declaratory Judgment Act and reached the same conclusion. Chapa, 2005 WL 2978396 *2-4. A court may dismiss a first-filed action and allow the secondfiled to proceed based upon its broad discretion under the Federal Declaratory Judgment Act. 28 U.S.C. § 2201(a); MedImmune, Inc. v. Genentech, Inc., 127 S.Ct. 764, 776 (2007)(quoting Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995)); see Sherwin-Williams Co. v. Holmes County, 343 F.3d 383, 391 (5th Cir. 2003).6 Pursuant to the Federal Declaratory Judgment Act, a court may entertain an action for declaratory judgment, but the court is not required to provide declaratory judgment relief. Mission Ins. Co. v. Puritan Fashions Corp., 706 F.2d 599, 601 (5th Cir. 1983). It is a matter solely within the court's sound discretion to exercise jurisdiction over a declaratory judgment action. Id. In deciding whether to entertain a declaratory judgment action, a court must address and balance the following nonexclusive factors: (1) whether there is a pending ... action in which all The test and the result is identical under Federal Circuit jurisprudence. EMC Corp. v. Norand Corp., 89 F.3d 807, 813 (Fed. Cir. 1996) ((quoting Wilton, 515 U.S. at 286-87) "Simply because there is an actual controversy between the parties does not mean that the district court is required to exercise that jurisdiction. . . . The Supreme Court recently reaffirmed that the Declaratory Judgment Act thereby accords district courts a "unique breadth of . . . discretion to decline to enter a declaratory judgment."). 10
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of the matters in controversy may be fully litigated; (2) whether the plaintiff filed suit in anticipation of a lawsuit filed by the defendant; (3) whether the plaintiff engaged in forum shopping in bringing the suit; (4) whether possible inequities exist in allowing the declaratory plaintiff to gain precedence in time or to change forums; (5) whether the federal court is a convenient forum for the parties and witnesses; and (6) whether retaining the lawsuit in federal court would serve the purposes of judicial economy. Travelers Ins. Co. v. La. Farm Bureau Fed'n, Inc., 996 F.2d 774, 778 (5th Cir. 1993)(citations omitted). Based upon an analysis of these factors, the Chapa court dismissed the declaratory judgment action because all of the matters in question could be fully litigated in the pending second-filed action, which was not only the mirror-image of the first-filed, but it also included a necessary party, absent in the first-filed action. Here, as in Chapa, the factors weigh in favor of dismissal of the Texas DJ action. Namely, all disputes may be fully litigated in the pending Delaware action, Luv n' care improperly engaged in forum shopping in filing this preemptive Texas DJ action, and judicial economy would be served by dismissing the Texas DJ action in favor of the Delaware action. VI. The present DJ action should be dismissed for failure of service Luv n' care's preemptive Texas DJ complaint should, likewise, be dismissed for failure to timely serve. Luv n' care furtively filed the Texas DJ complaint, and concealed the existence of the DJ action through a pattern of deception and neglect in failing to serve the DJ complaint for eleven (11) months. The Texas DJ complaint was filed December 1, 2006, and Luv n' care, while ostensively negotiating, silently allowed the 120 day service period to expire. [Dkt. 1]. Luv n' care did not seek an extension, nor a summons, for eight (8) months. [Dkt. 6 & 7]. This alone warrants dismissal of Luv n' care's DJ complaint. Porter v. Beaumont Enterprise and

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Journal, 743 F.2d 269, 272 (5th Cir. 1984); see Sealed Appellant v. Sealed Appellee, 452 F.3d 415, 419 n. 7 (5th Cir. 2006) (courts also have affirmed dismissals with prejudice for failure to serve process, even where the delay was as short as four months.)(citing Geiger v. Allen, 850 F.2d 330 (7th Cir. 1988)). However, Luv n' care did not merely delay eight (8) months before attempting to serve the DJ complaint. [Dkt. 8]. Luv n' care twice misrepresented its ulterior motives for seeking an extension to serve the DJ complaint, and ultimately did not serve it for eleven (11) months. This is inexcusable. The Delaware complaint was filed and served within a month, and more noteworthy, the Delaware complaint was served before the Texas DJ complaint. Returning to Luv n' care's misrepresentations to the Court, Luv n' care, in its first request for an extension, informed the Court that the parties were in negotiations, but Luv n' care failed to disclose that the Texas DJ action was kept secret from Bamed. [Dkt. 6]. Clearly, Luv n' care was not acting in good faith. Thereafter, Luv n' care misrepresented to the Court, in its second motion for an extension, that service had not been perfected because Luv n' care had inadvertently translated the DJ complaint into Swiss, and that only upon the papers being returned, did Luv n' care learn that the Canton where Bamed was located required the papers be translated into German. [Dkt. 9]. These statements are demonstrably false. First, the DJ complaint was translated into Swedish. (Verification of Translation; Ex. H). Second, there is no such language as "Swiss." (Swiss Federal Statistical Office, Language; Ex. I). Moreover, a mere review of the U.S. State Department's web page on Hague Service clearly indicates that Schwyz, the Canton where Bamed is located, requires service to be in German. (Id., p. 26; Ex. J). Yet, Luv n' care was purportedly unable to discovery this readily available

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information in the eight (8) months Luv n' care was concealing the Texas DJ action. Such statements are simply untenable. Further compounding matters, Luv n' care, after being served with the Delaware complaint, requested a sixty (60) day extension to respond. (Guerriero November 1, 2007 email; Ex. K). Luv n' care was undoubtedly concerned that its scheme would unravel if Luv n' care answered in the Delaware action, while the second motion for extension was pending before this Court. This second extension was critical to Luv n' care's plan because the DJ complaint had not been served within the time period allowed by the granted first extension. Had the Court not granted Luv n' care the second motion for a retroactive extension, the Texas DJ action would have expired, and only the Delaware action would be pending. With the sixty (60) day extension as a reprieve, Luv n' care filed a supplemental motion for a second extension, noting that the DJ complaint had finally been served, and that Luv n' care had extended Bamed the courtesy of an extension to respond. [Dkt. 10]. However, Luv n' care inexplicably omitted any reference to the Delaware action. [Id.]. Luv n' care also neglected to advise the Court that it was Luv n' care that sought additional time. (Guerriero November 1, 2007 email; Ex. K). Luv n' care's carefully crafted omissions likely led the Court to grant Luv n' care's second request for an extension retroactively; thereby requiring Bamed to bring this Motion to Dismiss. In view of the above, Bamed submits that the Texas DJ action should be dismissed for Luv n' care's bad faith and neglect in failing to timely serve the DJ complaint, which has prejudiced Bamed. "Delay in serving a complaint affects every aspect of a defendant's trial preparations." Porter, 743 F.2d at 272 (citing Veazey v. Young's Yacht Sale & Service, Inc., 644 F.2d 475, 478 (5th Cir. 1981)). And, "[a] delay between filing and service ordinarily is to be

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viewed more seriously than a delay of a like period of time occurring after service of process." Id. Moreover, allowing Luv n' care to maintain this DJ action improperly "divests the true plaintiff" Bamed of the right to seek redress in the forum of its choosing. Pennsylvania General Ins. Co. v. CaremarkPCS, 2005 WL 2041969 *7 (N.D. Tex. 2005)(citing Kinetic Concepts, Inc. v. Connetics Corp., 2004 WL 2026812 *3-4 (W.D. Tex. 2004) (concluding that the declaratory judgment plaintiff filed suit for the improper reason of subverting the real plaintiff's advantage); Capco Intern'l, Inc. v. Haas Outdoors, Inc., 2004 WL 792671 *4 (N.D. Tex. 2004) (holding that the declaratory plaintiff's suit was brought "not for reasons supported by the purposes of the Declaratory Judgment Act, but for the improper reason of `subverting the real plaintiff's advantage' in a forum of [the plaintiff's] choosing"); Peyman v. Optobionics Merger Corp., 2003 WL 193443 *3 (E.D. La. 2003) ("[M]isuse of the Declaratory Judgment Act to gain a procedural advantage and preempt the forum choice of the plaintiff in the coercive action militates in favor of dismissing the declaratory judgment action."). A dismissal, by contrast, will not prejudice Luv n' care. Luv n' care will have an opportunity to fully litigate its claims against both necessary and indispensable parties in the Delaware action, which will serve the interest of judicial economy by avoiding unnecessary duplicative litigations. V. The Texas DJ action should be dismissed for failure to join MAM, a necessary and indispensable party "The federal rules seek to bring all persons that may have an interest in the subject of an action together in one forum so that the lawsuit can be fairly and completely disposed of." Pulitzer-Polster v. Pulitzer, 784 F.2d 1305, 1308 (5th Cir. 1986) (citing Fed. R. Civ. P. 19 advisory committee note). In the event that a necessary party cannot be joined, the Court must

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consider whether the necessary party is also an "indispensable party"--namely, a necessary party who cannot be joined and without whom the suit should be dismissed. See Fed. R. Civ. P. 12(b)(7). Here, MAM, the owner of the MAM `083 design patent is a necessary and indispensable party. Schwarz Pharma, 504 F.3d at 1374. And, MAM cannot be joined to the Texas DJ action because MAM has no continuous, systematic or ongoing contacts with Texas, and is therefore not subject to personal jurisdiction in this District. (Susanna Wagner Declaration; Ex. G); Electric & Gas Tech., Inc., 2003 WL 22838719 *5; Hanson Pipe, 351 F.Supp.2d 603 (quoting International Shoe, 326 U.S. at 319). As such, the Texas DJ action should be dismissed pursuant to Fed. R. Civ. P. 12(b)(7). See, e.g., JLM Investments v. Acer Petroleum Corp., 2001 WL 376331 *2 (N.D. Tex. 2001); Cooper v. Digital Processing Sys., Inc., 182 F.R.D. 242 (N.D. Ohio 1998), aff'd, 215 F.3d 1342 (Fed. Cir. 1999). VI. Conclusion For the foregoing reasons, Bamed submits that this Motion to Dismiss Luv n' care's preemptive declaratory judgment action should be granted, and the instant DJ action dismissed in favor of the Delaware action. Respectfully submitted, YOUNG, PICKETT & LEE 4122 Texas Blvd.-P.O. Box 1897 Texarkana, TX-AR 75504-1897 Telephone: (903) 794-1303 Facsimile: (903) 794-5098 By: _/s/ Lance Lee__________________ Lance Lee Texas Bar No. 24004762

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Neil F. Greenblum Michael J. Fink P. Branko Pejic GREENBLUM & BERNSTEIN, P.L.C. 1950 Roland Clarke Place Reston, Virginia 20191 (703) 716-1191

CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing document was filed electronically in compliance with Local Rule CV-5(a). Therefore, this document was served on all counsel who are deemed to have consented to electronic service. Local Rule CV-5(a)(3)(A). Pursuant to FED.R.CIV.P. 5(d) and Local Rule CV-5(e), all other counsel of record not deemed to have consented to electronic service were served with a true and correct copy via email transmission, facsimile and/or U.S. Mail this15th day of January, 2008.

_/s/ LanceLee________________________

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION

LUV N' CARE, LTD., Plaintiff, v. BAMED AG, Defendant.

) ) ) ) ) ) ) ) )

C.A. No. 4:06CV486 JURY TRIAL DEMANDED

FED. R. CIV. P. 7.1(a) DISCLOSURE OF BAMED AG I, the undersigned counsel for Defendant Bamed AG ("Bamed"), hereby certify the following corporate disclosures pursuant to Fed. R. Civ. P. 7.1(a). To the best of my knowledge and belief, Röhrig Privatstiftung, a private foundation, owns an interest in MAM Babyartikel. To the best of my knowledge and belief, BAMED Babyartikel GmbH is the only corporate entity owning an interest in Bamed. Dated: January 18, 2007 Respectfully submitted, YOUNG, PICKETT & LEE 4122 Texas Blvd.-P.O. Box 1897 Texarkana, TX-AR 75504-1897 Telephone: (903) 794-1303 Facsimile: (903) 794-5098 By: _/s/ Lance Lee__________________ Lance Lee Texas Bar No. 24004762 Neil F. Greenblum Michael J. Fink P. Branko Pejic GREENBLUM & BERNSTEIN, P.L.C. 1950 Roland Clarke Place Reston, Virginia 20191 (703) 716-1191

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CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing document was filed electronically in compliance with Local Rule CV-5(a). Therefore, this document was served on all counsel who are deemed to have consented to electronic service. Local Rule CV-5(a)(3)(A). Pursuant to FED.R.CIV.P. 5(d) and Local Rule CV-5(e), all other counsel of record not deemed to have consented to electronic service were served with a true and correct copy via email transmission, facsimile and/or U.S. Mail this18th day of January, 2008. _/s/ LanceLee________________________

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION

LUV N' CARE, LTD. Plaintiff, v. BAMED AG, Defendant.

Civil Action No.: 4:06-cv-00486 (MHS)(DDB)

LUV N' CARE'S RESPONSE BRIEF IN OPPOSITION TO BAMED'S MOTION TO DISMISS

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Table of Contents

I.

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II.

Defendant's Claims that Mam is a Necessary and Indispensible Party Go Against Bamed's Prior Claims that it Owns the Exclusive Rights to the `083 Patent. . . . . . . . . . . 2

III.

Defendant are Not Concerned About Judicial Economy. . . . . . . . . . . . . . . . . . . . . . . . . . . 4

IV.

Discretionary Dismissal is Not Warranted.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 A. Defendant's Protests that this Suit Was Anticipatory Do Not Change the Legal Result. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 B. Luv n' care Has Fully Acted in Good Faith. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

V.

Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

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Table of Authorities Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994). . . . . . . . . . . . . . 2 Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Electronics for Imaging, Inc. v. Coyle, 394 F.3d 1341 (Fed. Cir. 2005). . . . . . . . . . . . . . . . . . . 5, 6 Luv n' care, Ltd. v. Insta-Mix, 438 F.3d 465 (5th Cir. 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Seitz v. Envirotech Sys. Worldwide Inc., 513 F. Supp. 2d 855 (D. Tex. 2007). . . . . . . . . . . . . . . . 2 Serco Services Co., LP v. Kelley Co., Inc., 51 F. 3d 1037 (Fed. Cir. 1995). . . . . . . . . . . . . . . . . . 5 Sherwin-Williams Co. v. Holmes County, 343 F.3d 383 (5th Cir. 2003).. . . . . . . . . . . . . . . . . . . . 5 World-Wide Volkswagen v. Woodson, 444 U.S. 286, 100 S.Ct. 559 (1980). . . . . . . . . . . . . . . . . . 3

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I.

Introduction Knowing that the first-to-file rule is a well established basis for this suit to proceed,

Defendant spins false claims regarding Luv n' care to dislodge the present suit in favor of a later one it filed ten months afterwards in Delaware. Defendant's claims are full of misrepresentations and inaccurate or contradictory statements. Bamed's allegation that Mam is a necessary and indispensable party contradict Bamed's prior statements in writing that the `083 design patent is its own. Either its present claims are false or its prior ones are. Regardless of what its latest story is, Mam can easily be added to this suit since there is plainly jurisdiction over it based on its shipments here, and its regular attendance of the Dallas trade show. There is similar jurisdiction over Bamed. Defendant's concerns regarding judicial economy are likewise misplaced. It can easily pursue its claims in this suit. In fact, it created the conditions of which it complains by instituting the second suit in Delaware. Its response papers show no connection between it and Delaware making that particular district a preferable or necessary one for its claims of alleged infringement. In fact, that foreign corporation only sued there after service of Luv n' care's suit here was attempted on it. The filing in Delaware was intended to maximize the potential inconvenience to Luv n' care when Defendant's claims could have easily been pursued in this first-filed action. Furthermore, the Delaware court has no basis for jurisdiction over Luv n' care, and has a motion pending for dismissal based on lack of personal jurisdiction. Likewise, Defendant's allegation that Luv n' care "feigned" interest in settlement negotiations is plainly false. It is an empty claim invented for the purpose of its motion. Luv n' care attempted to settle for months ­ in fact, settlement negotiations between Luv n' care, Bamed, and 1

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Mam have continued even after service of both the present suit and the Delaware suit. Bamed and Mam are well aware of this. See, Exhibit H (referring to Luv n' care's earlier settlement letter of December 13, 2007 and continuing settlement discussions). That Luv n' care would "make believe" it was interested in settlement makes no sense, is ridiculous, and is flatly contradicted by the settlement correspondence between the parties which has continued to date.

II.

Defendant's Claims that Mam is a Necessary and Indispensible Party Go Against Bamed's Prior Claims that it Owns the Exclusive Rights to the `083 Patent As far as Defendant's allegations that Mam is a "necessary and indispensable party" for the

issues in the `083 design patent, Bamed contradicts itself. Counsel previously told the opposite to Luv n' care; namely, that Bamed is the proprietor of the design patent (US D441,083 S) owning the exclusive rights thereto. See, 7 November 2006 letter from Sonn and Partners to Luv n' care (Exhibit A). Luv n' care's choice to sue Bamed and not Mam is not at all "inexplicable" ­ it was based on Bamed's own representations. Luv n' care relied on Bamed's representations in naming the defendant here, although it has since become difficult to tell which of Bamed's conflicting claims on this is true and which is false. Either way, however, Mam can be easily added to this suit. This court has jurisdiction over both Mam and Bamed. See, Declaration of Nouri E. Hakim submitted in Delaware Action (Exhibit G). To the best of Luv n' care's knowledge, Mam and Bamed's merchandise is shipped to warehouses in Texas to be distributed throughout Texas (see Exhibit G, Declaration of N. Edward Hakim). Such shipments to this state are an established basis for jurisdiction. See, Luv n' care, Ltd. v. Insta-Mix, 438 F.3d 465 (5th Cir. 2006); Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1566

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(Fed. Cir. 1994); Seitz v. Envirotech Sys. Worldwide Inc., 513 F. Supp. 2d 855, 862-863 (D. Tex. 2007). In addition, Mam has regularly displayed and offered its products for sale at the Juvenile Products Manufacturers' Association (JPMA) Trade Show in Dallas. It did so for years until that show was recently moved to Florida. For example, attached hereto are articles referring to Mam's exhibition in 1997 and to its exhibition in 2004. See, Exhibit E. These are merely two examples; in fact, it is Luv n' care's understanding and recollection that Mam has exhibited every year at that show. Its purpose for attending the trade show is to display and offer for sale its products in Texas ­ including, to our knowledge, the products related to the patents in this case. Mam has regularly done business in Texas and has had systematic contacts with this forum. Accordingly, there is a clear basis for jurisdiction over both Defendants. When a corporation purposefully avails itself of the privilege of conducting activities within the forum State it has clear notice that it is subject to suit there. World-Wide Volkswagen v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559 (1980). Defendants should have reasonably anticipated being haled into court in this State. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-475 (1985). In short, Defendant's statements that the parties have no connection with this State are no more than an attempt to mislead this Court. Should further evidence of documentation of these facts be desired, or should the Court wish that the parties address these issues further, jurisdictional discovery is respectfully requested since the pertinent evidence is mainly in Bamed and Mam's possession.

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III.

Defendant are Not Concerned About Judicial Economy Bamed's allegations that it is concerned about judicial economy ring completely hollow. In

fact, as its papers show in the Delaware case, it instituted the action against Luv n' care and Munchkin in Delaware after it became aware that Luv n' care had filed this suit in Texas. See, Bamed's Response from Delaware action at p.10 (excerpted) (Exhibit I). It could have easily pursued its alleged claims against Luv n' care in this suit. It could have likewise sued Munchkin here. Texas would have been the most appropriate venue in view of the fact that all of the parties in the Delaware action are believed to have been regular exhibitors at the JPMA trade show held in Dallas each year. But Bamed and Mam did not do so. Instead, they chose to sue at a significant distance from Luv n' care's location. Neither of those parties was forced to sue in Delaware when a sister court already had a case pending on these very issues. Rather, their choice to sue in Delaware only serves to deliberately inconvenience Luv n' care and its witnesses. They are well aware that LNC's headquarters is less than 150 miles from this court, but is across the country from the district court in Delaware. Neither Bamed nor Mam ­ both of whom are foreign corporations ­ has alleged any legitimate need for its suit to have been filed in the Delaware court. They can easily proceed here, and it is respectfully submitted that it should. Furthermore, Luv n' care has since moved to dismiss the Delaware suit since the Delaware court has no jurisdiction over it. Luv n' care has no agent, or offices in Delaware, and did not ship the accused products to Delaware. Dismissal of the present action would leave the issues hanging over Luv n' care unresolved.

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IV.

Discretionary Dismissal is Not Warranted A. Defendant's Protests that this Suit Was Anticipatory Do Not Change the Legal Result

Defendant distorts the record to have this Court dismiss this case in contravention of the well-established rule favoring the first filed action. Its focus on allegations that this suit was anticipatory do not overcome the first-to-file rule, and distracts from the relevant issues. Electronics for Imaging, Inc. v. Coyle, 394 F.3d 1341, 1347 (Fed. Cir. 2005) (focusing on anticipatory nature of suit is an abuse of discretion); Sherwin-Williams Co. v. Holmes County, 343 F.3d 383, 397 (5th Cir. 2003) (using a declaratory judgment action to resolve a dispute without waiting to be sued or until the statute of limitations expires is a proper purpose, and the mere fact that a declaratory judgment action is brought in anticipation of other potential suits does not require dismissal of the declaratory judgment action by the federal court). It is well settled that the first-filed action is preferred, even if it is declaratory. Genentech, Inc. v. Eli Lilly & Co., et seq., 998 F. 2d 931 (Fed. Cir. 1993); Serco Services Co., LP v. Kelley Co., Inc., 51 F. 3d 1037 (Fed. Cir. 1995). The declaratory judgment action allows a party "who is reasonably at legal risk because of an unresolved dispute, to obtain judicial resolution of that dispute without having to await the commencement of legal action by the other side". Electronics for Imaging, 394 F.3d at 1345. Before the Declaratory Judgment Act, a competitor was rendered helpless by allegations of a patent holder, and was forced to await the patent holder's decision to sue before it could obtain resolution of its rights. Id. at 1346. "After the Act, those competitors were no longer restricted to an in terrorem choice between the incurrence of a growing potential liability for patent infringement and abandonment of its enterprises; it could clear the air by suing for a judgment

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that would settle the conflict of interests". Id. Such a declaratory suit is particularly important where the allegations cast a cloud over the competitor's business and where the competitor has indicated confidence in its invalidity defense against the patent holder's meritless allegations, as is the case here. Id. at 1347. Other factors of relevance are the convenience and availability of the witnesses which favors suit here. Id. at 1348. LNC is located in northeast Louisiana and is in close proximity to this district. In contrast, traveling to the State of Delaware would cause significant inconvenience, with the travel and transfer of all of Luv n' care's witnesses and records halfway across the country. The purpose of the Declaratory Judgment Act is to provide the allegedly infringing party relief from uncertainty, and to relieve it from having to abandon its enterprises due to a threat of liability hanging over it. Id. at 1346. That is exactly why this case was filed. A declaratory judgment action is particularly important when, as here, the threats are not justified. Furthermore, Defendant's allegations regarding the Delaware suit are mainly irrelevant. When it filed that suit, it were fully aware of this first-filed one and deliberately chose to sue in another district to create the conditions of which it complain. This was no "race to the courthouse" ­ Bamed didn't file suit for over ten months after Luv n' care's, and it only did so in response to attempted service here. Absent that, the meritless threats raised would still be hanging over Luv n' care's head. The significantly increased convenience and availability of the witnesses to this district, the availability of jurisdiction over all the parties here, the nature of Defendant's misrepresentations to this Court, and the fact that the foreign Defendant have no real connection to Delaware making it necessary for suit to proceed there, all confirm that this suit is warranted and should proceed. 6

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B.

Luv n' care Has Fully Acted in Good Faith

The allegation that Luv n' care "feigned" interest in negotiation is a complete misstatement and is a knowing distortion of the facts. In fact, Luv n' care specifically indicated its intent to concurrently both negotiate a settlement and also have its attorneys move forward with the the legal avenues available to them. The present dispute began when several letters1 were forwarded to Luv n' care ("LNC") in November 2006 accusing LNC of infringement. Luv n' care's CEO, N. Edward Hakim, promptly responded by email on November 24, 2006 (see attached Exhibit B) as follows: "I will advise our attorneys that I have decided to negotiate with you directly, but I have instructed them to proceed forward until I think a settlement between the two of us is realistic." (emphasis our