Infringement Action Over Indoor Greenhouse Patents Transferred to Georgia Based on First-to-File Rule

On August 8, 2012, Judge Steve C. Jones of the Central District of California transferred a patent infringement case to the Northern District of Georgia based on the "first-to-file" rule. The issue was whether a declaratory judgment action filed in Georgia four days before the infringement action was filed in California was merely a forum-shopping anticipatory filing such that the first-to-file rule should not apply. (For more on the first-to-file rule, see this 2008 article by Mike Cicero.)

According to the original complaint and the Court's order, Atlantis Hydroponics, Inc. of College Park, Georgia ("Atlantis"), co-owned by Steve Sevener and Noah Hubbard, is a retailer of hydroponic growing kits, lights, "grow rooms," and other supplies. Atlantis has three retail stores in Georgia, one in Tennessee, and an online store. Atlantis' products are available on Home Depot's website, but not in Home Depot retail stores. One of Atlantis' products is described as a "Pop-Up Greenhouse," and is manufactured by Viagrow, a Georgia company also co-owned by Sevener and Hubbard.

On March 26, 2012, International Growers Supply, Inc. of Los Angeles, California ("IGS") sent a letter to Atlantis, Sevener and Hubbard, "to acquaint [Atlantis] with [U.S. Patent Nos. 7,823,324 and 7,975,428] and to offer a license under highly favorable terms." On April 9, 2012, without responding to the letter, Atlantis filed a declaratory judgment action in the Northern District of Georgia seeking a declaration of noninfringement and invalidity of the '324 and '428 Patents. Four days later, on April 13, 2012, IGS filed an infringement action in the Central District of California against Atlantis, Sevener, Hubbard, Viagrow, and Home Depot, alleging that the "Pop-Up Greenhouse" product manufactured by Viagrow and sold by Atlantis and Home Depot infringed the '324 and '428 Patents.

The defendants in each action filed motions to dismiss or, in the alternative, to transfer venue to California and Georgia, respectively. Judge Jones held that the first-to-file rule was applicable and transferred the action to the Northern District of Georgia. The case is action number 1:12-cv-2378 and is currently unassigned. The motion to dismiss the declaratory judgment action, case number 1:12-cv-1206, is still pending before Judge Charles A. Pannell, Jr.