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DJ Action can be Filed on Day Patent Issues: Federal Circuit
Practical Law Legal Update 7-560-5562 (Approx. 3 pages)
DJ Action can be Filed on Day Patent Issues: Federal Circuit
by Practical Law Intellectual Property and Technology
| Published on 12 Mar 2014 • USA (National/Federal) |
In Danisco US Inc. v. Novozymes A/S, the US Court of Appeals for the Federal Circuit reversed and remanded the district court's decision dismissing the plaintiff's declaratory judgment action even though the complaint was filed on the day the patent issued and the patent owner had not affirmatively accused the plaintiff's product of infringing that patent.
On March 11, 2014, in Danisco US Inc. v. Novozymes A/S, the US Court of Appeals for the Federal Circuit rejected the district court's bright-line test for declaratory judgment determinations and concluded that under the totality of circumstances, declaratory judgment jurisdiction existed even though:
- The declaratory judgment plaintiff filed the action on the day the patent issued.
- The patent owner had not affirmatively accused the plaintiff's product of infringing that patent.
Danisco and Novozymes develop and provide certain genetically modified industrial enzymes used for converting corn and other plant-based material into ethanol. Danisco, or its predecessors in interest, and Novozymes have previously clashed over patent issues before the activities surrounding the declaratory judgment action. For example, in one instance, Novozymes amended one of its pending patent applications to cover one of Danisco's new products and then sued Danisco on the same day the patent issued. Novozymes eventually lost that case when its patent was invalidated.
In this case, Novozymes sought to have an interference declared in connection with one of Danisco's allowed patent applications by:
- Amending one of its own pending patent applications.
- Asserting that:
- the amended claim covered the same invention claimed in Danisco's patent application; and
- Novozymes was entitled to priority.
The examiner rejected Novozymes's interference request, however, Novozymes continued to dispute this rejection. Specifically, Novozymes submitted a public comment to the USPTO asserting that:
- Danisco's claimed invention falls within the scope of the claim in Novozymes's pending patent application.
- It would not acquiesce in the examiner's decision.
On the day that Novozymes's pending patent application issued, Danisco filed the declaratory judgment action.
The US District Court for the Northern District of California granted Novozymes's motion to dismiss the declaratory judgment action concluding that there was no actual case or controversy because:
- Danisco filed the declaratory judgment action before Novozymes could have taken any affirmative action to enforce its rights.
- Novozymes's actions before the patent issue date could not support declaratory judgment jurisdiction.
The Federal Circuit reversed and remanded the case because:
- Novozymes attempted to have the USPTO declare an interference and award it priority.
- Novozymes believed that Danisco's product infringed its claim.
- The Federal Circuit has never held that:
- pre-issuance conduct cannot be the basis for a declaratory judgment action; or
- only implied or express enforcement threats can create a justiciable controversy.
As a result, the Federal Circuit concluded that, under the totality of the circumstances, Novozymes's activities demonstrated that it was prepared and willing to enforce its patent rights so that declaratory judgment jurisdiction existed.