Court Clarifies Use of Declaratory Judgment in IP Cases

Print Friendly, PDF & Email

The U.S. Court of Appeals for the Federal Circuit recently clarified how it will determine when a party has shown there is a sufficient dispute between the litigants to justify a declaratory judgment action in intellectual property rights (IPR) litigation.

In MedImmune, Inc. v. Genentech, Inc., the U.S. Supreme Court set forth the standard for determining a “dispute” justifies proceeding with a declaratory judgment action.  The recent decision further explained the standard the lower courts will follow, providing companies and counsel with additional guidance.

In the case, the plaintiff had developed a cleansing product and sought a declaration that its product did not infringe on four patents owned by the defendant covering a similar cleaning products.  The district court had dismissed plaintiff’s complaint for declaratory judgment finding it did not set forth an actual case or controversy.  On appeal, plaintiff argued that an actual controversy existed because the defendant listed the patents on its product (as required by law), previously sued plaintiff to enforce a different patent, might someday try to enforce its rights under the patents at issue, and refused to sign a covenant not to sue under the patents.

The Federal Circuit echoed the Supreme Court and stated that when determining whether an actual case or controversy is presented in a complaint, it takes all facts into account to determine if “there is a substantial controversy, between the parties having adverse legal interest, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”  The Court, however, made clear that “some affirmative actions by the defendant will also generally be necessary.”  Since, in this case, the defendant never took any affirmative actions to cause plaintiff to believe defendant would enforce its rights, the Federal Circuit found that the trial court properly dismissed the case.

While a declaratory judgment action can be an important tool in a company’s intellectual property strategy, it is necessary to understand when it is a viable option to pursue and how to effectively defend such actions.

Disclaimer: This Litigation and Dispute Resolution Law Alert is provided for informational purposes only and is not intended to serve as or provide legal advice relating to a particular matter. If you would like to discuss a litigation, arbitration or dispute matter please contact Jon P. Yormick, Managing Attorney, [email protected], Jason B. Desiderio, Associate,[email protected], or Nicholas A. Panagopoulos, II, Associate, [email protected], or call toll free(U.S. and Canada) at +1.866.967.6425.

 

Speak Your Mind

*

Copyright/Disclaimer
New York State Statement of Client's Rights
Attorney Advertising