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Judge Sleet Denies Motion to Dismiss Declaratory Judgment Action on Previously-Litigated Patents

Chief Judge Gregory Sleet has denied a declaratory judgment defendant’s motion to dismiss claims related to patents that were the subject of previous litigation between the parties. DJ plaintiff DNP filed its complaint seeking a judgment of noninfringement and invalidity of four patents owned by Natural Alternatives International (“NAI”). Three of the patents had been the subject of an infringement action in 2009, and NAI moved for dismissal as to those three patents, arguing that no justiciable case or controversy existed between the parties. Judge Sleet denied the motion, finding that an actual case or controversy existed with respect to these three patents even though NAI had only asserted a counterclaim of infringement with respect to the one new patent. See DNP Int’l Co. v. Natural Alternatives Int’l, Inc., C.A. No. 11-1283-GMS, Order at 1 n.1 (D. Del. Feb. 27, 2013).

Judge Sleet explained that “Federal Circuit precedent has established that ongoing disputes between the parties concerning related technology may suggest the existence of an actual controversy sufficient to support declaratory judgment jurisdiction.” Id. at 2 n.1 (citing Teva Pharms. USA, Inc. v. Novartis Pharms. Corp., 482 F.3d 1330, 1344 (Fed. Cir. 2007); Vanguard Research, Inc. v. PEAT, Inc., 304 F.3d 1249, 1255 (Fed. Cir. 2002)). He noted that NAI admitted the existence of a dispute with respect to the new patent and that the new patent came from the same family as the three older patents. He found that “[t]he admittedly live controversy surrounding the [new patent] makes it more likely that a similar controversy remains with respect to the Older Patents.” Id.

Judge Sleet also found that the history of patent litigation between the parties “[while] not dispositive . . . can be relevant where the prior conduct makes reasonable an assumption that the defendant will take action with respect to the patent-in-suit.” Id. (citing Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1341 (Fed. Cir. 2008)). NAI’s assurance “that it ‘has no intention of asserting the claims in [the three Older Patents] against DNP or its customers’ . . . does not suffice to remove subject matter jurisdiction,” especially given its “refusal to provide more concrete assurance” in the form of a covenant not to sue. Id. Additionally, an ongoing unfair competition case between the parties, while “provid[ing] less evidence of an ongoing patent dispute, it is certainly related to the earlier infringement contentions in the 2009 Action . . . [and is] indicative of the broader adversarial stance adopted by the parties.” Id.

Judge Sleet found that all of the facts taken together were sufficient for the exercise of declaratory judgment jurisdiction under the requirements of Medimmune v. Genentech, 549 U.S. 118 (2007). Id. at 2-3 n.1. Accordingly, he denied NAI’s motion to dismiss claims related to the three older patents.

DNP Int’l Co. v. Natural Alternatives Int’l, Inc., C.A. No. 11-1283-GMS, Order (D. Del. Feb. 27, 2013). by

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