Patentee's pre-issuance conduct can give rise to declaratory judgment jurisdiction

Fed. Cir. reverses lack of subject matter jurisdiction dismissal of Danisco's declaratory judgment suit challenging Novozymes' patent and concludes that the totality of the circumstances establish a justiciable controversy.

After Danisco obtained a Notice of Allowance on a patent, Novozymes amended its then-pending application to provoke an interference. The PTO refused to declare one, and it eventually issued both patents to both parties. Danisco filed suit seeking a declaratory judgment action on the Novozymes patent on the day it issued, based in part on a derivation claim under 291.

Danisco US Inc. v. Novozymes A/S, ___ F.3d ___ (Fed. Cir. Mar. 11, 2014) (LOURIE, Prost, O'Malley) (N.D. Cal.: Seeborg) (2 of 5 stars)

The Fed. Cir. held there was a justiciable controversy. That Novozymes had not accused Danisco of infringement "is not dispositive;" the proper question is whether Danisco established a "substantial risk" it would suffer harm. Slip op. at 7. "Article III does not mandate that the declaratory judgment defendant have threatened litigation or otherwise taken action to enforce its rights before a justiciable controversy can arise, and the Supreme Court has repeatedly found the existence of an actual case or controversy even in situations in which there was no indication that the declaratory judgment defendant was preparing to enforce its legal rights." Id. at 7-8.

The facts demonstrated a definite and concrete dispute between the parties. Novozymes had twice argued that its single-claim patent interfered with Danisco's patent, and Novozymes believed that Danisco’s products would infringe upon issuance of its patent. Moreover, Novozymes had never withdrawn those allegations, and it had previously sued Danisco for infringement of other patents. It did not matter that Novozymes's threatening conduct occurred before its patent issued, because a "categorical distinction between pre- and post-issuance conduct" was "irreconcilable with the Supreme Court's insistence on applying a flexible totality of the circumstances test, its rejection of technical bright line rules in the context of justiciability, and our own precedent." Slip op. at 11.

Finally, the Fed. Cir. vacated the dismissal of Danisco's 291 claim because it was premised on the erroneous dismissal of the declaratory judgment claims.