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By Tony Dutra
March 11 --Novozymes A/S's repeated arguments at the Patent and Trademark Office of an interference with a patent owned by Danisco US Inc. helped to establish jurisdiction for the latter's declaratory judgment action, the U.S. Court of Appeals for the Federal Circuit ruled March 11 (Danisco US Inc. v. Novozymes A/S, Fed. Cir., No. 2013-1214, 3/11/14).
Reversing dismissal of the case, the appeals court held that the lower court improperly limited its totality-of-circumstances assessment of whether an actual controversy exists to actions by a party after its patent issues.
Novozymes previously lost in patent battles in Europe on a related technology , and Novozymes lost against DuPont Nutrition Biosciences APS in the United States on a biofuel patent contest in similar circumstances as the case here. Novozymes A/S v. DuPont Nutrition Biosciences APS, 723 F.3d 1336, 2013 BL 192990, 107 U.S.P.Q.2d 1457 (Fed. Cir. 2013) , cert denied March 4 .
Both Danisco and Novozymes have been developing and attempting to patent claims on α-amalyse enzymes.
Danisco was granted a patent (U.S. Patent 8,084,240) on one such variant that is the active ingredient in its RSL products. Novozymes tried unsuccessfully to invoke an interference by claiming priority to an earlier application. Though a patent (8,252,573) was issued with a single claim, the examiner, by refusing to declare an interference, essentially said Novozymes's claim did not cover Danisco's claimed variant.
The day the '573 patent was issued, Danisco filed suit in the U.S. District Court for the Northern District of California seeking a declaration of noninfringement and invalidity. Magistrate Judge Richard G. Seeborg granted Novozymes's motion to dismiss, and Danisco appealed.
Judge Alan D. Lourie, writing for a unanimous court, first summarized the standard for finding the existence of an actual case or controversy to justify a declaratory judgment action, per MedImmune Inc. v. Genentech Inc., 549 U.S. 118, 127, 2007 BL 119118, 81 U.S.P.Q.2d 1225 (2007) : “Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”
The record in this case tilted in favor of finding an actual controversy, the court said, because:
• Novozymes insisted on multiple occasions that the claim that issued reads on Danisco's variant.
• Danisco has been consistently and entirely opposed to Novozymes's position as the latter argued for an interference.
• Novozymes previously sued for patent infringement by related products made by DuPont and Danisco.
• Novozymes never withdrew its allegations or “offered any assurance, such as with a covenant not to sue, that it will not accuse Danisco's RSL products of infringement.”
The district court had assessed only the history of patent litigation between the parties, the Federal Circuit said. “We see no reason why we should not similarly consider a pattern of administrative challenges in analyzing the totality of the circumstances,” it said.
“Contrary to the district court's stated view, we have never held that 'pre-issuance conduct' cannot constitute an affirmative act, nor have we held that the only affirmative acts sufficient to create justiciable controversies are 'implied or express enforcement threat[s],' ” the court said, quoting from the lower court's opinion.
The court thus reversed and remanded for consideration of Danisco's noninfringement and invalidity claims, as well as a priority claim that was not argued before the appeals court.
Judges Sharon Prost and Kathleen M. O'Malley joined the opinion.
Thomas G. Hungar of Gibson, Dunn & Crutcher LLP, of Washington, D.C., represented Danisco. David K. Tellekson of Fenwick & West LLP, Seattle, represented Novozymes.
“I don't think that this case can be relied on for the broad proposition that the fact that a patentee has sought to provoke an interference with a case (be it a patent or an application) owned by another entity will support jurisdiction over a declaratory judgment action filed by the other entity seeking a judgment that the claims in the patentee's patent are invalid or not infringed,” according to interferences expert Charles L. Gholz of Oblon, Spivak, McClelland, Maier & Neustadt, Alexandria, Va.
“I think that it will take more than that--specifically, that it will take that plus some incautiously pugnacious statements--probably (but not necessarily) in the suggestion(s) of interference,” he said, referring to comments made by Novozymes both in its two suggestions of interference and in public comments it made to the PTO after twice being rejected in its suggestions of interference.
Gholz is a member of this journal's advisory board.
To contact the reporter on this story: Tony Dutra in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Naresh Sritharan at email@example.com
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