Infringing Present Activity Needed For Declaratory Judgment

In Benitec v Nucleonics (July 20, 2007) a Federal Circuit panel affirms a district court’s dismissal of Nucleonics’ counterclaims for lack of jurisdiction under the Declaratory Judgment Act. Benitec brought suit for patent infringement against Nucleonics for activities directed to developing and submitting information to the U.S. Food and Drug Administration (“FDA”) for eventually filing of a new drug application. Nucleonics filed counterclaims seeking a declaratory judgment for invalidity and unenforceability. Subsequently, the Supreme Court decided Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005), which read expansively on the statutory “pharmaceutical research exception.” Benitec moved to dismiss its complaint without prejudice on the basis that Nucleonics activities in the aftermath of Merck no longer constituted patent infringement. Nonetheless, Nucleonics sought a declaratory judgment on its counterclaims. The district court granted Benitec’s motion, but dismissed Nucleonics’ counterclaims for lack of jurisdiction.

Citing the Supreme Court’s recent decision in MedImmune, the Federal Circuit panel states that 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. In addition, the panel states that the case or controversy must be present at all stages of the litigation. Finding that Nucleonics failed to meet its burden of showing that it was presently engaged in any activity that could subject it to a claim of infringement by Benitec, or that its future plans met the immediacy and reality requirement of MedImmune that is necessary to support a justiciable controversy, the panel affirms the District court’s decision.