IP News

Federal Circuit: Actual Controversy Existed When Patent Owner Did Not Know Existence of Specific Products

Asia Vital Components Co. v. Asetek Danmark A/S, No. 2015-1597 (Fed. Cir. Sept. 8, 2016) (precedential).

On Sept. 8, 2016 the Federal Circuit reversed the Eastern District of Virginia's dismissal of a patent dispute between Asia Vital Components Co. (AVC) and Asetek Danmark A/S (Asetek) for lack of subject matter jurisdiction. The district court found that the complaint did not plead sufficient facts to demonstrate a substantial controversy between the parties for a declaratory judgment, because the defendant-patent owner, Asetek, was not aware of the products at issue until the lawsuit was filed. Asetek initially wrote to AVC, alleging patent infringement over the manufacture and sale of a product called Liqmax120s, which actually was sold by another company unrelated to AVC.

The panel relied on the Supreme Court's decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007), which provides the test for whether an “actual controversy” exists is whether the facts as 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. Although the MedImmune test relaxed the previous standard under the test of” reasonable apprehension of imminent suit,” it did not alter the “bedrock” objective rule that an actual case or controversy must be based on the “real and immediate” injury or threat of future injury that is caused by the defendant, which cannot be met by a plaintiff's purely subjective fear of future harm. With respect to potential patent claims, this means that a case and controversy will not exist simply because a party learns of the existence of a patent and perceives a likelihood of litigation, but instead, based on the total circumstances, there must be “conduct that can be reasonably inferred as demonstrating intent to enforce a patent.” Hewlett-Packard Co. v. Acceleron LLC, 587 F.3d 1358, 1363 (Fed. Cir. 2009).

Here, the panel found that although the initial demand letter identified the wrong products, Asetek's conduct thereafter, including its aggressive correspondence with AVC and Asetek's threats to AVC's customers that they may be liable for patent infringement, can be reasonably inferred as demonstrating Asetek's intent to enforce its patent rights. Further, the panel found that the threat of suit was real and immediate because AVC had manufactured prototypes for the products at issue, intended to market and sell the products in the U.S., had customers lined up to purchase the products, and those products would compete against Asetek's products.

Federal Circuit Upholds Prosecution Estoppel Determination

UCB, Inc. v. Yeda Research and Dev. Co., No. 2015-1957 No. 2015-1957 (Fed. Cir. Sept. 8, 2016) (precedential)

On Sept. 8, 2016, a Federal Circuit panel of Judges Newman, Lourie and Chen issued a unanimous decision, authored by Judge Newman, in UCB, Inc. v. Yeda Research and Dev. Co., No. 2015-1957 (Fed. Cir. Sept. 8, 2016). UCB filed a declaratory judgment action against Yeda for non-infringement of its Cimzia' brand antibody and invalidity of Yeda's '923 patent. Yeda counterclaimed for patent infringement. The Eastern District of Virginia granted summary judgment of non-infringement in favor of UCB and Yeda appealed to the Federal Circuit.

The '923 patent is directed to a monoclonal antibody that binds a defined human cytotoxin. The District Court rejected Yeda's claim construction that would allow the '923 patent to cover both human and chimeric (mouse) antibodies. During prosecution of the '923 patent, Yeda submitted claims specific to “rat, hamster and human antibodies and chimeras thereof” as well as claims specifically encompassing “chimeras of” mouse monoclonal antibodies and “nonmurine” monoclonal antibodies. These claims were rejected by the Examiner on the basis that they constituted new matter, and Yeda cancelled them. Yeda's claims that were allowed did not mention chimeric antibodies and were not amended during prosecution in that respect.

Both the District Court and the CAFC found that, although issued claim 1 was not specifically rejected for new matter, Yeda is estopped from obtaining a claim construction that recovers claim scope that was withdrawn in order to obtain issuance of the patent. The panel explained that although “a patent applicant cannot later obtain scope that was requested during prosecution, rejected by the Examiner, and then withdrawn by the applicant.” Therefore, the claims of the '923 patent were properly construed as excluding chimeric and humanized antibodies.

Howard J. Shire is Editor-in-Chief of this newsletter and a Partner in the New York office of Andrews Kurth Kenyon. He can be reached at [email protected]. Jessica Cohen Nowak is an associate with the firm. She can be reached at jcohennowak@andrews kurthkenyon.com.