In a decision Tuesday, the Federal Circuit vacated a district court's order denying a declaratory judgment plaintiff attorney fees, but including a scathing description of alleged spoliation by the patentee/DJ defendant.  The Federal Circuit held that the district court's decision was an improper advisory opinion, and therefore vacated with instructions to dismiss.

The patentee, before bringing suit against several defendants, shredded over two million documents on what it called "shred day."   In an effort to avoid having a formal court opinion holding it had engaged in spoliation, the patentee offered to pay the DJ plaintiff's full attorneys' fees in the litigation, and provided an offer of judgment under Rule 68.  The plaintiff declined, and ultimately the court did not award attorney fees, but issued the spoliation order anyway.  On appeal, the Federal Circuit held that when a party essentially "throws in the towel," there is nothing left for the court to decide and therefore no jurisdiction exists.  In this case, the Federal Circuit determined that as soon as attorneys' fees were offered by a party, the case became moot and the trial court lacked any further jurisdiction to hear it or determine issues.  As a result, the order regarding spoliation was vacated.

More on Samsung Elecs. Co. v. Rambus, Inc. after the jump.

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In a decision yesterday, the Federal Circuit affirmed a district court's denial of the defendant's motion to dismiss for lack of subject matter jurisdiction.  The court also denied the defendant's post-verdict motion for judgment as a matter of law.  The defendant contended that because it shipped its allegedly infringing products f.o.b. from its place of business in Canada, it did not sell or import the product in the United States, and thus there was no subject matter jurisdiction over the plaintiff's infringement claims.  Alternatively, the defendant argued these same facts in support of its motion for judgment as a matter of law.

The Federal Circuit noted that the district court had erred in considering the issue of whether allegedly infringing products had been sold or imported in the United States as an issue implicating the court's subject matter jurisdiction.  Instead, this issue was simply an element of the claim to be proven that did not affect the court's ability to hear the case.  On the merits, the Federal Circuit rejected the contention that because legal title to the products changed in Canada that there was not a "sale" in the United States as contemplated by § 271(a), given that the customer was in the United States and the products were shipped there.  As a result, the court affirmed the finding of infringement.

More detail of Litecubes, LLC v. N. Light Prods., Inc. after the jump.

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In a recent decision, the Federal Circuit addressed the issue of declaratory judgment jurisdiction in the context of the Hatch-Waxman Act. The court found that a unilateral covenant not to sue on a patent does not defeat declaratory judgment jurisdiction because there is still a "restraint on the free exploitation of non-infringing goods."

This case had a somewhat peculiar factual scenario:  the first generic company to file an ANDA, and therefore challenge a patent on a prescription drug, is rewarded with a 180-day exclusive marketing period after either (1) the patent is declared invalid or not infringed, or (2) the company begins marketing the drug (typically after the patent expires).  The FDA is prohibited from approving subsequent ANDAs until the exclusivity period ends.

Here, the first company to file was unsuccessful in getting a court to declare one of the two relevant patents (that expires in 2012) invalid or not infringed.  So, a subsequent ANDA filer attempted to trigger the first ANDA filer's exclusivity period by seeking to have the patents declared invalid or not infringed, so the subsequent filer could then begin marketing its generic before the patent expires.  In response, the patent holder granted the subsequent filer a covenant not to sue under the patent, attempting to prevent a judicial determination that might permit a generic from being introduced before the patent's expiration.  Based on the covenant not to sue, the district court dismissed the subsequent filer's declaratory judgment action as lacking a case or controversy under Article III.

The Federal Circuit reversed, finding that although the covenant not to sue removed any reasonable apprehension of suit, under the new "totality of the circumstances" test post-MedImmune, there was still a sufficient controversy to support Article III jurisdiction.  Essentially, the court saw that the patentee was trying to prevent any other drug company from getting a generic to market before 2012, which allowed a finding of a sufficient continuing case or controversy.  As a result, the court reversed the district court's holding that declaratory judgment jurisdiction and remanded the case for further proceedings.

More detail of Caraco Pharm. Labs., Ltd. v. Forest Labs., Inc. after the jump.

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In a ruling today, the Federal Circuit affirmed in part a decision by the International Trade Commission (ITC) concerning the application of 19 U.S.C. § 1337 and 35 U.S.C. § 271(e)(1) to imported products and products imported produced via a patented process.  

The main issue before the court was whether the safe harbor against infringement provided by § 271(e) applies in proceedings under § 1337 relating to method patents.  The court determined that applying the safe harbor exemption would further congressional policy of removing patent-based barriers to federal regulatory approval of medical products, and therefore the safe harbor applied.

In a partial dissent, Judge Linn agreed that the policies of § 271(e) would be furthered by its application to § 1337 proceedings, but that the plain text of the statute precluded that result.  In his words:

I see no basis for concluding that Congress did not intend what it said.  I do not disagree with the majority's policy judgment that § 1337 and § 271 should be brought into synchrony.  But that is not a decision for a court to make, particularly in light of the legislative history.

The court also determined that jurisdiction was appropriate as the ITC's assignment is to prevent and remedy unfair acts flowing from infringement.  The ITC's jurisdiction under § 1337, according to the court, is broad, and it therefore erred in holding that it lacked jurisdiction absent an actual sale or contract for sale of the imported product.

More detail of Amgen, Inc. v. Int'l Trade Comm'n after the jump,

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In a decision Friday, the Federal Circuit decided a case addressing the requirements for a declaratory judgment action post-MedImmune.  The court reversed and remanded a district court's decision that there was no declaratory judgment jurisdiction applying the pre-MedImmune reasonable apprehension of suit standard rejected by the Supreme Court.

The Federal Circuit applied the MedImmune requirement for a showing of "whether the facts alleged under all the circumstances show that there is a substantial controversy between parties having adverse legal interest of sufficient immediacy and reality to warrant the issuance of a declaratory judgment."  The Federal Circuit clarified further in stating that "all of the circumstances" most show a controversy.  Here, there was no difficulty in finding a substantial controversy between the parties, as one day after the declaratory judgment suit was filed, a corresponding infringement suit was filed in another district court.  

In perhaps the most interesting aspect of the decision, the court noted that when both a declaratory judgment case and an infringement case have been filed, there really is no question as to whether the requirements for jurisdiction are met.  Instead, the question is really one of whether the court where the declaratory judgment action is pending should exercise its discretion to hear the case, as the real issue is where the case will be litigated.  Because of this, the Federal Circuit held that the relevant factors for a court to consider are the "convenience factors" considered in the context of transfer under § 1404(a).  Here, these factors weighed in favor of the suit proceeding in the declaratory judgment forum, so it was an abuse of discretion by the district court to decline to hear the case.

More detail of Micron Tech. Inc. v. Mosaid Techs., Inc. after the jump.

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In a decision yesterday, the Federal Circuit remanded a case for further discovery, finding that the district court abused its discretion by denying jurisdictional discovery regarding patent ownership due to the "central relevance" of the information.  The patent ownership dispute arose from an employment contract between one of the two inventors and his employer that purportedly assigned all inventions "which relate in any way to" the business of the employer.  The infringement defendant seized upon this, and obtained an assignment and retroactive license from the employer of any rights it had in the inventions, and then moved to dismiss the case after the close of discovery on the grounds that it was now properly a co-owner of the patent.  Jurisdiction therefore depended on whether or not the inventor or the employer owned the patents in question.  

The district court, after allowing extremely limited discovery on the issue, found that the employer owned an interest the patents and dismissed the case for lack of subject matter jurisdiction.  The Federal Circuit held that the district court had abused its discretion as further discovery was required to fully evaluate the ownership issue, and remanded the case for jurisdictional discovery.  However, the court held that because it characterized the issue as jurisdictional, there was no right to a jury trial on the issue.

Judge Newman dissented in part, finding errors in several aspects of the majority's reasoning, including the conclusion that no jury trial on the underlying jurisdictional issues was necessary, what law applied to whether the contract at issue produced a duty to assign or resulted in an automatic assignment, and the availability of equitable defenses.

More detail of DDB Techs., L.L.C. v. MLB Advanced Media, L.P. after the jump.

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In a decision Friday, the Federal Circuit affirmed a district court's finding of inequitable conduct based on nondisclosure of details of a poster presentation presented at a scientific conference.  While the patentee disclosed the abstract during prosecution of the patents-in-suit, notes taken by one of the patentee's employees with much more detail of what was actually presented at the conference were not.  The court affirmed the conclusion that these notes were highly material, because they directly contradicted statements made by the patentee during prosecution in support of patentability.

The court also affirmed the finding of intent to deceive.  The notes had been widely circulated among the patentee's scientists working in the field of the invention, and the prosecuting attorney was aware of them.  The attorney stated that while he was aware of the notes, he did not know or understand the contents of the notes, even though he discussed them with the employee who took the notes.  The district court found this statement not credible, and the Federal Circuit found no clear error.  As a result, the finding of inequitable conduct, and therefore unenforceability, was affirmed.

There were three related patents also at issue, and the court likewise affirmed the holding of unenforceability as to those patents.  Although the patentee dismissed its infringement claims under those patents with prejudice and offered a covenant not to sue after the first appeal in this case, the court held that because the alleged infringer maintained its claim for attorney fees under § 285, the issue of inequitable conduct was still within the district court's subject matter jurisdiction.  As a finding of inequitable conduct necessarily results in unenforceability of the patents, the court affirmed the unenforceability of the three related patents.

More detail of Monsanto Co. v. Bayer Bioscience N.V. after the jump.

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Last week, the Second Circuit issued a decision addressing whether the registration requirement for bringing a copyright action was jurisdictional or merely a "claim processing" rule. The decision turned on whether the Supreme Court's decision in Eberhart v. United States reduced the class of "jurisdictional" statutes such that 17 U.S.C. § 411(a) should be considered a "claim processing" rule. The majority, following the First, Fourth, Fifth, Sixth, Tenth, and Eleventh Circuits, held that the requirement was jurisdictional, and that all members of the class had to have registered their works for the district court to have jurisdiction. The dissent—focusing instead on statutory language, legislative history, jurisdictional exceptions, and exceptions for foreign works—argued that the requirement was merely a claim processing rule.

Update (12/4):  This holding arguably conflicts with the Ninth Circuit's decision in Perfect 10, Inc. v. Google, Inc. (opinion here, amended opinion released yesterday here).  In footnote 1 of that opinion, the Ninth Circuit held that as long as the plaintiff has at least one registered copyright, a district court had jurisdiction to enjoin infringement of the plaintiff's registered and unregistered copyrights, because "section 411 does not limit the remedies a court can grant."  While the case was also factually distinguished by the Second Circuit in this case, the nature of the § 411 registration requirement is one that would benefit from clarity, either from Congress or the Supreme Court.

More on In re Literary Works in Electronic Databases Copyright Litig. after the jump.

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Addressing an issue of first impression, the Federal Circuit today held that a district court's decision remanding a case to state court on the basis of declining supplemental jurisdiction was unreviewable.  The court determined that this decision was within the class of remands described in 28 U.S.C. § 1447(c).  Because of this, review was barred by § 1447(d), and the court dismissed the appeal.

This decision puts the Federal Circuit in conflict with several other circuits, including the Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits.  The Federal Circuit explained its departure from the holdings of the other circuits by citing the Supreme Court's decision last Term in Powerex Corp. v. Reliant Energy Services, Inc., which cast doubt on the other circuits' reasoning.  Given the circuit split, this case may be one that is ripe for Supreme Court review.

More detail of HIF Bio, Inc. v. Yung Shin Pharms. Indus. Co. after the jump.

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On Monday, the Ninth Circuit addressed the issue of a federal court's subject matter jurisdiction over a trademark declaratory relief action when an infringement action has not been brought and proceedings related to the trademark are pending at the Trademark Trial and Appeal Board (TTAB).  The district court dismissed the case as not presenting a sufficient case or controversy to support jurisdiction, and also noted that the case should be dismissed under the doctrine of "primary jurisdiction" given the concurrent proceedings at the TTAB.

The court held (1) that a defendant had shown a real controversy in order to establish subject matter jurisdiction, (2) that related proceedings at the TTAB could not be the basis for denying jurisdiction under the doctrine of primary jurisdiction, and (3) that the district court abused its discretion when it declined jurisdiction under 28 U.S.C. § 2201.  In doing so, the court rejected the declaratory judgment defendant's contention that any proof of a "case or controversy" was privileged under Rule 408 for purposes of establishing jurisdiction, as the settlement letters were not offered for one of the enumerated reasons in the Rule.  The court also remanded the case back to a different judge.  

More detail of Rhoades v. Avon Prods., Inc. after the jump.     

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