Infringers, those who fear that they may be accused of infringement, and those planning to infringe, have been emboldened by recent decisions of the C.A.F.C. to bring a declaratory judgment action. The underlying premise, when bringing a declaratory judgment action, is that litigation is inevitable.
So rather than waiting for the axe to fall, the plaintiff in such an action seeks to litigate at a time and, most importantly, in a venue of its choosing. The limiting factor is the need for “standing,” i.e. the existence of a controversy of “sufficient immediacy and reality.”
The key question, of course, is what constitutes “sufficient immediacy and reality”? A recent plaintiff in a declaratory judgment action found that whatever it is, they didn’t have it. (Innovative Therapies, Inc. v. Kinetic Concepts, Inc. et al.)
Kinetic (KCI) was the owner of 5 patents directed to medical devices for negative pressure wound therapy. ITI filed suit for a declaratory judgment that the 5 patents were invalid and/or were not infringed by a device that ITI planned shortly to introduce. ITI had secured expedited pre-marketing F.D.A. approval of its device based upon its representations that it had “the same technological characteristics” as KCI’s previously approved wound therapy device. ITI, therefore, argued that this demonstrated the reasonableness of its belief that KCI would view their device as an infringement.
ITI also relied upon two telephone calls, placed by its Chief Technology Officer, to former colleagues at KCI, namely KCI’s Director of Marketing and KCI’s Senior Vice President of Manufacturing. In the course of these supposedly social calls, the KCI executives made statements which, ITI argued, showed an intent to sue KCI for infringement. In this regard, ITI argued that KCI’s previous history of enforcing its patents against competitors should be considered by the court in evaluating the statements made by the KCI executives. Finally, after the filing of the declaratory judgment action by ITI, KTI DID sue ITI for infringement.
KCI responded that, at the time that ITI filed its declaratory judgment action, “KCI had not seen any device produced or intended to be produced by ITI, that no such device had been sold or offered for sale, and that KCI had not charged ITI with infringement as to any such device.” KCI apparently made a mantra of this statement, repeating it in response to each and every argument raised by ITI. KCI further argued that the decision by the F.D.A. that the ITI device has the “same technological characteristics as the patented product” “does not equate to a statement that ITI’s device infringes any KCI patent.”
The mantra carried the day. The Court, noting that “declaratory judgment jurisdiction generally will not arise merely on the basis that a party learns of the existence of a patent owned by another or even perceives such a patent to pose a risk of infringement, without some affirmative act by the patentee,” found for KCI and dismissed the case for lack of standing.
Just in case there was any question, the Court also exercised its discretion to dismiss the case on the grounds that “ITI had used a ploy to attempt to generate jurisdiction through informal phone calls to past colleagues,” a strategy which “did not comport with the purposes of the Declaratory Judgment Act.”
THE LESSONS TO BE LEARNED: (1) Standing to bring a declaratory judgment action still requires an affirmative act by the patentee; and (2) making phone calls in an effort to entrap the patentee could well piss off the judge.