Prasco, LLC v. Medicis Pharmaceutical Corp.

United States Court of Appeals for the Federal Circuit
2007-1524
PRASCO, LLC,
Plaintiff-Appellant,
v.
MEDICIS PHARMACEUTICAL CORPORATION and
IMAGINATIVE RESEARCH ASSOCIATES, INC.,
Defendants-Appellees.
William A. Rakoczy, Rakoczy Molino Mazzochi Siwik LLP, of Chicago, Illinois,
argued for plaintiff-appellant. With him on the brief were Deanne M. Mazzochi and Amy
D. Brody.
Matthew D. Powers, Weil, Gotshal & Manges LLP, of Redwood Shores,
California, argued for defendants-appellees. On the brief were Barry J. Coyne, Reed
Smith LLP, of Pittsburgh, Pennsylvania, and William J. McNichol, Jr., of Philadelphia,
Pennsylvania. Of counsel were Elizabeth S. Weiswasser and Jennifer H. Wu, Weil,
Gotshal & Manges LLP, of New York, New York.
Appealed from: United States District Court for the Southern District of Ohio
Judge Michael R. Barrett
United States Court of Appeals for the Federal Circuit
2007-1524
PRASCO, LLC,
Plaintiff-Appellant,
v.
MEDICIS PHARMACEUTICAL CORPORATION and
IMAGINATIVE RESEARCH ASSOCIATES, INC.,
Defendants-Appellees.
Appeal from the United States District Court for the Southern District of Ohio in
case no. 06-CV-313, Judge Michael R. Barrett.
___________________________
DECIDED: August 15, 2008
___________________________
Before GAJARSA, Circuit Judge, CLEVENGER, Senior Circuit Judge, MOORE, Circuit
Judge.
GAJARSA, Circuit Judge.
This is a patent case concerning the scope of our jurisdiction over declaratory
judgment actions. Plaintiff-appellant Prasco, LLC (“Prasco”) brought a declaratory
judgment action against defendants-appellees Medicis Pharmaceutical Corp. and
Imaginative Research Associates, Inc. (collectively “the defendants”), seeking a
declaration that one of its products did not infringe various patents owned by the
defendants. The district court dismissed the action for lack of jurisdiction, concluding
that Prasco’s complaint failed to establish a case or controversy under Article III of the
Constitution. Prasco LLC v. Medicis Pharm. Corp., No. 1:06cv313, slip op. (S.D. Ohio
Mar. 27, 2007) (Prasco I); Prasco LLC v. Medicis Pharm. Corp., No. 1:06cv313, slip op.
(S.D. Ohio July 3, 2007) (Prasco II). Because the district court was correct that under
the standard affirmed in MedImmune, Inc. v. Genentech, Inc., 127 S. Ct. 764 (2007),
this action does not present an Article III case or controversy, we affirm.
I.
As this case was dismissed on the pleadings, for the purposes of this appeal, we
must take the facts in the complaint as true. Medicis markets a benzoyl peroxide
cleansing product TRIAZ®, which is marked as being covered by four patents, U.S.
Patent Nos. 5,648,389 (the “’389 patent”); 5,254,334 (the “’334 patent”); 5,409,706 (the
“’706 patent”); and 5,632,996 (the “’996 patent”). Prasco makes a generic benzoyl
peroxide cleansing product OSCION™, which it alleges will directly compete with
Medicis’ TRIAZ® product. The ’389 patent is owned by Medicis; the ’334, ’706, and
’996 patents are owned by Imaginative Research Associates and licensed to Medicis.
On May 26, 2006, Prasco filed the current action, requesting a declaratory
judgment that OSCION™ did not infringe the ’389, ’334, ’706, and ’996 patents. 1 At the
time that Prasco filed its declaratory judgment action, it had not yet begun marketing
OSCION™, but had devoted substantial efforts to development and marketing plans.
Prasco does not dispute that the defendants did not know about the existence of
OSCION™ until the complaint was served. Rather, in its initial complaint, Prasco based
its alleged Article III jurisdiction on two facts unrelated to the existence of OSCION™:
(1) Medicis’ marking of TRIAZ® products with the numbers of the four patents-in-suit to
1
The complaint does not challenge the validity of the four patents.
2007-1524 2
satisfy the public notice requirements of 35 U.S.C. § 287 and (2) an infringement suit
brought by Medicis against Prasco and another generic company in October 2005,
concerning a different cleanser product, covered by an unrelated patent. 2
Defendants moved to dismiss the initial complaint on the grounds that a lack of
case or controversy precluded subject matter jurisdiction. After the suit and the motion
to dismiss were filed, Prasco sent a sample of OSCION™ and an ingredient list to
Medicis and Imaginative Research Associates and requested a covenant not to sue
under the four patents. The defendants did not sign the covenant not to sue and
responded with a single sentence letter advising that they “do not plan to withdraw
[their] motion to dismiss the complaint.” Prasco subsequently filed a second complaint,
styled an “Amended Complaint” that included this post-filing conduct and the fact that it
had begun to market OSCION™. Defendants renewed their motion to dismiss.
Shortly after the Supreme Court issued its decision in MedImmune, Inc. v.
Genentech, Inc., 127 S. Ct. 764 (2007), the district court granted the motion to dismiss
the Amended Complaint. Prasco I, slip op. at 10. MedImmune reaffirmed that the
proper test for subject matter jurisdiction in declaratory judgment actions is “whether the
facts alleged, under all the circumstances, show that there is a substantial controversy,
between the parties having adverse legal interests, of sufficient immediacy and reality to
warrant the issuance of a declaratory judgment.” MedImmune, 127 S. Ct. at 771. At the
time of the district court’s initial decision, this court had yet to issue a decision
interpreting MedImmune, and notwithstanding the MedImmune Court’s statement that
the Federal Circuit’s “reasonable apprehension of suit” test for determining subject
2
Imaginative Research Associates was not involved in the prior suit.
2007-1524 3
matter jurisdiction in declaratory judgment actions contradicted earlier Supreme Court
precedent, id. at 774 n.11, the district court applied the Federal Circuit’s reasonable
apprehension of suit test and found that Prasco had not alleged a case or controversy.
Prasco I, slip op. at 10. In a footnote, however, the court noted that even if MedImmune
had overruled the reasonable apprehension of suit test, it would still conclude that there
was no case or controversy because there was “no definite and concrete dispute that
touches the legal relations of these parties.” Prasco I, slip op. at 11 n.4.
Following this court’s decision in Teva Pharmaceuticals USA, Inc. v. Novartis
Pharmaceuticals Corp., 482 F.3d 1330 (Fed. Cir. 2007), which concluded that
MedImmune had effectively overruled the reasonable apprehension of suit test, id. at
1339, the district court reconsidered its ruling pursuant to a Rule 59(e) motion, but
declined to amend its decision. Prasco II, slip op. at 8. The court concluded that under
all the circumstances there was not an Article III case or controversy. Id. Prasco
appeals the final judgment of dismissal. We have jurisdiction under 28 U.S.C. §
1295(a)(1).
II.
The only issue on appeal is whether the facts alleged in this case establish that
there is a justiciable case or controversy within the meaning of the Declaratory
Judgment Act and Article III of the Constitution. We review issues of jurisdiction de
novo. Novartis, 482 F.3d at 1335.
A.
The Declaratory Judgment Act provides:
In a case of actual controversy within its jurisdiction . . . any court of the
United States, upon the filing of an appropriate pleading, may declare the
2007-1524 4
rights and other legal relations of any interested party seeking such
declaration, whether or not further relief is or could be sought.
28 U.S.C. § 2201. The Declaratory Judgment Act is not an independent basis for
subject matter jurisdiction. Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671-
72 (1950). Rather, it provides a remedy available only if the court has jurisdiction from
some other source. Cat Tech LLC v. TubeMaster, Inc., 528 F.3d 871, 879 (Fed. Cir.
2008) (citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240 (1937)). Such
jurisdiction is limited by Article III of the Constitution, which restricts federal judicial
power to the adjudication of “Cases” or “Controversies.” U.S. Const. art. III, § 2; Cat
Tech LLC, 528 F.3d at 879. The Declaratory Judgment Act’s requirement of “a case of
actual controversy” simply affirms this Constitutional requirement, having long been
interpreted as referring to any case and controversy that is justiciable under Article III.
See Aetna Life Ins., 300 U.S. at 239-40 (explaining that the phrase “cases of actual
controversy” refers “to controversies which are such in the constitutional sense”); see
also MedImmune, 127 S. Ct. at 771. Thus, as long as the suit meets the case or
controversy requirement of Article III, a district court may have jurisdiction over a
declaratory judgment action. Novartis, 482 F.3d at 1340. 3
For there to be a case or controversy under Article III, the dispute must be
“definite and concrete, touching the legal relations of parties having adverse legal
interests,” “real and substantial,” and “admi[t] of specific relief through a decree of a
conclusive character, as distinguished from an opinion advising what the law would be
3
Of course, meeting the requirements of Article III is necessary but not
sufficient for district court jurisdiction. All other jurisdictional requirements, including a
statutory basis for subject matter jurisdiction and personal jurisdiction over the
defendant, must also be met. Subject matter jurisdiction over actions for a declaratory
judgment of patent non-infringement comes from 28 U.S.C. § 1338.
2007-1524 5
upon a hypothetical state of facts.” MedImmune, 127 S. Ct. at 771 (quoting Aetna Life,
300 U.S. at 240-41). As the Supreme Court has recently reiterated, however, there is
no bright-line rule for determining whether an action satisfies the case or controversy
requirement. Id. To the contrary, “[t]he difference between an abstract question and a
‘controversy’ contemplated by the Declaratory Judgment Act is necessarily one of
degree, and it would be difficult, if it would be possible, to fashion a precise test for
determining in every case whether there is such a controversy.” Md. Cas. Co. v. Pac.
Coal & Oil Co., 312 U.S. 270, 273 (1941). Instead of a bright-line rule, “the analysis
must be calibrated to the particular facts of each case,” Cat Tech LLC, 528 F.3d at 879,
with the basic standard being 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,” MedImmune, 127 S. Ct. at 771 (quoting Md. Cas. Co., 312 U.S. at 273); see
also Caraco Pharms. Labs. Ltd. v. Forest Labs., 527 F.3d 1278, 1290 (Fed. Cir. 2008).
While this standard can be analyzed directly, the Supreme Court has also developed
various more specific but overlapping doctrines rooted in the same Article III inquiry,
which must be met for a controversy to be justiciable, including standing, ripeness, and
a lack of mootness. See Caraco, 527 F.3d at 1291 (citing Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560 (1992) (standing); Abbott Labs. v. Gardner, 387 U.S. 136,
149 (1967) (ripeness); and U.S. Parole Comm’n v. Geraghty, 445 U.S. 388, 397 (1980)
(mootness)). As satisfying these doctrines represents the absolute constitutional
minimum for a justiciable controversy, they can be a helpful guide in applying the all-
the-circumstances test. Id.2007-1524 6
Prior to MedImmune, this circuit had generally required that a declaratory
judgment plaintiff in a patent dispute demonstrate (1) conduct by the patentee that
created a “reasonable apprehension” of suit on the part of the declaratory judgment
plaintiff and (2) present activity by the declaratory judgment plaintiff that could constitute
infringement or “meaningful preparation” to conduct potentially infringing activity. See,
e.g., Glaxo Inc. v. Novopharm Ltd., 110 F.3d 1562, 1571 (Fed. Cir. 1997). However, in
MedImmune, the Supreme Court found that requiring a reasonable apprehension of suit
conflicted with the Court’s precedent. MedImmune, 127 S. Ct. at 774 n.11. While the
Supreme Court rejected the reasonable apprehension of suit test as the sole test for
jurisdiction, it did not completely do away with the relevance of a reasonable
apprehension of suit. Rather, following MedImmune, proving a reasonable
apprehension of suit is one of multiple ways that a declaratory judgment plaintiff can
satisfy the more general all-the-circumstances test to establish that an action presents a
justiciable Article III controversy. Caraco, 527 F.3d. at 1291. 4
B.
As an initial matter, the parties dispute whether the allegations in Prasco’s
Amended Complaint that concern actions taken after the filing of the initial complaint
can be used to establish subject matter jurisdiction. Because the Amended Complaint
included allegations regarding events that happened after the first complaint, technically
it is a supplemental complaint, not an “amended complaint.” See Fed. R. Civ. P. 15(d)
4
The second prong of the old test, whether there has been potentially
infringing activity or meaningful preparation to conduct potentially infringing activity,
“remains an important element in the totality of circumstances which must be
considered in determining whether a declaratory judgment is appropriate.” Cat Tech
LLC, 528 F.3d at 880. This element is not in contention here, however, as according to
the complaint, Prasco is currently making and selling OSCION™.
2007-1524 7
(allowing a party to “serve a supplemental pleading setting forth transactions or
occurrences or events which have happened since the date of the pleading sought to be
supplemented”); 6A Wright & Miller, Federal Practice and Procedure § 1504, at 184
(“Parties and courts occasionally confuse supplemental pleadings with amended
pleadings and mislabeling is common. However, these misnomers are not of any
significance and do not prevent the court from considering a motion to amend or
supplement under the proper portion of Rule 15.”).
Rule 15(d) expressly allows for supplemental complaints to “cure” defects in the
initial complaint. Fed. R. Civ. P. 15(d) (“Permission [to serve a supplemental pleading]
may be granted even though the original pleading is defective in its statement of a claim
for relief or defense.”). The Supreme Court has confirmed that supplemental pleadings
can be used to cure subject matter jurisdiction deficiencies. See Mathews v. Diaz, 426
U.S. 67, 75 (1976) (explaining that there was “little difficulty” in a party’s failure to file an
application that was a “nonwaivable condition of jurisdiction” until after he was joined in
the action because “[a] supplemental complaint in the District Court would have
eliminated this jurisdictional issue”); see also 6A Wright & Miller, Federal Practice and
Procedure § 1505, at 191 (explaining that, prior to the 1963 amendment to Rule 15(d),
some courts had not allowed curing of defects through supplemental complaints, but
that the addition of the second sentence to 15(d) in 1963 removed “any uncertainty on
the point”).
Thus, while “[l]ater events may not create jurisdiction where none existed at the
time of filing,” the proper focus in determining jurisdiction are “the facts existing at the
time the complaint under consideration was filed.” GAF Bldg. Materials Corp. v. Elk
2007-1524 8
Corp., 90 F.3d 479, 483 (Fed. Cir. 1996) (emphasis added) (quoting Arrowhead Indus.
Water, Inc. v. Ecolochem Inc., 846 F.2d 731, 734 n.2 (Fed. Cir. 1988)); see also
Rockwell Int’l Corp. v. United States, 127 S. Ct. 1397, 1409 (2007) (“[W]hen a plaintiff
files a complaint in federal court and then voluntarily amends the complaint, courts look
to the amended complaint to determine jurisdiction.”); Connectu LLC v. Zuckerberg, 522
F.3d 82 (1st Cir. 2008). As the district court accepted Prasco’s Amended Complaint, it
is the Amended Complaint that is currently under consideration, and it is the facts
alleged in this complaint that form the basis for our review. 5
C.
Considering the totality of the circumstances, Prasco has not alleged a
controversy of sufficient “immediacy and reality” to create a justiciable controversy. This
“immediacy and reality” inquiry can be viewed through the lens of standing. To satisfy
standing, the plaintiff must allege (1) an injury-in-fact, i.e., a harm that is “‘concrete’ and
actual or imminent, not ‘conjectural’ or ‘hypothetical,’” (2) that is “fairly traceable” to the
defendant’s conduct, and (3) redressable by a favorable decision. Caraco, 527 F.3d at
1291 (quoting Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 102-03 (1998)); see
5
The district court seemed to assume that Prasco had the right to file its
Amended Complaint “as a matter of course” under Federal Rule of Civil Procedure
15(a). Prasco I, slip op. at 5-6. This is incorrect. It is Rule 15(d), not Rule 15(a), that
governs supplemental complaints, even if the complaint is mislabeled as an amended
complaint. Under Rule 15(d) the district court had discretion to decide whether or not to
allow Prasco’s supplemental complaint so long as it did so “upon reasonable notice and
upon such terms as are just.” Defendants conceded at oral argument that it was within
the district court’s discretion to accept Prasco’s Amended Complaint, and they have
never argued that the district court’s arguable failure to acknowledge its own discretion
was an abuse of discretion. Accordingly, any challenge to the district court’s decision to
accept the Amended Complaint is waived. Moreover, as we conclude that there is no
subject matter jurisdiction even when the additional facts alleged in the Amended
Complaint are considered, any such error would be harmless.
2007-1524 9
also DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 (2006). Absent an injury-in-fact
fairly traceable to the patentee, there can be no immediate and real controversy. 6
As Prasco acknowledges, MedImmune does not change our long-standing rule
that the existence of a patent is not sufficient to establish declaratory judgment
jurisdiction. See Capo, Inc. v. Dioptics Med. Prods. Inc., 387 F.3d 1352, 1355 (Fed. Cir.
2004) (“More is needed than knowledge of . . . an adversely held patent.”). The mere
existence of a potentially adverse patent does not cause an injury nor create an
imminent risk of an injury; absent action by the patentee, “a potential competitor . . . is
legally free to market its product in the face of an adversely-held patent.” 7 Novartis,
482 F.3d at 1345.
Prasco argues that a case and controversy has nevertheless been created
because Medicis has caused Prasco to suffer an actual harm—namely, “paralyzing
uncertainty” from fear that Medicis will bring an infringement suit against it. Appellant’s
Br. 23. As Prasco admitted at oral argument, however, any uncertainty has not been
paralyzing. To the contrary, notwithstanding this lawsuit, Prasco has launched its
6
This justicability problem can also be viewed through one of the prongs of
the ripeness doctrine, whether the complained-of-conduct has an “immediate and
substantial impact” on the plaintiff such that withholding court consideration would
cause hardship to the plaintiff. Caraco, 527 F.3d at 1294-95 (quoting Gardner v. Toliet
Goods Ass’n, 387 U.S. 167, 171 (1967)); see also Hillblom v. United States, 896 F.2d
426, 430 (9th Cir. 1990). In the circumstances of this case, the underlying inquiry,
rooted in the requirement that Article III courts cannot issue advisory opinions, is the
same regardless of whether labeled standing, ripeness, or the requirement that the
controversy have “sufficient immediacy and reality.” See MedImmune, 127 S. Ct. at 772
n.8 (explaining that the justicability problem at issue could be described in terms of
standing or ripeness and that “standing and ripeness boil down to the same question in
this case”).
7
The situation is different in the highly-regulated pharmaceutical context, in
which a manufacturer is not permitted to market a drug without FDA approval. See
generally Caraco, 527 F.3d at 1278.
2007-1524 10
OSCION™ product. More importantly, the Supreme Court has emphasized that a fear
of future harm that is only subjective is not an injury or threat of injury caused by the
defendant that can be the basis of an Article III case or controversy. City of L.A. v.
Lyons, 461 U.S. 95 (1983); see also Indium Corp. of Am. v. Semi-Alloys, Inc., 781 F.2d
879, 883 (Fed. Cir. 1985) (“A purely subjective apprehension of an infringement suit is
insufficient to satisfy the actual controversy requirement.”). Rather, “it is the reality of
the threat of . . . injury that is relevant to the standing inquiry, not the plaintiff’s
subjective apprehensions.” Lyons, 461 U.S. at 107 n.8 (emphasis in original); see also
Laird v. Tatum, 408 U.S. 1, 13-14 (1972) (“Allegations of a subjective ‘chill’ are not an
adequate substitute for a claim of specific present objective harm or a threat of specific
future harm; ‘the federal courts established pursuant to Article III of the Constitution do
not render advisory opinions.’”). Although MedImmune clarified that an injury-in-fact
sufficient to create an actual controversy can exist even when there is no apprehension
of suit, it did not change the bedrock rule that a case or controversy must be based on a
real and immediate injury or threat of future injury that is caused by the defendants—an
objective standard that cannot be met by a purely subjective or speculative fear of future
harm. Thus, as we explained post-MedImmune, “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.” SanDisk, 480 F.3d at 1380-81.
Rather than a purely subjective fear or the mere existence of a potentially
adverse patent alone, the alleged injury at the root of most justiciable declaratory
judgment controversies in the patent context is a “restraint on the free exploitation of
2007-1524 11
non-infringing goods,” or an imminent threat of such restraint. Caraco, 527 F.3d at 1291(quoting Red Wing Shoe Co., Inc. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1360
(Fed. Cir. 1998)).
A patentee can cause such an injury in a variety of ways, for example, by
creating a reasonable apprehension of an infringement suit, e.g., Arrowhead Indus.
Water, 846 F.2d at 737, demanding the right to royalty payments, e.g., MedImmune,
127 S. Ct. at 777, or creating a barrier to the regulatory approval of a product that is
necessary for marketing, e.g., Caraco, 527 F.3d at 1292-94. See also Arrowhead Indus.
Water, 846 F.2d at 735 (describing the type of “sad and saddening scenario” that led to
enactment of the Declaratory Judgment Act in which the “patent owner attempts extra-
judicial patent enforcement with scare-the-customer-and-run tactics that infect the
competitive environment of the business community with uncertainty and insecurity”).
Prasco does not allege that defendants had actually restrained its right to freely
market OSCION™ at the time the supplemental complaint was filed. Rather, it is the
threat of future injury that forms the basis for Prasco’s complaint. Thus, there can be no
controversy without a showing that this threat was real, imminent, and traceable to
defendants.
Taking all the facts into account, Prasco has not met this threshold burden of
proving an immediate and real controversy. Important to the totality of the
circumstances analysis in the instant case is that which has not occurred. Generally,
the Supreme Court has affirmed declaratory judgment jurisdiction when “the parties had
taken adverse positions with regard to their obligations, each side presenting a concrete
claim of a specific right” prior to the suit. SanDisk Corp., 480 F.3d at 1379 (citing Aetna
2007-1524 12
Life Ins., 300 U.S. at 240-41 and Md. Casualty, 312 U.S. at 272); see also MedImmune,
127 S. Ct. at 772-77 (concluding that declaratory judgment jurisdiction was proper in the
context of a patent licensing agreement when the patentee claimed a right to royalties
under the licensing agreement, and the licensee asserted that no royalties were owing
because the patent was invalid and not infringed); Altvater v. Freeman, 319 U.S. 359,
365 (1943) (“[T]he requirements of case or controversy are met where payment of a
claim is demanded as of right and where payment is made, but where the involuntary or
coercive nature of the exaction preserves the right to recover the sums paid or to
challenge the legality of the claim.”); Cardinal Chem. Co. v. Morton Int’l, 508 U.S. 83, 96
(1993) (“If . . . a party has actually been charged with infringement of the patent, there
is, necessarily, a case or controversy adequate to support jurisdiction of a complaint . . .
.”). And we have held that “where a patentee asserts rights under a patent based on
certain identified ongoing or planned activity of another party, and where that party
contends that it has the right to engage in the accused activity without license, an Article
III case or controversy will arise.” SanDisk, 480 F.3d at 1381.
In contrast, here the defendants have not accused Prasco of infringement or
asserted any rights to OSCION™, nor have they taken any actions which imply such
claims. Instead, all we have before us is Prasco’s allegation that its product does not
infringe the defendants’ patents. The defendants’ lack of any “concrete claim of a
specific right” is an important factor weighing against a finding of an actual controversy,
particularly given that there has been no actual injury. The lack of any evidence that the
defendants believe or plan to assert that the plaintiff’s product infringes their patents
2007-1524 13
creates a high barrier to proving that Prasco faces an imminent risk of injury. 8
Moreover, not only have the defendants not taken a concrete position adverse to
Prasco’s, but they also have taken no affirmative actions at all related to Prasco’s
current product.
None of the facts on which Prasco relies overcome the complete lack of evidence
of a defined, preexisting dispute between the parties concerning OSCION™. First,
Prasco relies on Medicis’ marking of its products with the four patents-in-suit, consistent
with the requirements of 35 U.S.C. § 287(a). Under § 287(a), a patentee’s marking of
its products with the applicable patent numbers serves as notice to the public that the
goods are patented. Absent such a marking, the patentee is not entitled to receive
damages for infringement that took place before the alleged infringer received actual
notice of the infringement. Id. The failure to mark a product under § 287(a) or to
provide the requisite notice does not prohibit a patentee from bringing an infringement
suit to obtain an injunction or damages occurring after the complaint was served. Id.
Nor does it prevent the patentee from demanding a licensing agreement, or otherwise
interfering with a competitor’s business. Indeed, in the one infringement suit that
Medicis has brought against Prasco—regarding unrelated products and unrelated
patents—it appears that Medicis’ products were not marked with the patents alleged to
be infringed. Conversely, Medicis’ decision to mark its products with the applicable
8
In addition, the lack of clearly delineated, adverse positions by the parties
diminishes the “definite[ness] and concrete[ness]” of any potential controversy and its
fitness for current judicial resolution. Prasco asks this court to find that its benzoyl
peroxide product does not infringe any of the 71 claims of the four patents, each of
which have additional limitations beyond benzoyl peroxide being an active ingredient.
We have no way of knowing which if any of these claims defendants could or might
assert against Prasco.
2007-1524 14
patents provides little, if any, evidence that it will ever enforce its patents. And in
particular, Medicis’ decision to mark its products, prior to any knowledge of Prasco’s
OSCION™ product, is irrelevant to the question of whether Medicis’ believes
OSCION™ infringes the applicable patents or will attempt to interfere with Prasco’s
business on the basis of an allegation of infringement. Thus, Medicis’ marking of its
competing products pursuant to § 287(a) is not a circumstance which supports finding
an imminent threat of harm sufficient to create an actual controversy.
Second, Prasco argues that Medicis’ past history of enforcing patent rights to
protect its “core products” supports a finding of a case or controversy. In particular,
Prasco alleges that Medicis’ infringement suit against Prasco and another generic
company in October 2005 demonstrates a genuine risk that the defendants will also
attempt to enforce its patents against Prasco. 9 Prior litigious conduct is one
circumstance to be considered in assessing whether the totality of circumstances
creates an actual controversy. However, one prior suit concerning different products
covered by unrelated patents is not the type of pattern of prior conduct that makes
reasonable an assumption that Medicis will also take action against Prasco regarding its
new product. See Indium Corp., 781 F.2d at 883. Accordingly, Medicis’ prior suit
premised on other patents cannot alone create a real and immediate controversy, and it
9
Prasco also argues in its briefs that Medicis has brought other suits
against competitors. However, such conduct is not clearly alleged in its complaint.
Accordingly, we will not consider it.
2007-1524 15
is entitled to only minimal weight in analyzing whether such a controversy has been
created. 10
Third, Prasco places significant weight on Medicis’ and Imaginative Research
Associates’ failure to sign covenants not to sue after Prasco sent them samples of
OSCION™ in the wake of their initial motion to dismiss. We have explained that
“although a patentee’s refusal to give assurances that it will not enforce its patent is
relevant to the determination, it is not dispositive.” BP Chems. v. Union Carbide Corp.,
4 F.3d 975, 980 (Fed. Cir. 1993). A patentee has no obligation to spend the time and
money to test a competitors’ product nor to make a definitive determination, at the time
and place of the competitors’ choosing, that it will never bring an infringement suit. And
the patentee’s silence does not alone make an infringement action or other interference
with the plaintiff’s business imminent. Thus, though a defendant’s failure to sign a
covenant not to sue is one circumstance to consider in evaluating the totality of the
circumstances, it is not sufficient to create an actual controversy—some affirmative
actions by the defendant will also generally be necessary. 11
Here, where Prasco has suffered no actual present injury traceable to the
defendants, and the defendants have not asserted any rights against Prasco related to
the patents nor taken any affirmative actions concerning Prasco’s current product, one
prior suit concerning unrelated patents and products and the defendants’ failure to sign
a covenant not to sue are simply not sufficient to establish that Prasco is at risk of
10
Moreover, the prior suit has no relevance to whether there is a case or
controversy with Imaginative Research Associates, as Imaginative Research Associates
was not a party to the prior suit.
11
Conversely, we have held that in certain situations signing a covenant not
to sue is also not sufficient to defeat declaratory judgment jurisdiction if signing the
covenant does not negate the underlying injury. See Caraco, 527 F.3d at 1296-97.
2007-1524 16
imminent harm from the defendants and that there is an actual controversy between the
parties of sufficient immediacy and reality to warrant declaratory judgment jurisdiction.
Although we understand Prasco’s desire to have a definitive answer on whether its
products infringe defendants’ patents, were the district court to reach the merits of this
case, it would merely be providing an advisory opinion. This is impermissible under the
Article III. 12
III.
Considering the totality of the circumstances, Prasco has failed to establish a
case or controversy under Article III. Therefore, the judgment of the district court
dismissing the case for lack of jurisdiction is affirmed.
AFFIRMED
12
Prasco had sued only for a declaratory judgment of non-infringement. We
thus have no opportunity to consider whether similar facts would be sufficient to
establish jurisdiction if, instead, Prasco had conceded infringement and was only
arguing invalidity.
2007-1524 17