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Prasco, LLC v. Medicis Pharmaceutical Corp.

United States Court of Appeals for the Federal Circuit · 2008 · Civil Procedure

Civil ProcedureDeclaratory JudgmentArticle III JurisdictionPatentArticle IIIcase or controversydeclaratory judgmentpatent noninfringement

Facts

Medicis marketed a competing benzoyl peroxide cleanser, TRIAZ, marked with four patents; Prasco developed and later began marketing OSCION, which it alleged would directly compete with TRIAZ. When Prasco filed suit, defendants did not know OSCION existed, and Prasco based jurisdiction on Medicis's patent marking and on an earlier infringement suit by Medicis against Prasco involving different products and unrelated patents. After suit was filed, Prasco sent defendants a sample and ingredient list for OSCION and requested a covenant not to sue; defendants declined to withdraw their motion to dismiss but did not accuse OSCION of infringement or otherwise assert rights against it.

Issue

Whether, under MedImmune's all-the-circumstances standard, Prasco's allegations established a substantial controversy of sufficient immediacy and reality to create Article III declaratory judgment jurisdiction over its noninfringement claim.

Rule

A declaratory judgment action satisfies Article III only when, under all the circumstances, there is a substantial controversy between parties with adverse legal interests of sufficient immediacy and reality to warrant relief. In patent cases, the existence of a patent or a plaintiff's subjective fear of suit is not enough; absent actual injury, jurisdiction generally requires some affirmative act by the patentee that creates a real and immediate injury or threat of future injury fairly traceable to the patentee. A patentee's refusal to grant a covenant not to sue is relevant but not dispositive, and supplemental pleadings under Rule 15(d) may be considered to cure jurisdictional defects.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

North Harbor Labs in Cleveland develops a skin cleanser that will compete with a rival product sold by Seaview Therapeutics, a fictional company based in Phoenix. Seaview marks its own bottles with several patent numbers, but it has never contacted North Harbor, never seen North Harbor's product, and took no action directed at that product before North Harbor filed a federal declaratory judgment action for noninfringement.

Is there likely Article III jurisdiction over North Harbor's declaratory judgment action?

Explanation. Under the majority's all-the-circumstances approach, a patent's existence does not itself create a case or controversy, and marking under 35 U.S.C. § 287(a) merely gives public notice. Without some affirmative act by the patentee directed at the plaintiff or its product, there is no objectively real and immediate threat fairly traceable to the patentee. The plaintiff's competitive posture alone is not enough. (Derived from Prasco, LLC v. Medicis Pharmaceutical Corp. (2008).)