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This past Wednesday, Judge Kenneth A. Marra of the federal district court in Miami, Florida issued a decision that addresses when a case and controversy arises for purposes of subject matter jurisdiction.

Breckenridge Pharmaceutical and Everett Laboratories  manufacture vitamin supplements.  The two corporations are currently engaged in patent litigation over a product (not at issue in this case) in the District of New Jersey.

On the same day that Breckenridge Pharmaceutical launched a new multi-vitamin named Nutravance, it filed a complaint seeking, among other things, a declaratory judgment that a number of Everett patents were invalid, or in the alternative, that Nutravance didn’t infringe the patents; and that the copyright for an Everett product insert was invalid, or in the alternative, that any copying by Breckenridge of the product insert was fair use.  At the time of the filing, Everett wasn’t aware that Breckenridge had began to market Nutravance.

Judge Marra found that a case and controversy didn’t exist and granted Everett’s motion to dismiss.

The standard for a case and controversy

Judge Marra set forth the standard for a case and controversy as follows:

Courts must determine 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.  The MedImmune Court emphasized that the dispute must be definite and concrete, touching the legal relations of parties having adverse legal interests; and that it be real and substantial and admit of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts. [citation and quotations omitted]

Prior lawsuits

Breckenridge further argued that Everett’s prior lawsuits against Breckenridge and other competitors show that an actual and substantial controversy existed between the parties.  Everett had, according to the complaint, filed five previous lawsuits.  Only one of the lawsuits was against Breckenridge and none of the suits concerned Nutravance.

Judge Marra agreed that prior litigious conduct is one factor to be considered but found that a prior suit premised on other patents is only given minimal weight, and cannot alone create a real and immediate controversy.

Everett’s filing of a suit a week after Breckenridge filed their action

Breckenridge argued that the fact that Everett filed a patent infringement suit against it (presumably in the D. N.J.) only a week after they filed their action supports a finding that there was a case and controversy.  Judge Marra agreed, noting that “the fact that Defendant did sue Plaintiffs . . . reflects the reasonableness of Plaintiffs’ belief that Defendant intended to initiate legal proceedings against them.”

The Court, however, found that subject matter jurisdiction must have existed at the time the declaratory judgment action was filed, and that later events may not create jurisdiction when none existed at the time of filing:

At the time Breckenridge initiated this lawsuit, it did not have an objectively reasonable basis to believe that Everett would sue it for infringement. The fact that Breckenridge chose to throw down the gauntlet without a valid basis should not inure to its benefit because Everett has since countered with a lawsuit of its own. To hold otherwise would impose a chilling effect on the right of a patent holder, who is prematurely sued in a declaratory judgment action, to initiate what it believes is a legitimate infringement action for fear that its suit will be used against it in a forum selection battle. Therefore, while the Court may use a subsequently filed suit to support its conclusion that a “substantial dispute” existed at the time the declaratory suit was filed, if the Court concludes, as it does here, that there was no “substantial dispute” at the time of filing, a subsequently filed suit should not affect the outcome.

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