Danisco v. Novozymes: DJ’s and pre-issuance activity

Danisco US Inc. v. Novozymes A/S  (Fed. Cir. 2014) 13-1214.Opinion.3-7-2014.1
Panel: Lourie (author), Prost, O’Malley

On August 28, 2012, Patent No. 8,252,573 issued to Novozymes.  That same day, Danisco filed a Declaratory Judgment action in federal district court seeking a judgment that its Rapid Starch Liquefaction (“RSL”) product did not infringe the single claim of the ‘573 patent and that the claim was invalid.  The district court dismissed Danisco’s actions, concluding that it “was filed prior to the time Novozymes took, or even could have taken, any affirmative action to enforce its patent rights.”  Novozyme’s only conduct, the court observed, was prior to the issuance of the patent and while that could support a conclusion that an actual controversy exists, jurisdiction could not be based on those acts alone.

On appeal, the Federal Circuit (channeling, perhaps, the Supreme Court) treated the district court’s ruling regarding pre-issuance activity as an improper bright-line rule:

The district court’s categorical distinction between pre- and post-issuance conduct is therefore irreconcilable with the Supreme Court’s insistence on applying a flexible totality of the circumstances test, its rejection of technical bright line rules in the context of justiciability, and our own precedent.

Slip Op. at 10.  The Court itself has declined to develop a bright line rule for determining whether there is an Article III case or controversy and the Federal Circuit judges “are likewise not inclined to do so now.”  Rather, the existence of a justiciable controversy involves a flexible totality of the circumstance analysis.

Examined in that light, the Federal Circuit concluded that this case satisfied the case or controversy requirement.  The parties were close competitors in the same field and Novozymes had twice sued Danisco or its predecessors in interest for patent infringement over related products.  But for Novozymes’ behavior during the prosecution of the ‘573 patent and Danisco’s own patent on a RSL product, however, the totality of the circumstances test would probably not have been met.  Novozymes repeatedly sought interferences between them, contending that its patent application covered the same subject matter as Danisco’s patent and that it was entitled to priority.  When the examiner twice rejected Novozyme’s request for an interference, Novozyme took one more action:

Although under no regulatory obligation to do so, Novozymes then submitted public comments to the PTO “in order to clarify [for] the record” its belief that the α-amylase variant claimed by Danisco’s ’240 patent “fall[s] within the scope” of its own claim, which later issued to Novozymes as the sole claim of U.S. Patent 8,252,573 (the “’573 patent”) on August 28, 2012, claiming the benefit of priority from a provisional application filed June 7, 2001. Id. at 456–59. Novozymes further commented that it refused to “acquiesce” to or otherwise be “estopped” by what it deemed to be the examiner’s erroneous and “overly narrow” view of Novozymes’s claim scope, which consequently did not allow Novozymes to invalidate Danisco’s ’240 patent or to claim priority over the ownership of the BSG E188P α-amylase variant invention. Id.

Slip Op. at 4. The Federal Circuit viewed this as an “allegation that Danisco’s α-amylase variant is encompassed by and would infringe the claim that issued in Novozymes’s ’573 patent.”  Id. at 9.  The court also noted that there was no Already v. Nike-style covenant not to sue that might moot the controversy.  Considering all the circumstances, the panel concluded that the case or controversy requirement was met here, and returned the case to the district court for proceedings on the merits.

Although not a new holding, the Federal Circuit also ruled that the fact that Novozyme had never affirmatively accused Danisco’s products of infringing the patent was not dispositive on the question of whether an actual controversy exists.

6 thoughts on “Danisco v. Novozymes: DJ’s and pre-issuance activity

  1. I also think it was significant that Novozyme had previously amended one of its patent applications to read on a Danisco product, then sued. The claim was declared invalid for lack of written description support.

    One should note here also that Novozyme claims priority back to a provisional filed in 2001 while Danisco claims priority back to a provisional filed 2008. If there was an interference, I would think that Novozyme would win. But the question really is, do they have written description support. Given their past history, I would think that Novozyme might have some difficulty in that area.

  2. From all the recited facts the D.J. suit plaintiff here had reason to fear being sued for patent infringement, and presumably wanted to avoid the suit being brought in E.D. TX or other inconvenient locale. The patent owner will have now to file a counterclaim for patent infringement anyway, so this is really just about where the patent suit will be conducted [and the natural resistance of many judges outside of E.D. TX to take on the extra work of patent cases].

    BUT, by filing a D.J. suit one is now deprived of the opportunity to file an IPR that can be much cheaper and faster than a D.J. suit if there is good patent or publication prior art available. Clients need to be told that.

  3. Interesting that the Fed. Cir. and Scotus eschew bright line rules that would provide notice to the public of what the law is, but DEMAND that patentees claims meet that standard.

    1. Clarity applies to thee, and he – but not to me.

      It’s good to be a lifetime government appointee.

  4. Thus is the “guidance from which legal outcomes may be predicted” (or clarity) distributed on an as-needed basis.

    Or is that, as required?
    per se?
    as such?
    to each according to their needs?
    whatever to reach a desired end?
    whatever to keep (judicial) power as it is?

    /off wry sardonic bemusement

  5. “The existence of a justiciable controversy involves a flexible totality of the circumstance analysis.”

    Meaning: do not expect us to do the intellectually honest and cognitively challenging thing of rendering guidance from which legal outcomes may be predicted. Instead, we will cloak our judicial failure under the guise of subtlety, and by this expedient more or less decide each case by the seat of our pants at our unfettered whim, as befits an enlightened elite.

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