Two-way Declaratory Judgment: Court rejects “competing patent” theory of jurisdiction

Creative Compounds v. Starmark Labs (Fed. Cir. 2011).

Creative and Starmark compete in manufacturing and selling the body-building supplement dicreatine malate. Both also hold patents that cover aspects of the supplement.  Starmark’s Patent No. 7,109,373 claims a genus of creatine salts and methods of making the salts; Creative’s Patent No. 7,129,273 has a narrower set of claims directed to dicreatine malate and methods of administering that compound.  In the lead-up to litigation, Starmark’s predecessor-in-interest (SAN) first sent a letter to supplement buyers to advise the industry of its patent. Creative then sent similar letter to buyers identifying its own patent and also noting its belief that the SAN patent was unenforceable.  Starmark itself was not formed until two months after Creative sent its letters.

Although both parties held patents, Creative started the lawsuit with a declaratory judgment complaint seeking a judgment that Starmark’s ‘373 patent was invalid and not infringed. In its answer/counterclaim, Starmark alleged infringement of its ‘373 patent and also demanded a declaratory judgment that it did not infringe Creative’s ‘273 patent.   

A court’s subject matter jurisdiction over a declaratory judgment complaint requires that the requested judgment relate to an actual,  substantial, immediate and adverse legal controversy between the parties. See MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007).  A DJ defendant (i.e., the patentee) generally waives objection to jurisdiction when it files an answer with a cross-allegation of infringement.  Here, however, Creative was able to successfully challenge the court’s jurisdiction because it did not allege infringement of its own patent.

In many ways, this case is a level-of-abstraction problem.  Clearly the parties compete in the market place and for buyers and they hold potentially overlapping patents that have been linked in correspondence with third parties. However, the court focuses its attention on the more narrow question of whether there is a case-or-controversy surrounding the ‘273 patent so as to allow the court to hold jurisdiction over a declaratory judgment action seeking to invalidate that patent. 

In its decision, the Federal Circuit came to the interesting conclusion that Creative’s seemingly threatening letter could not be seen as any accusation of infringement against Starmark because Starmark was formed as a legal entity by SAN after the letters were mailed.

Here, Creative never accused Starmark of infringing its ’273 Patent. While Creative did send letters to purchasers of dicreatine malate alleging that dicreatine malate would infringe claims of the ’273 Patent, none of these letters were sent to Starmark. To the extent Starmark contends those letters were sent to its customers, this contention rings hollow when the letters were sent to SAN’s customers in August 2006 and Starmark was not formed until October 2006. In the absence of an indemnity agreement between Starmark and one of these “customers,” Starmark has, at most, only an economic interest in clarifying its customers’ rights under Creative’s patents. Such an economic interest alone, however, cannot form the basis of an ‘actual controversy’ under the Declaratory Judgment Act. Thus, the district court lacked declaratory judgment jurisdiction over the ’273 Patent.

The court also made clear that the “competing patent” scenario does not tend to create jurisdiction with regard to the opposing party’s patent unless the the legal claim being sought is akin to an interference proceeding.  

Readers may notice that these declaratory judgment rulings appear to follow a formalistic approach that make a distinction without explaining the importance.  For instance, it appears that the “late” formation of Starmark had very little practical impact because the new company was a subsidiary that involved the same individuals, the same products, and same market structure as the predecessor company.  


  • The decision also affirms the lower court summary judgment ruling that Creative infringed the ‘373 patent and that the patent was not invalid.  It does not appear that Creative appealed the permanent injunction.
  • Anthony Roberts has some background information on the parties. [Link]

11 thoughts on “Two-way Declaratory Judgment: Court rejects “competing patent” theory of jurisdiction

  1. 11

    Still, Cy, I don’t think they can relitigate against Starmark whether the ‘273 patent is entitled to a priority date prior to the ‘373 patent based on prior invention.

    That pretty much sinks the ‘273 against Starmark and its customers.

  2. 10

    Never mind, Ned. I misread your post to say that Anon was missing something. Back to sleep.

  3. 9

    C’mon, Ned. You can do better than that. Please explain why Creative can’t assert the ‘273 patent against Starmark or its customers. I’d like to know, too.

  4. 7

    Why not? The ‘273 wasn’t asserted in this litigation and it wasn’t a compulsory counterclaim.

    Am I missing something? (I very well may be.)

  5. 6

    35 USC 291 – “Interfering Patents” – is said to only be able to determine respective claims validity [but in some cases, due to In re Hilmer, both patents may be valid] and not to be able to determine infringement. Also, my recollection is that what is considered “interfering” in this statute has been so narrowly interpreted in at least one Fed. Cir. decision that this statute has rarely been successfully used.
    Also, as an alternative in such cases, one party could file a reissue application to eventually get into a normal PTO interference. [Assuming the PTO under Kappos finally fixes its blatent ignoring of its own MPEP requirement for examiners to handle all reissues on a TOP priority basis (instead of a “put it on the bottom of the pile” basis}.]
    Or, best yet?, file a reexamination if you have an earlier filing date. If the reexamination is inter partes and the subject patent owner files a typical 102(g)-flakey Rule 131 declaration to “swear behind” the 102(e)/103 prior art date of the requestor, the requestor can rebut it. This should be a lot cheaper than a DJ lawsuit, especially with the inevitable mandatory infringement suit counterclaim.
    [As always, this is a general comment on such situations, not necessarily a comment on this specific case, because none of us are ever in possession of all underlying factors.]

  6. 4


    I follow your argument that Creative can’t practice the ‘273. I don’t see how claim preclusion prevents it from asserting infringement of the ‘273 patent though.

  7. 3

    Creative did not allege a count under Section 291 even though its major theory of invalidity of Starmark’s ‘373 patent was one of prior invention a species of Starmark’s genus, that it itself patented in the ‘273 patent. Had it raised a count under Section 291, there would have been jurisdiction for Starmark to litigate the validity of the ‘273 patent. It appears that Creative chose to forgo its 291 count to focus instead on a motion to dismiss Starmark’s attack on the validity of the ‘273. It did succeed in this latter strategy, on appeal. But now the question becomes, why bother?

    Creative now owns a potentially valid patent, the ‘273, on an invention it apparently invented first; but nevertheless finds itself permanently enjoined from using that invention by a subsequent inventor who patented the very same invention. Creative has now won the jurisdictional dispute to keep its patent valid, but so what? What kind of victory is this? It is permanently enjoined and its patent on this invention worthless.

    Creative’s litigation strategy in failing to bring a Section 291 count regarding the interfering species makes no sense whatsoever to this viewer. What are they going to do with the ‘273 patent to the species? Res Judicata should prevent any infringement lawsuits against Starmark and its customers under the ‘273 patent regarding the species claims. Creative won, but lost as well. Why even appeal?

  8. 2

    And I guess the Airs have it then.

    From Tani to me oh my,
    from Superman to Kent.
    From the time it takes to Sue you,
    sixteen years, I now can vent.

    I was given a cite in Japanese,
    but was told it needed air.
    And when I explained what I was taught,
    It was the beginning of my despair.

    But now they have the answer,
    and you will have one too.
    Finally sixteen years later,
    you will get your due.

    They even morphed the citings,
    but now it’s rather easy.
    Sato et al. and then Lowery,
    don’t sound so Japanezzey.

  9. 1

    Perhaps Mooney may want to investigate the use of dicreatine malate as a body building supplement to enhance his “micro-entity.”

Comments are closed.