Sierra Applied Sciences, Inc. v. Advanced Energy Ind. (AEI) (Fed. Cir. 2004)

Sierra designed and tested a power supply that arguably infringes AEI’s Patents. (E.g., U.S. Patent 6,001,224). Sierra filed a declaratory judgment action prior to putting its power supply on the market and conceded that it did not intend to sell the supply unless the Court determined invalidity or noninfringement in favor of Sierra. The court considered whether a sufficient case or controversy existed to support such a declaratory action.

AEI’s counsel, at oral arguments, represented that AEI would not sue Sierra for its current in-house use (for design or testing) of its power supply technology. The Court found that these representations created an estoppel against AEI in future suits and thus eliminated any case or controversy for the associated actions. In reference to a second power supply technology being developed by Sierra, the Court ruled that Sierra’s efforts at developing the device were not sufficiently far along “on the date of the complaint.” Reversed-in-part, vacated-in-part, affirmed-in-part, and remanded.

Geof has more on the case.

Commentary: Declaratory judgments actions require action by both the defendant (e.g., threaten suit) and the plaintiff (e.g., arguably infringing activity) in order to be appropriate. It is interesting that the Court examined the plaintiff’s actions up to the date of filing the complaint (Sierra being far from completing its new product as of filing) but examined the defendant’s actions that occurred much later (counsel conceding at oral arguments that AEI will not file suit for in-house uses).

Monsanto Co. v. Homan McFarling

McFarling replanted some ROUNDUP READY(r) soybeans that he had saved from his prior year’s crop in violation of the Technology Agreement that he signed as a condition of his purchase of the seeds from Monsanto. (U.S. Patents 5,633,435 and 5,352,605). On appeal from a summary judgment, McFarling argued that the Technology Agreement involved an unlawful misuse of Monsanto’s patents by restricting use of “god-made” second-generation seeds. The Court disagreed. Because the first-generation seeds (sold by Monsanto) were nearly identical copies to the second-generation seeds, the court found that the patent scope includes both generations. Thus, the Court rejected McFarling’s appeal and held that the Technology Agreement did not impermissibly extend Monsanto’s rights.

The Court vacated and remanded the district court’s damages award under Missouri law as an “unenforceable and invalid penalty clause.”

Andrew Hagen provides some anti-GMO comments and links. Canola Farmers may also be violating Monsanto’s patents. Here is an older article on the Roundup Ready soybean controversy, and here is another. Andrew Raff provides further commentary.

Update: Farmers in Argentina are allowed to cull seeds for replanting new crops. Apparently there is also a large black-market for GM seeds. (Thanks to Carol Nottenburg for the link).

Inland Steel Co. v. LTV Steel Co. and USX Corp.

The Court found that USX was a “prevailing party” on a claim before the district court, even though USX prevailed on the issue of invalidity in a different forum (a PTO reexamination). (U.S. Patents 4,421,574 and 4,483,723). Thus, USX may have a right to attorney fees and costs under 35 U.S.C. 285 and Rule 54(d) of the Federal Rules of Civil Procedure. The major indication of the status of prevailing party cited by the Court is that the case would have res judicata effect as to any claims brought against USX in the future with respect to the patent claims that were at issue in the district court case.

Reversed and remanded to determine whether the case is “exceptional” or if the court should exercise its discretion to allow or deny costs to the prevailing party.