A previous post discussed the dismissal of Danisco‘s declaratory judgment action against its rival Novozymes. As described by the San Francisco district court decision, the Danish companies are “reputedly the two major competitors in the field of developing and supplying industrial enzymes used in the process of converting corn into ethanol fuel.”
Danisco’s lawsuit sought a judgment that the company’s Rapid Starch Liquefaction (RSL) alpha-amylase products did not infringe Novozymes’s U.S. Patent No. 8,252,573 (’573 Patent) and that the ’573 Patent is invalid.
The ’573 Patent is entitled “Alpha-amylase variant with altered properties” and is directed to an isolated variant polypeptide having alpha amylase activity and containing a proline substitution at position 188 (to yield a variant called “E188P”).
In the alternative, Danisco asked the court for a determination that its own U.S. Patent No. 8,084,240 (’240 Patent) has priority over the ’573 Patent. The ’240 Patent is entitled “Geobacillus stearothermophilus alpha-amylase (AMYS) variants with improved properties” and directed to an isolated variant of a truncated Geobacillus stearothermophilus enzyme also containing the proline substitution at position 188.
Novozymes had added the position 188 proline substitution to a claim late in prosecution of the application that issued as the ’573 Patent after learning that Danisco’s ’240 Patent would be granted with such a claim.
Although the district court conceded that the circumstances might reasonably suggest that Novozymes wanted to enforce the ’573 Patent against Danisco at some point, it held that events occurring prior to patent grant alone cannot support declaratory judgment jurisdiction.
Danisco appealed the district court decision dismissing the case, and the Court of Appeals for the Federal Circuit recently reversed the lower court, holding there was an actual controversy and that the DJ action could be sustained.
The appeals court made clear that the distinction between a patentee’s activities before and after a patent issues is not significant to a DJ analysis that is supposed to be flexible:
The district court’s categorical distinction between pre- and post-issuance conduct is . . . irreconcilable with the Supreme Court’s insistence on applying a flexible totality of circumstances test, its rejection of technical bright line rules, and our own precedent. Contrary to the district court’s stated view, we have never held that “pre-issuance conduct” cannot constitute an affirmative act . . .
The Federal Circuit found “the record demonstrates that a definite and concrete patent dispute exists” between the parties, based on Novozymes’s actions and statements about the Danisco enzyme product before and after its ’573 Patent issued:
Novozymes has insisted on multiple occasions that its ’573 patent claim reads on the BSG alpha-amylase with an E188P mutation, which is the active compound in Danisco’s RSL products and is claimed in Novozymes’s patent. The record shows that Novozymes sought its patent because it believed that Danisco’s products would infringe once the claim issued.
Significantly, the court of appeals observed that the parties have clearly staked out opposing legal positions on the patent rights at issue:
Novozymes twice asserted that Danisco’s ’240 patent was invalid and that Novozymes, not Danisco, is entitled to a patent on the claimed BSG E188P alpha-amylase invention. Danisco has taken a legal position that is entirely opposed to the position taken by Novozymes, viz., that Danisco successfully prosecuted and obtained the ’240 patent, that it is the rightful owner of the claimed invention, and that its RSL products do not infringe the claim of Novozymes’s ’573 patent.
In light of all the circumstances, including previous litigation and Novozymes’ conduct prior to issuance of the ’573 Patent, the Federal Circuit held that there is declaratory judgment jurisdiction here:
Novozymes has twice sued Danisco or its predecessors in interest for patent infringement regarding related liquefaction products. The parties have plainly been at war over patents involving genetically modified alpha-amylase enzymes and are likely to be for the foreseeable future. They thus have adverse legal interests over a dispute of sufficient reality that is capable of conclusive resolution through a declaratory judgment.