In the latest of a series of post-MedImmune decisions regarding jurisdiction over declaratory judgment actions in patent cases, the U.S. Court of Appeals for the Federal Circuit further delineated the subtle borderland between jurisdiction and lack thereof. Prasco, LLC v. Medicis Pharmaceutical Corp., Case No. 07-1524, (Fed. Cir., Aug. 15, 2008) (Gajarsa, J.).
The manufacturer of a generic benzoyl peroxide product attempted to bring a declaratory judgment action for non-infringement of four patents that were marked on a competitor's benzoyl peroxide product. The generic manufacturer had not been sued for infringement on these patents nor had it been threatened or approached for a license. The manufacturer based its claim of jurisdiction simply upon the fact that its competitor marked the product with the four patents, had sued Prasco previously on an unrelated patent and a different product and had not signed a covenant not to sue on the four patents in question.
Comparing the inquiry into Article III jurisdiction with tests for standing, ripeness and mootness, the Federal Circuit explained that there was no "injury in fact" or "actual harm" that plaintiff Prasco had suffered and therefore there was no jurisdiction. The Court noted that "MedImmune does not change our long-standing rule that the existence of a patent is not sufficient to establish declaratory judgment jurisdiction."
The Federal Circuit also commented on the circumstances that can lead to jurisdiction under MedImmune. The Court explained that MedImmune did not "do away with the relevance" of a reasonable apprehension of suit to the question of jurisdiction but rather recognized that the "reasonable apprehension of suit" test was not the only route to declaratory judgment jurisdiction. An injury in fact sufficient to create an actual controversy requires "real and immediate injury or threat of future injury that is caused by the defendants—an objective standard that cannot be met by a purely subjective or speculative fear of future harm." The Court enumerated several types of behavior that could create jurisdiction, including creating a reasonable apprehension of suit, demanding royalty payments or creating a barrier to regulatory approval of a product. The Court then concluded that Prasco's stated concerns were too hypothetical to find jurisdiction, noting that Prasco had gone forward with the commercialization of its product despite such subjective concerns.
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