Declaratory Judgment Actions, Covenants Not to Sue, and Bad Patents: A Call to Allow the Judiciary to Weed out Bad Patents While Adhering to the "Case or Controversy" Requirement

By Tiedeman, Jason Scott; Gorman, Eric D. | The Journal of High Technology Law, January 2013 | Go to article overview

Declaratory Judgment Actions, Covenants Not to Sue, and Bad Patents: A Call to Allow the Judiciary to Weed out Bad Patents While Adhering to the "Case or Controversy" Requirement


Tiedeman, Jason Scott, Gorman, Eric D., The Journal of High Technology Law


It seems incongruous that a potentially invalid patent may be allowed to remain merely because the patent owner issues a CNS. It seems equally incongruous to force a party to continue with litigation when no longer wishes enforce its patent against a DJ plaintiff. In its current guise, our system allows for a patentee to remove the case and controversy requirement and thus end litigation. It may do this even when--or perhaps because of--a potentially invalidating piece of prior art has been uncovered.

To resolve these seemingly conflicting ideals, the authors propose two options that would resolve this issue. Initially, the authors propound the extension subject matter jurisdiction to all claims of invalidity brought under the Declaratory Judgment Act such that a CNS may not be used to obviate a potentially invalidating piece of prior art. The authors also assert that the use of ex parte reexamination, instigated by the courts and administered by the USPTO, is an equally compelling means to resolve this issue.

A. The Extension of Currently-Accepted Judicial Means

As noted in the preceding sections, a court may extend jurisdiction over claims of violation of the Sherman Act or claims based on Section 285. (410) Each of these derives its jurisdiction-retaining power because they constitute their own cause of action and are independent of the underlying infringement suit. (411) Claims brought pursuant to the Declaratory Judgment Act must always carry their own jurisdiction. (412)

However, neither of these causes of action were initially held to confer jurisdiction. (413) In both cases either the Supreme Court or the CAFC sided with the party claiming that jurisdiction existed, thus allowing the court to determine whether the inequitable assertion of a patent had occurred. (414) Prior to their assertion by the aggrieved party, neither of these causes of action was originally seen to satisfy the case or controversy requirement on their own accord. (415) It was only after the court recognized the inequitable burden placed on the patent system that these jurisdiction-retaining means were recognized. (416)

Further, the court has not hesitated in extending jurisdiction to claims of invalidity or unenforceability levied against patents that are interrelated or derived from the same general invention. (417) This shows that if the court considers a wrong egregious enough, it will project its equitable powers to right the wrong. (418) It is unclear whether a court may extend subject matter jurisdiction to patents subject to a CNS or whether such power resides in the equitable powers of the court itself. (419) Yet courts may, and do, extend this power. (420)

The combination of the Declaratory Judgment Act and the court's equitable function lays the groundwork for the extension of jurisdiction. Functionally, the proposed extension of jurisdiction would only occur in the limited circumstance where, during litigation, the parties became aware of a potentially invalidating piece of prior art and a CNS was issued to avoid this piece of art. Thereafter, the court would exercise its equitable powers and would retain jurisdiction to consider the art in question. If the art was not invalidating, there would be limited harm in this exercise. If the art was found to be invalidating, the court would have utilized the opportunity to fulfill the important function of removing an improvidently granted patent.

Extending jurisdiction in this way would better accomplish the Declaratory Judgment Act's intended purpose and would forestall the assertion of a patent that does not disserve the limited monopoly granted to it. (421)

B. Utilizing Administrative Remedies

Administrative remedies before the USPTO provide a further means by which the judiciary may address the validity of patent claims even in the face of a CNS. Of the available administrative remedies, it is ex parte reexamination which presents the most viable solution. …

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Declaratory Judgment Actions, Covenants Not to Sue, and Bad Patents: A Call to Allow the Judiciary to Weed out Bad Patents While Adhering to the "Case or Controversy" Requirement
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