The Federal Circuit today modified its test for jurisdiction to hear cases that seek declaratory judgments of patent invalidity or non-infringement.  The court noted that the U.S. Supreme Court, in MedImmune, Inc. v. Genentech, Inc., 127 S.Ct. 764 (2007), expressly rejected the Federal Circuit’s "reasonable-apprehension-of-imminent-suit" test in favor of an "under all the circumstances" inquiry into whether a "substantial controversy" that justifies declaratory relief exists.  The court then pointed to Teva’s denial, in an application to the Food and Drug Administration, that it infringed any of Novartis’s five patents relating to its Famvir drug.  Although Novartis never threatened to sue Teva for infringement of four of the five patents, the court held that the FDA application presented a sufficiently substantial controversy to warrant declaratory judgment jurisdiction.  Teva Pharmaceuticals USA, Inc. v. Novartis Pharmaceuticals Corp., No. 06-1181 (Fed. Cir. Mar. 30, 2007).

Blawgletter notes that the ruling may encourage potential infringers to create a controversy — by, for example, denying infringement in an agency filing — and run to court for a declaratory judgment.  Blawgletter also suggests that the decision makes a nice parallel to the Federal Circuit’s recent ruling that a patent holder may sue for infringement even if the potential infringer promises not to file a lawsuit during licensing negotiations.

Barry Barnett

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