A blog about patent, copyright and trademark law in the U.S. District Court
for the Southern District of New York

Court Finds Lack of Subject Matter Jurisdiction Over Invalidity Claim After Plaintiff Dismissed its Infringement Claim

In a November 10, 2015 ruling, Judge Jed S. Rakoff dismissed the defendant's declaratory judgment counterclaim of invalidity for lack of subject matter jurisdiction when the plaintiff dismissed its infringement claim after an adverse Markman construction.  The plaintiff also offered a covenant not to sue that was effective as to future claims against the defendant unless the adverse claim construction was reversed.  Judge Rakoff found that the covenant not to sue eliminated subject matter jurisdiction over the invalidity counterclaim, writing:
In light of the parties' joint stipulation of non-infringement and plaintiff's covenant not to sue on the [patent-in-suit] barring a change in the law of the case, there is no live controversy between the parties as to infringement and defendants have no immediate interest in the validity of defendants' . . . Patent as long as that remains so. While defendants might gain such an interest if plaintiff both appeals the Court's Markman Order and persuades the Federal Circuit of what it could not persuade this Court, there is no certainty that plaintiff will even take an appeal. Plaintiff has not committed to doing so and defendants themselves recognize that plaintiff very well may choose not to, asserting that plaintiff is posturing in threatening to appeal. . . . A controversy this speculative simply cannot be considered to have the "sufficient immediacy" needed to invoke the Declaratory Judgment Act. As such, this Court does not have jurisdiction to entertain the invalidity claim.
Judge Rakoff also ruled that even if the Court had jurisdiction, the Court would decline in its discretion to exercise it given the lack of any immediate controversy.  Judge Rakoff found that "that it would be imprudent and a potential waste of both the parties' and judicial resources for the Court to proceed to determine the validity of the [patent-in-suit], when plaintiff has categorically dropped its infringement allegations barring a reversal of the Court's construction of the term" at issue.
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