Just this past week the most recent MedImmune follow on case was decided. Given the fact that this was a patent case, one would expect such a decision to come from Texas, New York, or even here in sunny California. However, the latest pearl of patent wisdom comes from the Northern District of Iowa in the case Highway Equipment Co. v. Cives Corp. The case was brought by Highway Equipment Co. (HECO) for declaratory judgment as to the validity of four patents for a dump truck system held by Cives. As predicted by The Fire of Genius and others, MedImmune did in fact throw out the Federal Circuit Court of Appeals ‘reasonable-apprehension-of-suit’ test for determining subject matter jurisdiction in actions for declaratory judgment. U.S. District Chief Judge Linda Reade left no doubt, stating:

In MedImmune, Inc. v. Genentech, Inc., 127 S.Ct. 764 (2007), the Supreme Court abrogated the Federal Circuit Court of Appeals’ reasonable-apprehension test. See, e.g., MedImmune, 127 S.Ct. at 774 n. 11 (explaining how the reasonable-apprehension test runs afoul of numerous Supreme Court precedents).[T]he phrase ââ?¬Ë?case of actual controversyââ?¬â?¢ in the [Declaratory Judgment] Act refers to the type of ââ?¬Ë?Cases’ and ââ?¬Ë?Controversies’ that are justiciable under Article IIIââ?¬Â? of the Constitution. MedImmune, Inc. v. Genentech, Inc., 127 S.Ct. 764, 771 (2007) (citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240 (1937)

As a result, Judge Reade said MedImmune threw out the ‘reasonable-apprehension-of-suit’ test where

there is an ââ?¬Å?actual controversyââ?¬Â? if there is: (1) an explicit threat or other action by the patentee, which creates a reasonable apprehension on the part of the declaratory judgment plaintiff that it will face an infringement suit and (2) present activity [by the declaratory judgment plaintiff] which could constitute infringement, or concrete steps taken with the intent to conduct such activity. BP Chems. Ltd. v. Union Carbide Corp., 4 F.3d 975, 978 (Fed.Cir.1993)

The question, according to Judge Reade “is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality (emphasis added) to warrant the issuance of a declaratory judgment.” (quoting Md. Cas. Co. v. Pac. Coal and Oil Co., 312 U.S. 270, 273 (1941)). The court found an actual controversy due primarily to the fact that (1) Cives had sent a cease and desist letter to HECO, and (2) there was no reason (in the from of promises or representations by Cives) for HECO to think that there was no threat of suit. The court finished up by stating that they would exercise their discretion and accept jurisdiction because of the “totality of the circumstances.”

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