Danisco US Inc. v. Novozymes A/S and Novozymes North America, Inc.

Docket No. 2013-1214

March 11, 2014

Brief Summary: DC dismissal of DJ action for lack of “justiciable Article III case or controversy” reversed and remanded because “Novozymes’s behavior” made “Danisco, quite reasonably,…more than a ‘nervous…possible infringer’, even if Novozymes if not currently ‘poised on the courthouse steps’ to sue Danisco for infringement” (based on totality of the circumstances).

Summary: Danisco appealed USDC ND CA dismissal of its DJ action against Novozymes for lack of subject matter jurisdiction. The opinion first noted that in an earlier dispute between the parties, Novozyme’s patent that it “amended…to claim one of Danisco’s new products and then sued…on the same day the patent issued” was invalidated for lack of written description (Novozymes, FC 2013). This dispute relates to Danisco’s US 8,084,240 directed to a truncated Geobacillus stearothermophilus (BSG) α-amylase variant peptide having an “E188P” substitution useful in starch liquefaction assays. The opinion explains that “[s]hortly after the PTO issued a Notice of Allowance [for the ‘240 patent], Novozymes again amended one of its own then-pending patent applications to claim a BSG α-amylase variant peptide with an E188P substitution, and subsequently requested an interference contesting entitlement to priority”. That request was denied by the PTO because “Danisco’s then-pending claim did not meet the sequence identity limitations of Novozymes amended claim.” Novozymes then filed an RCE challenging the examiner’s conclusions and arguing for priority, which was rejected. Novozymes then submitted public comments to the PTO, stating its belief that the variant of Danisco’s claims “‘fall[s] within the scope’ of its own claim” and “refused to ‘acquiesce’ to or otherwise be ‘estopped’ by what it deemed to be the examiner’s erroneous and ‘overly narrow’ view” of Novozymes’ claim. When Novozymes’ ‘573 patent issued, Danisco filed a DJ action that its products did not infringe that patent which was denied (“no justiciable Article III case or controversy”) which is the subject of this appeal. The FC panel wrote that “Novozymes seeks a bright line rule…that a declaratory judgment defendant must first threaten suit on an issued patent or otherwise take action to enforce its rights in an issued patent.” Citing Arkema (FC 2013), Organic Seed Growers (FC 2013) and MedImmune (US 2007), it explained that a patentee does not need to make specific accusations of infringement; all that is required is for the requesting party to demonstrate a “‘substantial risk’ that the harm will occur.” Here, the panel found “[t]he record demonstrates a definite and concrete patent dispute exists between the parties…of sufficient reality that is capable of conclusive resolution through a declaratory judgment.” Given “Novozymes’s behavior”, the panel concluded “that Danisco, quite reasonably, is more than a ‘nervous…possible infringer’, even if Novozymes if not currently ‘poised on the courthouse steps’ to sue Danisco for infringement” (citing Vanguard, FC 2002) (“Danisco is in the position of either abandoning its RSL products or running the risk of being sued for infringement….”) and reversed and remanded the DC decision.

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