In a recent decision out of the District of Massachusetts, Judge Talwani provided litigants with insights into patent subject matter jurisdiction in declaratory judgment actions. Here the patent owner, US Carburetion, had lost previous motions to throw the case out due to lack of declaratory judgment jurisdiction. But after repeatedly asserting that it does not want to enforce its patents against Gen-Connect, and filing a permanent irrevocable convent stating as such, the Court agreed to dismiss the case.
New England Gen-Connect filed the case as a declaratory judgment action after receiving a letter asserting that Gen-Connect’s gas kit devices infringed US Carburetion’s patents, and warning that it “aggressively and actively enforces its valuable patent rights.” US Carburetion moved to dismiss the action on the basis that it had executed an “Irrevocable Covenant Not to Sue” that had a three-year duration. Because the covenant was of limited duration, however, Judge Talwani found that a live case or controversy still existed between the parties. Shortly after, US Carburetion moved to dismiss again on the basis that it had executed an “Extended Irrevocable Covenant Not to Sue,” extending its covenant for an additional four years; the court again denied the motion to dismiss, noting that the patent’s expiration date far exceeded the duration of the covenant not to sue.
US Carburetion then filed a third motion to dismiss, on the basis of a far more substantial covenant. This time, the covenant covered “all past and future sales” of the accused products. In Gen-Connect’s view, this still left a live case or controversy between the parties: it was preparing to launch new products, which it had already developed and planned to release soon, and which utilized the exact same technology as in its current products. But, as Judge Talwani determined, these future, unreleased products are simply not sufficient to satisfy the case or controversy requirement for subject matter jurisdiction – the new products were simply too remote to provide a real case or controversy. Worse yet, the Extended Irrevocable Covenant Not to Sue also covered future products, further reducing the chance that Gen-Connect would be sued for infringement. As there was no imminent lawsuit at hand, Judge Talwani dismissed the declaratory judgment action.
The case is New England Gen-Connect, LLC v. US Carburetion, Inc. and John M. Keller, No. 14-cv-13530-IT, in the District of Massachusetts. A copy of the opinion can be found here.