519 F.Supp. 356 (D.Del. 1981), Civ. A. 80-358, Enka B. V. of Arnhem, Holland v. E. I. Du Pont De Nemours & Co.
|Docket Nº:||Civ. A. 80-358|
|Citation:||519 F.Supp. 356|
|Party Name:||Enka B. V. of Arnhem, Holland v. E. I. Du Pont De Nemours & Co.|
|Case Date:||July 10, 1981|
|Court:||United States District Courts, 3th Circuit, District of Delaware|
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Roderick R. McKelvie, Robinson, McKelvie & Geddes, Wilmington, Del., for plaintiff; Ellsworth H. Mosher, Charles A. Wendel, Roger W. Parkhurst and Thomas W. Cole, Stevens, Davis, Miller & Mosher, Arlington, Va., of counsel.
James M. Tunnell, Jr., Morris, Nichols, Arsht & Tunnell, Wilmington, Del., for defendant; Joseph M. Fitzpatrick, Fitzpatrick, Cella, Harper & Scinto, New York City, Robert C. Kline, Wilmington, Del., of counsel.
MURRAY M. SCHWARTZ, District Judge.
This opinion treats two closely allied actions under the Declaratory Judgment Act, 28 U.S.C. ss 2201 and 2202, for determination of the validity and enforceability of United States patents. No answers have been filed, defendant having instead moved to dismiss on jurisdictional grounds. Plaintiffs are Dutch producers of industrial fibers potentially within the scope of claims of American patents owned by E. I. duPont de Nemours & Co. Although they manufacture and do most of their marketing in Europe, each company alleges some stake in the American market that it regards as threatened by duPont's U.S. patents. Consequently, plaintiffs wish to challenge those patents. The issue before this Court is whether the stakes alleged and the threats perceived create a case or controversy that may vest jurisdiction in a federal district court. Finding that the requisite concrete interest has not been shown, the Court will dismiss the complaints for lack of subject matter jurisdiction.
I. PROCEDURAL POSTURE
DuPont has grounded its motions on both Federal Rules of Civil Procedure 12(b) (1) and 12(b)(6). The latter rule appears inapposite. A Rule 12(b)(6) motion goes to the merits of the substantive claims and may be converted into summary judgment under Federal Rule of Civil Procedure 56. A Rule 12(b)(1) motion, on the other hand, attacks subject matter jurisdiction and may require examination of factual issues wholly distinct from the case on the merits. Johnsrud v. Carter, 620 F.2d 29, 32-33 (3d Cir. 1980); Mortensen v. First Federal Savings & Loan Assoc., 549 F.2d 884, 891 (3d Cir. 1977). The motions presently before this Court fit the Rule 12(b)(1) category. DuPont's arguments concern not the patent validity issues, but the question whether plaintiffs' ties to the United States are sufficient to create an immediate apprehension of harm so as to warrant exercise of jurisdiction under the Declaratory Judgment Act. Therefore, today's decisions will be based on Rule 12(b)(1).
Treatment of these motions under Rule 12(b)(1) raises evidentiary issues that should be resolved preliminarily. A motion to dismiss generally requires that the well-pleaded factual allegations of the complaint be regarded as true. Third Circuit precedent establishes, however, that when the motion creates a factual issue regarding subject matter jurisdiction, "no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims. Moreover, the plaintiff will have the burden of proof that jurisdiction does in fact exist." Mortensen, supra, 549 F.2d at 891 (dictum) (footnote omitted). See also Nelson v. Keefer, 451 F.2d 289, 296 (3d Cir. 1971); Groh v. Brooks, 421 F.2d 589, 594-95 (3d Cir. 1970). It is believed that this rule should govern the
present motions. 1 Even though answers have not been filed, the record contains sufficiently full documentation for the court to find jurisdictional facts without recourse to presumptions. Equally important, plaintiff has had and used the opportunity to make discovery, present affidavits, and brief and argue the issues. With such a record, there can be no unfairness in dismissal of a case on jurisdictional grounds where, as here, the disposition in no way touches the merits of plaintiffs' underlying claims. 2
A corollary of the procedure outlined above is the conclusion that the Court may view the evidentiary record as a whole, rather than restrict itself to scrutiny of the complaint. See Mortensen, supra, 549 F.2d at 891; Grafon Corp. v. Hausermann, 602 F.2d 781, 783 (7th Cir. 1979); Phoenix Canada Oil Co. v. Texaco, Inc., 78 F.R.D. 445, 452 (D.Del.1978). One limitation attaches to this principle: because jurisdiction must be determined as of the date the complaints were filed, July 30, 1980, the Court will not consider evidence of subsequent events alleged to create the concrete adversity needed for federal jurisdiction. 3 See Super Products Corp. v. D P Way Corp., 546 F.2d 748, 752 (7th Cir. 1976); American Needle & Novelty Co. v. Schuessler Knitting Mills, Inc., 379 F.2d 376, 379 (7th Cir. 1967); Technical Tape Corp. v. Minnesota Mining & Manufacturing Co., 200 F.2d 876, 878 (2d Cir. 1952).
II. LEGAL PRINCIPLES
Under the Declaratory Judgment Act, this Court may declare the "rights and other legal relations" of parties to a "case of actual controversy within its jurisdiction." 28 U.S.C. s 2201. 4 To determine the presence of an "actual controversy," the Court must assess the parties' relations in light of the familiar principles outlined hereafter.
The Declaratory Judgment Act has a broad, remedial purpose and should be interpreted liberally. See, e. g., Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617 (1937); Treemond Co. v. Schering Corp., 122 F.2d 702, 703 (3d Cir. 1941). In patent litigation, a declaratory
judgment of invalidity or non-infringement serves two highly practical interests. It prevents a patentee from abusing the presumption of validity by threatening would-be competitors with his patent, yet refusing to face adjudication of its merit in an infringement action. See, e. g., Wembley, Inc. v. Superba Cravats, Inc., 315 F.2d 87, 89 (2d Cir. 1963); Treemond, supra, 122 F.2d at 704; E. Borchard, Declaratory Judgments, 803-05 (2d ed. 1941). The availability of a declaratory judgment also permits would-be competitors to ascertain whether a market is open to them without fully committing their resources to arguably infringing activities and amassing avoidable liability in damages. See, e. g., Wembley, supra, 315 F.2d at 90; Girdler Corp. v. E. I. duPont de Nemours & Co., 56 F.Supp. 871, 875 (D.Del.1944).
These admirable policies do not, however, constitute the courts as roving inquirers into patent validity. The Declaratory Judgment Act established a new procedure and a new remedy only for conflicts within the bounds of Article III of the United States Constitution. The rights claimed by a declaratory judgment plaintiff must be in existence and at risk before there is a case or controversy for judicial resolution. See Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 61 S.Ct. 510, 85 L.Ed. 826 (1941); Aetna Life, supra, 300 U.S. at 239-41, 57 S.Ct. at 463-64.
The courts have developed a form of jurisdictional inquiry appropriate to declaratory judgment patent cases. First it must be determined that the case properly arises under federal laws so as to permit invocation of federal jurisdiction. This requirement is met if the adverse action that plaintiff seeks to prevent would arise under federal laws. See Thiokol Chemical Corp. v. Burlington Industries, 448 F.2d 1328 (3d Cir. 1971), cert. denied, 404 U.S. 1019, 92 S.Ct. 684, 30 L.Ed.2d 668 (1972). Second, live adversity between the two parties must be established by evidence that the defendant has acted so as to cause plaintiff "reasonable apprehension" of legal action if it continues to pursue its commercial course. See, e. g., Dewey & Almy Chemical Co. v. American Anode, Inc., 137 F.2d 68 (3d Cir.), cert. denied, 320 U.S. 761, 64 S.Ct. 70, 88 L.Ed. 454 (1943); Polaroid Corp. v. Berkey Photo, Inc., 425 F.Supp. 605 (D.Del.1976); Japan Gas Lighter Assoc. v. Ronson Corp., 257 F.Supp. 219 (D.N.J.1966). Third, plaintiff must show that its claim is concrete rather than academic by credible allegations of immediate intent and ability to undertake the business that must bring it into collision with defendant's patent claims. See, e. g., Super Products Corp. v. D P Way Corp., 546 F.2d 748 (7th Cir. 1976); Aralac, Inc. v. Hat Corp. of America, 166 F.2d 286 (3d Cir. 1948); Atlas Imperial Diesel Engine Co. v. Lanova Corp., 79 F.Supp. 1002 (D.Del.1948). In short, Congress' liberal grant of jurisdiction to anticipate legal injury is confined within constitutional limits by judicial inquiry into imminent events that must grow out of existing situations. Examination of the instant motions will proceed according to these general guidelines.
III. AKZO PLASTICS
Akzo Plastics B.V. ("Akzo") is a Dutch subsidiary of Akzo N.V., a holding company that encompasses a multi-national network of manufacturing companies. Akzo produces an industrial fiber, marketed under the tradename Arnitel, that is comparable to duPont's patented Hytrel. Both are polyetherester elastomers used in manufacturing a variety of molded products such as soccer balls, cable and the soles of sports shoes. DuPont has refused to enter into licensing arrangements with Akzo, instead commencing a world-wide patent battle joined by Akzo in other countries and now in this Court. 5
A. Does the Case Arise Under the Patent Laws.
The first question is whether the case arises under the patent laws cognizable
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