Icos Vision Sys. Corp. v. Icos Vision Sys. Inc

Decision Date29 March 2010
Docket Number09 Civ. 6920 (DC),09 Civ. 7014 (DC).,08 Civ. 8142 (DC),No. 08 Civ. 8102 (DC),08 Civ. 8102 (DC)
Citation699 F.Supp.2d 664
PartiesICOS VISION SYSTEMS CORP., N.V., ICOS Vision Systems, Inc., and Nvidia Corp., Plaintiffs,v.SCANNER TECHNOLOGIES CORP., Defendant.
CourtU.S. District Court — Southern District of New York

Orrick, Herrington & Sutcliffe LLP, by I. Neel Chatterjee, Esq., Monte M.F. Cooper, Esq., Menlo Park, CA, by Paul R. Gupta, Esq., Clifford R. Michel, Esq., New York, NY, for Plaintiffs.

Hodgson Russ LLP, by Jacqueline I. Meyer, Esq., New York, NY, Fredrikson & Byron, P.A., by Kurt J. Niederluecke, Esq., Minneapolis, MN, The Marbury Law Group, PLLC, by John F. Mardula, Esq., Shauna M. Wertheim, Esq., Reston, VA, for Defendant.

MEMORANDUM DECISION

CHIN, District Judge.

Plaintiffs filed declaratory judgment complaints against defendant requesting that this Court find that several of defendant's patents are invalid and have not been infringed by plaintiffs. Defendant moves to dismiss these complaints for lack of subject matter jurisdiction. For the reasons set forth below, I hold that this Court has jurisdiction to consider plaintiffs' claims.

BACKGROUND

Plaintiffs ICOS Vision Systems Corporation, N.V., and ICOS Vision Systems Inc. (together, ICOS) are subsidiaries of KLA-Tencor Corporation that manufacture and sell equipment used to inspect Ball Grid Arrays (“BGAs”). (ICOS Am. Compl. ¶ 1 (09 Civ. 6920)). Plaintiff Nvidia Corporation (Nvidia) is one of ICOS's customers. Defendant Scanner Technologies Corporation (Scanner) owns a series of patents relating to BGA inspection technology. ( Id. ¶ 3). The Court's May 22, 2007, opinion contains a detailed discussion of ICOS and Scanner's background and the relevant BGA inspection technology. See Scanner Techs. Corp. v. ICOS Vision Sys. Corp., N.V., 486 F.Supp.2d 330, 344 (S.D.N.Y.2007) aff'd in part, rev'd in part, 528 F.3d 1365 (Fed.Cir.2008).

A. The 2000 Litigation

In July of 2000, Scanner filed a complaint against ICOS claiming that ICOS infringed two of its patents. (Compl. (00 Civ. 4992)). The parties waived their right to a jury and tried the case to the Court. I found that (1) the accused product did not infringe upon Scanner's patents, (2) the patents were unenforceable due to Scanner's inequitable conduct, and (3) the patents were unenforceable for obviousness. Id. at 343, 347.

In 2005 and 2007, during the course of the 2000 litigation, ICOS filed two declaratory judgment complaints regarding eight Scanner patents related to the patents at issue in the 2000 litigation. (Compl. (05 Civ. 6322); Compl. (07 Civ. 771)). In my Final Judgment disposing of the 2000 litigation, I ruled that Scanner's inequitable conduct barred it from enforcing the patents in suit and related patents in the same family. This determination regarding related patents obviated the need for ICOS's two declaratory judgment complaints and so those complaints were dismissed without prejudice. (6/1/07 Order (05 Civ. 6322 & 07 Civ. 771)).

In 2008, the Federal Circuit affirmed my invalidity and non-infringement rulings, but found that my ruling regarding unenforceability was clearly erroneous. Scanner Techs. Corp. v. ICOS Vision Sys. Corp. N.V., 528 F.3d 1365 (Fed.Cir.2008).

B. The 2008 Declaratory Judgment Complaints

The Federal Circuit's reversal of my determination regarding unenforceability re-exposed ICOS to suit on the related patents for which it had filed declaratory judgment complaints in 2005 and 2007. Id. at 1379 n. 7. Accordingly, on September 19, 2008, ICOS filed a declaratory judgment complaint against Scanner alleging the invalidity and non-infringement of the eight Scanner patents that it had named in its earlier complaints. The parties refer to these patents as the '678 Patent, the '411 Patent, the '006 Patent, the '007 Patent, the '365 Patent, the '898 Patent, the '668 Patent, and the '796 Patent. On the same day, Nvidia filed a declaratory judgment complaint against Scanner alleging the invalidity and non-infringement of the '678 Patent and the '411 Patent. I refer to these eight contested patents as the 2008 Patents.”

The parties engaged in settlement discussions. On March 11, 2009, Scanner provided ICOS with a covenant not to sue (a “CNS”) on all of the 2008 Patents, and provided Nvidia with a CNS on the '678 Patent and the '411 Patent (the only two of the 2008 Patents Nvidia contested).

C. The 2009 Declaratory Judgment Complaints

On March 24, 2009, ICOS and Nvidia amended their complaints to include an allegation as to the invalidity and non-infringement of an additional patent, the '974 Patent, which is related to the 2008 Patents. (ICOS Am. Compl. ¶ 15 (09 Civ. 6920) (“The '974 patent issued from an application that was a continuation-in-part from an application that was a continuation application that issued as the '365 patent, which itself issued from an application that was a continuation-in-part from the application that issued as the '898 patent.”); Nvidia Am. Compl. ¶ 15 (09 Civ. 7014); Cooper Decl. Exs. 3-4, 9-10).

On August 5, 2009, and August 7, 2009, ICOS and Nvidia filed declaratory judgment complaints as to another Scanner patent, the '798 Patent, which is also related to the 2008 Patents. (ICOS Am. Compl. ¶ 14 (09 Civ. 6920); Nvidia Am. Compl. ¶ 14 (09 Civ. 7014); Cooper Decl. Exs. 3-4, 9-10).

In the interests of clarity and efficiency, ICOS and Nvidia voluntarily withdrew their allegations as to the '974 Patent in the 2008 litigation and amended their complaints in the 2009 litigation to include the '974 Patent.

Despite plaintiff's requests, Scanner has not issued CNSs on the '974 Patent or the '798 Patent. (ICOS Am. Compl. ¶ 16 (09 Civ. 6920); Nvidia Am. Compl. ¶ 17 (09 Civ. 7014); Cooper Decl. Ex. 21).

D. ICOS's Product Developments

Throughout the course of this litigation, ICOS has continued to develop and manufacture new products and updates of previous designs that it believes expose it to further infringement litigation by Scanner. (McAndrews Decl. ¶¶ 4, 26; ICOS Opp. Mem. at 15 (08 Civ. 8142)).

DISCUSSION

The above filings have produced four related actions before this Court: 08 Civ. 8142 and 08 Civ. 8102, wherein ICOS and Nvidia seek declaratory judgment on the 2008 Patents, and 09 Civ. 6920 and 09 Civ. 7014, wherein ICOS and Nvidia seek declaratory judgment on the '974 and '798 Patents. Currently before this Court are Scanner's motions to dismiss all four of these complaints for lack of subject matter jurisdiction. For the reasons set forth below, I hold that this Court has declaratory judgment jurisdiction over all of plaintiffs' invalidity and non-infringement claims, and thus Scanner's motions to dismiss are denied.

A. Motion to Dismiss Standard

The Court's first inquiry must be whether it has the constitutional or statutory authority to adjudicate a case. If there is no subject matter jurisdiction, the Court lacks power to consider the action further. See Arar v. Ashcroft, 532 F.3d 157, 168 (2d Cir.2008).

In considering a Rule 12(b)(1) motion to dismiss, a court may resolve disputed jurisdictional facts by referring to evidence outside the pleadings, such as affidavits. See Zappia Middle E. Constr. Co. v. Emirate of Abu Dhabi, 215 F.3d 247, 253 (2d Cir.2000); Filetech S.A. v. Fr. Telecom S.A., 157 F.3d 922, 932 (2d Cir.1998). As the party “seeking to invoke the subject matter jurisdiction of the district court,” Scelsa v. City Univ. of N.Y., 76 F.3d 37, 40 (2d Cir.1996), the plaintiff bears the burden of demonstrating that there is subject matter jurisdiction in the case, Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir.2005).

B. Declaratory Judgment Jurisdiction Standard

Declaratory relief is “intended to ... settle legal rights and remove uncertainty and insecurity from legal relationships without awaiting a violation of the rights or a disturbance of the relationships.” Nat'l Union Fire Ins. Co. of Pittsburgh v. Int'l Wire Group, Inc., No. 02 Civ. 10338, 2003 WL 21277114, at *4, 2003 U.S. Dist. LEXIS 9193, at *4 (S.D.N.Y. June 2, 2003) (citations and internal quotation marks omitted). There must be a “substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 261 F.Supp.2d 293, 295 (S.D.N.Y.2003) (citations and internal quotation marks omitted).

“Whether an actual case or controversy exists so that a district court may entertain an action for a declaratory judgment of non-infringement and/or invalidity is governed by Federal Circuit law.” Ass'n for Molecular Pathology v. USPTO, 669 F.Supp.2d 365, 385 (S.D.N.Y.2009) (internal quotation marks and citation omitted). The Supreme Court, however, recently revised the Federal Circuit's “reasonable apprehension of suit” test for declaratory judgment jurisdiction, holding that the proper analysis is one that considers all of the circumstances. MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127, 132, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007). MedImmune and its progeny have effectively “lower[ed] the bar for a plaintiff to bring a declaratory judgment action in a patent dispute.” Frederick Goldman, Inc. v. West, No. 06 Civ. 3413, 2007 WL 1989291, at *3, 2007 U.S. Dist. LEXIS 50259, at *7 (S.D.N.Y. July 6, 2007); see Russian Standard Vodka (USA), Inc. v. Allied Domecq Spirits & Wine USA, Inc., 523 F.Supp.2d 376, 382 (S.D.N.Y.2007). Since MedImmune, the trend has been to “find an actual controversy, at least where the declaratory judgment plaintiff's product arguably practices a patent and the patentee has given some indication it will enforce its rights.” Diamonds.net LLC v. Idex Online, Ltd., 590 F.Supp.2d 593, 598 (S.D.N.Y.2008).

When considering whether declaratory judgment jurisdiction exists, courts have given weight to whether there has been prior litigation between the parties or brought by the defendant on related technology,...

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