Mobil Oil v. ADVANCED ENV. RECYCLING TECHNOLOGIES, Civ. A. No. 92-351-JJF.

• Citation: 826 F. Supp. 112
• Decision Date: 30 June 1993
• Docket Number: Civ. A. No. 92-351-JJF.
• Parties: MOBIL OIL CORPORATION, Plaintiff, v. ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC., Defendant.
• Court: U.S. District Court — District of Delaware

826 F. Supp. 112

MOBIL OIL CORPORATION, Plaintiff, v. ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC., Defendant.

Civ. A. No. 92-351-JJF.

United States District Court, D. Delaware.

June 30, 1993.

Charles S. Crompton, Jr. of Potter Anderson & Corroon, Wilmington, DE, Richard E. Kurtz, and Albert T. Keyack, of Woodcock Washburn Kurtz Mackiewicz & Norris, Philadelphia, PA, for plaintiff.

Douglas E. Whitney, Matthew B. Lehr, and R. Judson Scaggs, Jr. of Morris Nichols Arsht & Tunnell, Wilmington, DE, for defendant.

OPINION

FARNAN, District Judge.

I. INTRODUCTION

Presently before the Court is Plaintiff, Mobil Oil Corporation's ("Mobil") Motion to Compel Discovery. (D.I. 58). Specifically, Mobil seeks to compel Advanced Environmental Technologies, Inc. ("AERT") to comply with discovery requests on the issues of breach of a confidential relationship and patent invalidity. For the reasons outlined below, the Court will grant Mobil's Motion to Compel Discovery.

II. BACKGROUND

Mobil commenced this suit on June 9, 1992 by filing a declaratory judgment action against AERT seeking a judgment that four AERT patents are invalid and unenforceable, and that Mobil has not infringed the AERT patents. Complaint, at 4. AERT initially responded by filing a motion to dismiss on the grounds that Mobil had not demonstrated a reasonable apprehension of litigation so as to give this Court subject matter jurisdiction. In a Memorandum Opinion, dated November 23, 1992, the Court held that a reasonable apprehension of litigation existed at the time the Complaint was filed, giving the Court subject matter jurisdiction under 28 U.S.C. § 2201. (D.I. 60). Accordingly, the Court denied AERT's motion to dismiss. (D.I. 61). Mobil then filed an amended Complaint on August 28, 1992.¹ (First Amended Complaint, D.I. 17). The First Amended Complaint seeks a declaratory judgment that: 1) the four AERT patents are invalid and unenforceable, 2) Mobil has not infringed the AERT patents, 3) Mobil has not breached any confidential relationship that may exist between AERT and Mobil. (First Amended Complaint, D.I. 17, at 6).

AERT answered Mobil's First Amended Complaint on December 8, 1992. Answer and Counterclaims, D.I. 67. Paragraph 8 of the Answer states that "AERT lacks sufficient knowledge or information to form a belief as to whether Mobil has infringed." The Answer also asserts four counterclaims against Mobil: 1) violation of Section 1 of the Sherman Act (illegal monopoly), 2) violation of Section 2 of the Sherman Act (sham litigation), 3) breach of a confidential relationship, and 4) unfair competition.

The Motion to Compel

On November 16, 1992, in the course of taking the Deposition of Joe G. Brooks, the corporate representative of AERT, Mobil's counsel propounded a number of questions relating to the issue of Mobil's breach of a confidential relationship. Motion to Compel, Exhibit A, at 2-4. AERT's counsel directed Mr. Brooks not to answer these questions, asserting that the issue of whether Mobil breached a confidential relationship was not in the case. The Court had not yet decided AERT's Motion to Dismiss the initial Complaint.

AERT has also refused discovery on the issue of patent invalidity. AERT contends that all patent issues, including invalidity, are rendered moot by AERT's admissions that Mobil's process and equipment for producing composite lumber do not infringe AERT's patents.² AERT contends that its admissions of noninfringement divest the Court of subject matter jurisdiction over Mobil's claim for a declaratory judgment that AERT's patents are invalid and unenforceable. Mobil then filed the motion now before the Court to compel discovery on the breach of a confidential relationship and patent issues. (D.I. 58). After hearing argument from both parties, the Court delayed ruling on the motion and ordered supplemental briefing on the mootness issues raised by AERT. This Memorandum Opinion constitutes the Court's findings and conclusions as to the issues of mootness and jurisdiction raised by AERT in refusing to comply with Mobil's discovery requests.

III. DISCUSSION

AERT asserts that the Court lacks subject matter jurisdiction to hear Mobil's claims of invalidity and unenforceability. AERT contends that "no claims of infringement remain in this action because AERT admits that Mobil's process and equipment, as described by Mobil in discovery, do not infringe. Therefore, the Court has no jurisdiction over the subject matter of Mobil's validity or enforceability defenses." Defendant's Brief in Opposition to Plaintiff's Motion to Compel Discovery, at 6. Mobil, on the other hand, contends that AERT's admissions are not sufficient to render the threat of infringement litigation "all but extinct." Plaintiff's Opening Brief in Support of Its Motion to Compel, at 4. Thus, contends Mobil, the Court has not been divested of its jurisdiction over the validity and enforceability claims.

A. Court's Continuing Jurisdiction Over the Infringement Issues

The Declaratory Judgment Act provides that in a case of actual controversy within its jurisdiction ..., any court of the United States ... may declare the rights and other legal relations of any interested party seeking such declaration...." 28 U.S.C. § 2201. The actual controversy requirement precludes a declaration about the validity of a patent unless the defendant has an objectively reasonable apprehension that it will face an infringement suit. International Medical Prosthetics Research Assoc. v. Gore Enterprise Holdings, Inc., 787 F.2d 572, 575 (Fed. Cir.1986). A case or controversy must exist as of the date of the filing of the declaratory judgment complaint, and at all stages of review. Preiser v. Newkirk, 422 U.S. 395, 401, 95 S.Ct. 2330, 2334, 45 L.Ed.2d 272 (1975); United Sweetener USA, Inc. v. Nutrasweet Co., 760 F.Supp. 400, 405 (D.Del.1991). Once the Court's jurisdiction has been established, that jurisdiction vanishes only when subsequent events renders the threat of an infringement action nonexistent. See Nutrasweet, 760 F.Supp. at 407.

The Court has previously held that a case or controversy existed as of the date of the filing of this declaratory judgment action. (D.I. 60). What brings the case or controversy dispute to the forefront again is AERT's contention that its admissions of noninfringement have destroyed any case or controversy between the parties. AERT contends that its admissions of noninfringement remove any apprehension that Mobil may have concerning a potential patent infringement suit.

A review of the facts and circumstances present in this case convinces that Court that AERT's admissions that Mobil's process, as described by Mobil, does not infringe the four AERT patents have not rendered Mobil's continuing apprehension of litigation unreasonable. AERT has not, as in Spectronics Corp. v. H.B. Fuller Co., Inc., 940 F.2d 631, 633 (Fed.Cir.1991), filed a formal covenant with the Court not to sue Mobil on the four patents. Nor has there been a final determination of noninfringement as in Safe Flight Instrument Corp. v. Sundstrand Data Control, Inc., C.A. No. 87-545-JRR (D.Del. December 12, 1990). AERT created the threat of litigation by its own statements and conduct. In the Court's view, a nonbinding qualified admission of noninfringement at this late stage in the proceedings does not render Mobil's apprehension unreasonable. The reasonableness of Mobil's...