United Sweetener USA, Inc. v. Nutrasweet Co.

Decision Date22 March 1991
Docket NumberCiv. A. No. 89-245-JRR.
Citation760 F. Supp. 400
PartiesUNITED SWEETENER USA, INC., and Holland Sweetener Company, Vof, Plaintiffs, v. The NUTRASWEET COMPANY, Defendant.
CourtU.S. District Court — District of Delaware

COPYRIGHT MATERIAL OMITTED

John Mulford, of Theisen, Lank, Mulford & Goldberg, Wilmington, Del. (Carl G. Love (argued), Chris Comuntzis, Lynn E. Eccleston, and Jeffrey A. Simenauer, of Cushman, Darby & Cushman, and Thomas J. Macpeak, and Peter D. Olexy, of Sughrue, Mion, Zinn, Macpeak & Seas, Washington, D.C., of counsel), for plaintiffs.

Charles S. Crompton, Jr., of Potter, Anderson & Corroon, Wilmington, Del. (Robert G. Sugarman (argued), and Steven D. Glazer, of Weil, Gotshal & Manges, and Robert L. Baechtold, and Henry J. Renk, of Fitzpatrick, Cella, Harper & Scinto, New York City, of counsel), for defendant.

ROTH, District Judge.

Lucia Vanderwalk moved to a sofa and took a seat by the tea service. It was a signal for the men to sit. Her hands moved powerfully, gracefully, over the silver, seeming to communicate with it.
"Tell me about yourself, Leftenant." She pronounced his rank that way, British. Lef, not lou.
"I was born in New York, I grew up in New York, I became a cop in New York."
"Homicide or vice?"
"Homicide."
"You look familiar." She stared at him, something more than ordinary interest in her eyes. "Ceylon or China?"
He realized she was talking tea and he figured what could he lose. "China."
She poured from the teapot on the left. "Lemon or milk?"
"Lemon, please."
"Sugar"she glanced at him — "or Nutrasweet?"1
I. INTRODUCTION

Patent litigation, while not as intriguing as homicide investigation, often has high stakes and interesting twists and turns. Our attention today focuses on a dispute over an artificial sweetening product known throughout the world as aspartame or Nutrasweet.2 In contrast to the lengthy and somewhat complicated factual background to this dispute, the procedural posture of the case is relatively simple.

On May 16, 1989, plaintiffs United Sweetener, USA, Inc. ("United Sweetener") and Holland Sweetener Co., Vof ("Holland Sweetener") initiated the present declaratory judgment action against defendant Nutrasweet Co. In their complaint the plaintiffs seek, among other relief, a declaration of the invalidity of two patents that pertain to aspartame, patent number 3,492,131 ("the '131 patent") for peptide sweetening agents, issued on January 27, 1970, and patent number 3,780,189 ("the '189 patent") for sweetening compositions and method for use thereof, issued on December 18, 1973. Count I of the complaint alleges that the '189 patent is unenforceable due to inequitable conduct on the part of Nutrasweet. Count II alleges that the same patent is invalid because of the effect of certain prior art; because it is obvious; and because of a foreign patent in existence when a continuation-in-part application for the patent was filed. Count III of the complaint asks this court to declare that the plaintiffs have not infringed the '131 patent. Finally, Count IV asserts that the two patents involved here are unenforceable due to certain inequitable conduct by Nutrasweet during its successful application for an extension of the two patents.3

In response to the complaint, Nutrasweet now moves to dismiss Counts I, II, and IV. Both sides of this dispute move for summary judgment on Count III. For the reasons explained below, we will deny the motion to dismiss Counts I and II. As to Count III, we will grant plaintiffs' motion for summary judgment on claim 2 of the '131 patent on the ground that they do not infringe that claim. We find, however, that there are genuine issues of material fact in dispute with regard to claim 8. The cross-motions for summary judgment on that claim will be denied. Finally, we will grant Nutrasweet's motion to dismiss Count IV.

II. DISCUSSION

Both the '131 and '189 patents name certain dipeptide chemical compounds as sweetening agents, the '131 patent covering compositions involving dipeptides and the '189 patent covering mixtures of dipeptides with known sweetening agents, resulting in an enhanced sweetening potency. Most relevant to this litigation is the fact that both patents name the chemical L-as-partyl-L-phenylalanine methyl ester. This chemical is more commonly known as "aspartame." Holland Sweetener currently produces and markets aspartame products in the Netherlands and exports them for sale in other countries. United Sweetener, a wholly owned subsidiary of Holland Sweetener, has imported a large inventory of a table top sweetener blend of aspartame and saccharine into the United States. It has also imported aspartame for use in the manufacture of table top sweetener. United Sweetener now stands ready to sell its product in the State of Delaware.

A. Counts I and II

The parties apparently agree that on May 16, 1989, when plaintiffs filed their complaint in this action, they were faced with the threat of a suit for infringement of the '189 patent. However, defendant contends that its July 7, 1989 "promise" not to assert the '189 patent against plaintiffs until after the conclusion of reexamination proceedings4 has eliminated any reasonable apprehension of an infringement suit.

Nutrasweet first argues in its motion to dismiss Counts I and II that this Court lacks jurisdiction over the '189 claim because there is no "actual controversy" as required by the Declaratory Judgment Act. Nutrasweet believes that, under applicable case law, its promise not to assert the '189 patent negates the "actual controversy" that existed when the complaint was filed. The plaintiffs, of course, disagree.

The Declaratory Judgment Act provides in pertinent part that:

In a case of actual controversy within its jurisdiction ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration....

28 U.S.C. § 2201(a) (emphasis supplied). The parties agree on the basic test to be applied in determining whether an actual controversy exists in a declaratory judgment action brought by a potential infringer against a patentee. The plaintiff must show that:

the defendant in such an action ... engaged in conduct that created on the part of the declaratory judgment plaintiff a reasonable apprehension that it will face an infringement suit if it commences or continues the activity in question ... Next, the plaintiff seeking a declaration of invalidity must show that it has actually produced the accused device or has actually prepared to produce such a device.

Jervis B. Webb Co. v. Southern Systems, Inc., 742 F.2d 1388, 1398-99 (Fed.Cir.1984) (citation omitted). Thus, the declaratory judgment plaintiff must demonstrate "reasonable apprehension" of suit and production or preparation for production of an infringing product.

There is no dispute here that the plaintiffs have met the second part of the test: They are prepared to market their sweetener product, SweetMatch. The issue we must determine is that of the first part of the test, i.e., "reasonable apprehension." Nutrasweet does not contest that reasonable apprehension existed when the complaint was filed. It claims, however, that such apprehension no longer exists, and for that reason dismissal is warranted. We must determine whether, as Nutrasweet argues, reasonable apprehension must exist throughout the litigation, or merely, as the plaintiffs assert, at the time the complaint is filed. If we adopt the plaintiffs' view, Nutrasweet's promise not to sue pending the outcome of the reexamination will have no effect on the ultimate determination of whether the plaintiffs in fact possess the requisite reasonable apprehension. If we adopt the defendant's view, we must go on to consider whether defendant's promise is sufficient to relieve plaintiffs of the apprehension of suit.

The cases cited by the parties present a square and seemingly irreconcilable conflict of authority on this issue. The Federal Circuit alluded to the question in Jervis B. Webb, supra, where it stated that "a case or controversy must exist as of the date of the filing of the declaratory judgment action." 742 F.2d at 1398. In a footnote, however, the court stated that it was not reaching "the question whether the establishment of the action is sufficient to sustain the case or controversy requirement to the conclusion of that action." Id. n. 6. The court continued in that footnote to quote Preiser v. Newkirk, 422 U.S. 395, 95 S.Ct. 2330, 45 L.Ed.2d 272 (1975), a civil rights case cited by Nutrasweet: "The rule in federal cases is that an actual controversy must be extant at all stages of review, not merely at the time the complaint is filed." 422 U.S. 395, 401, 95 S.Ct. 2330, 2334 (quoting Steffel v. Thompson, 415 U.S. 452, 94 S.Ct. 1209, 39 L.Ed.2d 505 (1974)). Nutrasweet also looks to International Medical Prosthetics Research Assoc. v. Gore Enterprise Holdings, Inc., 787 F.2d 572 (Fed.Cir.1986), where the court stated in dictum that the "the burden is on the declaratory judgment plaintiff to establish that jurisdiction over its declaratory judgment action existed at, and has continued since, the time the complaint was filed." Id. at 575 (holding that no controversy existed at time complaint filed). This language appears in Akzona, Inc. v. E.I. duPont de Nemours & Co., 662 F.Supp. 603 (D.Del.1987), where the court also quoted the Preiser "federal rule" in reaching the conclusion that no actual controversy existed because an International Trade Commission order completely eliminated the declaratory judgment plaintiff's "present capacity to enter the U.S. market." Id. Nutrasweet finally alerts us to a case in which the Federal Circuit repeated the Preiser "rule" in the course of determining that no reasonable apprehension existed when a patentee completely abandoned its charge of infringement prior to trial and then "steadfastly" refused...

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