Panavise Products v. National Products (CAFC 2008-1444) non-precedential

A party claiming declaratory judgment jurisdiction has the burden to establish the existence of such jurisdiction. See Benitec Austl., Ltd. v. Nucleonics, Inc., 495 F.3d 1340, 1344 (Fed. Cir. 2007).

The CEO of NPI filing an affidavit of "what up?" did the trick.

In doing so, NPI mounted a factual attack of the asserted basis of subject matter jurisdiction. We have previous stated that if a declaratory judgment defendant adequately challenges jurisdiction in fact, "the allegations in the complaint are not controlling." Cedars-Sinai Medical Ctr. v. Watkins, 11 F.3d 1573, 1583 (Fed. Cir. 1993). Therefore, as NPI's factual challenge was adequate, it placed the burden on Panavise to demonstrate facts sufficient to support its contention regarding the court's jurisdiction. See id. at 1584 (stating that once jurisdiction is factually challenged, "allegations alone are insufficient to meet the complainant's burden."). In other words, Panavise must produce sufficient evidence to establish subject matter jurisdiction.

We recently reiterated that an actual "controversy must be based on a real and immediate injury or threat of future injury that is caused by the defendants--an objective standard that cannot be met by a purely subjective or speculative fear of future harm." Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1338 (Fed. Cir. 2008) (emphasis in original).

We do not, of course, mean that the lack of direct pre-complaint communication between a patentee and a declaratory plaintiff by itself is sufficient to defeat subject matter jurisdiction. See SanDisk, 480 F.3d at 1381 (stating that "the outer boundaries of declaratory judgment jurisdiction . . . depend[s] on the application of the principles of declaratory judgment jurisdiction to the facts and circumstances of each case."). On the contrary, we recognize that "[p]rior litigious conduct is one circumstance to be considered in assessing whether the totality of circumstances creates an actual controversy." Prasco, 537 F.3d at 1341. However, there are many other circumstances that must also be considered. In this case, the prior lawsuits in which NPI asserted the '420 patent concern different products. Panavise does not argue or present any evidence to show that its Model 811 Series device is similar to any of those accused products. The mere allegation that the Model 811 Series "potentially" infringes the '420 patent falls short of satisfying Panavise's burden of proof. Therefore, the fact that NPI routinely enforces its patent rights, when viewed under the totality of the circumstances in this case, is insufficient to create an actual controversy and establish subject matter jurisdiction.

The ironic comedy kicker was in denying NPI's motion for sanctions, while complaining about the frivolity of Panavise appealing.

NPI files a motion for sanctions under Fed. R. App. P. 38. We deny NPI's motion. Although the appeal can be viewed as very weak from both a factual and a legal stand point, we do not agree that it rises to the level of frivolousness. At the same time, we do note that this appeal approaches wasting the court's time and unduly delaying more deserving litigants.

Affirmed.