Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-00970/USCOURTS-azd-2_08-cv-00970-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

VyaTek Sports, Inc., an Arizona

corporation, 

Plaintiff/Counterdefendant,

vs.

Ping, Inc., an Arizona corporation; and

Karsten Manufacturing Corporation, an

Arizona corporation, 

Defendants/Counterclaimants.

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No. CV-08-970-PHX-DGC

ORDER

VyaTek Sports, Inc. (“VyaTek”) manufactures and licenses products and technology

used in connection with sporting goods. Vyatek is the owner of three patents describing a

method for the design and manufacture of multi-material tube structures: No. 7,207,354

(“‘354 patent”), No. 7,314,067 (“‘067 patent”), and No. 6,896,006 (“‘006 patent”). Ping, Inc.

and Karsten Manufacturing Corporation (collectively, “Ping”) manufacture, sell, and license

sporting goods. Ping’s product line includes “Rapture” brand golf clubs.

I. This Lawsuit.

VyaTek filed a complaint against Ping alleging that its Rapture driver infringes the

‘354 and ‘067 patents. Dkt. #1. Ping filed a counterclaim seeking a declaratory judgment

that it is not infringing the ‘354 and ‘067 patents, that the patents are invalid, and that the

Case 2:08-cv-00970-DGC Document 33 Filed 09/29/08 Page 1 of 5
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‘067 patent is unenforceable. Dkt. #13 (counts one through five). Ping also seeks a

declaratory judgment that it is not infringing the ‘006 patent and that the patent is invalid.

Id. (counts six and seven).

VyaTek has filed a motion to dismiss counts six and seven for lack of subject matter

jurisdiction. Dkt. #18. The motion is fully briefed. Dkt. ##25, 29, 31. For reasons

explained below, the Court will grant the motion.

II. Legal Standard.

A court has subject matter jurisdiction over a declaratory judgment claim where the

claimant shows that the claim satisfies the case or controversy clause of Article III of the

Constitution. 28 U.S.C. § 2201(a) (a court may declare the rights and other legal relations

of parties in “a case of actual controversy”); U.S. Const. art. III, § 2, cl. 1 (restricting judicial

power to the adjudication of “Cases” or “Controversies”); see Prasco, LLC v. Medicis

Pharm. Corp., 537 F.3d 1329, 1335 (Fed. Cir. 2008) (the Declaratory Judgment Act’s

requirement of “a case of actual controversy” refers to “any case or controversy that is

justiciable under Article III”); Benitec Australia, Ltd. v. Nucleonics, Inc., 495 F.3d 1340,

1344-45 (Fed. Cir. 2007) (claimant bears burden of establishing declaratory judgment

jurisdiction).

In MedImmune, Inc. v. Genentech, Inc., 127 S. Ct. 764 (2007), the Supreme Court

reaffirmed the basic standard for determining whether a declaratory judgment claim satisfies

Article III’s case or controversy requirement: “‘whether the facts alleged, under all the

circumstances, show that there is a substantial controversy, between parties having adverse

legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory

judgment[.]’” 127 S. Ct. at 771 (quoting Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270,

273 (1941)). MedImmune emphasized that Article III requires the dispute to be “‘definite

and concrete, touching the legal relations of parties having adverse legal interests’; and that

it be ‘real and substantial’ and ‘admit of specific relief through a decree of a conclusive

character, as distinguished from an opinion advising what the law would be upon a

hypothetical state of facts.’” Id. (alteration omitted).

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III. Motion to Dismiss.

In January 2007, VyaTek sent Ping a letter stating that VyaTek had determined that

the Rapture driver infringed the ‘006 patent. Dkt. #25-2. VyaTek has now stipulated that

it “will not sue Defendants (including successors and assignees) or their customers or others

in the stream of manufacturing or commerce for infringement of the ‘006 patent as to the

Rapture driver or any other Ping product in existence.” Dkt. #29 at 3. The Court lacks

subject matter jurisdiction over counts six and seven, VyaTek argues, because this stipulation

and a similar covenant not to sue eliminate any potential case or controversy with respect to

the ‘006 patent and current Ping products. Id. at 2-7. Ping disagrees, contending that the

covenant is insufficient because it does not eliminate the restraint imposed by the ‘006 patent

on Ping’s product development and business. Dkt. #31 at 2-7.

Having considered the totality of the circumstances, the Court finds that Ping

has not shown “a controversy of sufficient ‘immediacy and reality’ to create a justiciable

controversy” with respect to counts six and seven. Prasco, 537 F.3d at 1338. The mere

“existence of a patent is not sufficient to establish declaratory judgment jurisdiction” because

it “does not cause an injury or create an imminent risk of injury.” Id. 

An important element in the totality of the circumstances test is “whether there has

been potentially infringing activity or meaningful preparation to conduct potentially

infringing activity[.]” Id. at 1336 n.4. Where the party seeking declaratory judgment “has

not taken significant, concrete steps to conduct infringing activity, the dispute is neither

‘immediate’ nor ‘real’ and the requirements for justiciability have not been met.” Cat Tech

LLC v. TubeMaster, Inc., 528 F.3d 871, 880 (Fed. Cir. 2008). Ping asserts that the existence

of the ‘006 patent chills its “ability to freely develop, manufacture, and exploit non-infringing

products” and places a restraint on its “business practices and flexibility in product

development[.]” Dkt. #31 at 5-7. But Ping has presented no evidence that it currently uses

or plans to use in other products either the design of the Rapture driver or the method claimed

in the ‘006 patent.

/ / /

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“[A] case or controversy must be based on a real and immediate injury or threat of

future injury that is caused by the [patentee] – an objective standard that cannot be met by

purely subjective or speculative fear of future harm.” Id. at 1339 (emphasis in original).

VyaTek’s broad and binding covenant not to sue on the ‘006 patent eliminates any threat of

injury to Ping with respect to its existing products. See Benitec, 495 F.3d at 1347-48;

compare ScanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372, 1383 (Fed. Cir. 2007)

(patentee’s “statement that it does not intend to sue does not moot the actual controversy”)

(emphasis added). Ping has “failed to show that its future plans meet the immediacy and

reality requirement of MedImmune necessary to support a justiciable controversy.” Benitec,

495 F.3d at 1348-49; compare Cat Tech, 528 F.3d at 881-83 (actual controversy existed

where the claimant had taken “significant, concrete steps” and its potentially infringing

technology was “substantially fixed”). Nor has Ping shown that the mere existence of the

‘006 patent effectively excludes Ping from the marketplace. See Caraco Pharm. Labs., Ltd.

v. Forest Labs., Inc., 527 F.3d 1278, 1296 (Fed. Cir. 2008). The Court will grant VyaTek’s

motion to dismiss counts six and seven for lack of subject matter jurisdiction. See Benitec,

495 F.3d at 138-50 (no justiciable controversy existed where the patentee promised not to

sue with respect to the claimant’s existing products and the claimant failed to show

immediate and real plans to engage in potentially infringing activity).

Ping asserts that VyaTek’s covenant does not bind third-parties that may acquire

rights in the ‘006 patent and therefore does not shield Ping from third-party enforcement

actions. Dkt. #31 at 6. The potential threat of future third-party actions is wholly speculative

and does create a justiciable controversy. Ping further asserts that the ‘006 patent is highly

relevant to VyaTek’s infringement claims and the invalidity of the ‘354 and ‘067 patents

(id. at 2), but presents no argument that mere relevance to other claims satisfies Article III’s

case or controversy requirement.

IT IS ORDERED:

1. Defendants’ motion for leave to file a sur-reply (Dkt. #30) is granted.

2. The Clerk is directed to file the lodged proposed sur-reply (Dkt. #31).

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 3. Plaintiff’s motion to dismiss counts six and seven of the counterclaim

(Dkt. #18) is granted.

DATED this 26th day of September, 2008.

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