Court Opinion

ID: 9476459
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:56:35.005778+00
Date Added: 2024-06-11T17:45:19.994630
License: Public Domain

BENNETT, Senior Circuit Judge,
with whom ARCHER, Circuit Judge, joins, concurring:
I concur with the views contained in Senior Judge Baldwin’s majority opinion. I write separately in order to express more fully my reasons for concurring in the decision to vacate the district court’s judgment on the validity issue and to dismiss Japax’s cross-appeal1 as moot under the circumstances of this case.
Whether or under what circumstances an appellate court should or must decide a *1518cross-appeal on validity following disposition of a companion appeal on the grounds of noninfringement has not been squarely addressed by this court. In Altvater v. Freeman, 319 U.S. 359, 63 S.Ct. 1115, 87 L.Ed. 1450, 57 USPQ 285 (1943), the Supreme Court stated the following:
To hold a patent valid if it is not infringed is to decide a hypothetical case. But the situation in the present case is quite different. We have here not only bill and answer but a counterclaim. Though the decision of non-infringement disposes of the bill and answer, it does not dispose of the counterclaim which raises the question of validity.... [T]he issue of validity may be raised by a counterclaim in an infringement suit.... [W]e are of the view that the issues raised by the present counterclaim were justiciable and that the controversy between the parties did not come to an end on the dismissal of the bill for non-infringement, since their dispute went beyond the single claim and the particular accused devices involved in that suit.
Id. at 363-64, 63 S.Ct. at 1117-18, 57 USPQ at 288 (all citations and footnotes omitted) (emphasis added). Under the facts of Altwater, it was clear to the Supreme Court that—
[a] controversy was raging, even apart from the continued license agreement. That controversy was “definite and concrete, touching the legal relations of parties having adverse legal interests.” That controversy concerned the validity of the reissue patents. Those patents had many claims in addition to the single one involved in the issue of infringement. And petitioners were manufacturing and selling additional articles claimed to fall under the patents. Royalties were being demanded and royalties were being paid. But they were being paid under protest and under the compulsion of an injunction decree. It was to lift the heavy hand of that tribute from the business that the counterclaim was filed.
Id. at 364-65, 63 S.Ct. at 1118, 57 USPQ at 288-89 (citations and footnote omitted).
The decision in Altvater followed Electrical Fittings Corp. v. Thomas & Betts Co., 307 U.S. 241, 59 S.Ct. 860, 83 L.Ed. 1263, 41 USPQ 556 (1939), in which the Supreme Court reversed the dismissal of an appeal by a defendant from a decree declaring the patent-in-suit valid, despite a finding of noninfringement in the same decree. The Supreme Court ruled that the Circuit Court of Appeals had jurisdiction to entertain the appeal, but only for the purpose of reformation of the decree. This result was subsequently explained by the Supreme Court in Deposit Guaranty National Bank v. Roper, 445 U.S. 326, 337, 100 S.Ct. 1166, 1173, 63 L.Ed.2d 427 (1980):
In Electrical Fittings, the petitioners asserted a concern that their success in some unspecified future litigation would be impaired by stare decisis or collateral estoppel application of the District Court’s ruling on patent validity. This concern supplied the personal stake in the appeal required by Art. III. It was satisfied fully when the petitioners secured an appellate decision eliminating the erroneous ruling from the decree. After the decree in Electrical Fittings was reformed, the then unreviewable judgment put an end to the litigation, mooting all substantive claims.
One patent commentator has explained the results in Electrical Fittings and Alt-vater in the following way:
Altvater seemed to do two things. First, it provided a rational [sic] for the ruling in Electrical Fittings — decision on validity of a patent not found infringed is one on a “hypothetical case.” Second, it affirmed that an accused infringer could seek a declaratory judgment of invalidity, providing there was a continuing dispute between the parties transcending the status of certain accused devices already found not to infringe.
4 D. Chisum, Patents § 19.02[1], at 19-10 (1986) (emphasis added).
The requirement of satisfying the case or controversy requirements in declaratory judgment actions through identification of an actual and continuing dispute has been recognized by this court. For example, in *1519Envirotech Corp. v. Al George, Inc., 730 F.2d 753, 221 USPQ 473 (Fed.Cir.1984), a case involving a counterclaim for a declaratory judgment on validity, the court affirmed the district court’s finding of non-infringement. Although conceding that the judgment of noninfringement could render academic any discussion of validity, the court vacated the district court’s finding of invalidity in light of errors in the court’s analysis and remanded the issue to district court for a determination of whether there remained a continuing case or controversy between the parties and if so, whether issuance of a declaratory judgment was appropriate under the facts of that case. Id. at 761 n. 7, 221 USPQ at 479 n. 7. See also Kinzenbaw v. Deere & Co., 741 F.2d 383, 222 USPQ 929 (Fed.Cir.1984), cert. denied, 470 U.S. 1004, 105 S.Ct. 1357, 84 L.Ed.2d 379 (1985) (where court vacated a district court’s finding of invalidity following a settlement agreement on liability because injunctive relief was no longer possible since the subject patent had expired).
In Jervis B. Webb Co. v. Southern Systems, Inc., 742 F.2d 1388, 1398, 222 USPQ 943, 949 (Fed.Cir.1984), this court observed:
Declaratory judgment jurisdiction pursuant to 28 U.S.C. § 2201, must be predicated on the existence of a case or controversy between the parties. Altvater, 319 U.S. at 363, 63 S.Ct. at 1117; Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 512, 85 L.Ed. 826 (1941). In addition, the case or controversy requirement for declaratory judgment jurisdiction has been defined to be the same as the case or controversy requirement in the constitutional sense. Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 239-41, 57 S.Ct. 461, 463-64, 81 L.Ed. 617 (1937). Moreover, such a case or controversy must exist as of the date of the filing of the declaratory judgment action. See International Harvester Co. v. Deere & Co., 623 F.2d 1207, 1217, 206 USPQ 772, 781 (7th Cir.1980). (All footnotes omitted.) 2
In Webb, the patentee had asserted and litigated infringement of 6 of the 12 claims in its patent; however, the defendant had filed a counterclaim for a declaratory judgment asserting invalidity and noninfringement of all 12 claims of the patent. The district court found the inventions set forth in all 12 claims to have been obvious. On appeal, in addition to contesting the invalidity of the 6 claims that it put in issue, Webb asserted that the district court erred in holding invalid the six claims not litigated by Webb, but only raised in the counterclaim since there was no case or controversy between the parties regarding those claims. This court agreed, vacating the invalidity holding with respect .to those claims. 742 F.2d at 1398-1400, 222 USPQ at 948-50. See also Datascope Corp. v. SMEC, Inc., 776 F.2d 320, 327, 227 USPQ 838, 844 (Fed.Cir.1985).
In Webb, this court outlined some of the requirements for satisfying the jurisdiction requirements of a case or controversy for a declaratory judgment in a patent case.
The case or controversy requirement for a patent invalidity declaratory judgment action requires the presence of two elements. First, the defendant in such an action must have engaged in conduct that created on the part of the declaratory 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 *1520declaration of invalidity must have actually produced the accused device or have actually prepared to produce such a device. Moreover, the existence of a case or controversy must be evaluated on a claim-by-claim basis. Further, where ... the declaratory defendant (patentee) has denied the factual allegations that allegedly support the existence of case or controversy, the declaratory plaintiff must prove the existence of facts underlying such allegations. (All citations omitted).
742 F.2d at 1398-99, 222 USPQ at 949 (emphasis added).
The basis for the court’s decision to vacate in Webb was the inability of the declaratory plaintiff to meet the second requirement noted above — showing that it had produced or intended to produce a device that met the limitations of the claims from which injunctive relief was sought. The court restricted the scope of its holding to the situation where the declaratory plaintiff, in response to an initial complaint by the declaratory defendant that asserted the infringement of less than all of his claims, had counterclaimed for an invalidity declaration but failed to meet the case or controversy requirement regarding the invalidity of all the claims.3
Thus, the precedent from the Supreme Court and this court makes clear that when a cross-appeal on a counterclaim seeking a declaratory judgment on validity remains following a determination of noninfringement by the appellate court, an inquiry into whether there is a continuing case or controversy should be made in order to determine if the validity issue raised by the cross-appeal should be considered by the appellate court. The appellate court need go on to rule on the merits of the cross-appeal only if there is a continuing dispute (such as the presence or threat of further litigation) regarding other claims or other accused devices that remains unresolved by the finding of noninfringement.
It is the burden of the party seeking the declaratory judgment to illustrate, either in its briefs or at oral argument, the continued existence of a case or controversy should a decision of noninfringement be made by this court in deciding the appeal. See International Medical Prosthetics, 787 F.2d at 575, 229 USPQ at 281 (burden is on declaratory plaintiff to establish that jurisdiction existed at, and has continued since, the time the complaint was filed). This requirement avoids having this court unnecessarily address what might turn out to be a hypothetical situation. Cf. Envirotech Corp., 730 F.2d 753, 221 USPQ 473. The factual situation in the present case falls into the second category noted in the footnote from the Webb case — a declaratory counterclaim asserting the invalidity of all of the claims in response to a complaint that asserted the infringement of all of the claims.4 Yet here, the accused devices are the only devices manufactured by the defendants which have been alleged to infringe the claims of the Vieau patent. Furthermore, Japax’s brief states that its cross-appeal on obviousness was filed in response to Vieau’s continued allegations of infringement on appeal in this case. Therefore affirmation of the finding of no *1521infringement of claim 1 and the lack of a showing of any other potentially infringing devices means, as in Webb, the defendant can no longer meet the second requirement for a continuing case or controversy for a declaratory judgment.
Since there is no indication in the present ease that the controversy between the parties extends beyond the accused devices found to be noninfringing, this court properly exercises its discretion to dismiss the cross-appeal in this case as moot. See A.B. Dick Co. v. Burroughs Corp., 798 F.2d 1392, 1400, 230 USPQ 849, 855-56 (Fed.Cir.1986) (mooting cross-appeal on validity and infringement after affirming district court’s finding of unenforceability); see also Harries v. Air King Products Co., 183 F.2d 158, 162-63, 86 USPQ 57, 61 (2d Cir.1950) (concluding that appellate court had discretion to rely solely on noninfringement where claims are not evidently invalid). Furthermore, the validity issue in this case is not one in which invalidity is plainly evident. See Leesona Corp. v. United States, 530 F.2d 896, 906 n. 9, 208 Ct.Cl. 871 (1976); cf. Mannesmann Demag Corp. v. Engineered Metal Products Co., 793 F.2d 1279, 230 USPQ 45 (Fed.Cir.1986) (where in a case involving a declaratory judgment counterclaim and cross-appeals by both parties, the court summarily affirmed the district court’s holding that the patent had not been shown to be invalid after first affirming the district court’s holding of noninfringement).5

. Where judgments on validity and infringement are distinct, the prevailing party on liability seeking to challenge either validity or infringement on appeal must file a cross-appeal. Shelcore, Inc. v. Durham Industries, Inc., 745 F.2d 621, 623 n. 1, 223 USPQ 584, 585 n. 1 (Fed.Cir.1984); see Radio Steel & Mfg. Co. v. MTD Products, Inc., 731 F.2d 840, 844, 221 USPQ 657, 660 (Fed.Cir.), cert. denied, 469 U.S. 831, 105 S.Ct. 119, 83 L.Ed.2d 62 (1984). By filing a cross-appeal following the denial of JNOV on the obviousness issue, Japax has properly met that requirement in this case.

. The court in Webb declined to address the question of whether the establishment of declaratory judgment jurisdiction at the time of the filing of the action is sufficient to sustain the case or controversy requirement to the conclusion of the action. But it left little doubt as to its likely position on the question, noting that the Supreme Court had stated that "'an actual controversy must be extant at all stages of review, not merely at the time the complaint is filed.’" 742 F.2d at 1398 n. 6, 222 USPQ at 949 n. 6 (quoting Preiser v. Newkirk, 422 U.S. 395, 401, 95 S.Ct. 2330, 2334, 45 L.Ed.2d 272 (1975)); see also Steffel v. Thompson, 415 U.S. 452, 459 n. 10, 94 S.Ct. 1209, 1216 n. 10, 39 L.Ed.2d 505 (1974). Subsequently, in International Medical Prosthetics Research Associates, Inc. v. Gore Enterprise Holdings, Inc., 787 F.2d 572, 575, 229 USPQ 278, 281 (Fed.Cir.1986), this court expressly confirmed its adoption and adherence to the need for a continuing controversy in order to sustain the court's jurisdiction over a declaratory judgment action.

. As the court explained:
This holding does not preclude the issuance of a declaratory judgment that all claims are valid or invalid in response to, inter alia, (1) the filing of a declaratory judgment complaint asserting the invalidity of all of a patentee’s claims in response to general accusations of infringement by the patentee ... ; (2) the filing of a declaratory judgment counterclaim asserting the invalidity of all of patentee’s claims in response to a complaint that asserted the infringement of all of the claims; or (3) the filing of a declaratory judgment counterclaim asserting the invalidity of all of a patentee’s claims in response to an accusation or a complaint that asserted the infringement of less than all of the claims where the declaratory plaintiff is able to meet both of the case or controversy requirements for all of the claims. Nor does the present holding preclude a declaratory judgment that all claims are invalid when the proof at trial establishes a basis, e.g., fraud, derivation, for such judgment.
Id. at 1399 n. 8, 222 USPQ at 950 n. 8 (all citations omitted).

. Although all the claims were alleged to be infringed by the patentee and all were sought to be declared invalid by the defendant, only claims 1, 3, and 5 were litigated at trial or disputed on appeal.

. Admittedly, in light of the collateral estoppel effects given a finding of invalidity under Blonder-Tongue Laboratories v. University of Illinois Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788, 169 USPQ 513 (1971), there could be greater potential ramifications to vacating a finding of invalidity than a finding of validity; nevertheless, since a determination of non-infringement also creates finality and res judica-ta effects with respect to the defendant and the accused devices involved in the suit, if there are no other claims or devices at issue, there is no remaining case or controversy between these parties.