Patentees Can File DJ Actions, Too: Complaint in Middle District of GA Provides Example

“A declaratory action allows a party ‘who is reasonably at legal risk because of an unresolved dispute, to obtain judicial resolution of that dispute without having to await the commencement of legal action by the other side.’”^[1]  In the patent litigation context, declaratory judgment actions are frequently brought as preemptive strikes by those who perceive that they will soon be sued by a patentee for infringement.  “Declarations of infringement sought by patentees against parties who will allegedly infringe in the future have been less frequently requested, but have nevertheless been allowed to proceed.”^[2]  As the U.S. Court of Appeals for the Federal Circuit stated over twenty years ago:

If the controversy requirement is met by a sufficient allegation of immediacy and reality, we see no reason why a patentee should be unable to seek a declaration of infringement against a future infringer when a future infringer is able to maintain a declaratory judgment action for noninfringement under the same circumstances.^[3]

A new complaint in the U.S. District Court for Middle District of Georgia provides an example of a comparatively-rare declaratory judgment action by a patentee.

On December 5, 2012, Merial Limited and Merial SAS (collectively “Merial”) filed a “Declaratory Judgment Complaint for Patent Infringement” against Ceva Animal Health, LLC (“Ceva”), alleging a “real and immediate controversy concerning Ceva’s infringement of [U.S. Patent No. 6,096,329] (“the ’329 Patent”)] under 35 U.S.C. § 271.” 

As explained in a prior post, the ’329 Patent is directed to parasiticides comprised of the chemical compounds fipronil and methoprene, for veterinary treatment of dogs and cats, and the Middle District of Georgia observed that the commercial embodiment of those compositions, sold under the registered trademark FRONTLINE PLUS,  is the leading flea and tick treatment in the United States.  The complaint alleges that Merial S.A.S. is the assignee of the ’329 Patent, and that Merial Limited received an exclusive license under that patent from Merial S.A.S.

Ceva, according to the complaint, is based in Rutherford, New Jersey, and its parent company is Ceva Santé Animale, based in France (referred to in this blog post as “the French parent company”). Merial alleges that Ceva intends to begin selling infringing products in the United States “in approximately the spring of 2013.”  More specifically, the complaint includes the following allegations, made upon information and belief:

• “Ceva, acting through another company, Horizon Valley Generics, Inc. (‘Horizon’), has filed with the EPA applications to register generic FRONTLINE PLUS products, i.e., spot-on flea and tick products containing fipronil and methoprene as the only active ingredients.”
• As required by federal regulations, Ceva, through another company, offered to pay Merial for the use of its FRONTLINE PLUS data.  A September 25, 2012 letter containing that offer advised that Horizon was “‘applying for registration for two (2) end-use products containing fipronil and S-methoprene . . . as active ingredients,’” and that in support of those applications, Horizon intended to rely on toxicity, performance, and safety data that Merial had submitted to the EPA for registration of its FRONTLINE PLUS “fipronil and methoprene-containing flea and tick products.”
• The products referred to by Horizon “are within the scope of one or more claims of Merial’s ’329 Patent.”

Additionally, Merial alleges that on or around November 7, 2012, the General Counsel of the French parent company contacted Merial, advising that Ceva “intended to launch fipronil and methoprene-containing spot-on flea and tick products in the United States,” stating that Ceva was “‘far down the road’” in its launch preparations, and expressing a desire to obtain a license under the ’329 Patent. The Ceva representative, according to Merial, also threatened to file a lawsuit to invalidate the ’329 Patent if Merial would not grant a license.

Merial’s complaint expresses unwillingness to grant that license “or otherwise to relinquish its legal right to exclude others from exploiting its patented inventions claimed in the ’329 Patent.”  Merial prays for a judgment that Ceva’s planned products infringe the ’329 Patent, for preliminary and permanent injunctive relief, for a declaration that any infringement “has been and is willful,” and for awards of specified forms of monetary relief under the Patent Act, including those available for an “exceptional case.”  Compensatory damages and interest thereon are requested “if necessary at some future date.”

The case is Merial Ltd. and Merial SAS v. Ceva Animal Health, LLC., No. 3:12-cv-154 (CDL), filed 12/05/12 in the U.S. District Court for Middle District of Georgia, Athens Division, assigned to U.S. District Judge Clay D. Land.

_{[1] Elecs. for Imaging, Inc. v. Coyle, 394 F.3d 1341, 1345 (Fed. Cir. 2005) (quoting BP Chems. Ltd. v. Union Carbide Corp., 4 F.3d 975, 977 (Fed.Cir.1993)).}  

_{[2] Lang v. Swath Ocean Sys., Inc., 893 F.2d 761, 763 (Fed. Cir. 1990).}

_{[3] Id. at 764.}