Declaratory Judgment Act, which in patent cases is to provide the allegedly infringing party relief from uncertainty and delay with regard to its legal rights. Goodyear, 824 F.2d at 956.
In fact, there does not even need to be an express charge of infringement in order for a justiciable controversy to exist. Arrowhead, 846 F.2d at 736; see, e.g., Grafon Corp., 602 F.2d at 784; Super Products Corp. v D P Way Corp., 546 F.2d 748, 753 (7th Cir. 1976). "We must [first] look for any express charges of infringement, and if none, then to the totality of the circumstances." Shell Oil Co., 970 F.2d at 886. And the totality of the circumstances, with regard to defendant's conduct, must be such as to indicate defendant's intent to enforce its patent. Arrowhead, 846 F.2d at 736. The Federal Circuit Court in Arrowhead specifically stated that "if defendant has expressly charged a current activity of the plaintiff as an infringement, there is clearly an actual controversy, [and] certainty has rendered apprehension irrelevant." Arrowhead, 846 F.2d at 736. Therefore, based on Kodak's express charges of infringement, as well as its intent to enforce its patent rights as expressed in its letter of November 18, 1991, combined with its conduct at the March 31, 1992 meeting, it was reasonable for Oce to anticipate the threat of an infringement suit.
In rebuttal, Kodak additionally argues that Oce has never apprehended an infringement suit; rather, it contends Oce is just using this action to further its bargaining position in what is a continuing series of business negotiations. It supports this contention with an April 3, 1992 letter from Oce to Kodak stating that Oce hoped that this matter could be resolved without the litigation going to conclusion. Kodak argues that this letter was essentially a counteroffer to the terms proposed by Kodak at the March 31 meeting. Oce states that this letter was no more than a transmittal letter sent to Kodak with a courtesy copy of the complaint, and that the portion of the letter to which Kodak refers was an attempt to keep open the possibility that any litigation might be resolved out of court. (Sweeney Affidavit at P 3).
The court finds Kodak's position unpersuasive. While the April 3, 1992 letter seems to indicate a willingness on the part of Oce to continue negotiations, the affidavits of both Mr. Hilst and Mr. Bittman state that in no way should the letter be construed to indicate that Oce wishes to continue negotiations. Oce further maintains that it never negotiated licensing conditions for the Oce 2500 under the '387 patent. (van der Velden Declaration at P 21). Therefore, based on the material submitted and supported by the fact that Oce has unwaveringly maintained since the beginning of these communications that the Oce 2500 does not infringe the '387 patent, it is unlikely that the April 3 letter evinces a wish on Oce's behalf to continue negotiations for a license for their copier under this patent.
Kodak additionally finds fault with Oce filing a declaratory judgment action in order to not let this matter "languish indefinitely." The court does not agree. In fact, as stated above, the aim of a declaratory judgment is to relieve the plaintiff from uncertainty and delay regarding its legal rights. Goodyear, 824 F.2d at 956. It would be unfair to require imminent apprehension of an infringement suit when a defendant could delay such suit until all other enforcement efforts had failed. Arrowhead, 846 F.2d at 736. Resolving the uncertainty and anxiety resulting from a looming lawsuit is, indeed, the purpose of the Declaratory Judgment Act. See Shell Oil Co., 970 F.2d at 889 ("the Declaratory Judgment Act was intended to protect threatened parties . . ."). Hence, the court finds no fault with Oce wishing to determine this real and tangible issue in a prompt fashion.
Lastly, Kodak argues in its brief supporting its motion to dismiss that it had fully intended licensing discussions to continue after the March 31, 1991 meeting, and that Kodak would only begin "consideration of other appropriate actions" once licensing discussions had failed. Licensing discussions did fail. Oce steadfastly maintained its position that its 2500 copier did not infringe Kodak's '387 patent. And Kodak equally tenaciously maintained its infringement position and the requirements for a license. So, at the conclusion of the March 31 meeting, Oce determined that the discussions were fruitless and ended the negotiations. And, while it was Oce who terminated these discussions, it is not a prerequisite that negotiations must terminate naturally or amicably, nor that the defendant must be the party to terminate negotiations, for a declaratory judgment plaintiff to establish jurisdiction. It is enough that the defendant's conduct "be such as to indicate defendant's intent to enforce its patent." Arrowhead, 846 F.2d at 736. Therefore, Kodak's argument that it had intended negotiations to continue does not work to defeat jurisdiction.
Based on Kodak's express charges of infringement, the conclusions of Kodak's legal staff regarding Oce's alleged infringement, Kodak's refusal to modify its position regarding the '387 patent, Kodak's statement in its November 18, 1991 letter that it would consider other appropriate action if license discussions broke down, and Kodak's reference to a recent case where a jury had found in favor of the patent holder, Oce has established that it had a reasonable apprehension of litigation or the threat of litigation if it continued its activities with regard to the Oce 2500. Hence, a justiciable controversy is present here and Kodak's motion to dismiss is denied.
Date: NOV 03 1992
JAMES H. ALESIA
United States District Judge
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