Where the Underlying Infringement is Eliminted, the Court May Not Have Jurisdiction Over an Invaldity Counterclaim

Benitec Australia, Ltd. v. Nucleonics, Inc., [06-1122](July 20, 2007)[WHYTE, Rader, Dyk] The Federak Curcuit affirmed the dismissal of Nucleonics declaration judgment counterclaims against Benitec for lack of subject matter jurisdiction.
SIGNIFICANCE: Medimmune did not eliminate the requirement of a controversy.
BRIEF: Benetic sued Nucleonics for patent infringement, and Nucleonics counterclaimed. After Merck v. Integra applied an expansive experimental use exception to infringement, Nucleonics moved to dismiss without prejudice. The district court granted Benitec's motion, and dismissed Nucleonics' counterclaim for lack of subject matter jurisdiction. Recognizing that under Cardinal Chemical the infringement suit created a case and controversy, the Federal Circuit examined whether subsequent events could divest the district court of subject matter jurisdiction. Because Benitec withdrew its infringement claim after it became clear that Nucleonics was not doing anything that could be regarded as infringement, the court found that there was no controversy between the parities concerning infringement by Nucleonics. Benitec tried to salvage jurisdiction by planning to use the technology on animals, but the Federal Circuit found that Nucleonics had failed to establish a justiciable controversy. The Federal Circuit recognized "that Nucleonics would like to remove any concerns it or its potential investors might have over possible infringement of the Benitec patent" but failed to show a present controversy."