Panavise Products, Inc. v. National Products, Inc.

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2008-1444
PANAVISE PRODUCTS, INC.,
Plaintiff-Appellant,
v.
NATIONAL PRODUCTS, INC.,
Defendant-Appellee.
Joseph A. Walker, The Walker Law Firm, APC, of Newport Beach, California, for
plaintiff-appellant. With him on the brief was Jason Matthew Lamb.
David K. Tellekson, Darby & Darby P.C., of Seattle, Washington, for defendant-
appellee. With him on the brief were Robert L. Jacobson and Mark P. Walters.
Appealed from: United States District Court for the Central District of California
Judge Audrey B. Collins

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NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2008-1444
PANAVISE PRODUCTS, INC.,
Plaintiff-Appellant,
v.
NATIONAL PRODUCTS, INC.,
Defendant-Appellee.
Appeal from United States District Court for the Central District of California in case no.
08-CV-1300, Judge Aubrey B. Collins.
__________________________
DECIDED: January 6, 2009
__________________________
Before MICHEL, Chief Judge, PROST, and MOORE, Circuit Judges.
MICHEL, Chief Judge.
In this declaratory judgment action, Plaintiff-Appellant Panavise Products, Inc.
(“Panavise”) appeals from an order granting the motion to dismiss for lack of subject
matter jurisdiction by Defendant-Appellee National Products, Inc. (“NPI”). See Minutes
of In Chambers Order, Panavise Prods., Inc. v. Nat’l Prods., Inc., No. 08-1300 (C.D.
Cal. May 30, 2008) (“Order”). Under the totality of the circumstances, Panavise has not
shown a substantial controversy between Panavise and NPI upon which the court’s
subject matter jurisdiction may rest, despite an opportunity to respond to NPI’s factual
challenge. Therefore, we affirm the district court’s dismissal of Panavise’s complaint.

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I. INTRODUCTION
Both Panavise and NPI manufacture and sell suction cup mounting devices for
portable equipment. NPI is the assignee of U.S. Patent No. 6,666,420 (“the ’420
patent”). The ’420 patent issued on December 23, 2003. Between January 27, 2005
and February 5, 2007, NPI initiated at least six separate lawsuits against various
entities, alleging infringement of the ’420 patent.
On February 26, 2008, Panavise filed a complaint for declaratory relief in the
United States District Court for the Central District of California. Panavise alleged (1)
that it “ha[d] manufactured and produced,” “ha[d] publicly used and displayed,” “ha[d]
distributed and continue[d] to distribute samples of,” and “[would] begin or ha[d] begun
distribution and sales of” a “potentially infringing device known as the Model ‘811
Series;’” (2) that NPI observed the Model 811 Series at a trade show in Las Vegas in
January 2008; and (3) that NPI has filed various lawsuits against various entities,
alleging infringement of NPI’s patents, including the ’420 patent. Panavise also alleged
that NPI’s conduct “ha[d], and continue[d] to, put [Panavise] under a reasonable and
serious apprehension of an imminent suit in light of the fact that [Panavise] ha[d]
manufactured and produced a potentially infringing device.” Panavise sought a
declaratory judgment that its products did not infringe the ’420 patent, and that the ’420
patent was invalid and unenforceable.
NPI filed a motion to dismiss for lack of subject matter jurisdiction pursuant to
Fed. R. Civ. P. 12(b)(1). Panavise opposed. On May 30, 2008, the district court
granted NPI’s motion to dismiss. After correctly noting the subject matter jurisdiction
standard in a declaratory judgment patent action under MedImmune Inc. v. Genentech
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Inc., 127 S. Ct. 764 (2007) and SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d
1372 (Fed. Cir. 2007), the court concluded that “[t]he absence of any communication or
conduct by NPI towards Panavise about the 811 series devices [was] dispositive of the
jurisdictional question: there [was] no actual case or controversy . . . .” Order at 5. It
therefore dismissed Panavise’s complaint.
Panavise timely appealed. We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(1).
II. DISCUSSION
A. Standard of Review
We review a district court’s dismissal of a patent claim for lack of subject matter
jurisdiction de novo. Sandisk, 480 F.3d at 1377. We review the underlying factual
findings for clear error. Id.
B. Analysis
In analyzing jurisdictional questions in declaratory judgment actions, there is no
bright-line rule. MedImmune, 127 S. Ct. at 771. Instead, “the question in each case is
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.” Id.
Panavise argues that the district court failed to follow the MedImmune standard,
and instead, applied the prior Federal Circuit standard that MedImmune overruled, the
“reasonable apprehension of imminent suit test.” Specifically, Panavise emphasizes
that the district court, in deeming the absence of any communication or conduct by NPI
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towards Panavise as “dispositive” of the jurisdictional question, committed a reversible
error.
As an initial matter, because we review issues of jurisdiction de novo, we need
not decide whether the logic or supporting rationale as stated by the district court was
sound. Mangosoft, Inc. v. Oracle Corp., 525 F.3d 1327, 1330 (Fed. Cir. 2008). See
also Acumed LLC v. Stryker Corp., 483 F.3d 800, 809 n.2 (Fed. Cir. 2007) (“We review
only the district court’s finished product, not its process.”). We realize that the word
“dispositive” may have created the misimpression that the district court only considered
a single factor in deciding the case. However, the district court expressly acknowledged
the correct legal test under MedImmune and plainly took all the relevant facts into
account in determining subject matter jurisdiction, as a reading of its entire Order
shows. See Order at 3-5.
A party claiming declaratory judgment jurisdiction has the burden to establish the
existence of such jurisdiction. See Benitec Austl., Ltd. v. Nucleonics, Inc., 495 F.3d
1340, 1344 (Fed. Cir. 2007). In this case, Panavise alleged in its complaint that an
actual controversy existed because of NPI’s conduct, including the fact that NPI had
asserted the ’420 patent against various entities, as well as the “information and belief”
that NPI observed the Model 811 Series, the “potentially infringing device.” NPI filed a
motion to dismiss, asserting that “the facts of this case [were] clearly outside the limits
of federal court jurisdiction” under the Declaratory Judgment Act. In support, NPI
submitted a declaration by its president and the sole inventor listed on the ’420 patent,
Jeffrey Carnevali. Mr. Carnevali stated (1) that neither he, nor anyone in his company,
had ever “seen or evaluated the 811 Series Device;” (2) that he “was not even aware
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that Panavise made such a product until after their complaint was filed;” and (3) that his
company and its lawyers “had absolutely no contact with Panavise relating to the 811
Series Device or the ’420 patent prior to the date its complaint was filed.”
In doing so, NPI mounted a factual attack of the asserted basis of subject matter
jurisdiction. We have previous stated that if a declaratory judgment defendant
adequately challenges jurisdiction in fact, “the allegations in the complaint are not
controlling.” Cedars-Sinai Medical Ctr. v. Watkins, 11 F.3d 1573, 1583 (Fed. Cir. 1993).
Therefore, as NPI’s factual challenge was adequate, it placed the burden on Panavise
to demonstrate facts sufficient to support its contention regarding the court’s jurisdiction.
See id. at 1584 (stating that once jurisdiction is factually challenged, “allegations alone
are insufficient to meet the complainant’s burden.”). In other words, Panavise must
produce sufficient evidence to establish subject matter jurisdiction.
We recently reiterated that an actual “controversy must be based on a real and
immediate injury or threat of future injury that is caused by the defendants—an objective
standard that cannot be met by a purely subjective or speculative fear of future harm.”
Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1338 (Fed. Cir. 2008) (emphasis
in original). Panavise submitted a declaration by its president, Gary Richter, who stated
that Panavise had “sold approximately 20,000 units of the Model ‘811 Series’ suction
cup mounts through a subsidiary to a foreign company that [would] import to and
distribute [them] throughout the United States . . . .” Panavise did not allege, however,
that NPI actually restrained its right to freely market its products before or at the time the
complaint was filed. To the contrary, Mr. Richter stated that starting from as early as
1997, Panavise distributed and sold in the public a suction cup mount known as the
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Model 711, a device identical to the Model 811 Series, “except for some minor structural
differences.” Therefore, the only basis for Panavise’s declaratory judgment complaint is
its assumptions about a threat of future injury. Under settled law, Panavise must
present factual proof that such threat is real and immediate. Panavise failed to meet
this threshold burden.
In its opposition to NPI’s motion to dismiss, Panavise argued that its complaint
had put NPI “on notice of the adverse legal interests of the parties.” In addition, Mr.
Richter stated in his declaration that NPI was “a known and recognized competitor of
Panavise,” that both Panavise and NPI had booths at the Las Vegas trade show, and
that it was “important to visit the booths of known and recognized competitors to
observe the new products being offered in the marketplace.” We take these statements
as suggesting that NPI observed the “potentially infringing device.” This information is
the same as that alleged in the complaint and therefore, is insufficient to rebut NPI’s
factual challenge of jurisdiction. Furthermore, as the district court correctly pointed out,
the suggestion that NPI actually knew of the Model 811 Series is mere speculation—
there is nothing “definite and concrete,” and nothing “real and substantial,” as Panavise
has never presented any evidence and proof to support its allegation. See
MedImmune, 127 S. Ct. at 771. In fact, the only evidence before the court was Mr.
Carnevali’s declaration denying that NPI observed the Model 811 Series in Las Vegas
or was even aware of its existence before the filing of the complaint.
Nor, in view of the evidence do we see the immediacy of any threat of future
injury. Panavise submitted a request for judicial notice of six lawsuits initiated by NPI
between January 27, 2005 and February 5, 2007, in which NPI asserted infringement of
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the ’420 patent. However, the last lawsuit was filed more than a year prior to
Panavise’s filing of this declaratory judgment action. In addition, the ’420 patent issued
in December 2003. While Panavise’s Model 711, a device substantially identical to the
allegedly “potentially infringing product,” has been on the market since 1997, NPI has
yet to accuse Panavise of infringement or take any actions which may imply such
allegation. The lack of any evidence that NPI plans to assert the ’420 patent against
Panavise prevents us from concluding that Panavise faces any immediate threat of
future injury.
We do not, of course, mean that the lack of direct pre-complaint communication
between a patentee and a declaratory plaintiff by itself is sufficient to defeat subject
matter jurisdiction. See SanDisk, 480 F.3d at 1381 (stating that “the outer boundaries of
declaratory judgment jurisdiction . . . depend[s] on the application of the principles of
declaratory judgment jurisdiction to the facts and circumstances of each case.”). On the
contrary, we recognize that “[p]rior litigious conduct is one circumstance to be
considered in assessing whether the totality of circumstances creates an actual
controversy.” Prasco, 537 F.3d at 1341. However, there are many other circumstances
that must also be considered. In this case, the prior lawsuits in which NPI asserted the
’420 patent concern different products. Panavise does not argue or present any
evidence to show that its Model 811 Series device is similar to any of those accused
products. The mere allegation that the Model 811 Series “potentially” infringes the ’420
patent falls short of satisfying Panavise’s burden of proof. Therefore, the fact that NPI
routinely enforces its patent rights, when viewed under the totality of the circumstances
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2008-1444
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in this case, is insufficient to create an actual controversy and establish subject matter
jurisdiction.
C. Sanction
NPI files a motion for sanctions under Fed. R. App. P. 38. We deny NPI’s
motion. Although the appeal can be viewed as very weak from both a factual and a
legal stand point, we do not agree that it rises to the level of frivolousness. At the same
time, we do note that this appeal approaches wasting the court’s time and unduly
delaying more deserving litigants.
III. CONCLUSION
For the foregoing reasons, we affirm the district court’s dismissal of Panavise’s
complaint.

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