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An unnecessary ruling on an affirmative defense is not the same as the necessary resolution of a counterclaim for a declaratory judgment.
Since its 1987 decisions in Vieau v. Japax, Inc., 823 F.2d 1510, and Fonar Corp. v. Johnson & Johnson, 821 F.2d 627, the Court of Appeals for the Federal Circuit, which has exclusive jurisdiction over appeals from all Federal District Courts in patent litigation, has followed the practice of routinely vacating declaratory judgments regarding patent validity following a determination of noninfringement of the patent. Adhering to that practice in this and a similar case brought by respondent, the Federal Circuit affirmed the District Courts' findings that the particular defendants had not infringed respondent's two patents on chemical compounds used in polyvinyl chloride, and then vacated the entry of judgments, on the defendants' counterclaims, declaring the patents invalid. A third such case is still pending. Petitioners, the alleged infringers in this case, sought certiorari on the ground that the Federal Circuit has erred in applying a per se rule to what should be a discretionary matter. Respondent did not oppose the grant of certiorari, but instead pointed out that it also has an interest in having the validity issue adjudicated, in that its patents have been effectively stripped of any power in the marketplace by the Federal Circuit's refusals of substantive review on the two invalidity findings.
Was the Federal Circuit's affirmance of a finding that a patent has not been infringed a per se sufficient reason for vacating a declaratory judgment holding the patent invalid?
The court took issue with the lower court's procedure. Finding that the lower court did have jurisdiction to review the declaratory judgment of invalidity, even in light of its non-infringement affirmance, the court clarified that the lower court's practice was not compelled by federal caselaw, nor supported by the case or controversy requirement of U.S. Const. art. III. The court held, moreover, that the practice was impermissible as implemented. The judgment of the lower court was thus vacated, and the case was remanded for further proceedings.