Black Gold, Texas Tea: Court Again Tosses DJ Action Despite Later Filed Infringement Case

Posted on | March 21, 2008 | No Comments

2008-1244 Baker Hughes v. ReedHycalog
D/UT 2:05-CV-0931

DJ plaintiff Baker Hughes appeals from Judge Ted Stewart’s order (again) granting ReedHycalog’s motion to dismiss for lack of subject matter jurisdiction. The parties are competitors in the manufacture of rotary drill bits used for subterranean drilling in the gas and oil industry.  These drill bits employ polycrystalline diamond compact cutters and inserts.  ReedHycalog owns/licenses over a dozen patents towards these items.

Way back in 2003, ReedHycalog started sending Baker Hughes letters mentioning certain of these patents and highlighting some claim language.  Baker Hughes also learned that ReedHycalog was attempting to secure some of its products for analysis.  The parties had some discussions, but in October 2005 Baker Hughes filed the instant DJ action.

In May 2007 the court granted ReedHycalog’s motion to dismiss finding no reasonable apprehension of suit.  ReedHycalog filed an infringement action in Texas less than 6 hours later, and Baker Hughes appealed.

The Federal Circuit subsequently vacated the dismissal and remanded for consideration in light of MedImmune, Sony, Teva and SanDisk. 

The court did . . . and re-dismissed.  After reviewing the new case law, the court said:

In contrast, in this case, none of the interactions between Baker Hughes and ReedHycalog indicated either an affirmative act or adverse legal positions at the time of filing this case. While ReedHycalog had mailed several letters notifying Baker Hughes of issued and pending patents, these letters did not indicate that ReedHycalog had taken a position regarding infringement by Baker Hughes. While ReedHycalog was, in fact, evaluating possible infringement by Baker Hughes, the dispute had not yet become “definite and concrete, touching the legal relations of parties having adverse legal interests.” Baker Hughes cites several of ReedHycalog’s internal communications in support of its position that ReedHycalog had taken a position regarding infringement. The Court reads these communications to show that ReedHycalog was still evaluating infringement or, at most, gearing up for litigation. In any case, ReedHycalog did not communicate to Baker Hughes anything that would indicate ReedHycalog had taken “a position that puts [Baker Hughes] in the position of either pursuing arguably illegal behavior or abandoning that which he claims a right to do.”

The court also rejected consideration of the filing of the Texas case, reasoning that because  jurisdiction must be based at the time of filing, subsequent actions are irrelevant.

Comments