Federal Circuit Summary

Before NEWMAN, DYK, and STOLL. Appeal from the Northern District of California.

Summary: A consumer of a patented product has no standing under the Declaratory Judgment Act to challenge the validity of patents.

AIDS Healthcare—a medical care provider that buys AIDS drugs covered by Gilead’s patents—filed a declaratory judgment action seeking to invalidate Gilead’s patents. AIDS Healthcare argued there was declaratory jurisdiction, because (1) it unsuccessfully encouraged generic manufacturers to infringe (2) Gilead refused to grant a covenant not to sue, and (3) public policy favors invalidating weak patents. The Federal Circuit affirmed a finding of no declaratory jurisdiction. There was no “substantial controversy” with sufficient “immediacy and reality.” There was no present infringement, no threat of or possibility of infringement litigation, and no meaningful preparation to infringe. Regarding public policy, the court noted that the Hatch-Waxman Act already balances policy interests of preserving the patent incentive while enabling validity challenges by ANDA filers. Any further policy change would require new legislation.

This case is: AIDS HEALTHCARE FOUNDATION, INC. V. GILEAD SCIENCES, INC.

Written by: C. Dylan Turner, Ph.D. and Mark Kachner

Edited by: Paul Stewart