Free Motion for Attorney Fees - District Court of Arizona - Arizona


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Date: December 31, 1969
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State: Arizona
Category: District Court of Arizona
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1 WO
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3
4 I l
5 IN THE UNITED STATES DISTRICT COURT
6 FOR THE DISTRICT OF ARIZONA
7
8 True Center Gate Leasing Inc., an ) No. CV-02-1109-PHX-DGC
Arizona corporation,
9 ORDER
_ Plaintiff, )
10 )
vs. )
ll )
. ) I
12 Sonoran Gate, L.L.C., an Arizona limited )
liability company; K-Zell Metals, Inc., )
13 an Arizona corporation; Donald )
Kammerzell and Barbara Kammerzell, )
14 husband and wife; and Mike O’Connor, )
an individual, )
15 ‘ - )
Defendants. )
16 ‘ )
17 I `
` 18 In the only claims remaining in this case, Plaintiff True Center Gate Leasing, Inc.
19 ("True Center”) seeks a declaratory judgment that two patents held by Defendant K-Zell
20 Metals, Inc. (YK-Zell") are invalid. K-Zell recently has covenanted not to sue True Center
21 or its customers for infringement of the two patents based on past or present acts or
22 products. The Court concludes that this covenant eliminates the case or controversy
23 required for jurisdiction over the declaratory judgment claims and therefore will dismiss this
24 action.
25 I. Background.
26 True Center and K—Zel1 make starting gates for horse racing tracks. True Center has
27 been in the business for several decades. K—Zel1 acted as a contractor for True Center for
28 several years, fabricating parts for and sometimes assembling True Center starting gates.
n EXHIBIT B
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1 K—Zell subsequently begin manufacturing starting gates on its own.
2 On June 14, 2002, True Center filed this action against K-Zell and additional
3 defendants asserting claims for false advertising, trademark dilution and infringement,
4 breach of fiduciary duty, conspiracy, breach of contract, violation of the trade secrets act,
5 slander, and conversion. Doc. #1. Each of- these claims and all defendants other than
6 K-Zell have been eliminated from this case by summary judgment. Doc. #139.
7 After the lawsuit was filed, K—Zell obtained two patents from the United States
8 Patent and Trademark Office ("PTO") — Patent No. 6,508,201 ("201 patent") and No.
9 6,637,094 ("094 patent"). True Center thereafter amended its complaint to assert two claims C
10 for declaratory judgment, one seeking a declaration that the 201 patent is invalid and the
11 other seeking a declaration that the 094 patent is invalid. Docs. #57, 70. True Center ·
12 alleges that the patents embody prior art created and used for years by True Center in the l
‘ 13 manufacture of horse race starting gates and that K-Zell engaged in inequitable conduct
14 before the PTO when it failed to disclose this prior art while seeking the patents. _
15 K-Zell argued during pre-trial litigation of this case that the Court did not have - .
16 jurisdiction over the patent validity claims because there was no actual controversy
17 between True Center and K-Zell concerning the patents. The Court rejected this argument,
18 holding that True Center had adequately alleged and presented sufficient evidence that
19 K-Zell threatened True Center with claims of patent infringement. Docs. ##56, 139. The
20 Court accordingly denied K-Zell’s requests that the declaratory judgment claims be
21 dismissed. Id.
22 A bench trial on patent validity began on November 1, 2005. Shortly before trial,
1 23 K-Zell stated in filings to the Court and on the record during a fmal pretrial conference that
24 it was covenanting not to sue True Center or its customers for infringement of the 201 and
25 094 patents arising out of any products or acts existing on or before November 1, 2005.
l 26 K-Zell argued that this covenant eliminated any actual controversy between the parties
27 and therefore required disnrissal of the declaratory judgment claims for lack of jurisdiction.
28 The Court heard oral argument on this issue on the morning of the first day of trial and
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1 took the matter under advisement. Each of the parties had provided briefing on these
2 jurisdictional matters. Docs. ##178, 181-83. Following additional analysis and at the start
3 of the second day of trial, the Court held that the covenant not to sue did eliminate the
U 4 required case or controversy and that dismissal of the action was therefore required. This
5 order sets forth the Court’s rationale.
6 II. Analysis. . I
7 The United States Constitution provides that federal courts have jurisdiction only
8 over actual cases or controversies. U.S. Const. art. III, § 2, cl. 2; see Anderson v. United
» I 9 States, 344 F.3d 1343, 1349 (Fed. Cir. 2003) ("Article III, section 2 of the United States. q l
10 Constitution limits federal judicial power to- the .resolution of actual ‘cases’ or _
11 ‘controversies."’). Moreover, Congress has made clear that federal declaratory judgment
12 jurisdiction extends only to an "actua1 controversy" between interested parties. 28 U.S.C.
13 § 2201(a); see Gen—Pr0be, Inc. v. Vysis, Inc., 359 F.3d 1376, 1379 (Fed. Cir. 2004) ("The
14 Declaratory Judgment Act only supports jurisdiction in the event of an ‘actual I
15 controversy? This requirement effectuates Article III of the Constitution, which only
16 authoriz es the federal judiciary to justiciable cases and controversies?) (citations .
17 omitted); Medimmune, Inc. v. Centoccr, Inc., 409 F.3d 1376, 1378-79 (Fed. Cir. 2005)
18 ("Paralle1ing Article III of the Constitution, the [Declaratory Judgment] Act ‘requires an
l 19 actual controversy between the parties before a federal court may exercise jurisdiction over _
20 an action for declaratory judgment."’) (quoting Teva Pharrns. USA, Inc. v. Pfizer, Inc.,
21 395 F.3d 1324, 1331 (Fed. Cir. 2005)). Thus, "[t]he existence of a sufficiently concrete -
22 dispute between the parties remains . . . a jurisdictional predicate to the vitality of’ a
23 declaratory judgment case. Super Sack Mfg. Corp. v. Chase Packaging Corp., 57 F.3d n
24 1054, 1058 (Fed. Cir. 1995). "[T]he ‘actual controversy must be extant at all stages of
25 review, not merely at the time the complaint is filed.’” Id. (quoting Prezlser v. Newkirk, 422
26 U.S. 395, 401 (1975)). As the party seeking declaratory relief, True Center must "‘estab1ish
27 that jurisdiction over its declaratory judgment action existed at, and has continued since,
-28 the [declaratory judgment claims were] ii1ed."’ Id. (quoting Int? Med. Prosthetics Res.
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