Patentee's Infringement Claim Against Customers Creates Substantial Controversy With Manufacturer​

The court denied defendant's motion to dismiss plaintiffs' declaratory relief action and rejected defendant's argument that its lawsuit against plaintiffs' customer was insufficient to create an actual controversy with plaintiffs. "[Defendant's] litigation against [plaintiffs' customer] was an affirmative act by [defendant] to enforce its patent rights against alleged infringement by [plaintiffs'] Tree. . . . Its claim charts referred only to [plaintiffs'] trees and explained how [defendant] believed [plaintiffs'] trees met each and every claim of [defendant's] patents. . . . [Defendant] argues that a lawsuit against a manufacturer’s customer is not sufficient for Article III standing. . . . As [defendant] admits, its claims against [the customer] were based solely on its selling [plaintiffs'] Trees, something [a plaintiff] itself did. Unlike [other cases cited by defendant], [defendant's] infringement claims against [the customer], based on its sales of [plaintiffs'] trees, necessarily demonstrate a case or controversy with [plaintiffs]."

UCP International Co., Ltd. et al v. Balsam Brands Inc. et al, 3-16-cv-07255 (CAND May 9, 2017, Order) (Orrick, USDJ)