Addressing the issue of the sufficiency of evidence that corroborates a witness’s testimony concerning invalidating activities, the U.S. Court of Appeals for the Federal Circuit held that evidence is analyzed under the “rule of reason” test, which involves an assessment of the totality of the circumstances including an evaluation of all pertinent evidence. Adenta GMBH v. OrthoArm and American Orthodontics, Case Nos. 06-1571, -1598 (Fed. Cir., Sept. 19, 2007) (Lourie, J.).
OrthoArm patented a new type of bracket for holding orthodontic braces and assigned patent rights to American Orthodontics. American Orthodontics agreed to pay an ongoing royalty to OrthoArm. American Orthodontics also distributed Adenta’s products. In a contract between American Orthodontics and Adenta, the companies agreed to share royalty payments. However, after entering into the contract, Adenta came to believe that the patent was invalid and threatened to stop paying its share of the royalties. American Orthodontics responded with threats, leading Adenta to file for declaratory judgment, asserting that the patent was invalid and unenforceable. OrthoArm moved to dismiss the suit for lack of subject matter jurisdiction on the ground that Adenta never had a reasonable apprehension that it would be sued by American Orthodontics and that Adenta and American Ortho conspired to contest the validity of the patent.
Under the newly developed MedImmune precedent, declaratory judgment jurisdiction arises when a patentee asserts its patent rights against another party’s activity or planned activity. No actual infringement is required, nor is any cessation of royalty payments. Here, the Court found jurisdiction because the patent holder had threatened to assert its rights if Adenta failed to pay royalties, thus creating a substantial controversy.
Turning to the merits of the invalidity claim and using the “rule of reason” as to the quantum of evidence required, the Court noted that in order to demonstrate public use under § 102(b), testimony from a single individual is insufficient to invalidate a patent. Rather, some corroborating evidence must always be presented. Once that threshold is passed, a jury may evaluate the validity of a patent considering all of the evidence as a whole. Here, during the trial, Adenta argued that the patent claims were invalid based on the public use or sale of its orthodontic bracket in a trade show, which was held more than one year before the priority date of the patent. Adenta presented five witnesses to testify that the invention had been shown at a trade show. In addition, Adenta produced a letter from Adenta’s German patent attorney to Adenta’s U.S. patent attorney instructing the U.S. attorney to file an application on the bracket within a year of the trade show. Despite OrthoArm’s attempts to discredit the evidence, the Court found that the corroboration threshold was met and that the fact-finder had not committed clear error in considering all of the evidence.