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Exercising Restraint: Federal Circuit Affirms Dismissal of Declaratory Judgment Action Under Abstention Doctrine
The Federal Circuit affirmed the dismissal of a declaratory judgment action based on the "abstention doctrine," despite the declaratory judgment plaintiff's insistence that the underlying contract dispute required resolution of patent validity and claim scope that were within the federal courts' exclusive purview. Warsaw Orthopedic, Inc., et al. v. Sasso, 977 F.3d 1224 (Fed. Cir. 2020). The decision in Warsaw Orthopedic provides guidance to litigants with claims involving both state and federal issues and attempts to resolve competing Supreme Court standards governing application of the abstention doctrine.
Background
Rick A. Sasso is the inventor of a facet screw instrumentation and a headless facet screw fixation system that is used in spinal surgery (the Invention). Warsaw Orthopedic, Inc., Medtronic, Inc., and Medtronic Sofamor Danek, Inc. (collectively, Medtronic) develop and market medical devices, including implant screws used in connection with spinal surgery. The parties entered into a purchase agreement in December 1999, whereby Dr. Sasso agreed to transfer all rights to his invention (including the right to patent the invention), and Medtronic agreed to make quarterly royalty payments based on Medtronic's sales of certain medical devices (broadly defined as "any device, article, system, apparatus or product including the [i]nvention" and listed in an attachment). Those payments would run until the last patent expired or, if no patents issued with "valid claim coverage" of the covered medical devices, then seven years after the first sale. Two patents ultimately issued as U.S. Patent Nos. 6,287,313 and 6,562,046 (respectively, the "'313 patent" and "'046 patent"). Medtronic made royalty payments from 2002 to 2018.
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