United States Court of Appeals
for the Federal Circuit
__________________________
CREATIVE COMPOUNDS, LLC,
Plaintiff-Appellant,
v.
STARMARK LABORATORIES,
Defendant-Appellee.
__________________________
2010-1445
__________________________
Appeal from the United States District Court for the
Southern District of Florida in case no. 07-CV-22814,
Judge Alan S. Gold.
__________________________
Decided: June 24, 2011
__________________________
MATTHEW A. ROSENBERG, Law Offices of Matthew
Rosenberg, LLC, of St. Louis, Missouri, argued for plain-
tiff-appellant.
FREDERICK A. TECCE, McShea Tecce, P.C., of Philadel-
phia, Pennsylvania, argued for defendant-appellee.
__________________________
Before RADER, Chief Judge, CLEVENGER and LINN, Circuit
Judges.
2 CREATIVE COMPOUNDS v. STARMARK LABS
LINN, Circuit Judge.
Creative Compounds, LLC (“Creative”) filed a com-
plaint with the U.S. District Court for the Southern
District of Florida against Starmark Laboratories (“Star-
mark”) seeking a declaratory judgment that Starmark’s
patent, U.S. Patent No. 7,109,373 (the “’373 Patent”), is
invalid and not infringed. Starmark, in its Answer,
alleged infringement of the ’373 patent and sought a
declaration that Creative’s patent, U.S. Patent No.
7,129,273 (the “’273 Patent”), is invalid. The district court
granted Starmark’s motion for summary judgment on all
counts and denied Creative’s motion to dismiss for lack of
jurisdiction. Order, Creative Compounds, LLC v. Star-
mark Labs., Inc., No. 07-cv-22814 (S.D. Fla. Sept. 17,
2009), ECF No. 107 (“Summary Judgment Order”).
Creative appeals. For the reasons explained below, this
court affirms the district court’s judgment as to the ’373
Patent, reverses the district court’s determination as to
jurisdiction over the ’273 Patent, and vacates the district
court’s decision as to the validity of the ’273 Patent.
I. BACKGROUND
Both the ’373 and ’273 Patents relate to innovations
in dietary supplements and food products. These patents
relate to creatine formulations that increase the bioavail-
ability of creatine. Creatine is an amino acid derivative
naturally present in muscle tissue. ’373 patent col. 1, ll.
15-17. It serves as a central component of the metabolic
system and provides energy for work and exercise per-
formance. Id. col. 1, ll. 15-20. It assists in producing
adenosine triphosphate (“ATP”) during short bursts of
high intensity exercise. The depletion of creatine has
been associated with the onset of fatigue. Id. col. 1, ll. 20-
29.
CREATIVE COMPOUNDS v. STARMARK LABS. 3
Creatine is most commonly used by body builders
looking for a steroid-free way of improving athletic per-
formance. Id. col. 2, ll. 4-11. The prior art teaches oral
creatine supplementation using creatine monohydrate.
Id. col. 2, ll. 15-20. Creatine monohydrate is typically sold
as a nutritional supplement in powder form. Id. Draw-
backs of using creatine monohydrate include its low
solubility in water and low bioavailability. Id. col. 2, ll.
40-65.
A. Starmark’s ’373 Patent
The application for the ’373 Patent was filed on De-
cember 18, 2003, claiming priority to a provisional appli-
cation filed on December 18, 2002. The ’373 Patent
discloses creatine salts comprising two molecules of
creatine and one molecule of dicarboxylic acid. Id. col. 3,
ll. 55-59. These embodiments purport to provide hydro-
soluble creatine salts. Id. Claims 1-6 cover creatine salts,
whereas claims 7-13 cover methods of making these
creatine salts. Independent claim 1 recites:
1. A creatine salt having the formula
wherein A represents an anion of a dicarboxylic
acid.
Dependent claim 3 recites:
3. The creatine salt of claim 1, wherein A is an
anion of malic acid.
4 CREATIVE COMPOUNDS v. STARMARK LABS
Independent claim 7, representative of the method claims,
recites:
7. A process comprising reacting a molar excess
of creatine monohydrate and a dicarboxylic acid
or a tricarboxylic acid with heat to form a cre-
ateine salt having the formula:
The ’373 Patent issued on September 19, 2006, to
SAN Corporation (“SAN”) listing SAN’s CEO, Matthias
Boldt (“Boldt”), as the sole inventor. In October 2006,
Boldt formed Starmark, where he serves as CEO, presi-
dent, and sole shareholder. All right, title, and interest in
the ’373 Patent was then assigned to Starmark.
B. Creative’s ’273 Patent
Creative filed the application for the ’273 Patent on
April 30, 2003. Unlike the ’373 Patent, which claims a
genus of possible creatine salts, Creative’s ’273 Patent is
narrower and covers only dicreatine malate compounds.
Claims 1-3 cover a dicreatine malate compound and
claims 4-10 cover methods of administering a dicreatine
malate compound.
Independent claim 1, representative of the compound
claims, recites:
1. A dicreatine malate compound comprising
approximately two creatine cations per one malic
acid dianion.
CREATIVE COMPOUNDS v. STARMARK LABS. 5
Independent claim 4, representative of the method claims,
recites:
4. A method of increasing the production of
adenosine triphosphate in a human body com-
prising administering to a subject a dicreatine
malate compound comprising approximately two
creatine cations per one malic acid dianion.
The ’273 Patent issued to Creative on October 31,
2006, about one month after the issuance of Starmark’s
’373 Patent. Creative’s ’273 Patent lists Derek Cornelius
(“Cornelius”) and Gary Haynes (“Haynes”) as co-
inventors.
C. Factual History
Starmark and Creative are competitors in the
creatine market. Creative markets and sells a dicreatine
malate compound under the trade name 2CM. Starmark
retails its own dicreatine malate compound under its own
mark.
In August 2009, after receiving a notice of allowance
on the ’373 Patent, Boldt, as SAN’s CEO, mailed letters to
purchasers of dicreatine malate compounds. These letters
advised the industry that SAN’s ’373 Patent would soon
issue.
Viewing these letters as threatening, Creative decided
to mail letters of its own. Creative’s letter advised the
industry about a notice of allowance on its competing
patent, the ’273 Patent. Creative did not simply stop
there. Rather, Creative included a letter from its patent
counsel. This letter, in relevant part, stated:
It has also come to my attention that SAN Corpo-
ration has sent a number of threatening letters to
the industry alleging that it also has received a
6 CREATIVE COMPOUNDS v. STARMARK LABS
Notice of Allowance of its patent application enti-
tled Creatine Salts and Method of Making Same[,
the ’373 Patent] . . . . Even if SAN is correct that
a patent will issue from its application, the pat-
ent will not be enforceable because of [Creative’s]
prior inventions and work.
While Creative did not mail any of these letters to
SAN, SAN learned of Creative’s letters from its own
customers. One such customer informed SAN of Crea-
tive’s correspondence and refused to license SAN’s patent
after receiving the above-mentioned “letter from [Crea-
tive’s] counsel . . . assert[ing] that [the ’373 Patent] will
not be enforceable because of Mr. Haynes prior invention.”
Similarly, a letter from another one of SAN’s customers
stated: “we do not believe [the ’373 Patent] to be valid in
light of [the ’273 Patent] . . . moving forward [we] will no
longer be using compounds covered by the [’373 Patent].”
D. Procedural History
In October 2007, Creative filed suit against Starmark
in the United States District Court for the Southern
District of Florida. Creative sought a declaratory judg-
ment that the ’373 Patent was invalid and not infringed.
Starmark, in its Answer and Counterclaim, alleged in-
fringement of the ’373 Patent and sought a declaratory
judgment that the ’273 Patent was invalid. The parties
stipulated to a claim construction for the ’373 Patent.
Starmark filed a motion for summary judgment on all
counts. Subsequently, Creative filed a motion to amend
its affirmative defense of unclean hands and to dismiss
Starmark’s declaratory judgment action concerning the
’273 Patent for lack of subject matter jurisdiction. The
district court ultimately granted Starmark’s motion for
summary judgment on all counts and denied Creative’s
motions to amend and dismiss. Summary Judgment
CREATIVE COMPOUNDS v. STARMARK LABS. 7
Order. The parties stipulated to actual damages of
$112,500, subject to Creative’s right to appeal. The
district court, after a bench trial, found that Creative’s
infringement was not willful, that enhanced damages
were unwarranted, and that a permanent injunction
against Creative was warranted.
Creative timely appeals on multiple grounds. First,
Creative challenges the district court’s grant of summary
judgment that the ’373 Patent is not invalid. Second,
Creative challenges the district court’s grant of summary
judgment that the ’373 Patent is infringed. Third, Crea-
tive challenges the district court’s denial of its motion to
dismiss Starmark’s declaratory judgment counterclaim on
the ’273 Patent for lack of subject matter jurisdiction.
Finally, Creative challenges the district court’s denial of
Creative’s motion to amend its Answer. This court has
jurisdiction under 28 U.S.C. § 1295(a)(1).
II. DISCUSSION
A. Standards of Review
“We review a district court’s grant of summary judg-
ment de novo.” Ethicon Endo-Surgery, Inc. v. U.S. Surgi-
cal Corp., 149 F.3d 1309, 1315 (Fed. Cir. 1998).
“This court reviews a grant or denial of a motion to
dismiss for lack of subject matter jurisdiction de novo.”
Hewlett-Packard Co. v. Acceleron LLC, 587 F.3d 1358,
1361 (Fed. Cir. 2009). “The usual standard for reviewing
a district court’s findings of jurisdictional facts is the
clearly erroneous standard.” Lawrence v. Dunbar, 919
F.2d 1525, 1530 (11th Cir. 1990).
We review an order granting or denying leave to
amend under the pertinent regional circuit law. See
Innova/Pure Water, Inc. v. Safari Water Filtration Sys.,
Inc., 381 F.3d 1111, 1124 (Fed. Cir. 2004). In the Elev-
8 CREATIVE COMPOUNDS v. STARMARK LABS
enth Circuit, a denial of leave to amend is reviewed for
abuse of discretion. Carruthers v. BSA Adver., Inc., 357
F.3d 1213, 1217-18 (11th Cir. 2004).
B. Invalidity of the ’373 Patent
The district court granted Starmark’s motion for
summary judgment that the ’373 Patent was not invalid.
In doing so, the district court determined that Creative
both failed to raise a genuine issue of material fact and, in
the absence of opinion or expert testimony, could not
succeed as a matter of law in proving invalidity of Star-
mark’s ’373 Patent by clear and convincing evidence.
1. Burden of Proof
Before addressing the validity of the ’373 Patent,
Creative argues that the district court applied the wrong
burden of proof for Creative to establish invalidity of
Starmark’s patent. Relying on Environ Products, Inc. v.
Furon Co., 215 F.3d 1261 (Fed. Cir. 2000) and Slip Track
Systems, Inc. v. Metal-Lite, Inc., 304 F.3d 1256 (Fed. Cir.
2002), Creative argues “[t]he correct standard of proof of
priority of invention, as between co-pending interfering
patents, is the preponderance of the evidence, the junior
party bearing the burden of pleading and proving prior-
ity.” Environ, 215 F.3d at 1266. Because the ’373 Patent
and ’273 Patent were co-pending and Creative alleges
that there is no patentable distinction between claim 1 of
the ’273 Patent and claim 3 of the ’373 Patent, Creative
claims it was entitled to a preponderance of the evidence
standard for proving invalidity of the ’373 Patent.
Starmark responds that the district court applied the
proper standard of clear and convincing evidence. Accord-
ing to Starmark, Environ and Slip Track are distinguish-
able from this case because both cases involved either an
action predicated upon 35 U.S.C. § 291 or a judicial de-
lineation of conflicting subject matter. See Eli Lilly & Co.
CREATIVE COMPOUNDS v. STARMARK LABS. 9
v. Aradigm Corp., 376 F.3d 1352, 1367 (Fed. Cir. 2004).
In this case, Starmark asserts that the parties never
stipulated to the common claimed subject matter, that
Creative did not present evidence of common claimed
subject matter, and that Creative did not plead a count
under § 291. Creative “must surmount the clear and
convincing burden of proof to demonstrate priority.” Id.
Finally, Starmark notes that the district court stated that
even if it erred in not applying the preponderance stan-
dard, “any error could not have ‘changed the result.’”
Order at 4, Creative Compounds, LLC v. Starmark Labs.,
Inc., No. 07-22814 (S.D. Fla. Aug. 31, 2010), ECF No. 187
(citing Environ, 215 F.3d at 1267).
This court agrees with Starmark. This court has long
held that because “[u]nder 35 U.S.C. § 282, each claim of
a patent shall be presumed valid[,] an accused infringer
must prove invalidity by clear and convincing evidence.”
Tokai Corp. v. Easton Enters., 632 F.3d 1358, 1367 (Fed.
Cir. 2011) (citing Metabolite Labs., Inc. v. Lab. Corp. of
Am. Holdings, 370 F.3d 1354, 1365 (Fed. Cir. 2004)); see
also Microsoft Corp. v. i4i Ltd. P’Ship, 564 U.S. ___, slip
op. at 19 (June 9, 2011) (“For nearly 30 years, the Federal
Circuit has interpreted § 282 as we do today.”).
Environ and SlipTrack are distinguishable on their
facts and are limited to a narrow set of circumstances.
Environ began as a multi-party infringement action in
which Environ accused Advanced Polymer and Furon of
infringing its patent. Environ, 215 F.3d at 1265. Both
Advanced Polymer and Furon raised invalidity defenses
based on prior invention. Id. Two issued patents and a
pending application were all co-pending in the PTO at the
same time. Id. The parties agreed that the same inven-
tion was common to the patents and application, “agreed
on the description of the common subject matter that
would serve as the basis for determining who was the
original inventor,” and left it for the jury to determine
10 CREATIVE COMPOUNDS v. STARMARK LABS
which party established priority of invention. Id. at 1262-
64. Thus, Environ turned into a three-way priority con-
test between two issued patents and a patent application.
Id. at 1264.
On appeal in Environ, Furon argued that the proper
standard should have been the “preponderance of the
evidence” standard, the same standard used in PTO
interference proceedings and § 291 actions in district
courts. Id. Indeed, this court noted that “had these
applications been the subject of an interference proceed-
ing in the PTO or a § 291 proceeding in the district court,
the burden of proof of prior invention would be with the
junior applicants, but the standard of proof would be the
preponderance of the evidence.” Id. at 1266.
This court determined that the formality of invoking
§ 291 should not affect the standard of proof for establish-
ing priority of invention when the parties conceded that
the patents did, in fact, interfere. Thus, this court stated,
“[t]he correct standard of proof of priority of invention, as
between co-pending interfering patents, is the preponder-
ance of the evidence, the junior patentee bearing the
burden of pleading and proving priority.” Id. at 1266.
The accompanying footnote explains that this holding
“relates solely to that of priority of invention of common
claimed subject matter in issued patents; this does not
affect the standard of proof as to any other question that
may be in dispute.” Id. at 1266 n.4 (emphases added).
Thus, for the lower standard to apply, there must be
common claimed subject matter and the junior party
bears the burden of raising this issue.
In both interference proceedings and § 291 actions,
common claimed subject matter must be identified. In an
interference proceeding before the PTO, common claimed
subject matter is identified at the outset in the form of a
“count.” See 37 C.F.R. § 1.601(i) (“An interference may be
CREATIVE COMPOUNDS v. STARMARK LABS. 11
declared . . . when . . . any application . . . claims the same
patentable invention.”). Similarly, in § 291 proceedings
before a district court, “a single description of the interfer-
ing subject matter is necessary for a determination of
priority.” See SlipTrack, 304 F.3d at 1264 (appeal from
§ 291 proceeding); Albert v. Kevex Corp., 729 F.2d 757, 761
(Fed. Cir. 1984) (“[T]he court has no jurisdiction under
§ 291 unless interference is established.”).
In Environ, the parties had already stipulated to the
single description of the interfering subject matter. 215
F.3d at 1266. This court concluded that the fact that the
priority dispute arose as a defense to an infringement
allegation, rather than in a § 291 action, was irrelevant.
Id. The Environ court determined that the district court
should have applied the preponderance of the evidence
standard, but ultimately concluded that the court’s appli-
cation of the clear and convincing standard, in that case,
was harmless. Id. at 1266-67 (“This procedural flaw could
not have changed the result”). SlipTrack is consistent. In
SlipTrack, this court applied the preponderance standard
where the action was brought under § 291, the parties did
not dispute that the patents interfered, and this court had
previously stated that “the PTO issued two patents for the
same invention on the same day.” SlipTrack, 304 F.3d at
1264. Even if Creative is correct that Eli Lilly’s charac-
terization of Environ was dicta, its reasoning was sound.
Because the facts of this case squarely address the issue,
we now hold that an accused infringer cannot obtain the
benefit of the lower burden of proof that prevails in an
interference proceeding simply by alleging, as a defense to
infringement, that the asserted patent is invalid based
upon a co-pending patent unless common claimed subject
matter is first identified and an adjudication of priority is
sought.
Here, unlike Environ, the parties did not identify or
agree on common claimed subject matter. Further, here,
12 CREATIVE COMPOUNDS v. STARMARK LABS
unlike in SlipTrack, Creative did not file an action under
§ 291. Finally, here, unlike in Environ or SlipTrack, the
parties did not seek an adjudication of priority as to
identified common subject matter. Absent those special
circumstances, the preponderance standard of Environ
does not apply. See Eli Lilly, 376 F.3d at 1367 (stating
“Environ Products prevents form from triumphing over
substance in priority contests embedded in infringement
proceedings, provided that the parties have stipulated to
a definition of the interfering subject matter.”). Creative
faces the same presumption of validity faced by all ac-
cused infringers and must prove invalidity by clear and
convincing evidence. The district court did not err in
holding Creative to the clear and convincing standard.
Having determined the proper standard, this court will
now address the merits of Creative’s invalidity allegation.
2. Merits
Creative challenges the district court’s grant of Star-
mark’s motion for summary judgment that the ’373 Pat-
ent was not invalid. According to Creative, a genuine
issue of material fact exists as to whether the ’373 Patent
is invalid under §§ 102(g), (f), and (e). Starmark re-
sponds, and this court agrees, that there is an absence of
evidence on at least one element in each of Creative’s
three invalidity theories, and, as such, Creative’s conclu-
sory attorney arguments fail to raise a genuine issue of
material fact. See Celotex Corp. v. Catrett, 477 U.S. 317,
325 (1986) (“[T]he burden on the moving party may be
discharged by ‘showing’—that is, pointing out to the
district court—that there is an absence of evidence to
support the nonmoving party’s case.”). Although Creative
did submit expert testimony, the district court excluded it
for failure to comply with the court’s scheduling order and
Creative did not appeal that issue. Each invalidity theory
is discussed in turn.
CREATIVE COMPOUNDS v. STARMARK LABS. 13
i.
Creative contends that the ’373 Patent is invalid un-
der § 102(g)(2) because of Creative’s prior invention.
Creative alleges that Cornelius, named inventor on the
’273 Patent, conceived the subject matter of the ’373
Patent prior to Boldt, named inventor of the ’373 Patent.
For support, Creative points to an email order for “di-
creatine malate” placed with Creative’s Chinese supplier
as evidence of prior conception. This email, which also
speculates that the method of making dicreatine malate
should be the same as the method of making creatine
citrate, predates the filing date of the provisional applica-
tion that led to the ’373 Patent. Creative further alleges
that Cornelius was diligent through his constructive
reduction to practice, when he and co-inventor Haynes
filed the application leading to the ’273 Patent.
To establish prior invention, Creative was required to
prove prior conception. “Conception is the formation in
the mind of the inventor of a definite and permanent idea
of the complete and operative invention, as it is therefore
to be applied in practice.” Singh v. Brake, 317 F.3d 1334,
1340 (Fed. Cir. 2003). An idea is sufficiently definite for
conception “when the inventor has a specific, settled idea,
a particular solution to the problem at hand, not just a
general goal or research plan he hopes to pursue.”
Burroughs Wellcome Co. v. Barr Labs., 40 F.3d 1223, 1228
(Fed. Cir. 1994). “Conception requires (1) the idea of the
structure of the chemical compound, and (2) possession of
an operative method of making it.” Oka v. Youssefyeh,
849 F.2d 581, 583 (Fed. Cir. 1988). “When, as is often the
case, a method of making a compound with conventional
techniques is a matter of routine knowledge among those
skilled in the art, a compound has been deemed to have
been conceived when it was described, and the question of
whether the conceiver was in possession of a method of
making it is simply not raised.” Id.
14 CREATIVE COMPOUNDS v. STARMARK LABS
Here, Creative relied on the 2001 email order for “di-
creatine malate” and simply concluded that this suffi-
ciently demonstrated conception of that compound. In
this email, Cornelius speculates that the method of mak-
ing dicreatine malate “should” be like that of making
creatine citrate. The district court concluded, and this
court agrees, that this email is insufficient to establish
prior conception of the subject matter of the ’373 Patent.
Creative failed to submit testimony explaining the signifi-
cance of this email and whether this reference would
constitute conception of subject matter within the scope of
even a single claim in the ’373 Patent. Moreover, the
email fails to reveal knowledge of a process for making
dicreatine malate and, to the contrary, merely speculates
that the process “should” be like that for creatine citrate.
The email far from establishes that Cornelius actually
possessed an operative method of making dicreatine
malate. In the absence of expert testimony, Creative has
failed to show how this email raises a genuine issue of
material fact that a method of making dicreatine malate
would have been a matter of routine knowledge among
those skilled in the art. Creative’s evidentiary shortcom-
ings are not overcome by its reliance on attorney argu-
ment. “It is well established that conclusory statements
of counsel or a witness that a patent is invalid do not
raise a genuine issue of material fact.” Biotec Biologische
Naturverpackungen GmBH v. Biocorp, Inc., 249 F.3d
1341, 1353 (Fed. Cir. 2001).
Even if Creative raised a genuine issue of material
fact as to conception, which it did not, Creative’s bald
assertion that Cornelius was “diligent” during the inter-
vening eighteen months between conception and Crea-
tive’s first reduction to practice fails to raise a genuine
issue of material fact as to diligence—a required element
of Creative’s § 102(g) defense. Merely asserting diligence
is not enough; a party must “account for the entire period
during which diligence is required.” Gould v. Schawlow,
CREATIVE COMPOUNDS v. STARMARK LABS. 15
363 F.2d 908, 919 (CCPA 1966). Accordingly, the district
court correctly determined that, as to Creative’s
§ 102(g)(2) defense, there were no genuine issues of mate-
rial fact and that Starmark was entitled to judgment as a
matter of law.
ii.
Creative next alleges that the ’373 Patent is invalid
under § 102(f) because Starmark derived the invention
from Cornelius. In order to establish derivation, Creative
was required to “prove both prior conception of the inven-
tion by another and communication of that conception to
the patentee.” Eaton Corp. v. Rockwell Int’l Corp., 323
F.3d 1332, 1334 (Fed. Cir. 2003). As stated above, Crea-
tive failed to raise a genuine issue of material fact con-
cerning Cornelius’s prior conception. Furthermore, as the
district court found, Creative failed to present any record
evidence supporting any communication or that the
alleged communicator actually knew of the claimed sub-
ject matter. Creative’s only evidence on this issue was the
uncorroborated deposition testimony of Cornelius himself.
“[T]he case law is unequivocal that an inventor’s testi-
mony respecting the facts surrounding a claim of deriva-
tion or priority of invention cannot, standing alone, rise to
the level of clear and convincing proof.” Price v. Symsek,
988 F.2d 1187, 1194 (Fed. Cir. 1993). “Such evidence is
insufficient as a matter of law to establish invalidity of
the patent.” Finnigan Corp. v. Int’l Trade Comm’n, 180
F.3d 1354, 1370 (Fed. Cir. 1990). Thus, in the absence of
any other factual bases for Creative’s § 102(f) derivation
defense, there were no genuine issues of material fact and
Starmark was entitled to judgment as a matter of law.
iii.
Creative also alleges that the ’373 Patent is invalid
under § 102(e) in light of U.S. Patent App. Pub. No.
16 CREATIVE COMPOUNDS v. STARMARK LABS
2004/0077902, a reference previously considered by the
PTO and overcome by the applicant. Again, Creative
failed to provide any testimony from one skilled in the art
identifying each claim element and explaining how each
claim element is disclosed in the prior art reference. See
Schumer, 308 F.3d at 1315. “It is not the trial judge’s
burden to search through lengthy technologic documents
for possible evidence.” Id. at 1353. Conclusory state-
ments simply mentioning the alleged prior art patent,
relying on the same prior art considered by the PTO, and
alleging invalidity fail to raise a genuine issue of material
fact. See id. at 1354 (finding that merely mentioning an
allegedly invalidating, yet otherwise unexplained, prior
art reference is insufficient to survive a summary judg-
ment of no invalidity); see also Tokai, 632 F.3d at 1367
(“[A]lthough the standard of proof does not depart from
that of clear and convincing evidence, a party challenging
validity shoulders an enhanced burden if the invalidity
argument relies on the same prior art considered during
examination by the [PTO]”).
Creative failed to raise a single genuine issue of mate-
rial fact as to even one of its three asserted invalidity
theories. Thus, the district court properly granted Star-
mark’s motion for summary judgment finding the ’373
Patent not invalid. Optium Corp. v. Emcore Corp., 603
F.3d 1313, 1320 (Fed. Cir. 2010) (“When a party has failed
to introduce evidence sufficient to establish the existence
of an essential element of that party’s case in accordance
with the applicable standard of proof, summary judgment
is properly granted against that party.”).
C. Infringement of the ’373 Patent
The district court granted Starmark’s motion for
summary judgment that Creative’s 2CM product in-
fringed claims 1-3 and 7-10 of Starmark’s ’373 Patent. In
moving for summary judgment of infringement, Starmark
CREATIVE COMPOUNDS v. STARMARK LABS. 17
relied upon an expert report furnished by Dr. Perlmutter.
As to the method claims, claims 7-10, Dr. Perlmutter
noted that “Creative has not produced information re-
garding its manufacturing process.” Nonetheless, Dr.
Perlmutter concluded that Creative’s 2CM product was
“most likely synthesized” according to claim 7, “consistent
with having been manufactured” according to claim 8, and
manufactured according to claims 9 and 10.
Creative concedes infringement of the compound
claims and only contests infringement of the method
claims, claims 7-10. Creative argues that Dr. Perlmut-
ter’s report was entirely devoid of analysis or testing and
discusses no evidence of how Creative’s product infringes
the method claims. Creative asserts that “[i]t is nonsensi-
cal for Starmark to say that the 2CM product has every
element of the method claims.” Appellant Br. 28. Crea-
tive also takes a “head-in-the-sand” approach to avoid
infringement liability, arguing that “Creative merely
imports the 2CM product that is manufactured by an-
other party located in China. Creative does not manufac-
ture 2CM or even have any information on the precise
manufacturing process used by its supplier.” Id. Creative
faults the district court for impermissibly shifting the
burden to Creative to prove noninfringement. Summary
Judgment Order at 32 (stating that Creative “has offered
no argument as to why or how the process employed to
create the product does not infringe the ’373 Patent.”).
Starmark responds that Creative failed to submit ex-
pert testimony rebutting Dr. Perlmutter’s conclusions and
failed to offer any theory of noninfringement. Starmark
contends that Dr. Perlmutter’s expert report satisfied
Starmark’s burden, as movant, and therefore the burden
shifted to Creative to present specific evidence indicating
a genuine issue for trial. See Air Turbine Tech., Inc. v.
Atlas Copco AB, 410 F.3d 701, 708 (Fed. Cir. 2008).
Because Creative failed to point to record evidence con-
18 CREATIVE COMPOUNDS v. STARMARK LABS
cerning the method of making 2CM, Starmark asserts it
was entitled to judgment as a matter of law.
“The patentee bears the burden of proving infringe-
ment by a preponderance of the evidence.” SRI Int’l v.
Matsushita Elec. Corp., 775 F.2d 1107, 1123 (Fed. Cir.
1985). If the patentee fails to meet that burden, the
patentee loses regardless of whether the accused comes
forward with any evidence to the contrary. See Licensing
Corp. v. Videotek, Inc., 545 F.3d 1316, 1327 (Fed. Cir.
2008). While the burden typically rests with the patentee
to prove infringement, the law makes exceptions. In
actions alleging infringement of a process claim under
§ 271(g), there is a rebuttable presumption that the
imported product was made from the patented process if
the court finds: “(1) that a substantial likelihood exists
that the product was made by the patented process, and
(2) that the plaintiff has made a reasonable effort to
determine the process actually used in the production of
the product and was unable to so determine.” 35 U.S.C.
§ 295. If both conditions are met, “the product shall be
presumed to have been so made, and the burden of estab-
lishing that the product was not made by the process shall
be on the party asserting that it was not so made.” Id.
Because the accused infringer is in a far better position to
determine the actual manufacturing process than the
patentee, fairness dictates that the accused, likely the
only party able to obtain this information, reveal this
process or face the presumption of infringement. Jeffrey
I.D. Lewis & Art C. Cody, Unscrambling the Egg: Pre-Suit
Infringement Investigations of Process and Method Pat-
ents, 84 J. Pat. & Trademark Off. Soc’y 5, 22-23 (2002).
In this case, the district court found that Dr. Perlmut-
ter “opined that the process most likely used to manufac-
ture 2CM is the method claimed in claims 7 through 10 of
the [’373 Patent].” Summary Judgment Order at 32.
Furthermore, Starmark sought discovery on the manufac-
CREATIVE COMPOUNDS v. STARMARK LABS. 19
turing process by which 2CM was made and “Creative
failed to produce documentation regarding the process.”
Id. Thus, under § 295, the burden of establishing that the
product was not made by claims 7-10 was properly on
Creative. Because Creative “offered no argument as to
why or how the process employed to create the product
does not infringe the ’373 Patent,” id., the district court
properly granted Starmark’s motion for summary judg-
ment of infringement.
D. Subject Matter Jurisdiction Over the ’273 Patent
The district court denied Creative’s motion to dismiss
Starmark’s declaratory judgment counterclaim of invalid-
ity of the ’273 Patent for lack of subject matter jurisdic-
tion. The district court analyzed several letters sent by
Creative to the industry. See Lawrence v. Dunbar, 919
F.2d 1525, 1529 (11th Cir. 1990) (holding that, in address-
ing a factual attack to jurisdiction, the court may consider
evidence outside the pleadings and is “free to weigh the
evidence and satisfy itself as to the existence of its power
to hear the case”). These letters contained a separate
letter from Creative’s patent counsel opining that the ’373
Patent was invalid in light of the ’273 Patent and
Haynes’s prior work. The district court concluded that
“the dispute regarding . . . the competing ’273 and ’373
patents runs with the patents. As the ’373 Patent is now
held by Starmark, the dispute is between Creative and
Starmark.” Summary Judgment Order at 9. As further
factual support for this finding, the district court also
analyzed those letters addressed to Boldt from SAN’s
customers in response to Creative’s letters. The district
court found these customer letters similarly “reference the
validity and enforceability of the ’373 Patent and do not
limit the customers’ understanding of the dispute to
SAN.” Id. at 10.
20 CREATIVE COMPOUNDS v. STARMARK LABS
Creative argues that the district court erred in finding
subject matter jurisdiction over Starmark’s counterclaim.
According to Creative, “the only grounds on which Star-
mark could establish declaratory judgment jurisdiction is
if it was in objective apprehension that Creative would
sue it (not its customers) for infringement of the ’273
Patent.” Appellant Br. 35. Because Creative had never
accused Starmark of infringing the ’273 Patent, it argues
that there is no case or controversy between Creative and
Starmark concerning the ’273 Patent. Creative contends
that the dispute between the ’373 and ’273 patents is
insufficient to create a case or controversy because “if
Creative cannot prove that the ’373 Patent is invalid, the
mere existence of the ’273 Patent will not affect the ’373
Patent.” Id. at 34.
Starmark responds that a charge of infringement is
just one factor in which an actual case or controversy may
arise and that Creative failed to show clear error in the
district court’s finding that the dispute concerning the
competing ’273 and ’373 Patents was in itself enough to
show a case or controversy. Starmark contends that the
opinion letters sent by Creative to the industry declaring
that Starmark’s ’373 Patent was invalid in light of Crea-
tive’s ’273 Patent, along with Haynes’s prior work, evi-
denced a “substantial controversy” between parties with
“adverse legal interests” sufficient to satisfy the test set
forth in MedImmune, Inc. v. Genentech, Inc., 549 U.S.
118, 127 (2007).
Subject matter jurisdiction in declaratory judgment
actions exists when “the facts alleged, under all the
circumstances, show that there is a substantial contro-
versy, between the parties having adverse legal interests,
of sufficient immediacy and reality to warrant the issu-
ance of a declaratory judgment.” Id. at 127. A court’s
decision must “admi[t] of specific relief through a decree
of a conclusive character, as distinguished from an opin-
CREATIVE COMPOUNDS v. STARMARK LABS. 21
ion advising what the law would be upon a hypothetical
state of facts.” Id. “The purpose of the Declaratory
Judgment Act . . . in patent cases is to provide the alleg-
edly infringing party relief from uncertainty and delay
regarding its legal rights.” Micron Tech. Inc. v. Mosaid
Techs., Inc., 518 F.3d 897, 902 (Fed. Cir. 2008) (citations
omitted).
The concept of adverse legal interests requires that
there be a dispute as to a legal right, such as an underly-
ing legal cause of action that the declaratory defendant
could have brought or threatened to bring, if not for the
fact that the declaratory plaintiff had preempted it. Arris
Grp., Inc. v. British Telecomm. PLC, 639 F.3d 1368, 1374-
75 (Fed. Cir. 2011); Microchip Tech. Inc. v. Chamberlain
Group, Inc., 441 F.3d 936, 943 (Fed. Cir. 2006). “Without
an underlying legal cause of action, any adverse economic
interest that the declaratory plaintiff may have against
the declaratory defendant is not a legally cognizable
interest sufficient to confer declaratory judgment jurisdic-
tion.” Microchip, 441 F.3d at 943. Starmark contends
that Creative could have brought two causes of action: (1)
an infringement action alleging infringement of the ’273
Patent, or (2) an action under § 291 alleging an interfer-
ence between the ’373 and ’273 Patents. These conten-
tions are addressed in turn.
Here, Creative never accused Starmark of infringing
its ’273 Patent. While Creative did send letters to pur-
chasers of dicreatine malate alleging that dicreatine
malate would infringe claims of the ’273 Patent, none of
these letters were sent to Starmark. To the extent Star-
mark contends those letters were sent to its customers,
this contention rings hollow when the letters were sent to
SAN’s customers in August 2006 and Starmark was not
formed until October 2006. In the absence of an indem-
nity agreement between Starmark and one of these “cus-
tomers,” Starmark has, at most, only an economic interest
22 CREATIVE COMPOUNDS v. STARMARK LABS
in clarifying its customers’ rights under Creative’s pat-
ents. “Such an economic interest alone, however, cannot
form the basis of an ‘actual controversy’ under the De-
claratory Judgment Act.” Microchip Tech., 441 F.3d at
943; see also Arris, 639 F.3d at 1374 n.4. Thus, the dis-
trict court lacked declaratory judgment jurisdiction over
the ’273 Patent. See Prasco, LLC v. Medicis Pharm.
Corp., 537 F.3d 1329, 1338 (Fed. Cir. 2008) (“MedImmune
does not change our long-standing rule that the existence
of a patent is not sufficient to establish declaratory judg-
ment jurisdiction.”).
Counsel for Creative noted at oral argument that
“[t]he whole time, the parties had been discussing . . .
with each other, that we have these competing patents.”
Oral Argument at 7:55, available at
http://www.cafc.uscourts.gov/oral-argument-recordings/
2010-1445/all. Starmark alleges this fight over competing
patents arguably demonstrates an underlying cause of
action under 35 U.S.C. § 291. Starmark is correct that a
cause of action under § 291 does not require an infringe-
ment allegation. 35 U.S.C. § 291; Kimberly-Clark Corp. v.
Procter & Gamble Distrib. Co., 973 F.2d 911, 914 (Fed.
Cir. 1992) (stating “by its very language, a cause of action
under section 291 does not require that ‘the owner of the
interfering patent’ accuse ‘the owner of another’ of in-
fringement.”). And a district court could adjudicate the
validity of either interfering patent in a § 291 action.
Albert, 729 F.2d at 760. A district court lacks jurisdiction
under § 291, however, unless an interference is estab-
lished. Medichem, S.A. v. Rolabo, S.L., 353 F.3d 928, 934
(Fed. Cir. 2003) (citing Albert, 729 F.2d at 760-61). Here,
neither party filed an action under § 291, neither party
established the existence of an interference, nor, as dis-
cussed above, did either party seek an adjudication at
trial as to any identified common claimed subject matter.
CREATIVE COMPOUNDS v. STARMARK LABS. 23
Importantly, Starmark itself does not contend that
the claims of the patents do, in fact, interfere. Cf. Kim-
berly-Clark, 914 F.2d at 914 (finding jurisdiction over
§ 291 action where parties concede that patents interfere).
Indeed, Starmark’s purported theory of invalidity for the
’273 Patent relies on the disclosure contained in the
specification of the ’373 Patent, rather than the claims of
the ’373 Patent. As Creative stated, “the mere existence
of the ’273 Patent will not affect the ’373 Patent.” Appel-
lant Br. 34. Thus, the district court’s jurisdictional predi-
cate to a potential § 291 claim involving the ’373 and ’273
Patents had not been established. Albert, 729 F.2d at 761
(“Until it is determined that there are patents which do,
in fact, interfere, § 291 simply does not apply. Nor is
§ 291 comparable to the declaratory judgment statute.”).
In the absence of a substantial controversy between
the parties concerning an adverse legal interest, the
district court lacked declaratory judgment jurisdiction of
the ’273 Patent. Accordingly, the district court’s determi-
nation of jurisdiction is reversed, and its grant of sum-
mary judgment of invalidity of the ’273 Patent is vacated.
E. Motion for Leave to Amend
Creative argues that the district court abused its dis-
cretion in denying its motion for leave to amend its An-
swer. In the Eleventh Circuit, “it is not an abuse of
discretion for a district court to deny a motion for leave to
amend following the close of discovery, past the deadline
for amendments, and past the deadline for filing disposi-
tive motions.” Carruthers v. BSA Adver., Inc., 357 F.3d
1213, 1217-18 (11th Cir. 2004). Here, as the district court
noted, Creative “sought leave to amend on May 15, 2009,
nine months after the date for such amendments, as set
forth in the Scheduling Order; six months after the close
of fact and expert discovery; almost three months after
summary judgment motions were due and have been
24 CREATIVE COMPOUNDS v. STARMARK LABS
filed; and two months before trial.” Order at 3, Creative
Compounds, LLC v. Starmark Labs., Inc., No. 07-22814
(S.D. Fla. June 23, 2009), ECF No. 97. We see no basis on
which to conclude that the district court abused its discre-
tion in denying Creative’s “tardy and unduly prejudicial”
motion to amend. Id.
III. CONCLUSION
Based on the foregoing, this court concludes that the
district court did not err in granting Starmark’s motion
for summary judgment that the ’373 Patent is not invalid
and is infringed and, therefore, affirms that determina-
tion. Because the district court lacked declaratory judg-
ment jurisdiction over the ’273 Patent, this court reverses
the district court’s determination of declaratory judgment
jurisdiction and vacates its invalidity determination as to
the ’273 patent. Finally, because the district court did not
abuse its discretion in denying Creative’s motion for leave
to amend, that portion of the district court’s decision is
affirmed.
AFFIRMED-IN-PART, REVERSED-IN-PART, AND
VACATED-IN-PART
COSTS
Each party shall bear its own costs.