Corning Incorporated v. Wilson Wolf Manufacturing Corporation

Background

Corning manufactures and sells cell-culture vessels, including the HYPERStack product. Wilson Wolf Manufacturing Corp. and John R. Wilson develop and manufacture cell-culture devices. The parties have litigated disputes concerning cell-culture technology for several years.

Wilson Wolf filed patent-infringement cases against customers and end-users of Corning’s HYPERStack product. Those cases involve three patents and have been stayed. Corning filed this declaratory-judgment action seeking rulings concerning infringement and patent validity, as well as a claim for tortious interference with its customer relationships. A declaratory judgment is a court ruling that clarifies the parties’ legal rights before or apart from a claim for damages.

Count Ten sought a declaration that the federal patent safe harbor protected Corning’s customers and end-users from infringement claims based on uses of HYPERStack products reasonably related to developing and submitting information under federal laws regulating drugs or veterinary biological products. Corning later moved to dismiss Count Ten without prejudice. Defendants did not oppose removing Count Ten but asked that it be dismissed with prejudice, or that Corning reimburse their fees and provide information related to the safe-harbor issue.

Defendants separately moved to dismiss the entire action for lack of standing. They argued that they had sued Corning’s customers rather than Corning, that Corning lacked standing concerning method-patent claims, that Corning could not rely on indemnity, and that the tortious-interference claim should also be dismissed. Standing is the legal requirement that a plaintiff have a sufficient stake in a real dispute that a federal court may decide.

Count Ten

The court applied Federal Rule of Civil Procedure 41(a)(2), which allows a plaintiff to dismiss a claim by court order after certain filings have been made. The court considered whether Corning had a proper reason for dismissal, whether dismissal would waste judicial resources, and whether it would cause Defendants legal prejudice.

The court granted Corning’s motion. It dismissed Count Ten without prejudice, meaning the ruling did not bar the claim from being brought again. The court reasoned that the safe-harbor defense depended on facts about each customer’s individual use of HYPERStack products and could be addressed, if necessary, in the individual customer lawsuits. The court reserved the right to require Corning to reimburse Defendants for costs and fees directly related to litigating Count Ten in this action if circumstances later warranted that relief.

Standing and the Motion to Dismiss

The court held that Corning had standing to bring the declaratory-judgment claims. Under the Declaratory Judgment Act, jurisdiction requires an actual controversy: a substantial, immediate, and real dispute between parties with opposing legal interests.

The court relied first on a July 31, 2019 letter in which Wilson Wolf stated that it was about to file a patent-infringement lawsuit against Corning based on the patents at issue and identified Corning customers using the HYPERStack product line. The court concluded that this threatened litigation was enough to establish a substantial controversy.

The court also relied on the history of the parties’ dispute and the customer lawsuits. Those lawsuits repeatedly referred to Corning’s HYPERStack product and relied on Corning’s instructions for using it. The court found that the infringement allegations appeared to concern the HYPERStack product as sold and instructed by Corning, rather than being limited to customer-specific conduct. The court concluded that these circumstances created a real, non-hypothetical dispute about whether Corning’s product infringed the patents. The court also found that Defendants had implicitly asserted theories of indirect infringement against Corning and noted Corning’s allegation that it was contractually required to defend or indemnify two customers.

The court separately held that it had jurisdiction over Corning’s tortious-interference claim because that claim alleged that the customer lawsuits were objectively baseless and intended to disrupt Corning’s customer relationships.

Disposition

The court granted Corning’s Motion to Dismiss Count Ten Without Prejudice, and Count Ten was dismissed without prejudice. The court denied Defendants’ Motion to Dismiss. The remaining claims were not dismissed by this order.