Declaratory action ruled inadmissible for patent infringement cases

The following fact has been under discussion in Argentina for a long time: if a patent owner has sent a cease and desist letter to an alleged infringer does this entitle the latter to request the Courts to determine whether his, her or its product actually infringes the patent?

This practice is relatively common under other legislations, where such declaratory judgment actions are generally admitted provided that the plaintiff proves a state of uncertainty that causes an actual or imminent harm (e.g., for having received a cease and desist letter from the patent owner).  Launching a new product in the market usually involves a large investment, and therefore the need for certainty that the product will not infringe third parties’ rights has been considered sufficient grounds to allow a declaratory judgment action.

In Argentina, the declaratory action is governed by Section 322 of the Code of Civil Procedures, which provides strict requirements for its admissibility:

(i)   state of uncertainty in connection with the existence, scope or mode of a legal situation;
(ii)  actual harm caused by said uncertainty; and
(iii) lack of alternative legal remedies to end said state of uncertainty.

The admission of declaratory judgment actions in patent infringement cases had not been discussed in Courts since the old Patent Law No 111 was enacted in 1864, almost 150 years ago.  On September 22, 2009, in re: ‘”Laboratorios Richmond SACIyF v. F. Hoffmann-La Roche AG on Declaratory Action” (Docket No. 14071/07), Tribunal II of the Federal Court of Appeals had the opportunity to analyze this issue for the first time.

In this case, Richmond had filed a declaratory judgment action requesting the Court to determine that its products did not infringe Roche’s patents, alleging that the products were manufactured through a process different from the one patented by Roche.

The District Court held the declaratory judgment action to be inadmissible and therefore rejected it in limine.  Richmond appealed, but Tribunal II of the Federal Court of Appeals upheld the ruling.

The Court of Appeals held that the requirements to start a declaratory action had not been met.  In particular, it pointed out that Richmond had not proved the lack of alternative legal remedies to end its state of uncertainty.  The Court further argued that the cease and desist letter sent by Roche was not an immediate threat but only the regular exercise of its rights, and also that the ordinary legal remedies provided by the Patent Law and by the Code of Civil Procedures (preliminary measures, injunctions, damages for any abuse by the patent owner, etc.) were adequate to protect Richmond’s interests.

Therefore, according to the Federal Court of Appeals, the act of receiving a cease and desist letter from the patent owner does not entitle the alleged infringer to a declaratory judgment from the Courts to determine whether he, she or it is infringing or not.

The Court’s decision is debatable, and it should be borne in mind that it comes from only one out of the three Tribunals of the Federal Court of Appeals.  In any case, the decision is noteworthy because so far it is the only precedent from our Courts on this matter.