Butamax (TM) Advanced Biofuels LLC et al v. Gevo Inc.

Filing 29

MEMORANDUM ORDER denying 7 MOTION to Dismiss for Lack of Jurisdiction Over the Subject Matter . Signed by Judge Sue L. Robinson on 5/2/2013. (nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

BUTAMAX™ ADVANCED
BIOFUELS LLC and DU PONT,
DENEMOURSANDCOMPANY
Plaintiffs,
v.
GEVO, INC.,
Defendant.

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Civ. No. 12-1301-SLR

MEMORANDUM ORDER
At Wilmington

this~day of May, 2013, having considered defendant Gevo,

Inc.'s ("defendant") motion to dismiss for lack of subject matter jurisdiction and the
papers submitted therewith;
IT IS ORDERED that said motion (D. I. 7) is denied, as follows:
1. Background. Butamax™ Advanced Biofuels LLC ("Butamax") and DuPont
de Nemours and Company ("DuPont") (collectively, "Butamax and DuPont") filed this
action on October 8, 2012 against Gevo, Inc. ("Gevo") seeking declaratory judgment of
non-infringement of U.S. Patent No. 8,283,505 ("the '505 patent"). (D.I. 1 at ~ 1) The
'505 patent is entitled "Recovery of Higher Alcohols from Dilute Aqueous Solutions" and
issued October 9, 2012. (D. I. 20 at ex. H, the '505 patent) Butamax is a limited liability
corporation organized and existing under the laws of the State of Delaware, with its
principal place of business in Wilmington, Delaware. It develops biobutanol, a premium

biofuel molecule. (/d. at

,-r 2) DuPont is a corporation organized and existing under the

laws of the State of Delaware, with its principal place of business in Wilmington,
Delaware. It is a science company with leading capabilities in biotechnology. (/d. at

,-r

3) Gevo is a corporation organized and existing under the laws of the State of
Delaware, with its principal place of business in Englewood, Colorado. (/d. at ,-r 4)
Currently before the court is Gevo's motion to dismiss for lack of subject matter
jurisdiction, filed November 5, 2012. (D. I. 7)
2. Standard. Not only may the lack of subject matter jurisdiction be raised at
any time, it cannot be waived and the court is obliged to address the issue on its own
motion. See Moodie v. Fed. Reserve Bank of NY, 58 F.3d 879, 882 (2d Cir. 1995).
Once jurisdiction is challenged, the party asserting subject matter jurisdiction has the
burden of proving its existence. See Carpet Group lnt'l v. Oriental Rug Importers Ass'n,
Inc., 227 F.3d 62, 69 (3d Cir. 2000). Under Rule 12(b)(1 ), the court's jurisdiction may

be challenged either facially (based on the legal sufficiency of the claim) or factually
(based on the sufficiency of jurisdictional fact). See 2 James W. Moore, Moore's
Federal Practice § 12.30[4] (3d ed. 1997). Under a facial challenge to jurisdiction, the

court must accept as true the allegations contained in the complaint. See id. Dismissal
for a facial challenge to jurisdiction is "proper only when the claim 'clearly appears to be
immaterial and made solely for the purpose of obtaining jurisdiction or ... is wholly
insubstantial and frivolous."' Kehr Packages, Inc. v. Fide/cor, Inc., 926 F.2d 1406,
1408-09 (3d Cir. 1991) (quoting Bell v. Hood, 327 U.S. 678, 682 (1946)).
3. Under a factual attack, however, the court is not "confine[d) to allegations in

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the ... complaint, but [can] consider affidavits, depositions, and testimony to resolve
factual issues bearing on jurisdiction." Gotha v. United States, 115 F.3d 176, 179 (3d
Cir. 1997); see also Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891-92
(3d Cir. 1977). In such a situation, "no presumptive truthfulness attaches to plaintiff's
allegations, and the existence of disputed material facts will not preclude the trial court
from evaluating for itself the merits of jurisdictional claims." Carpet Group, 227 F.3d at
69 (quoting Mortensen, 549 F.2d at 891 ). Although the court should determine subject
matter jurisdiction at the outset of a case, "the truth of jurisdictional allegations need not
always be determined with finality at the threshold of litigation." Moore, supra, §
12.30[1]. Rather, a party may first establish jurisdiction "by means of a nonfrivolous
assertion of jurisdictional elements and any litigation of a contested subject-matter
jurisdictional fact issue occurs in comparatively summary procedure before a judge
alone (as distinct from litigation of the same fact issue as an element of the cause of
action, if the claim survives the jurisdictional objection)." Jerome B. Grubart, Inc. v.
Great Lakes Dredge & Dock Co., 513 U.S. 527, 537-38 (1995) (citations omitted).
4. The Declaratory Judgment Act requires an actual controversy between the
parties before a federal court may exercise jurisdiction. 28 U.S.C. § 2201 (a). A plaintiff
bringing an action for declaratory judgment must prove, by a preponderance of the
evidence, that an actual controversy exists. See Shell Oil Co. v. Amoco Corp., 970 F.2d
885, 887 (Fed. Cir. 1992). An actual controversy exists where "the facts alleged, under
all the circumstances, show that there is a substantial controversy, between parties
having adverse legal interests, of sufficient immediacy and reality to warrant the

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issuance of a declaratory judgment." 1 Medlmmune, Inc. v. Genentech, Inc., 549 U.S.
118, 127 (2007) (quoting Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273,
(1941)). This is not a bright-line test. See, e.g., Maryland Cas., 312 U.S. at 273; Sony
E/ecs., Inc. v. Guardian Media Techs., Ltd., 497 F.3d 1271, 1283 (Fed. Cir. 2007).
5. Discussion. There is an extensive pattern of litigation between these parties.
Butamax initially sued defendant in this court on January 14, 2011, alleging
infringement of two of its patents. Butamax Advanced Biofuels LLC v. Gevo, Inc., Civ.
No. 11-54 (D. Del. Jan. 14, 2011 ). Currently, there are fifteen cases pending between
the parties, with Butamax as plaintiff in nine and Gevo as plaintiff in six. 2 All of the
cases relate to bio-isobutanol technology. (D. I. 18 at 2; D. I. 21 at 3)
6. In January 2012, Gevo alleged that Butamax and DuPont infringed U.S.
Patent No. 8,101 ,808 ("the '808 patent"), entitled "Recovery of Higher Alcohols from
Dilute Aqueous Solutions." Gevo, Inc. v. Butamax Advanced Biofuels LLC, eta/., Civ.
No. 12-70, D.l. 1 at1f12 (D. Del. Jan. 24, 2012). Specifically, Gevo asserted that
Butamax and/or DuPont infringe the '808 patent by "produc[ing] isobutanol through
fermentation and, for example, extract[ing] the isobutanol by introducing an extractant

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"[T]he phrase 'case of actual controversy' in the [Declaratory Judgment] Act
refers to the type of 'Cases' and 'Controversies' that are justiciable under Article Ill."
Medlmmune, 549 U.S. at 127 (citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227
(1937)). Consequently, the analysis of whether "a case of actual controversy" exists is
essentially an analysis of whether Article Ill standing exists. See generally id.; see a/so,
e.g., SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372, 1381 (Fed. Cir. 2007),
Micron Tech., Inc. v. Mosaid Techs., Inc., 518 F.3d 897, 901 (Fed. Cir. 2008). For
brevity's sake, the court confines its analysis in this opinion to whether, under the
Declaratory Judgment Act, "a case of actual controversy" exists.
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DuPont is a party to most of the lawsuits.
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to the fermentation broth, distilling the mixture to produce an isobutanol vapor, and
returning the remaining liquid to the fermentor." /d. at 3-4.
7. The '505 patent at issue in the present litigation is a continuation of the '808
patent and shares the same specification and title as the '808 patent. ('505 patent; D. I.
19 at ex. A, the '808 patent) Both are directed to the production of bio-isobutanol from
fermentation broths. (D.I. 18 at 4) Further, the '505 patent was terminally disclaimed
over the '808 patent. (/d.) Gevo alleges the claims of the '505 patent are distinct from
those of the '808 patent; thus, Gevo's assertion of infringement of the '808 patent does
not necessarily implicate the '505 patent. (D. I. 21 at 5)
8. Comparing the claims of the '505 patent and the '808 patent and more
particularly the independent claims, the court concludes that there are substantial
similarities in the claimed subject matter. ('505 patent, 63:1-23; '808 patent, col 61:6162:5) The claims are directed to producing and recovering isobutanol ('505 patent) or
C3-C6 alcohol, which includes isobutanol ('808 patent), through fermentation and
subsequent separation of the alcohol. Under a "totality of the circumstances" review,
the pattern of litigation between the parties and the close relationship between the
patents constitute facts sufficient to show the existence of an actual controversy
between the parties. 3 Teva Pharms. USA, Inc. v. Novartis Pharms. Corp., 482 F.3d
1330, 1344 (Fed. Cir. 2007) (finding that pending litigation between the parties,

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Gevo asserts that it lacks sufficient information regarding the fermentation
conditions of Butamax and DuPont's products to determine if they infringe the '505
patent. (D. I. 8 at 4) This contention loses force as the '505 patent is a continuation of
the '808 patent and Gevo has not offered Butamax and DuPont a covenant not to sue
on the '505 patent. (D.I. 18 at 4)

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combined with three other factors including defendant's filing of an abbreviated new
drug application, was sufficient to sustain a declaratory action); Dish Network v. Tivo,
Inc., 604 F. Supp. 2d 719, 723-724 (D. Del. 2009) (allowing a declaratory action to go

forward based on litigation history between the parties and defendant's public
statements regarding the probable infringement of plaintiff's redesigned products); cf.
Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1338-41 (Fed. Cir. 2008) (holding

that one prior lawsuit concerning different products, without more, was not sufficient to
sustain an actual controversy); W.L. Gore & Associates, Inc. v. AGA Medical Corp.,
2012 WL 924978 at *6 (D. Del. Mar. 19, 2012) (finding no substantial controversy for a
declaratory judgment of non-infringement, when the patent relates to similar technology
of another patent, which was at issue in a pending litigation); Edmunds Holding Co. V.
Autobytellnc., 598 F. Supp. 2d 606, 610-611 (D. Del. 2009) (finding that general public

statements by a patent owner regarding enforcing his rights, combined with a pattern of
litigation against other companies, was insufficient to sustain a declaratory action).
8. Conclusion. For the foregoing reasons, Gevo's motion to dismiss for lack of
subject matter jurisdiction (D. I. 7) is denied.

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