Res Judicata Precludes Declaratory Judgment Claim of Invalidity

The U.S. Court of Appeals for the Federal Circuit upheld a district court ruling that barred declaratory judgment action alleging non-infringement, invalidity and unenforceability of several Dow patents on the basis of res judicata arising from an earlier settled case. Pactiv Corp. v. Dow Chem. Co., Case No. 05-1260 (Fed. Cir. June 5, 2006) (Dyk, J.).

Pactiv’s declaratory judgment action grew out of proceedings in 1998 in which Dow had sued Pactiv for infringement of two patents. In those proceedings, Pactiv asserted counterclaims of invalidity and unenforceability. Pactiv agreed to pay royalties, and pursuant to a settlement and license agreement the action was dismissed with prejudice. However, in 2002 Pactiv ceased payments and notified Dow it believed the patents were invalid. Pactiv responded by filing a declaratory judgment action seeking rulings on invalidity, unenforeability and non-infringement. The district court granted Dow’s rule 12(b)(6) motion to dismiss on grounds of re