JOSEPH E. IRENAS, Senior District Judge
This patent infringement suit appears before the Court on Plaintiff's motion to dismiss pursuant to Fed. R. Civ. P. 41(a)(2) (Dkt. No. 20). The motion is denied for the reasons stated below.
In July of 2011, while Plaintiff Shoulder Innovations, LLC had a patent application pending, Defendant Ascension Orthopedics, Inc. introduced into the market TITAN Inset Mini Glenoid products ("Titan Products"). Defendant invested over $90,000 in research and development on the products and spent more than $200,000 in fabricating an inventory of approximately 1,500 units.
On August 30, 2011, Plaintiff's patent issued and on September 2nd Plaintiff's counsel, via letter, invited Defendant to discuss the patent's implications at its earliest convenience. On September 13th, with Defendant not having responded, Plaintiff filed the instant action. In response, having sold an unspecified number of units, Defendant ceased sales of the Titan Products and filed an answer, denying the accusations and asserting counterclaims for declaratory judgment of noninfringement and invalidity of the patent.
At some point thereafter, Plaintiff sought Defendant's consent to dismiss the entire action; Defendant refused. Plaintiff now moves this court to dismiss both its and Defendant's claims pursuant to Fed. R. Civ. P. 41(a)(2).
Federal Rule of Civil Procedure 41(a)(2) holds:
The underlying purpose of the rule is to prevent voluntary dismissals which unfairly impact the defendant. Buse v. Vanguard Group of Inv. Cos., 1994 U.S. Dist. LEXIS 3978 at 9 (E.D. Pa. 1994), citing Paulucci v. City of Duluth, 826 F.2d 780, 782 (8th Cir. 1987). The second sentence, limiting dismissal after the pleading of a counterclaim, seeks to preserve the court's jurisdiction over the parties and the counterclaim. John Evans Sons, Inc. v. Majik-Ironers, Inc., 95 F.R.D. 186, 189 (E.D. Pa. 1982).
Whether a dismissal should be granted on a Rule 41(a)(2) motion lies within the sound discretion of the court. Ockert. v. Union barge Line Corp., 190 F.2d 303, 304-05 (3d Cir. 1951).
Plaintiff moves "pursuant to Fed. R. Civ. P. 41(a)(2) to dismiss all of its claims, and all of Defendant Ascension Orthopedics, Inc.'s counterclaims, without prejudice." Pl. Motion 1, Dkt. No. 20. Rule 41(a)(2), however, can only be used to dismiss a movant's own claims. See id. (allowing a plaintiff's withdrawal of its claims only if defendant's counterclaims can remain for adjudication, implying that the rule, in and of itself, cannot be used to dismiss an opposing party's claims); Brown v. Brown, 343 F.Supp.2d 195, 197 (E.D.N.Y. 2004) ("As stated in Rule 41(a)(2), if a defendant's counterclaims cannot stand alone the Court is precluded from allowing the action to be dismissed."); Environ Prods. v. Total Containment, 1996 U.S. Dist. LEXIS 4947 (E.D. Pa.) (noting that the Third Circuit applies the same analysis for a Rule 41(a)(2) motion for voluntary dismissal as a party seeking to amend its pleadings under Fed. R. Civ. P. 15(a)).
Defendant opposes the dismissal of its claims on the basis that a real controversy exists that requires the Court's ruling. Consequently, this Court must determine whether subject matter jurisdiction exists over Defendant's counterclaims and, if so, whether it should exercise such jurisdiction or, conversely, dismiss the entire case without prejudice. Wilton, 515 U.S. at 286-87.
A claim for declaratory judgment must state an actual case or controversy. MedImmune, 549 U.S. at 126-27.
The party asserting the claim has the burden of establishing both prongs. Indium Corp., 781 F.2d at 879. This Court finds the counterclaimant has met its burden. Ascension Orthopedics has clearly established a threat of defending against a future suit if it resumes selling its Titan Products. "[N]o express charge of infringement or threat of suit is required. Rather, a reasonable apprehension of suit may be induced by subtler conduct if that conduct rises `to a level sufficient to indicate an intent [on the part of the patentee] to enforce its patent,' to initiate an infringement action." EMC Corp. v. Norand Corp, 89 F.3d 807, 811 (Fed. Cir. 1996), quoting Shell Oil Company v. Amoco Corporation, 970 F.2d 885, 887 (Fed. Cir. 1992).
Plaintiff brought the patent to Defendant's attention immediately after it was issued and filed suit ten days thereafter. Plaintiff's counsel represented to Defendant that Defendant will be sued if it reintroduces the accused products into the market. Pompa Dec. ¶ 2. Furthermore, Plaintiff refuses to dismiss its own claims with prejudice, insisting on maintaining the ability sue again in the future. See Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1341 (Fed. Cir. 2008) (recognizing as relevant to determining threat of future suit a patentee's refusal to enter into a covenant not to sue). In light of the foregoing, Defendant has established a cognizable threat of future suit.
Defendant has also proved that they have produced the Titan Products. Defendant submits to the Court that it has approximately 1,500 units in inventory, and that such units would re-enter the market but for the instant suit. This submission satisfies the second prong of the analysis and shows to the Court that a real controversy exists, thereby granting the Court subject matter jurisdiction over Defendant's counterclaims.
The finding that subject matter jurisdiction exists over Defendant's counterclaims does not end the inquiry concerning Plaintiff's motion to dismiss. The Declaratory Judgment Act accords district courts "a unique breadth of ... discretion to decline to enter a declaratory judgment." Wilton, 515 U.S. at 287. Such discretion is not unfettered, however, and must be exercised in accordance with the principles of the Declaratory Judgment Act and sound judicial administration. EMC, 89 F.3d at 813-14. "The factors considered by the Court in exercising its discretion include, but are not limited to: (1) whether declaratory relief would clarify and settle the legal relations in issue; (2) the convenience of the parties; (3) the public interest in a settlement of the uncertainty of obligation, (4) the availability and relative convenience of other remedies; and (5) whether the declaratory judgment act is being used for `procedural fencing,' `forum shopping,' or as a means to provide another forum in a `race' for res judicata." DISH Network v. TiVo, Inc., 604 F.Supp.2d 719 (D. Del. 2009), citing Terra Nova Insurance Co. v. 900 Bar, Inc., 887 F.2d 1213, 1224 (3d Cir. 1989).
The instant action presents a real controversy upon which this Court should rule. Defendant has spent over $200,000 in manufacturing an inventory that could be reintroduced into the market with a judicial determination of noninfringement or invalidity of Plaintiff's patent. Defendant has already sold the Titan Products in accordance with a 510(k) Compliance Letter to File and represents that it will continue the costly process of obtaining FDA approval upon resolution of the instant action.
Plaintiff's argument that because Defendant lacks FDA approval for the accused products its counterclaims are premature is unconvincing. Claims that FDA approval is required for a district court to rule on a declaratory judgment action have been continually rejected. See, e.g., Infinitech v. Vitrophage, Inc. 842 F.Supp. 332, 337-38 (N.D. Ill. 1994); Biogen, Inc. v. Schering AG, 954 F.Supp. 391, 397 (D. Mass. 1996); see also BP Chemicals Ltd. v. Union Carbide Corp., 4 F.3d 975, 978 (Fed. Cir. 1993) (holding that "[w]hile [plaintiff] may not have the present ability to market [its product], it had embarked upon a protracted and costly process of obtaining regulatory approval. [Plaintiff's] conduct thus evinces the kind of `concrete steps' or `meaningful preparation' needed to establish an actual controversy under `all the circumstances.'"). Furthermore, in the instant case, refraining from adjudication unnecessarily and inequitably forces upon Defendant the prospect of expending resources for FDA approval only to be met with the very same lawsuit once such approval is received. See Infinitech, 842 F. Supp. at 337 (declining to construe the Declaratory Judgment Act as "placing all of the burden and risk on those who would seek to develop new medical and surgical products" and holding that final government approval is unnecessary for a declaratory judgment claim to be cognizable).
Because of the concrete steps Defendant has taken to market its Titan Products, and the threat of suit put forward by Plaintiff, the Court finds a justiciable controversy over which this Court has jurisdiction. Furthermore, because of both the ripeness of the suit and the expenditures already incurred by the parties, the Court retains such jurisdiction. Consequently, the Court denies Plaintiff's motion to dismiss on the terms specified by Plaintiff.
In light of the foregoing, Plaintiff's motion is denied. An Order will accompany this opinion.