Shenzhen Yihong Technology Co Ltd. v. dbest products Inc, 2:24-cv-02043

Plaintiff Shenzhen Yihong Technology Co., Ltd. ("Vtopmart"), based in China, sells stackable storage drawers primarily through Amazon in the U.S.
Defendant dbest Products Inc. (“dbest”) filed a utility patent infringement complaint against Vtopmart's products on Amazon, leading to their removal.
Following the removal, dbest retracted the Amazon complaint and later issued a broad covenant not to sue Vtopmart (including affiliates and successors) for infringement based on the specific products/ASINs at issue.
Vtopmart sued dbest in federal court, seeking declaratory judgments of non-infringement and invalidity of the patent, and also brought state law claims for tortious interference and unfair competition.
dbest moved to dismiss under Rule 12(b)(1) (lack of subject matter jurisdiction) and 12(b)(6) (failure to state a claim), arguing the covenant not to sue eliminated any actual case or controversy.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Subject matter jurisdiction for DJ claims	DBest’s infringement action caused ongoing harm/controversy	Covenant not to sue & retraction of complaint moots the issue	No actual controversy; claims dismissed for lack of standing
Whether § 285 provides independent jurisdiction	Even if federal claims dismissed, § 285 allows fees jurisdiction	Not a prevailing party; dismissal is not on merits	§ 285 does not create independent jurisdiction
Supplemental jurisdiction over state claims	Court should retain state claims even if federal dismissed	Court cannot retain jurisdiction after dismissing all fed. claims	No jurisdiction, state claims dismissed
Leave to amend	No explicit position stated, but sought broader relief	No amendment can cure for the covered products	Leave to amend only for products not covered by covenant

Safe Air for Everyone v. Meyer, 373 F.3d 1035 (9th Cir. 2004) (Rule 12(b)(1) standard for factual vs. facial jurisdictional challenges)
3M Co. v. Avery Dennison Corp., 673 F.3d 1372 (Fed. Cir. 2012) (Federal Circuit law governs actual controversy in patent DJ cases)
SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372 (Fed. Cir. 2007) (actual controversy requires adverse legal interests and affirmative act)
Hewlett-Packard Co. v. Acceleron LLC, 587 F.3d 1358 (Fed. Cir. 2009) (affirmative acts beyond suit can create DJ jurisdiction)
Already, LLC v. Nike, Inc., 568 U.S. 85 (2013) ("absolutely clear" standard for mooting declaratory claims with covenants)
Raniere v. Microsoft Corp., 887 F.3d 1298 (Fed. Cir. 2018) (prevailing party for § 285 requires material alteration of legal relationship)
Herman Fam. Revocable Tr. v. Teddy Bear, 254 F.3d 802 (9th Cir. 2001) (no discretion to retain supplemental jurisdiction after jurisdictional dismissal)