In the context of conduct prior to the existence of a license, declaratory judgment jurisdiction generally will not arise merely on the basis that a party learns of the existence of a patent owned by another or even perceives such a patent to pose a risk of infringement, without some affirmative act by the patentee. But U.S. Const. art. III jurisdiction may be met where the patentee takes a position that puts the declaratory judgment plaintiff in the position of either pursuing arguably illegal behavior or abandoning that which he claims a right to do.
SanDisk Corporation ("SanDisk") was in the flash memory storage market and owned several patents related to flash memory storage products. STMicroelectronics, Inc. ("ST"), traditionally in the market of semiconductor integrated circuits, entered the flash memory market and had a sizeable portfolio of patents related to flash memory storage products. SanDisk filed an action in a federal district against ST for patent infringement, but the district court granted ST's motion to dismiss for failure to present an actual controversy. SanDisk appealed the decision.
Did the lower court err in dismissing the case?
The court held that the first question to ask was whether the facts alleged in the case showed there was a case or controversy within the meaning of the Declaratory Judgment Act. The court found that SanDisk had established a U.S. Const. art. III case or controversy that gave rise to declaratory judgment jurisdiction. Among other facts leading to that conclusion were ST's communication to SanDisk that it had made a studied and determined infringement determination and asserted the right to a royalty based on such determination, and SanDisk's position that it could proceed in its conduct without the payment of royalties to ST. Next, the court declined to hold that the statement of ST's vice president for intellectual property and licensing that ST would not sue SanDisk eliminated the justiciable controversy created by ST's actions because ST had engaged in a course of conduct that showed a preparedness and willingness to enforce its patent rights despite that statement. Finally, given the change reflected in MedImmune and the court's holding in the instant case, the court discerned little basis for the district court's refusal to hear the case. The court vacated the dismissal and remanded the case for further proceedings.