Friday, December 4, 2009

Hewlett-Packard v. Acceleron

The Federal Circuit reversed a dismissal for lack of declaratory judgment jurisdiction. This was a typical letter writing dance case, but the court recognized that its decision represented a shift from past cases, and also that declaratory judgment cases can be tricky. “[T]here is no bright-line rule for distinguishing those cases that satisfy the actual case-or-controversy requirement from those that do not. Our decision in this case undoubtedly marks a shift from past declaratory judgment cases.” (p. 9.)

The opinion included excerpts from the exchanged letters, which showed both parties were quite cognizant of the declaratory judgment issue. While noting that “MedImmune may have lowered the bar for determining declaratory judgment jurisdiction in all patent cases,” it made clear that more is required than just any communication regarding a patent: “a communication from a patent owner to another party, merely identifying its patent and the other party’s product line, without more, cannot establish adverse legal interests between the parties, let alone the existence of a ‘definite and concrete’ dispute. More is required to establish declaratory judgment jurisdiction.” (p. 5.)

With no history of litigation, the determining factor here appeared to revolve in large part around the patent owner’s status as a patent holding company. Relevant facts included that “the receipt of such correspondence from a non-competitor patent holding company . . . may invoke a different reaction than would a meet-and-discuss inquiry by a competitor, presumably with intellectual property of its own to place on the bargaining table. Under the totality of the circumstances, therefore, it was not unreasonable for HP to interpret Acceleron’s letters as implicitly asserting its rights under the [] patent.” In addition, the court “observe[d] that Acceleron is solely a licensing entity, and without enforcement it receives no benefits from its patents….” (p. 8.)

Other factors that played a role were that the patent owner asserted the patent as “relevant” to a specific product line, imposed a short deadline for a response, insisted the other party not file suit, and refused a standstill agreement. (p. 7.) The court also noted that “it is the objective words and actions of the patentee that are controlling,” not its actual state of mind. (p. 7.)