Thursday, April 1, 2010

Declaratory Judgment Jurisdiction


  • An “adverse legal interest” requires a dispute as to a legal right—for example, an underlying legal cause of action that the declaratory defendant could have brought or threatened to bring. In the absence of a controversy as to a legal right, a mere adverse economic interest is insufficient to create declaratory judgment jurisdiction.

  • [E]conomic injury alone is insufficient to create standing….

  • We have recognized that, where a patent holder accuses customers of direct infringement based on the sale or use of a supplier’s equipment, the supplier has standing to commence a declaratory judgment action if (a) the supplier is obligated to indemnify its customers from infringement liability, or (b) there is a controversy between the patentee and the supplier as to the supplier’s liability for induced or contributory infringement based on the alleged acts of direct infringement by its customers.

  • When the holder of a patent with system claims accuses a customer of direct infringement based on the customer’s making, using, or selling of an allegedly infringing system in which a supplier’s product functions as a material component, there may be an implicit assertion that the supplier has indirectly infringed the patent.6 Likewise, when the holder of a patent with method claims accuses the supplier’s customers of direct infringement based on their use of the supplier’s product in the performance of the claimed method, an implicit assertion of indirect infringement by a supplier may arise.

  • While direct communication between a patentee and a declaratory plaintiff is not necessary to confer standing, the nature and extent of any communications between the declaratory plaintiff and the patentee are certainly relevant factors to consider when evaluating whether there is an Article III case or controversy between the parties.[W]e have held that a patentee’s grant of a covenant not to sue a supplier for infringement can eliminate the supplier’s standing to bring a declaratory judgment action….

  • "The district court found that these informal conversations did not constitute a threat of suit for patent infringement against a device that had not been seen and evaluated for infringement of any patent. We agree that the indirection reflected in these conversations did not produce a controversy of such 'immediacy and reality' as to require the district court to accept declaratory jurisdiction.

  • "MedImmune did not hold that a patent can always be challenged whenever it appears to pose a risk of infringement."


  • “[A] specific threat of infringement litigation by the patentee is not required to establish jurisdiction, and a declaratory judgment action cannot be defeated simply by the stratagem of a correspondence that avoids magic words such as ‘litigation’ or ‘infringement.’”

  • “In determining whether there is federal subject matter jurisdiction for declaratory judgment actions: ‘[I]t is the character of the threatened action, and not of the defense, which will determine whether there is federal-question jurisdiction in the District Court.’”

  • “Because the actual controversy in this case is over infringement, the declaratory defendant’s hypothetical coercive complaint here is a patent infringement suit. It is well-established that a claim for infringement arises under federal law. Even if the only issue in that suit would be a state law defense, subject matter jurisdiction does not depend on whether a federal law issue will be the crux of the case but instead whether federal patent law creates the cause of action.”

  • “The general rule, articulated repeatedly by the Supreme Court, is that declaratory judgment jurisdiction exists where the defendant’s coercive action arises under federal law. … We see no reason to depart from that general principle where the defense is non-federal in nature.”


  • "The concept of adverse legal interests requires that there be a dispute as to a legal right, such as an underlying legal cause of action that the declaratory defendant could have brought or threatened to bring, if not for the fact that the declaratory plaintiff had preempted it."