Commc'ns Test Design, Inc. v. Contec LLC

367 F. Supp. 3d 350
District Court, E.D. Pennsylvania·Decided February 15, 2019·No. CIVIL ACTION NO. 18-4077·Published·Cited by 3 cases

Opinion

II

A

The Declaratory Judgment Act provides in pertinent part:

In a case of actual controversy within its jurisdiction ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.

28 U.S.C. § 2201(a) (2000). The purpose of a declaratory action is to allow a party "who is reasonably at legal risk because of an unresolved dispute, to obtain judicial resolution of that dispute without having to *355await the commencement of legal action by the other side." Capo, Inc. v. Dioptics Med. Prod., Inc. , 387 F.3d 1352, 1354-55 (Fed. Cir. 2004) (quoting BP Chems. Ltd. v. Union Carbide Corp. , 4 F.3d 975, 977 (Fed Cir. 1993) ). Courts exercise discretion in retaining or declining jurisdiction under the Declaratory Judgment Act. See Minn. Min. & Mfg. Co. v. Norton Co. , 929 F.2d 670, 672 (Fed. Cir. 1991) ("[T]he very terms of the Act and its subsequent interpretation by the courts have made the exercise of declaratory judgment jurisdiction discretionary.").

Moreover, "[t]he field of patent litigation ... is particularly adapted to declaratory resolution." Capo , 387 F.3d at 1357. Federal Circuit precedent controls such disputes because "[t]he proper relationship between an action under this act for a declaration of patent rights and a later-filed infringement suit triggers the Federal Circuit's special responsibility to foster national uniformity in patent practice." Serco Servs. Co., L.P. v. Kelley Co., Inc. , 51 F.3d 1037, 1038 (Fed. Cir. 1995) ; see Futurewei Techs., Inc. v. Acacia Research Corp. , 737 F.3d 704, 708 (Fed. Cir. 2013) ("Resolution of whether the second-file actions should proceed presents a question sufficiently tied to patent law that the question is governed by this circuit's law.")

B

Paralleling Article III of the Constitution, the Declaratory Judgment Act requires the existence of an actual controversy. Aetna Life Ins. Co. v. Haworth , 300 U.S. 227, 239-41, 57 S.Ct. 461, 81 L.Ed. 617 (1937). An actual controversy arises "where a patentee asserts rights under a patent based on certain identified ongoing or planned activity of another party, and where that party contends that it has the right to engage in the accused activity without [a] license." SanDisk Corp. v. STMicroelectronics, Inc. , 480 F.3d 1372, 1381 (Fed. Cir. 2007). Neither party disputes that an actual controversy exists here. Contec told CTDI of its intention to sue in its September 12 Letter. (Compl. ¶ 20.) Contec maintains that CTDI's test systems infringe the '732 and '071 Patents and, as a result, a licensing agreement is necessary. (Mot. Dismiss at 1-9.) Although CTDI was in the midst of negotiating possible licensing terms, it argues that its test systems do not infringe Contec's patents and that it has a right to develop and manufacture these systems without a license. (Resp. Opp'n at 1-7, ECF No. 9); see Sony Elecs. Inc. v. Guardian Media Techs., Ltd. , 497 F.3d 1271, 1286 (Fed. Cir. 2007) (ruling that an actual controversy existed where the patentee argued it was owed royalties based on the alleged infringer's activities but the alleged infringer contended it had a right to engage in those activities without a license).

C

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Commc'ns Test Design, Inc. v. Contec LLC, 367 F. Supp. 3d 350 (E.D. Pa. 2019).

367 F. Supp. 3d 350 (Commc'ns Test Design, Inc. v. Contec LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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