587 F.3d 1358, 2009 U.S. App. LEXIS 26359 (Fed. Cir. 2009) (MICHEL, Newman & Moore)
MAJOR ISSUES: Declaratory judgment jurisdiction patent holding company implied assertion of a patent.
Soon after acquiring a patent, a patent holding company, Acceleron, sent two letters to a plaintiff, Hewlett-Packard (HP). The letters identified the patent and the plaintiff’s product line and requested that any information on the patent that the patent owner provided “not be used for any litigation purposes.” In the second letter, the patent owner declined the plaintiff’s request for a 120 day “stand-still” agreement (that is, an agreement not to sue). The letters did not mention litigation or infringement, identify specific claims in the patent, or refer to licensing or litigation involving other parties.
In a thorough opinion, a district court held that the letters did not create a justiciable controversy sufficient to support the plaintiff’s declaratory judgment suit. Hewlett-Packard Co. v. Acceleron, LLC, 601 F. Supp. 2d 581 (D. Del. 2009).
The Federal Circuit reversed. Under case law before the Supreme Court’s decision, MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007), there would have been no jurisdiction. However, MedImmune requires a shift in jurisprudence. See SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372 (Fed. Cir. 2007). Under the totality of the circumstances, the patent owner’s letters were “an implied assertion” of patents against the plaintiff’s products. Those circumstances included (1) the patent owner’s status as a non-competing patent “holding company,” which benefits from patents only by asserting them, (2) the patent owner’s acts of contacting plaintiff soon after acquiring the patent, and (3) the patent owner’s refusal to agree to a standstill, which “is distinguishable from a covenant not to sue, such as that cited by the district court in Prasco, LLC, v. Medicis Pharmaceutical Corp., 537 F.3d 1329, 1341 (Fed. Cir. 2008).”
On declaratory judgment jurisdiction, see Chisum Patent Law Digest § 8126.40; Chisum on Patents § 21.02[1][d].
