Micron Technology, Inc. v. MOSAID Technologies, Inc.
518 F.3d 897 (2008)
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Rule of Law:
For a court to have declaratory judgment jurisdiction in a patent case, the plaintiff does not need to show a 'reasonable apprehension of an imminent suit.' Instead, jurisdiction exists if, under the totality of the circumstances, there is a substantial controversy between parties with adverse legal interests of sufficient immediacy and reality to warrant a declaratory judgment.
Facts:
- MOSAID Technologies, Inc. (MOSAID) owns several patents related to dynamic random access memory (DRAM) chips and seeks to license them to major manufacturers.
- Beginning in June 2001, MOSAID sent several letters to Micron Technology, Inc. (Micron), a leading DRAM manufacturer, strongly suggesting it take a license for MOSAID's patents.
- Over the next few years, MOSAID systematically sued the other three major DRAM manufacturers—Samsung, Hynix, and Infineon—and settled with each of them.
- After settling with its competitors, MOSAID issued public statements and annual reports declaring its intent to pursue an 'aggressive' licensing strategy against the 'remaining DRAM manufacturers.'
- With Samsung, Hynix, and Infineon now licensed, Micron was the last of the four leading DRAM manufacturers without a license from MOSAID.
- Press reports at the time predicted that Micron was MOSAID's 'obvious next target' for litigation.
Procedural Posture:
- Micron filed a declaratory judgment action against MOSAID in the U.S. District Court for the Northern District of California, seeking a declaration of noninfringement.
- One day later, MOSAID filed a patent infringement suit against Micron in the U.S. District Court for the Eastern District of Texas.
- In the California action, MOSAID filed a motion to dismiss for lack of subject matter jurisdiction.
- The district court granted MOSAID's motion to dismiss, finding no jurisdiction under the 'reasonable apprehension of suit' test and also stating it would decline to hear the case as a matter of discretion.
- Micron (appellant) appealed the dismissal to the U.S. Court of Appeals for the Federal Circuit.
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Issue:
Does a federal district court have subject matter jurisdiction over a declaratory judgment action for patent noninfringement where the patentee has not made an explicit threat of suit, but its overall conduct creates a substantial controversy of sufficient immediacy and reality?
Opinions:
Majority - Rader, J.
Yes. A substantial controversy between the parties of sufficient immediacy and reality existed, granting the district court subject matter jurisdiction. The district court erred by applying the 'reasonable apprehension of suit' test, which was rejected by the Supreme Court in MedImmune Inc. v. Genentech Inc. The correct standard is whether, under the totality of the circumstances, the dispute is definite, concrete, and real. Here, MOSAID's pattern of suing all of Micron's major competitors, coupled with its public statements about its 'aggressive' strategy, created a controversy of sufficient immediacy and reality. The fact that MOSAID sued Micron in another district one day after Micron filed its declaratory judgment action confirms the existence of an actual controversy. The purpose of the Declaratory Judgment Act is to relieve parties like Micron from the uncertainty and delay caused by a patentee's litigation threats.
Analysis:
This case is significant for clarifying and applying the Supreme Court's MedImmune standard for declaratory judgment jurisdiction in patent law. It formally buries the Federal Circuit's old 'reasonable apprehension of suit' test, making it substantially easier for potential infringers to initiate litigation and choose their preferred forum. The decision anticipates the increased 'race to the courthouse' this new standard will create and provides guidance for lower courts. By instructing district courts to use a transfer analysis under 28 U.S.C. § 1404(a) to resolve competing first-filed declaratory actions and later-filed infringement suits, the court attempts to manage forum shopping by focusing on factors of convenience and justice rather than a rigid first-to-file rule.
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