Medimmune Continues to Provide Broad Declaratory Judgment Jurisdiction

Sony Electronics, Inc. v. Guardian Media Technologies, Ltd., [2006-1363] (August 3, 2007) [PROST, Newman, Friedman] The Federal Circuit vacated and remanded the trial court's dismissal of the plaintiff's actions for declaratory judgment of non-infringement and invalidity of U.S. Patent Nos. 4,930,158 and 4,930,160, relating to methods of blocking certain television programs.
BRIEF: After being contacted by defendant regarding infringement of the '158 and '160 patents, the plaintiffs brought a declaratory judgment action, and a month later initiated reexamination of the patents. The trial court granted the patentee's motion to dismiss for lack of actual controversy, and said that even if it did have jurisdiction, it was a close question and it appeared that plaintiff's brought the declaratory judgment action as a negotiation tactic, which were enough reason to exercise its discretion not to hear the cases. As a result of the Supreme Court's decision in Medimmune, the reasonable apprehension of suit test has been abrogated. The Federal Circuit noted that a patentee's statement that it had absolutely no plant whatsoever to sue or a patentee's willingness in licensing did not eliminate an actual controversy for purposes of declaratory judgment jurisdiction. The Federal Circuit concluded that at the time of suit, an actual controversy existed between the parties. Noting the broad discretion of the trial court in exercising declaratory judgment jurisdiction, the Federal Circuit reversed and remanded the case, because the reasons given by the court for exercising its discretion to decline to hear the case were incorrect. There was in fact an actual controversy, so it was not a close case as the trial court supposed. Further, the Federal Circuit was troubled by the trial court's finding that bringing the suit was a tactic. The Federal Circuit found it harder to infer a nefarious motive from the filing. The Court remanded for the trial court to reconsider whether to exercise its discretion to hear the case, or to stay the case, pending the reexamination.