Appeal from a decision of the U.S. District Court for the Northern District of California granting dismissal of claims relating to declaratory judgment of noninfringement and invalidity for failure to present an actual controversy. 
| On March 26, 2007, the Federal Circuit issued its opinion in SanDisk Corp. v. STMicroelectronics, Inc., a patent infringement suit addressing the requirements for bringing a declaratory judgment action against a patentee. 2007 U.S. App. LEXIS 7029 (Fed. Cir. March 26, 2007). The decision makes it significantly easier for a prospective patent licensee to initiate a declaratory judgment action. SanDisk Corp. ("SanDisk") and STMicroelectronics ("ST") were competitors in the flash memory storage market. In April of 2004, ST sent a letter to SanDisk informing them of several ST patents and requesting a meeting to discuss a potential patent cross-licensing agreement. When the parties met in August of 2004, ST requested that their discussions be treated as settlement discussions under Federal Rule of Evidence 408. ST then proceeded through “a thorough infringement analysis presented by seasoned litigation experts ... which identified, on an element-by-element basis, the manner in which ST believed each of SanDisk's products infringed the specific claims of each of ST’s patents.” At the end of meeting, however, ST told SanDisk that “ST has absolutely no plan whatsoever to sue SanDisk.” After further discussions, SanDisk filed suit, alleging infringement of one of its patents and seeking a declaratory judgment of noninfringement and invalidity of the fourteen ST patents. ST responded with a motion to dismiss the declaratory judgment claims for failure to present an actual controversy. The district court granted ST’s motion to dismiss because SanDisk did not have an objectively reasonable apprehension of suit. The court reasoned that SanDisk presented no evidence that ST threatened litigation at any time during the parties’ negotiations and ST specifically stated that it did not intend to sue SanDisk. Although ST had alleged that SanDisk was infringing ST patents, express charges of infringement coupled with the threat of judicial enforcement were required to establish a reasonable apprehension of suit. On appeal, the Federal Circuit re-considered whether the facts alleged in the case presented a “case or controvery” within the meaning of the Declaratory Judgment Act. The court considered the Supreme Court’s recent decision in MedImmune, Inc. v. Gentech, Inc., 127 S.Ct 764 (2007) and decided it was “a rejection of our reasonable apprehension of suit test.” Applying MedImmune, the Federal Circuit held that in the context of conduct prior to the existence of a license, declaratory judgment jurisdiction requires some affirmative act by the patentee to establish a reasonable apprehension of suit. Declining to define the outer boundaries of declaratory judgment jurisdiction, the Federal Circuit stated that “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 a right to engage in the accused activity without license, an Article III case or controversy will arise and the party need not risk a suit for infringement by engaging in the identified activity before seeking a declaration of its legal rights.” Because ST had made a "studied and determined infringement determination and asserted the right to a royalty based on this determination," the Federal Circuit found that SanDisk had established an actual controversy. Furthermore, ST's statement that it would not sue SanDisk did not eliminate the case or controversy “because ST has engaged in a course of conduct that shows a preparedness and willingness to enforce its patent rights.” Circuit Judge Bryson concurred with the majority, agreeing that MedImmune required the district court’s dismissal to be reversed. Nevertheless, Judge Bryson stated that the rule adopted by the Federal Circuit “will effect a sweeping change in our law regarding declaratory judgment jurisdiction. Under the court’s standard, “virtually any invitation to take a paid license relating to the prospective licensee's activities would give rise to an Article III case or controversy if the prospective licensee elects to assert that its conduct does not fall within the scope of the patent.” |