SanDisk Corp. v. STMicroelectronics, Inc. et al.

Under the U.S. Supreme Court’s decision in Medimmune, Inc. v. Genentech, Inc., 127 S.Ct. 764 (2007), the requirement of “reasonable apprehension of [imminent] suit” is not necessary as it may place the potential plaintiff in a “bet the farm” position. An Article III controversy is presented when the parties have “taken adverse positions with regard to their obligations” with “each side presenting a concrete claim of a specific right”.

In SanDisk, STMicroelectronics (ST), during so-called licensing negotiations with SanDisk, continually pressed the protection of a number of its patents related to flash memory and made specific comparisons with SanDisk’s products as well as “liberal references” to SanDisk’s alleged infringement of ST’s products.  SanDisk subsequently filed a Declaratory Judgment action against ST seeking judgment of noninfringement and invalidity of the named ST patents. The District Court granted ST’s Motion to Dismiss after determining there was no “actual controversy”.  The CAFC vacated the dismissal and remanded for further proceedings.

The CAFC pointed to specific conduct by ST during its discussions with SanDisk which supported SanDisk’s position. First, “ST sought a right to a royalty under its patents based on specific, identified activity by SanDisk.” At one meeting, ST presented, as part of its “license negotiations”, “a thorough infringement analysis” by “seasoned litigation experts, detailing that one or more claims of its patents read on one or more of SanDisk’s identified products.”  Second, “ST presented SanDisk with a detailed presentation which identified, on an element-by-element basis, the manner in which ST believed each of SanDisk’s products infringed”.  Third, “[d]uring discussions, the experts liberally referred to SanDisk’s present, ongoing infringement of ST’s patents and the need for SanDisk to license those patents.” Fourth, ST gave to SanDisk a packet of materials, containing, among other items, “diagrams showing a detailed infringement analysis of SanDisk’s products.” Fifth, ST “asserted the right to a royalty based on [its determined infringement determination].”  Finally, SanDisk “maintained that it could proceed in its conduct without the payment of royalties to ST.”

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