Declaratory judgment : CAFC Alert

The Court Gives Roadmap to Patent Trolls on How to Obtain Lucrative Settlements from Customers without Declaratory Judgment Recourse from Manufacturers.

Stephen Parker | April 11, 2014

Microsoft v. DataTern, Inc. and SAP v. DataTern, Inc. (Precedential Opinion).

April 4, 2014

Before Chief Judge Rader, Prost and Moore.  Opinion by Moore.  Opinion dissenting-in-part by Rader.

Summary

DataTern, Inc., a company established to exploit IP opportunities (aka patent troll), sued hundreds of customers of Microsoft and SAP alleging infringement of its’ patents for a software product that facilitates interfacing of object-oriented applications with relational databases, seeking lucrative settlements from consumers disinterested in combating a full patent lawsuit without suing Microsoft and SAP.  Despite DataTern’s effort to avoid litigation with Microsoft and SAP, who as manufacturers of the products were well equipped and interested to seek legal recourse, Microsoft and SAP successfully filed declaratory judgment actions in New York district court and were awarded summary judgments for non-infringement.  DataTern appealed to the CAFC.   Although the CAFC affirmed the district court’s decision, as explained in the dissenting-in-part opinion of Chief Judge Rader, the CAFC’s opinion “creates a roadmap [for patent troll’s] to avoid declaratory judgment” actions by taking steps to ensure that their claim charts presented to allegedly infringing customers reference only customer activity and not activity of the product manufacturers.


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Burden of persuasion in the post-MedImmune world

Stephen G. Adrian | September 27, 2012

Medtronic v. Boston Scientific Corporation, Guidant Corporation and Mirowski Family Ventures

September 18, 2012

Panel:  Lourie, Linn, Prost.  Opinion by Linn.

Summary

This decision discusses who carries the burden of persuasion in the post-MedImmune world. This question arises as a consequence of the Supreme Court’s decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007). In MedImmune, the Supreme Court found declaratory judgment jurisdiction even though the declaratory judgment plaintiff-licensee continued to make royalty payments pursuant to a license. The Court reasoned that a licensee should not be forced to cease royalty payments and risk infringement liability before the licensee can challenge the extent of coverage of the license.

The district court entered judgment of non-infringement in favor of Medtronic and judgment of validity and enforceability in favor of Mirowski Family Ventures (MFV). MFV appeals the judgment of non-infringement and Medtronic cross appeals the district court’s claim construction.  The CAFC vacates the district court ruling and remands.


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