You say:...

"I am asking for the free version so don't send me a bill for legal services rendered. :>)))"!?...

Over the past 11 years I have given you a lot of advice, and any time you listened to me you made a lot of money...

Have I ever sent you a bilL?!... Like the time I got back from the Federal Court in San Francisco and told you all to buy PTSC, ( it was $.04 Cents), and you did and bought yourself a 40 foot Mobile Home. Didn't even offer to buy me a drink. I am crushed that you will imply I bill or my advice.

Now back to your question, which is:...

"applicability of one Markman ruling to other cases"...

Your question should really be amended to read;...

"Applicability of a Markman Ruling in Patent litigation to other cases having similar set of issues"...

The ANSWER is YES...

Under the ruling in Sandisk vs. S.T. Microelectronics , (see below), a Markman Ruling opens the door to a Declaratory Judgment Motion by the parties. Here is a write up on the Sandik case. (see below). You really should google and read the case itself, especially the concurring decision of Justice Bryson that is a clear statement of law on this issue...

Gil...

Sandisk v. STMicroelectronics - licensing in the post-MedImmune age

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Manufacturing News, Source : The Manufacturer US
Published : 09 Apr 2007 17:13

by Fulbright & Jaworski L.L.P. intellectual property and technology attorney David Fox
On March 26, 2007, the Federal Circuit applied the Supreme Court’s MedImmune decision (MedImmune, Inc. v. Genentech, Inc., 127 S. Ct. 764, 166 L. Ed. 2d 604 (2007)) to patent licensing negotiations, and effected “a sweeping change in [Federal Circuit] law regarding declaratory judgment jurisdiction” with potentially “no practical stopping point short of allowing declaratory judgment actions in virtually any case in which the recipient of an invitation to take a patent license elects to dispute the need for a license and then to sue the patentee.” SanDisk Corp. v. STMicrosystems, Inc., 2007 U.S. App. LEXIS 7029, *37 (Fed. Cir. 2007) (Bryson, concurring).

SanDisk involved cross-licensing negotiations between SanDisk Corp. (“SanDisk”) and STMicroelectronics, Inc. (“ST”) for patents directed to flash memory storage components. ST initiated negotiations by sending a letter to SanDisk, listing several ST patents that “‘may be of interest’” to SanDisk, and requesting a meeting to discuss a cross-licensing agreement. Id. at *2. At the meeting, ST “listed SanDisk’s various ‘unlicensed activities,’” and gave “a four- to five-hour presentation by ST’s technical experts, during which they identified and discussed the specific claims of each patent and alleged that they were infringed by SanDisk.” Id. at *5-6. ST also gave SanDisk “a packet of materials [including] diagrams showing how elements of ST’s patent claims cover SanDisk’s products.” Id. at *7. However, ST told SanDisk that “‘ST has absolutely no plan whatsoever to sue SanDisk.’” Id. SanDisk responded by sending ST a confidential cross-licensing offer. ST refused several offers by SanDisk to confidentially negotiate a cross-license. SanDisk then filed suit seeking a declaratory judgment (“DJ”) of noninfringement and invalidity of ST’s patents.

The district court dismissed SanDisk’s DJ suit, reasoning that: (1) SanDisk “presented no evidence that ST threatened it with litigation;” (2) ST’s “studied and determined infringement analysis” did not constitute “the requisite ‘express charges [of infringement] carrying with them the threat of enforcement;’” and (3) the totality of the circumstances did not evince an actual controversy because ST told SanDisk that it did not intend to sue SanDisk for infringement.” Id. at *10-11.

In vacating and remanding the case, the Federal Circuit noted that the Supreme Court in MedImmune “specifically addressed and rejected [the Federal Circuit’s] reasonable apprehension test,” which was the first prong of a “two-part test that first considers whether conduct by the patentee creates a reasonable apprehension on the part of the declaratory judgment plaintiff that it will face an infringement suit . . . .” Id. at *17-22. Footnote 11 of MedImmune cites a number of precedential Supreme Court cases where the court granted DJ jurisdiction to plaintiffs that had no “reasonable apprehension of suit.” Id. at *21. [1]

Now that the “reasonable apprehension” requirement for DJ jurisdiction has been eliminated, the Federal Circuit held:

"[DJ] jurisdiction generally will not arise merely on the basis that a party learns of the existence of a patent owned by another or even perceives such a patent might pose a risk of infringement, without some affirmative act by the patentee. But Article III jurisdiction may be met where the patentee takes a position that puts the declaratory judgment plaintiff in the position of either pursuing arguably illegal behavior or abandoning that which he claims a right to do. . . . We hold 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 the 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." Id. at *23.

Under this interpretation of the law, the court found that SanDisk had DJ jurisdiction based on ST’s activities:

"Under the facts in this case, SanDisk has established an Article III case or controversy that gives rise to [DJ] jurisdiction. ST sought a right to a royalty under its patents based on specific, identified activity by SanDisk. For example, . . . 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 the specific claims of each of ST’s patents. During discussions, the experts liberally referred to SanDisk’s present, ongoing infringement of ST’s patents and the need for SanDisk to license those patents. . . SanDisk, on the other hand, maintained that it could proceed in its conduct without the payment of royalties to ST. These facts evince that the conditions of creating a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment were fulfilled. SanDisk need not “bet the farm,” so to speak, and risk a suit for infringement by cutting off licensing discussions and continuing the activity before seeking a declaration of its legal rights." Id. at *26-28 (citations omitted).

Regarding ST’s promise not to sue, the court held that the statement did not eliminate any actual controversy and render SanDisk’s DJ claims moot. The court reasoned:

"We decline to hold that [ST’s] statement that ST would not sue SanDisk eliminates the justiciable controversy created by ST’s actions, because ST has engaged in a course of conduct that shows a preparedness and willingness to enforce its patent rights despite [ST’s] statement. Having approached SanDisk, having made a studied and considered determination of infringement by SanDisk, having communicated that determination to SanDisk, and then saying that it does not intend to sue, ST is engaging in the kinds of “extra-judicial patent enforcement . . . tactics” that the Declaratory Judgment Act was intended to obviate." Id. at *29 (quoting Arrowhead Indus. Water, Inc. v. Ecolochem, Inc., 846 F.2d 731, 735 (Fed. Cir. 1988)).

According to the court’s concurring opinion, SanDisk will effect “a sweeping change in [Federal Circuit] law regarding declaratory judgment jurisdiction” with potentially “no practical stopping point short of allowing declaratory judgment actions in virtually any case in which the recipient of an invitation to take a patent license elects to dispute the need for a license and then to sue the patentee.” Id. at *37 (Bryson, concurring).

Thus, elimination of the “reasonable apprehension” test, that the Federal Circuit had created to provide a “safe haven” for licensing negotiations, appears to make sense based on the cases cited in footnote 11 of MedImmune. Moreover, the Federal Circuit’s SanDisk decision appears to correctly follow and apply MedImmune, as the concurrence states: “[T]he reasoning of the MedImmune footnote [11] seems to require us to hold that the district court in this case had jurisdiction to entertain SanDisk’s declaratory judgment action.” Id. at *37 (Bryson, concurring).

Now that the Federal Circuit has applied the MedImmune standard, patentees are well-advised to approach patent licensing overtures very carefully. It is now clear that simply approaching a party and suggesting that a patent be licensed because of an alleged infringement can result in the patentee having to defend its patent in a DJ action.

The SanDisk court suggests that the patentee may avoid the risk of a declaratory judgment by conducting licensing negotiations under a confidentiality agreement. Footnote 1 of SanDisk reads: “To avoid the risk of declaratory judgment action, ST could have sought SanDisk’s agreement to the terms of a suitable confidentiality agreement.” Id. at *5 n.1. For example, a nondisclosure agreement that nothing from the negotiations may be used in court to establish DJ jurisdiction.

However, as Judge Bryson pointed out in his concurring opinion, in fact, only a negotiating party who would not bring a DJ action is likely to enter into a such a confidentiality agreement:

"The court suggests that ST could have avoided the risk of a declaratory judgment action by obtaining a suitable confidentiality agreement. The problem with that suggestion is that it would normally work only when it was not needed – only a party that was not interested in bringing a declaratory judgment action would enter into such an agreement. A party that contemplates bringing a declaratory judgment action or at least keeping that option open would have no incentive to enter into such an agreement." Id. at *37 n.1 (Bryson, concurring).

Another means that may be necessary in order to avoid the chilling effect that SanDisk might have on patent licensing is for Congress to legislate that discussions in the context of licensing negotiations cannot form the basis of DJ jurisdiction. However, for the time being, patentees should approach licensing with extreme caution.

Footnotes:

[1] In Teva Pharm. USA, Inc. v. Novartis Pharm. Corp. (Fed. Cir. March 30, 2007), a different panel of the Federal Circuit reached the same conclusion, that footnote 11 in MedImmune eliminated the "reasonable apprehension" prong of the Federal Circuit's two-part DJ test. In a concurring opinion to Teva, Judge Friedman found footnote 11 in MedImmune to be dicta. However, he still stated that "it appears incumbent on us to stop using [the two-part DJ] test and hereafter to apply the general declaratory judgment standards that the Supreme Court applied in MedImmune." Id. (Friedman, concurring).

Notice: The author provided this information as a commentary on current legal issues, and it should not be considered legal advice, which depends on the facts of each situation."...