Through Declaratory Judgments, it is possible for disputing parties to get a binding determination from a federal court about whether a potential action would constitute patent infringement if the action were to proceed.
Parties seeking Declaratory Judgments in patent infringement suits may be seeking to:
- Prevent patentees from threatening competitors with legal action while refusing to litigate the validity of the patent or the legitimacy of the claim of patent infringement.
- Determine if an activity (such as entering the market) would be considered patent infringement before pursuing that activity.
Sometimes one party uses the declaratory judgment action to beat the opposing party to the court, and thus institute a case at a venue and time of its own choosing. The other party is then forced to challenge the venue, if it chooses and if grounds exist to do so.
The court has the discretion to allow the declaratory judgment action to proceed or not, and in some cases may dismiss a case if no actual “case or controversy” exists. A party who is being accused of infringement by a patent holder who, over a long period of time threatens to file a patent infringement lawsuit but never files it, may in some cases have a need to bring a declaratory judgment action asking the court to determine whether patent infringement occurred or not. The same need does not seem quite as strong when a accused infringer has merely received a letter from a patent holder requesting the accused infringer to review a cited patent.
Declaratory judgment actions are sought in both cases. Some IP lawyers advice their clients not to write any letters to alleged infringers asking them to “cease and desist” from the alleged patent infringement, out of concern that such a letter would give rise to the accused infringer filing a declaratory judgment suit.
The law in this area is complicated and ever-changing, and a proposed course of action can be determined only after a thorough review of the relevant facts.