Thursday, May 19, 2011

CAFC reverses ND Ga in Arris case; MedImmune interpreted

The CAFC found there was a controversy in the case:

The United States
District Court for the Northern District of Georgia dis-
missed for lack of subject matter jurisdiction, finding that
there was no Article III case or controversy between the
parties. Arris Group, Inc. v. British Telecomm., PLC, No.
1:09-CV-671-CAP, slip op. at 5–8 (N.D. Ga. Feb. 18, 2010).
Because we conclude that an actual controversy existed
between Arris and BT, we reverse the district court’s
decision and remand for further proceedings.

The issue:

This case again presents a question of standing to
bring a declaratory judgment action for a determination of
non-infringement and invalidity. In MedImmune, Inc. v.
Genentech, Inc., the Supreme Court rejected our prior,
more stringent standard for declaratory judgment stand-
ing insofar as it required a “reasonable apprehension of
imminent suit.” 549 U.S. 118, 132 n.11 (2007); see also
ABB Inc. v. Cooper Indus., LLC, No. 2010-1227, 2011 WL
553603, at *2 (Fed. Cir. Feb. 17, 2011) (recognizing
MedImmune’s rejection of the reasonable apprehension
test); Teva Pharm., 482 F.3d at 1338–39 (same); SanDisk
Corp. v. STMicroelectronics, Inc., 480 F.3d 1372, 1378–79
(Fed. Cir. 2007) (same). Under the Court’s new standard,
an Article III case or controversy exists when “the facts
alleged, under all the circumstances, show that there is a
substantial controversy, between parties having adverse
legal interests, of sufficient immediacy and reality to
warrant the issuance of a declaratory judgment.”

The CAFC noted:

We have recognized that, where a patent holder ac-
cuses customers of direct infringement based on the sale
or use of a supplier’s equipment, the supplier has stand-
ing to commence a declaratory judgment action if (a) the
supplier is obligated to indemnify its customers from
infringement liability, or (b) there is a controversy be-
tween the patentee and the supplier as to the supplier’s
liability for induced or contributory infringement based on
the alleged acts of direct infringement by its customers.5
Though there was no express indemnification agreement
here, Arris contends it risks being held liable to Cable
One for indemnification under Georgia’s Uniform Com-
mercial Code (“UCC”).

Bottom line:

From our consideration of “all the circum-
stances,” MedImmune, 549 U.S. at 127, there is an Article
III case or controversy between Arris and BT regarding Arris’
potential liability for contributory infringement.


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