Sunday, October 02, 2011



In Arris Group Inc. v. British Telecommunications PLC, 639 F.3d 1368, 1374 (Fed. Cir. 2011), we recognized the requirement in MedImmune that there be an “adverse legal interest” for there to be declaratory judgment juris- diction. This “adverse legal interest” required a “dispute as to a legal right—for example, an underlying legal cause of action that the declaratory defendant could have brought or threatened to bring.” Id. “In the absence of such a legal controversy . . . , a mere adverse economic interest is insufficient to create declaratory judgment jurisdiction.” Id. at 1374–75.


MedImmune made clear that, in almost identical circumstances, the issue of contract interpretation is a merits issue, not appropriate to decision on a motion to dismiss under Rule 12(b)(1). 549 U.S. at 135–36 (“[E]ven if re- spondents were correct that the licensing agreement . . . precludes this suit, the consequence would be that re- spondents win this case on the merits—not that the very genuine contract dispute disappears, so that Article III jurisdiction is somehow defeated.”). Here, we simply hold that the dispute between PTI and Tessera—as to whether the license agreement requires royalty payments to be tied to valid patent coverage—is sufficient to support declaratory judgment jurisdiction. We leave the merits- based arguments to the district court to consider on remand.

On forum selection clauses:

In M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972), the Supreme Court held that a forum-selection clause is “prima facie valid and should be enforced unless enforcement is shown by the resisting party to be ‘unreasonable’ under the circumstances.” 8 Moreover, Ninth Circuit law requires that, in considering the dismissal of a case, forum selection clauses should be enforced unless there is a strong public policy against doing so. Jones v. GNC Franchising, Inc., 211 F.3d 495, 497–98 (9th Cir. 2000) (citing M/S Bremen, 407 U.S. at 1); Docksider, Ltd. v. Sea Tech., Ltd., 875 F.2d 762, 763-64 (9th Cir. 1989). In Docksider, the Ninth Circuit held that “[w]here venue is specified with mandatory language, the clause will be enforced.” 875 F.2d at 764. The forum selection clause there used mandatory “shall” language to designate Virginia as the proper forum, stating that “[v]enue . . . shall be deemed to be in . . . Virginia.” Id. at 763 (empha- sis added). Here, the forum selection clause in PTI’s license agreement employs similar “shall” language to mandate jurisdiction in California. It is clear that the district court erred in failing to enforce the forum selec- tion clause.


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