Heralding the SanDisk and Teva cases (issued shortly after Cellco), the U.S. Court of Appeals for the Federal Circuit affirmed the district court’s decision to dismiss the declaratory judgment action filed by Cellco Partnership, while at the same time concluding that the district court incorrectly held that no actual controversy existed. Cellco Partnership v. Broadcom Corp., Case No. 06-1514 (Fed. Cir., Mar. 19, 2007) (per curiam).
The appellant, Cellco, filed a declaratory judgment action in district court on patents that were the subject of a pending U.S. International Trade Commission (ITC) proceeding instituted by the appellee, Broadcom, against Qualcomm. The district court dismissed the action, holding that no actual controversy existed between the parties, despite the fact that Qualcomm manufactures chips used by Cellco, which was likely to intervene in the parallel district court case filed by Broadcom against Qualcomm, an action that was stayed pending resolution of the ITC investigation.
The Federal Circuit pointed to several factors, including the commonality of issues raised in both the ITC action and the declaratory judgment suit, in concluding that the district court erred as a matter of law in finding no actual controversy between Cellco and Broadcom. However, many of these same factors persuaded the Court to uphold the dismissal of the declaratory judgment action based on a principal reaffirmed by the Supreme Court in its MedImmune decision (see IP Update Vol. 10, No. 1), that district courts have "unique and substantial discretion" in determining whether to decide cases over which they have declaratory judgment jurisdiction. The Court thus affirmed the reasoning of the district court that, in the exercise of its decision, allowing Cellco’s declaratory judgment action to proceed would be an inappropriate use of multiple judicial districts.
Practice Note: Also see case note in this issue regarding the SanDisk and Teva cases.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.