It was a good Friday for Fenwick & West’s Charlene Morrow, who got client Hewlett-Packard out of a jam and caused the Federal Circuit — the high court of patent case appeals — to move the needle a little toward companies who want to squash patent trolls before they get started.
Morrow was arguing that a declaratory judgment action her client HP had filed against patent holder Acceleron shouldn’t have been tossed by the district court in Delaware. What happened is that Acceleron sent a vaguely threatening letter to HP about a patent it had (the letter can be read, along with the opinion, here: (.pdf )
HP filed an action in Delaware, asking the court to rule that it didn’t infringe on Acceleron’s patents and that the patents were invalid. But Acceleron protested that it hadn’t even really threatened HP, so there was no reason to judge anything declaratorily. “At the time HP filed its complaint, Acceleron could not have asserted its rights in the ’021 patent against HP because it had not even determined if it had a basis to assert the patent against HP,” Acceleron’s lawyers from Alston & Bird wrote. Delaware Judge Sue Robinson agreed and tossed the suit.
Then the reversal, suggesting trolls have less appeal …
But Morrow and her colleagues appealed, countering that under another Federal Circuit case, SanDisk Corp. v. STMicroelectronics, the letters from Acceleron were more than just holiday cards. Although the Federal Circuit didn’t agree that the Sandisk case backed up Morrow’s argument, the three-judge panel did agree that the case shouldn’t have been dismissed. “The facts of this case, when viewed objectively and in totality, show that Acceleron took the affirmative step of twice contacting HP directly, making an implied assertion of its rights,” wrote Michel.
Michel also acknowledged that the ruling was new ground for the Federal Circuit, writing “Our decision in this case undoubtedly marks a shift from past declaratory judgment cases.”
In making the ruling, the judges also gave special consideration to the fact that Acceleron was a troll, weighing the fact that “Acceleron is solely a licensing entity, and without enforcement it receives no benefits from its patents” in its decision.
— Zusha Elinson