By Memorandum Order entered by The Honorable Sue L. Robinson in Draeger Medical Systems, Inc. v. My Health, Inc., Civil Action No. 15-248-SLR (D.Del., March 3, 2016), the Court denied the motion of defendant, My Health, Inc., seeking to dismiss the complaint in the declaratory judgment action on grounds that plaintiff, Draeger Medical Systems, Inc., failed to identify actions sufficient to give rise to an “actual case or controversy” as required by Article III of the U.S. Constitution.[1]  In denying the motion, the Court found that the actions of the non-practicing entity defendant, through its agent, in sending Draeger Medical a letter claiming that Draeger Medical’s Infinity M300 system utilized the technology claimed and disclosed in the ‘985 patent, a Notice of Infringement of the ‘985 patent, a copy of the ‘985 patent, and a detailed and studied claim chart prepared with input from legal counsel and titled “Pre-filing Investigation Claim Chart” were sufficient to create an actual case or controversy necessary to support subject matter jurisdiction. See id. at * 4-7.

The Court noted that the same facts were sufficient to support subject matter jurisdiction in the Federal Circuit’s seminal case on the issue, SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372, 1382 (finding jurisdiction where defendant provided a “thorough infringement analysis” prepared by legal experts, stated that plaintiff’s conduct infringed its patents, and claimed that plaintiff would need to pay a royalty for its infringing product). Id. at *5.  In reaching its conclusion, the Court also found that the fact that Draeger Medical never contacted or attempted to engage in license negotiations with defendant before filing the declaratory judgment action did not weigh against subject matter jurisdiction under the totality of the circumstances. Id. at *6-7.

A copy of the Memorandum Order is attached.

The takeaway is that this case may provide additional support for the strategy of not engaging in or not waiting to participate in negotiations of a license agreement with a non-practicing entity that sends your company or client a letter claiming infringement of a patent along with claim charts or other legal materials before offensively filing a declaratory judgment action when there are solid grounds for invalidity of the patent at issue, non-infringement and/or other affirmative defenses to the claim of infringement.

[1] The Complaint in the declaratory judgment action seeks a declaratory judgment of non-infringement and invalidity of U.S. Patent No. 6,612,985 (“the ‘985 patent”).