Patent Demand Letters: Avoiding Declaratory Judgment Jurisdiction

Recent Supreme Court and Federal Circuit jurisprudence lowered the bar for potential infringers to establish declaratory judgment jurisdiction. This article is provided in two installments. First, what follows is a discussion of relatively recent court decisions that liberalized the standard for establishing declaratory judgment jurisdiction in patent cases. The second installment (to be published in the next issue) discusses factors likely to trigger declaratory judgment jurisdiction and provides suggestions for practitioners and business people alike seeking to inform potential infringers of patent rights without triggering declaratory judgment jurisdiction.

A patent owner typically initiates contact with potential infringers with a patent demand letter.² A typical demand letter informs the recipient of the patent owner's patent, provides notice of potential infringement of the patent by the recipient, and requests cessation of the infringing activity by the recipient and/or calls for the recipient to license the patent.³

Such a letter creates uncertainty for the recipient. If the recipient continues to engage in the allegedly infringing activity, it risks incurring further liability -including the possibility of treble damages - and even an i...