In Hewlett-Packard Co. v. Acceleron, L.L.C., the Court of Appeals for the Federal Circuit (CAFC) panel reversed the district court’s dismissal of the case for lack of declaratory judgment jurisdiction under 28 U.S.C. §§ 2201, 2202. Acceleron, a patent holding company, had contacted Hewlett-Packard to call attention to U.S. Patent No. 6,948,021 (“the ’021 patent”). After receiving two letters from Acceleron, HP filed for declaratory judgment. The district court granted Acceleron’s motion to dismiss for lack of declaratory judgment jurisdiction. The CAFC reversed, noting that while a party’s identification of a patent it owns and the plaintiff’s product line is not enough by itself to give rise to declaratory judgment jurisdiction, under the totality of the circumstances, including Acceleron’s position as a patent holding company, it was not unreasonable for HP to interpret Acceleron’s letters as an implicit assertion of its rights in the ’021 patent.

Acceleron acquired the ’021 patent on May 31, 2007. On September 24, 2007, Thomas B. Ramey, III, President of Acceleron, wrote to Hewlett-Packard’s general counsel. In his letter, Ramey referenced the ’021 patent and stated it “relates to [HP's] blade servers.” Ramey gave HP two weeks to respond, stating, “if I do not hear from you by that time, I will assume you have no interest in discussing this patent.” On October 1, HP’s counsel responded with a request for a mutual standstill agreement for 120 days to discuss the ’021 patent. Ramey responded that “I do not believe HP has any basis for filing a declaratory judgment action,” and that if HP was interested in discussing the ’021 patent, it should respond by October 19, 2007. If HP did not respond, Ramey would, “understand that you are not interested in discussing this patent, and you do not have anything to say about the merits of this patent, or its relevance to your Blade Server Products.” On October 17, HP filed for declaratory judgment in the United States Court for the District of Delaware. Acceleron moved to dismiss for lack of subject matter jurisdiction.

The district court granted Acceleron’s motion to dismiss. The district court did note that Acceleron’s failure to request a confidentiality agreement and accept HP’s 120 day standstill agreement did weigh in favor of finding jurisdiction. However, the district court weighed Acceleron’s lack of a statement of infringement, identification of specific claims, claim charts, prior litigation, or identification of other licensees against these factors. Under the totality of the circumstances, including Acceleron’s business model as a non-competitor patent holding company, the district court determined that litigation was too speculative at the time HP filed suit to support declaratory judgment jurisdiction.

HP appealed, claiming that declaratory judgment jurisdiction, as determined in SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372, 1381 (Fed. Cir. 2007), was satisfied merely by Acceleron identifying its patent and HP’s ongoing activity in its product line. The CAFC rejected this argument, stating that even if the declaratory judgment bar had been lowered by MedImmune Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007), the declaratory judgment plaintiff must still show that the dispute is, “definite and concrete, touching the legal relations of parties having adverse legal interests; and that it be real and substantial and admit of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.”

Acceleron argued that because its letters to HP did not explicitly threaten to sue for infringement or demand a license, it did not create declaratory judgment jurisdiction. The CAFC disagreed, noting that it would be “implausible [after MedImmune] to expect that a competent lawyer drafting such correspondence for a patent owner would identify specific claims, present claim charts, and explicitly allege infringement.” Additionally, the CAFC called Acceleron’s suggestion that a patent owner may contact another party to incorporate the patented technology into the other party’s product or attempt to sell the patent to the other party “disingenuous.” Taking into account the short deadlines imposed by Acceleron, as well as its position as a “non-competitor patent holding company,” the CAFC concluded that it was not unreasonable for HP to interpret Acceleron’s letters as implicitly asserting its rights to the ’021 patent. The CAFC found additional support in Acceleron’s refusal to accept HP’s 120 standstill.

In its conclusion, the CAFC noted that there was no bright line rule in determining whether declaratory judgment jurisdiction exists. The CAFC noted that its decision in this case “undoubtedly marks a shift from our past declaratory judgment cases,” and attributed this shift to MedImmune. The CAFC reversed the district court’s dismissal of the case, and remanded the case for further proceedings.