POWERTECH TECHNOLOGY INC. v. Tessera, Inc.
660 F.3d 1301
Fed. Cir.2011Background
- PTI filed a declaratory action seeking non-infringement and invalidity of Tessera's '106 patent after ITC/Texas actions against PTI's customers.
- Tessera had licensed its patents to PTI under the Tessera Compliant Chip Licenses (TCC Licenses); PTI paid royalties under these licenses.
- ITC found certain µBGA products infringed; PTI licensees including PTI were alleged to have supplied these products through licensed channels.
- PTI asserted wBGA/µBGA chips were licensed and thus not infringing; Tessera argued royalty obligations persisted regardless of infringement or patent validity.
- District court dismissed for lack of subject matter jurisdiction, citing absence of a live controversy and implied no relief would redress PTI's injury.
- Appellate court reversed and remanded, holding there was a live controversy and enforcing a forum-selection clause to California.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of declaratory judgment jurisdiction | PTI contends Tessera's ITC/Texas allegations create a controversy as to infringement and validity. | Tessera argues no live controversy because licensed products are excluded and royalty obligations flow regardless. | Jurisdiction exists; controversy shown; reversed and remanded for merits. |
| Whether royalties must be tied to patent coverage/validity | PTI argues royalties should depend on patent coverage/validity; there may be implied terms of necessity. | Tessera argues royalties survive regardless of infringement or validity; contract interpretation merits on remand. | Merits not decided; court leaves contract interpretation for district court; jurisdiction acknowledged. |
| Enforcement of forum-selection clause | PTI argues California forum is required under the license agreement. | Tessera argues efficient adjudication supports Texas action; no need to enforce forum clause. | Forum-selection clause enforced; district court abused discretion; case remanded to California. |
Key Cases Cited
- MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007) (adverse legal interest standard for declaratory judgments)
- Arris Group Inc. v. British Telecommunications PLC, 639 F.3d 1368 (Fed. Cir. 2011) (adverse legal interest requirement; supplier-licensee controversy)
- Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008) (patent exhaustion by initial authorized sale)
- Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100 (1969) (patent license implications and lawful royalty structures)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (forum-selection clause validity and enforceability)
- SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372 (Fed. Cir. 2007) (declaratory judgment standing as to invalidity; MedImmune principle applied)
- Texas Instruments Inc. v. Int'l Trade Comm'n, 851 F.2d 342 (Fed. Cir. 1988) (ITC decisions and preclusion context in related actions)
- Tandon Corp. v. Int'l Trade Comm'n, 831 F.2d 1017 (Fed. Cir. 1987) (ITC decision review considerations)
- Stewart Org. v. Ricoh Corp., 487 U.S. 22 (1988) (forum-selection clause considerations in section transfer contexts)