X CORP. v. ADEIA INC.
3:23-cv-06151
| N.D. Cal. | May 7, 2024Background
- Plaintiff X Corp. (formerly Twitter) filed a lawsuit seeking declaratory judgment of non-infringement of four Adeia patents, after a dispute about unpaid royalties under a patent licensing agreement (PLA) between the parties.
- Adeia had previously sued X in California state court for breach of the PLA, seeking royalty payments that X stopped making after the company changed ownership.
- The patents at issue were not specifically referenced or discussed in pre-suit communications between X and Adeia; the state court action focuses solely on enforcement of the PLA and does not directly allege patent infringement.
- Adeia moved to dismiss X's federal declaratory judgment action for lack of subject matter jurisdiction, arguing there is no real and immediate controversy regarding the patents.
- While the motion to dismiss was pending, Adeia also moved to stay all discovery in the federal case, a motion now granted by the Magistrate Judge pending resolution of the dismissal motion.
- X opposed the stay, arguing some discovery was necessary to contest Adeia’s claims about the PLA and jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether to stay discovery pending a motion to dismiss | Discovery is needed to address factual disputes related to the PLA | Motion to dismiss is dispositive and can be decided without it | Stay granted; discovery not needed |
| Existence of case or controversy under Article III | State court PLA suit and alleged patent coverage suffice | No communication or threat regarding these patents by Adeia | Insufficient controversy; suit likely dismissed |
| Relevance of prior state court litigation to jurisdiction | State court breach action is an affirmative act creating jurisdiction | No direct linkage to patents-in-suit; not infringement suit | State action insufficient for DJ jurisdiction |
| Appropriateness of partial vs. full discovery stay | Some limited discovery is necessary, thus total stay is improper | Partial discovery not requested properly; none is necessary | Full stay appropriate under circumstances |
Key Cases Cited
- Landis v. N. Am. Co., 299 U.S. 248 (1936) (court’s inherent power to control its docket, including stays)
- MedImmune, Inc. v. Genentech, 549 U.S. 118 (2007) (standard for a substantial controversy sufficient for declaratory relief in patent cases)
- Wenger v. Monroe, 282 F.3d 1068 (9th Cir. 2002) (discovery can be stayed where the claim is likely to fail)
- 3M Co. v. Avery Dennison Corp., 673 F.3d 1372 (Fed. Cir. 2012) (actual controversy requirement for declaratory judgment in patent cases)
- Cat Tech LLC v. TubeMaster, Inc., 528 F.3d 871 (Fed. Cir. 2008) (meaningful preparation and real controversy standard in patent DJ actions)