Friday, May 30, 2014

District Court Lacks Subject Matter Jurisdiction Over DJ Claim to Determine FRAND Terms

The court granted plaintiff's motion to dismiss defendants' FRAND counterclaims for lack of subject matter jurisdiction. "[Defendant's] counterclaims . . . request the Court to find that [plaintiff] has not offered a FRAND rate to [defendant] and for the Court to determine what FRAND license terms would be. . . . [F]or a district court to take up a declaratory judgment suit the court must be 'convinced that by its action a useful purpose will be served.' . . . The Court is far from convinced that the trial that would be necessitated by the declaratory judgment would serve any useful purpose. First, even if the Court were to determine a FRAND rate, I am unclear as to how I could actually enforce such a ruling. . . . All the Court's determination of a FRAND rate would accomplish would be to give a data point from which the parties could continue negotiations. . . . Second, the determination of a FRAND rate would not lead directly to a patent license as multiple other license issues would still need to be negotiated between the parties, any one of which could become a sticking point. . . . [E]ven if the Court were able to determine the FRAND rate in an efficient manner, which the Court finds highly dubious considering that there are 500 or so possibly relevant patents, the Court's FRAND finding would have little utility and serve little to no useful purpose."

InterDigital Communications Inc. et al v. ZTE Corporation et al, 1-13-cv-00009 (DED May 28, 2014, Order) (Andrews, J.)

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