The Declaratory Judgment Act is a statute designed to give parties uncertain of their legal rights the ability to obtain a fair and impartial determination of those rights. Any action for declaratory relief must meet certain minimum jurisdictional requirements, but, interestingly, even if the case meets those requirements, the Act expressly gives courts the discretion to accept or decline the case. When, then, should a court take such a case, and when should it decline? This question is particularly important in patent cases given the frequency with which declaratory relief actions arise in patent litigation.
This Article contends that a crucial factor that substantially impacts the propriety of a grant of declaratory relief in a patent dispute, and one that has not been examined by the courts and the academic literature, is the nature of the patent itself, which lies at the heart of the dispute. More specifically, this Article argues that courts need to consider whether adjudicating particular patents would further fairness and innovation.
Part I introduces the Declaratory Judgment Act and discusses the substantial discretion courts have under the Act to accept or decline cases. This Part explains that courts have failed to articulate clear policy objectives to guide this discretion and argues that when deciding whether to accept or decline a declaratory relief action, courts should consider the patent-at-issue and whether adjudicating the patent would promote fairness and innovation.
Part II of this Article discusses how patents can conflict with our notions of justice and fair play. This Part also explains the impact of unjust patents on bargaining and innovation and argues that these effects need to be considered when deciding whether declaratory relief is appropriate. Furthermore, since unjust patents have varying impediment effects depending on the industry and technology-at-issue, industry-specific characteristics should also be taken into account.
Part III presents specific public policy concerns that courts need to consider when determining whether adjudicating the patent-at-issue would promote fairness and innovation. Specifically, unjust patents are more likely to lead to bargaining breakdown in certain industries, and courts should broadly grant declaratory relief in such industries because more of these patents need to be vetted through an impartial decision-maker. This Part offers an example of how this policy lever could be tailored to the software industry. This Part concludes by arguing that explicit consideration of the goals of the Declaratory Judgment Act and the patent system in this manner creates efficiencies for both patent owners and potential infringers.
64 S.M.U. L. Rev. 895 (2011).