Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_06-cv-06495/USCOURTS-cand-4_06-cv-06495-3/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:145 Patent Infringement

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

BRIDGELUX, INC.,

Plaintiff, No. C 06-6495 PJH

v. ORDER DENYING MOTION FOR

JURISDICTIONAL DISCOVERY

CREE, INC., et al.,

Defendants.

_______________________________/

Before the court is plaintiff’s motion for an order permitting jurisdictional discovery. 

Having read the parties’ papers and carefully considered their arguments and the relevant

legal authority, and good cause appearing, the court finds that the motion must be

DENIED.

BACKGROUND

In this action for declaratory relief, plaintiff BridgeLux, Inc. (“BridgeLux”) seeks a

judgment of non-infringement and invalidity of United States Patent No. 6,657,236 (“the

‘236 patent”), owned by defendant Cree, Inc. (“Cree”) and assigned to defendant Cree

Lighting Co. (“CLC”) (first and second causes of action); and a judgment of noninfringement and invalidity of United States Patent No. 5,686,738 (“the ‘738 patent”), owned

by defendant Trustees of Boston University (“BU”), and exclusively licensed to Cree (third

and fourth causes of action). In addition, BridgeLux seeks a judgment of non-infringement

of United States Patent No. 6,600,175 (“the ‘175 patent”), owned by Cree (fifth cause of

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action); United States Patent No. 6,953,703 (“the ‘703 patent”), owned by BU and

exclusively licensed to Cree (sixth cause of action); United States Patent No. 6,614,056

(“the ‘056 patent”), owned by Cree and assigned to CLC (seventh cause of action); and

United States Patent No. 6,885,036 (“the ‘036 patent”), owned by Cree (eighth cause of

action).

On December 27, 2006, defendants filed a motion to dismiss, arguing that the first

through fourth, seventh, and eighth causes of action should be dismissed under the first-tofile rule; that the fifth and sixth causes of action should be dismissed for lack of subject

matter jurisdiction because plaintiff had alleged no actual controversy that could support

declaratory judgment; and that BU should be dismissed from the case for lack of personal

jurisdiction. Defendants subsequently advised that BU would consent to personal

jurisdiction before this court solely for purposes of the present action.

BridgeLux now seeks an order permitting it to conduct jurisdictional discovery to

establish facts supporting its claim that an actual controversy existed between the parties

as of the date of the filing of the complaint, sufficient to support jurisdiction under the

Declaratory Judgment Act. 

DISCUSSION

A. Legal Standard

When a party challenges subject matter jurisdiction over a declaratory judgment

action pursuant to Federal Rule of Civil Procedure 12(b)(1), the declaratory plaintiff bears

the burden of proof. Spectronics Corp. v. H.B. Fuller Co., 940 F.2d 631, 633-34 (Fed. Cir.

1991). 

Under the Declaratory Judgment Act, a federal court may “declare the rights and

other legal relations of any interested party seeking such declaration,” but only “[i]n a case

of actual controversy within its jurisdiction.” 28 U.S.C. § 2201(a); see also Medimmune,

Inc. v. Genentech, Inc., 127 S.Ct 764, 771 (2007). 

Federal Circuit law governs the determination of whether an “actual controversy”

exists under the Declaratory Judgment Act when the underlying merits of an action involve

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patent infringement and/or validity. Foster v. Hallco Mfg. Co., Inc., 947 F.2d 469, 475 (Fed.

Cir. 1991). The question is whether the facts alleged, “under all of the circumstances, show

that there is a substantial controversy, between parties having adverse legal interests, of

sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Sierra

Applied Sciences, Inc. v. Advanced Energy Industries, Inc., 363 F.3d 1361, 1372 (Fed. Cir.

2004). 

The "actual controversy" requirement for a patent invalidity declaratory judgment

requires “both (1) an explicit threat or other action by the patentee, which creates a

reasonable apprehension on the part of the declaratory plaintiff that it will face an

infringement suit, and (2) present activity which could constitute infringement or concrete

steps taken with the intent to conduct such activity." Id. at 1373 (quoting BP Chemicals,

Ltd. v. Union Carbide Corp., 4 F.3d 975, 978 (Fed. Cir. 1993)); see also Microchip

Technology Inc. v. Chamberlain Group, Inc., 441 F.3d 936, 942 (Fed. Cir. 2006).

The test for whether the plaintiff had a reasonable apprehension is objective, and

focuses on whether the defendant’s conduct rose to a level sufficient to indicate an intent to

enforce its patents. Shell Oil Co. v. Amoco Corp., 970 F.2d 885, 888 (Fed. Cir. 1992). This

test “requires more than the nervous state of mind of a possible infringer; it requires that

the objective circumstances support such an apprehension.” Phillips Plastics Corp. v. Kato

Hatsujou Kabushiki Kaisha, 57 F.3d 1051, 1053-54 (Fed. Cir. 1995). Although declaratory

relief is often proper in the infringement context, a potential infringer "cannot stretch the

[DJA] to give him a paramount right to choose the forum for trying out questions of

infringement and validity." Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180,

185 (1952).

B. Motion for Jurisdictional Discovery

In their motion to dismiss, defendants assert that the court lacks subject matter

jurisdiction over the claims for declaratory relief as to the ‘175 and ‘703 patents because

BridgeLux did not file those claims based on a reasonable apprehension that it would be

sued for infringing those patents. 

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In the original complaint, BridgeLux alleged as follows:

This action is brought to resolve the apprehension under which BridgeLux is

forced to conduct its business in the United States as a result of Cree’s

pending infringement action and its additional threats to sue BridgeLux for

infringement of certain patents purportedly owned and/or exclusively licensed

by Cree.

Cplt, ¶ 12.

On information and belief, Cree has informed at least one of BridgeLux’s

customers, both orally and in writing, that the LED products developed by

BridgeLux are used in products that allegedly infringe not only the ‘236 and

‘738 patents, but also [the ‘175 and ‘703 patents]. On information and belief,

Cree has also informed at least one customer of BridgeLux that a patent

infringement lawsuit would be brought by Cree for allegedly infringing use of

BridgeLux’s LED products. 

Cplt, ¶ 15.

Cree and BU’s filing of a patent infringement lawsuit against BridgeLux, in

conjunction with Cree’s allegations of infringement and threat of another

lawsuit expressed to at least one of BridgeLux’s customers, has created in

BridgeLux a reasonable apprehension that [d]efendants will sue BridgeLux for

patent infringement of the ‘236, ‘738, ‘175, and ‘703 patents. 

Cplt, ¶ 18. 

In their motion to dismiss, defendants argue that the fifth and sixth causes of action,

seeking a declaratory judgment of non-infringement of ‘175 and ‘703 patents, should be

dismissed because Cree and BU have never accused BridgeLux of infringing those

patents, and have not threatened BridgeLux with a suit on those patents, either in a

communication with BridgeLux or in a communication with a third party. Defendants assert

that a declaratory judgment plaintiff must show that there exists an actual controversy

between the parties that is ripe for adjudication, and that in the present case, BridgeLux

cannot show the existence of an actual controversy sufficient to support jurisdiction under

the DJA. 

Defendants provide a declaration from a Cree executive, Scott S. Schwab, stating

that Cree has never brought suit against any company on the ‘175 patent, and that Cree

and BU have never brought suit against any company on the ‘703 patent. In addition, the

declaration asserts, on information and belief, that no employee of Cree has ever told

BridgeLux or a third party that BridgeLux infringed either the ‘175 or the ‘703 patent, and

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 According to BridgeLux’s CEO, one of BridgeLux’s Asian-based customers told

BridgeLux that in April 2006, Cree management approached the customer’s booth at a trade

fair in Germany, and told the customer that if it was not using Cree’s chips in its lighting

products, it was infringing Cree’s patents. This same customer allegedly told BridgeLux in

June 2006 that Cree had sent it a warning letter asserting Cree’s ‘738, ‘236, ‘175, and ‘703

patents. 

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that no employee of Cree has threatened BridgeLux with suit on those two patents. 

Defendants also provide a declaration from a BU Senior Associate Vice President, John F.

Imbergamo, stating on information and belief, that no BU employee has ever told BridgeLux

or a third party that BridgeLux infringed the ‘703 patent, and that no BU employee has

threatened BridgeLux with suit on the ‘703 patent.

In conjunction with its opposition to the motion to dismiss, BridgeLux filed the

present motion for jurisdictional discovery. BridgeLux originally sought jurisdictional

discovery to oppose the motion to dismiss BU for lack of personal jurisdiction, and also to

oppose the motion to dismiss the fifth and sixth causes of action (‘175 and ‘703 patents) for

lack of subject matter jurisdiction. However, defendants have indicated that BU will

consent to personal jurisdiction before this court solely for purposes of this litigation. 

BridgeLux argues that it should be permitted to take jurisdictional discovery to rebut

the assertion of the Cree and BU declarants that Cree did not threaten BridgeLux’s

customers, thereby causing reasonable apprehension that Cree would assert the ‘175 and

‘703 patents. 

In support of its motion, BridgeLux has submitted a declaration from its CEO, Robert

C. Walker, stating that one of BridgeLux’s Asian customers said that Cree had warned that

the customer’s lighting products (which incorporated BridgeLux’s LED chips) infringed

Cree’s patents.1

 It was based on this “threat” that BridgeLux asserted that it had a

reasonable apprehension that defendants would sue it for infringement of the ‘175 and ‘703

patents.

Because defendants have challenged the factual basis of BridgeLux’s assertion of

jurisdiction under the DJA with regard to the ‘175 and ‘703 patents, BridgeLux must

establish that at the time it filed this declaratory action on Cree’s ‘175 and ‘703 patents, it

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 BridgeLux also claims that it sent Cree a letter in January 2007 requesting Cree, if it

is not asserting the ‘175 and ‘703 patents against BridgeLux, to provide an unqualified

representation to that effect. BridgeLux contends that Cree has not done so.

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had an objective, reasonable apprehension of being sued for patent infringement on those

patents. In their opposition to the motion, defendants argue that because all the

information relating to this standard is solely in BridgeLux’s possession, BridgeLux does not

require, and should not be granted, jurisdictional discovery.

In reply, BridgeLux argues that at the time it filed the present complaint it had a

reasonable apprehension that Cree intended to sue for infringement of the ‘175 and ‘703

patents. The basis of this apprehension, as alleged in the complaint, was that Cree

employee(s) had allegedly advised one of BridgeLux’s customers that BridgeLux’s products

infringed the ‘175 and ‘703 patents.2

 According to BridgeLux, the customer does not want

to get drawn into the litigation and has not sent BridgeLux a copy of the letter. BridgeLux

also does not want to name the customer unless it can do so under the provisions of a

protective order. 

BridgeLux asserts that because defendants rely on a declaration from a Cree

executive, stating that Cree’s employees never threatened BridgeLux or any third party that

Cree would assert the ‘175 or ‘703 patents – a claim that controverts the jurisdictional facts

alleged in BridgeLux’s complaint – defendants’ subject matter jurisdiction challenge is a

factual challenge, not a facial one. Thus, BridgeLux contends, it should be entitled to

discovery so it can refute Cree’s claim. BridgeLux argues that unless it is permitted to

obtain such facts, the court will be left with a conflicting record on which to decide

defendants’ motion to dismiss.

BridgeLux asserts that it seeks limited jurisdictional discovery sufficient to rebut

Cree’s representation that it never threatened BridgeLux’s customer. BridgeLux

contemplates “a short set of document requests and interrogatories, and possibly a few

depositions of Cree employees who made or witnessed Cree’s verbal threats to

BridgeLux’s customer, or who have knowledge of the warning letter that Cree allegedly

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sent to the customer.” 

Defendants claim that the only information that is relevant to whether BridgeLux had

a reasonable apprehension of suit is information that was known to BridgeLux at the time it

filed suit. Defendants cite to two decisions from this district, denying a declaratory

judgment plaintiff’s request for jurisdictional discovery, on the basis that the facts giving rise

to jurisdiction over a declaratory judgment action should be found in the complaint. See

SanDisk Corp. v. Audio MPEG, Inc., 2007 WL 30598 at *6 (N.D. Cal., Jan. 3, 2007); Oracle

v. Teilhard Techs., Inc., No. C 06-2889 SI (N.D. Cal., Sept. 9, 2006).

The court finds that the motion for jurisdictional discovery must be DENIED. When a

court considers whether it has subject matter jurisdiction under the DJA, the question is

whether there has been an explicit threat or other action by the patentee, which creates a

reasonable apprehension on the part of the declaratory plaintiff that it will face an

infringement suit, and whether there is present activity which could constitute infringement

or concrete steps taken with the intent to conduct such activity. Sierra Applied Sciences,

363 F.3d at 1373. The facts giving rise to jurisdiction over a declaratory judgment action

"should be found in the complaint." Int'l Med. Prosthetics Research Assocs., Inc. v. Gore

Enter. Holdings, Inc., 787 F.2d 572, 576 n.8 (Fed. Cir. 1986). Thus, BridgeLux should have

had that information in its possession before it filed an action for declaratory relief. It

cannot file the action and then seek discovery to establish that it was entitled to file the

action. 

CONCLUSION

In accordance with the foregoing, the court hereby DENIES plaintiff’s motion for

jurisdictional discovery.

Defendants’ request that the court reinstate their motion to dismiss is GRANTED. 

The court will consider the papers filed by the parties in support of and in opposition to the

motion, and will issue a written decision. There will be no hearing. 

To the extent that either plaintiff or defendants wish to supplement their argument

with a discussion of the standard for determining the existence of an “actual controversy”

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set forth in the Supreme Court’s recent opinion in Medimmune, they may do so in briefs not

to exceed four pages, filed by defendants no later than February 22, 2007, and filed by

plaintiff no later than February 29, 2007. No such argument is required, and no other

issues are to be argued in any supplemental brief.

Finally, for future reference, counsel for plaintiff BridgeLux are reminded that the

Civil Local Rules of this court prohibit the use of font size smaller than 12 point in both the

text and the footnotes of briefs. See Civ. L.R. 3-4(c)(2). The court expects all counsel to

familiarize themselves with the local rules. 

IT IS SO ORDERED.

Dated: February 15, 2007 ______________________________

PHYLLIS J. HAMILTON

United States District Judge

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