Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_08-cv-01254/USCOURTS-cand-4_08-cv-01254-7/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:2201 Declaratory Judgement

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

FUJITSU LIMITED, a Japanese

corporation, and FUJITSU

MICROELECTRONICS AMERICA, INC., a

California corporation,

Plaintiffs,

v.

NANYA TECHNOLOGY CORP., a Taiwanese

corporation, and NANYA TECHNOLOGY

CORP., U.S.A., a California

corporation,

Defendants. /

No. C 06-6613 CW

ORDER GRANTING

FUJITSU’S MOTION TO

DISMISS KLA-TENCOR’S

COMPLAINT

Fujitsu Limited and Fujitsu Microelectronics America, Inc.

move to dismiss the claims brought against them by KLA-Tencor Corp. 

KLA opposes the motion. The matter was heard on August 7, 2008. 

Having considered oral argument and all of the papers submitted by

the parties, the Court grants Fujitsu’s motion.

BACKGROUND

On September 13, 2006, Nanya Technology Corp. filed a lawsuit

against Fujitsu in the District of Guam alleging antitrust

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violations and infringement of three of Nanya’s patents, and

seeking a declaration that it did not infringe any of fifteen of

Fujitsu’s patents. A month later, Fujitsu filed suit against Nanya

in this Court alleging infringement of five patents, all of which

were among the fifteen patents in the Guam action. The Guam case

was eventually transferred to the Northern District of California

and consolidated with Fujitsu’s case against Nanya.

Among the patents Nanya is accused of infringing is U.S.

Patent No. 6,104,486 (the ‘486 patent). This patent claims a

method of measuring the lateral size of features on a semiconductor

substrate using a technique called ellipsometry. Using the method,

it is possible to measure very small features with a high degree of

accuracy.

Fujitsu accuses Nanya of infringing the ‘486 patent in the

course of manufacturing dynamic random access memory by using a

device manufactured by KLA, the SpectraCD. The SpectraCD includes

an ellipsometer, but Fujitsu does not, at the present time, contend

that KLA’s sale of the SpectraCD infringes the ‘486 patent. This

is ostensibly because the SpectraCD may be used in a number of ways

that Fujitsu admits, based on its current knowledge, do not

infringe the patent.

In January, 2008, Nanya filed a third-party complaint against

KLA seeking indemnification for any damages Fujitsu is awarded for

Nanya’s infringement of the ‘486 patent. In March, 2008, KLA filed

a new lawsuit against Fujitsu in the Northern District of

California, seeking a declaration that it does not infringe the

‘486 patent and that the patent is invalid. The new action was

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consolidated with the present one. Fujitsu now moves to dismiss

KLA’s claims, arguing that the Court lacks subject matter

jurisdiction over them because there is no case or controversy

between KLA and Fujitsu. In the alternative, Fujitsu moves for a

more definite statement.

LEGAL STANDARD

 Subject matter jurisdiction is a threshold issue which goes to

the power of the court to hear the case. Federal subject matter

jurisdiction must exist at the time the action is commenced. 

Morongo Band of Mission Indians v. Cal. State Bd. of Equalization,

858 F.2d 1376, 1380 (9th Cir. 1988). A federal court is presumed

to lack subject matter jurisdiction until the contrary

affirmatively appears. Stock W., Inc. v. Confederated Tribes, 873

F.2d 1221, 1225 (9th Cir. 1989). 

Dismissal is appropriate under Rule 12(b)(1) when the district

court lacks subject matter jurisdiction over the claim. Fed. R.

Civ. P. 12(b)(1). A Rule 12(b)(1) motion may either attack the

sufficiency of the pleadings to establish federal jurisdiction, or

allege an actual lack of jurisdiction which exists despite the

formal sufficiency of the complaint. Thornhill Publ’g Co. v. Gen.

Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979); Roberts v.

Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987). 

DISCUSSION

The Declaratory Judgment Act, in accordance with Article III

of the Constitution, requires an “actual controversy” before the

Court “may declare the rights and other legal relations of any

interested party seeking such declaration.” 28 U.S.C. § 2201(a). 

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Until relatively recently, the Federal Circuit required that, in

order to prove an actual controversy, a plaintiff had to establish

that the defendant’s conduct created an objectively “reasonable

apprehension” that the defendant would initiate suit imminently if

the plaintiff continued the allegedly infringing activity. See

Teva Pharms. USA, Inc. v. Novartis Pharms. Corp., 482 F.3d 1330,

1334-36 (Fed. Cir. 2007). 

In MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 S.

Ct. 764 (2007), however, the Supreme Court noted that the Federal

Circuit’s “reasonable apprehension of imminent suit” test

conflicted with several cases in which the Supreme Court had found

that a declaratory judgment plaintiff had a justiciable

controversy. 127 S. Ct. at 774 n.11. The Supreme Court instructed

that, although there is no bright-line rule for distinguishing

cases that satisfy the actual controversy requirement from those

that do not, all that is required is:

that the dispute be definite and concrete, touching the

legal relations of parties having adverse legal

interests; and that it be real and substantial and admit

of specific relief through a decree of a conclusive

character, as distinguished from an opinion advising what

the law would be upon a hypothetical state of facts.

. . . Basically, the question in each case is whether the

facts alleged, under all 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.

Id. at 771 (citations and internal quotation marks omitted).

Following MedImmune, the Federal Circuit recognized that the

Supreme Court did not approve of its reasonable apprehension of

imminent suit test. SanDisk Corp. v. STMicroelectronics, Inc., 480

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F.3d 1372, 1380 (Fed. Cir. 2007); Teva, 482 F.3d at 1340. The

Federal Circuit discarded its “reasonable apprehension” requirement

and adopted MedImmune’s “all circumstances” test. Teva, 482 F.3d

at 1339 (“[W]e follow MedImmune’s teaching to look at ‘all the

circumstances’ . . . to determine whether Teva has a justiciable

Article III controversy.”). Under the new test, “Article III

jurisdiction may be met where the patentee takes a position that

puts the declaratory judgment plaintiff in the position of either

pursuing arguably illegal behavior or abandoning that which he

claims a right to do.” SanDisk, 480 F.3d at 1381. As one district

court has noted, this change in the law with respect to the nowdefunct “reasonable apprehension” requirement has “in effect

lower[ed] the bar for a plaintiff to bring a declaratory judgment

action in a patent dispute.” Frederick Goldman, Inc. v. West, 2007

WL 1989291, at *3 (S.D.N.Y.).

Fujitsu contends that, even under the Federal Circuit’s

revised standard, there is no actual controversy between it and

KLA, and, therefore, the Court does not have jurisdiction over

KLA’s declaratory judgment claims. It is significant that Fujitsu

has never accused KLA itself of infringing the ‘486 patent. 

Rather, Fujitsu accuses Nanya of using the SpectraCD device in a

way that infringes the patent. Because the ‘486 patent is a method

patent whereas the SpectraCD is a product, the fact that Nanya

might infringe the patent by using the SpectraCD in a particular

way does not necessarily imply that KLA’s sale of the SpectraCD to

Nanya likewise infringes; the parties agree that the SpectraCD has

substantial non-infringing uses. Nor has Fujitsu accused KLA of

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inducing Nanya to infringe the ‘486 patent. Thus, while there is a

controversy between Fujitsu and Nanya, there is no controversy

between Fujitsu and KLA.

It is true that, under some circumstances, a declaratory

judgment defendant’s litigation against the customers of the

declaratory judgment plaintiff can support a finding that a

controversy exists between the parties, particularly where the

plaintiff has an obligation to indemnify its customers. See WS

Packaging Group, Inc. v. Global Commerce Group, LLC, 505 F. Supp.

2d 561, 566 (E.D. Wis. 2007). However, in every case cited by KLA

finding a controversy under such circumstances, the defendant

asserted infringement claims against the plaintiff’s customers

based on facts which, if the customer’s infringement were proven,

would compel the conclusion that the plaintiff itself had also

infringed. This is not the case here. Although KLA posits that

Fujitsu’s theory of infringement is based on Nanya’s use of the

SpectraCD in accordance with KLA’s instructions, KLA has not made a

sufficient showing that a finding of infringement on Nanya’s part

would necessarily imply that KLA induced Nanya’s infringement. In

addition, although KLA maintains that a controversy exists by

virtue of Fujitsu’s alleged strategy of indirectly attacking KLA by

suing its customers, it has not shown that infringement suits by

Fujitsu threaten a significant portion of its SpectraCD business or

that its customers generally are at risk of being accused of

infringing simply by using the SpectraCD. Moreover, granting KLA’s

request for a declaration of non-infringement would not necessarily

prevent Fujtisu from employing its alleged strategy in the future;

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a declaration that KLA itself does not infringe the ‘486 patent

through its sale of the SpectraCD would not preclude a lawsuit

charging KLA’s customers with infringing the patent through their

use of the SpectraCD.

Finally, in its answer to Nanya’s third-party complaint for

indemnity, KLA asserts as affirmative defenses that it does not

infringe the ‘486 patent and that the patent is invalid. Thus, KLA

will have an opportunity to litigate the issues raised in its

declaratory judgment complaint to the extent necessary to protect

its interests.

The Court concludes that, considering the totality of the

circumstances, no substantial controversy exists between KLA and

Fujitsu. Accordingly, the Court lacks jurisdiction over KLA’s

complaint for a declaratory judgment.

CONCLUSION

For the foregoing reasons, the Court GRANTS Fujitsu’s motion

to dismiss KLA’s complaint. The complaint is dismissed without

prejudice. The parties shall bear their own costs.

IT IS SO ORDERED.

Dated: 8/12/08 

CLAUDIA WILKEN

United States District Judge

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