Sandisk Corporation v. Stmicroelectronics, Inc.

480 F.3d 1372 (2007)

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Nature of the Case

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Facts

P owns several patents related to flash memory storage products. ST (D) has a sizeable portfolio of patents related to flash memory storage products. D's vice president of intellectual property and licensing, Jorgenson, sent a letter to P's chief executive officer requesting a meeting to discuss a cross-license agreement. The letter listed eight patents owned by D that 'may be of interest' to P. P responded that it would need time to review the listed patents and would be in touch in several weeks to discuss the possibility of meeting in June. On July 12, 2004, having heard nothing further from P, Jorgenson sent a letter reiterating her request to meet in July to discuss a cross-license agreement and listing four additional ST patents that 'may also be of interest' to P. P's chief intellectual property counsel and senior director, Thompson, responded informing Jorgenson of his 'understanding that both sides wish to continue . . . friendly discussions.' There were already ongoing business discussions among managers and vice presidents of P and D to explore the possibility of D's selling flash memory products to P. These meetings were unrelated to any patents. Thompson requested that Jorgenson join the next business meeting on August 5, 2005. On July 27, 2004, Jorgenson replied, noting that it was 'best to separate the business discussions from the patent license discussions.' On August 5, 2004, when the business representatives next met, P presented an analysis of three of its patents and orally offered D a license. D sated that the matter should be discussed in a separate meeting with Jorgenson. A licensing meeting was held. Jorgenson requested that the parties' discussions be treated as 'settlement discussions' under Federal Rule of Evidence 408. D presented a four- to five-hour presentation during which D identified and discussed the specific claims of each patent and alleged that they were infringed by P. Thompson declared that the experts making the presentation liberally referred to P's (alleged) infringement of D's products. P's engineer then made a presentation, describing several of P's patents and analyzing how a semiconductor chip product sold by D infringes. At the end of the meeting, Jorgenson handed Thompson a packet of materials containing, for each of D's fourteen patents under discussion, a copy of the patent, reverse engineering reports for certain of P's products, and diagrams showing how elements of D's patent claims cover P's products. Jorgenson further told Thompson that 'D has absolutely no plan whatsoever to sue P.' Thompson responded to Jorgenson that 'P is not going to sue you on Monday' and that another meeting might be appropriate. The parties communicated further with P sending D technical information. On September 15, 2004, Thompson sent a letter enclosing a confidential version of P's cross licensing offer, which noted that the offer would expire on September 27, 2004. Jorgenson destroyed this confidential offer and requested that a non-confidential version be sent for D's consideration. Thompson offered to send another confidential version, or to communicate the offer orally. On October 15, 2004, after several further e-mails and phone calls between the business representatives trying to establish another meeting, P filed the instant lawsuit. P alleged infringement and sought a declaratory judgment of noninfringement and invalidity of the fourteen D patents. D filed a motion to dismiss P's declaratory judgment claims for lack of subject matter jurisdiction. The court granted D's motion to dismiss, holding that P did not have an objectively reasonable apprehension of suit, even though it may have subjectively believed so. The court found that the studied and determined infringement analyses that D presented did not constitute the requisite 'express charges of infringement carrying with them the threat of enforcement.' P appealed.