28 Pages Posted: 24 Jul 2010 Last revised: 7 Dec 2014
Date Written: July 22, 2010
The Declaratory Judgment Act is intended to give parties who are uncertain of their legal rights the ability to obtain a fair and impartial determination of those rights. Requests for declaratory relief are particularly common in patent disputes but courts have thus far failed to consider how the Act can further the primary goal of the patent system, which is to promote innovation. This Article contends that a crucial factor that substantially impacts the propriety of a grant of declaratory relief in a patent dispute, but that has not been examined by the courts and the academic literature, is the nature of the patent itself. More specifically, this Article argues that courts need to acknowledge that many patents obfuscate rather than illuminate, essentially allowing patent-holders to tell the public: “I won't (or can’t) tell you where the boundary is, but put one foot over where I think it is and I’ll sue you for patent infringement.” Such patents are, by definition, unjust because they fail to clearly and objectively disclose the invention and do not establish a fair boundary of the patent right. Vague boundaries make it difficult to resolve patent disputes, leading to uncertainty and requests for declaratory relief. When analyzing these requests for declaratory relief, courts must recognize that they can use their discretion under the Declaratory Judgment Act to effectively address the uncertainty caused by unjust patents, creating efficiencies that will foster innovation. To use this tool successfully, courts must focus on the nature of the patent-in-dispute and consider that in some industries it is more likely that the patent itself is preventing the parties from negotiating to a mutually agreeable solution. Expansive grants of declaratory relief in such industries is justified because vetting these kinds of patents through an impartial decision maker resolves uncertainty, facilitating private dispute resolution and furthering innovation. Thus, explicitly using this discretion as a policy lever hews to both the goals of the Declaratory Judgment Act and the patent system. By making these goals explicit in their consideration of declaratory relief actions, courts can address the recalcitrant problem of uncertainty in the patent system, thereby promoting fairness and innovation.
JEL Classification: K3
Suggested Citation: Suggested Citation
Chuang, Chester S., Unjust Patents & Bargaining Breakdown: When Is Declaratory Relief Needed? (July 22, 2010). Southern Methodist University Law Review, Vol. 64, p. 895, 2011. Available at SSRN: https://ssrn.com/abstract=1647149