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Judge Andrews grants motion to dismiss declaratory judgment action based on parties’ post-filing activity

In a declaratory judgment action for non-infringement of Defendants’ patents, Judge Richard G. Andrews granted-in-part Defendants’ motions to dismiss. Crypton Future Media, Inc. v. Hologram USA, Inc., et al., C.A. No. 14-1247-RGA (D. Del. Sept. 8, 2015). Defendants had sent a cease-and-desist letter to Plaintiff regarding Defendants’ potential infringing use. Id. at 2. Defendants argued that this did not create a substantial controversy, and even if it had, the controversy was mooted by the parties’ subsequent communications, after the complaint was filed, where Defendants gave Plaintiff “repeated assurances that it considers the technology at issue in the Complaint to be non-infringing.” Id. at 4.

While, at the time the action was filed, “there was clearly declaratory judgment jurisdiction” where Defendants’ letter was more than a mere expression of concern, it “acknowlege[d] the threatening tone,” and “clearly charged [Plaintiff] with infringement” id. at 6, the Court concluded that the parties’ subsequent interactions had divested it of subject matter jurisdiction.  The Court “agree[d] with [Plaintiff] that [Defendants] ha[ve] been careful to make narrow disclaimers that leave a wide range of future activity susceptible to attack. Because [Plaintiff’s] system uses a different layout each time based on site-specific concerns, and uses various materials rented on site, [Defendants’] statements may not address all future activity. It is for precisely that reason, however, that the Court cannot retain jurisdiction. Because the technology is different each time, this action cannot result in ‘specific relief through a decree of a conclusive character.’ . . . [Defendants’] representations are sufficient to moot the controversy and are binding as a matter of judicial estoppel.” Id. at 7 (citations omitted).

As a result of the Court’s finding that it now lacked subject matter jurisdiction and thus should dismiss the federal claims, it also dismissed the related state law claims and dismissed Defendant’ motions with respect to improper venue and failure to state a claim as moot. Id.

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