A decision today by the Federal Circuit may encourage patent holders to sue for infringement first and discuss settlement later.  In SanDisk Corp. v. STMicroelectronics, Inc., 05-1300 (Fed. Cir. Mar. 26, 2007), the court reversed dismissal of SanDisk’s declaratory judgment lawsuit for lack of a "case or controversy" between SanDisk and STMicroelectronics over infringement of ST’s flash memory patents — despite ST’s unilateral promise, during licensing negotiations, not to sue SanDisk.

In footnote 1, the court suggests that ST could have avoided the result by getting SanDisk to sign a "suitable confidentiality agreement."  The court doesn’t explain how confidentiality would stave off litigation.

Blawgletter’s thoughts:  If you want to extend a pre-suit olive branch to a possible infringer, gently insist that he first sign an agreement that obligates him not to file suit before you do.  If he balks, tell him "sorry, mate, but I can’t risk it.  SanDisk leaves me no choice."  Otherwise, you may find yourself litigating, as ST now does, far from home (Carrollton, Texas, in the case of ST) and in your adversary’s back yard (San Jose, California).

Barry Barnett

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