Editing Declaratory judgment

{{Short description|Legal determination of the rights, duties, or obligations of parties to a civil dispute}}
{{Use American English|date = March 2019}}
{{Use mdy dates|date = March 2019}}
{{Globalize|article|USA|2name=the United States|date=November 2013}}
{{Judicial remedies}}
A '''declaratory judgment''', also called a declaration, is the [[Legal judgment|legal determination]] of a [[court]] that resolves legal uncertainty for the [[litigant]]s. It is a form of legally binding preventive by which a party involved in an actual or possible legal matter can ask a court to conclusively rule on and affirm the rights, duties, or obligations of one or more parties in a [[civil case|civil]] [[:wikt:dispute|dispute]] (subject to any [[legal appeal|appeal]]).<ref>28 U.S.C.S. § 2201 (“Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.”)</ref> The declaratory judgment is generally considered a [[statutory]] remedy and not an [[equitable remedy]] in the [[United States]],<ref>''Gulfstream Aerospace Corp. v. Mayacamas Corp.'', 485 U.S. 271, 284 (1988) (“Actions for declaratory judgments  are neither legal nor equitable . . . .”).</ref> and is thus not subject to equitable requirements, though there are analogies that can be found in the remedies granted by [[equity (law)|courts of equity]].<ref name="Samuels v Mackell">''Samuels v. Mackell'', 401 U.S. 66, 70 (1971) (“Although the declaratory judgment sought by the plaintiffs was a statutory remedy rather than a traditional form of equitable relief, the Court made clear that a suit for declaratory judgment was nevertheless ‘essentially an equitable cause of action,’ and was ‘analogous to the equity jurisdiction in suits quia timet or for a decree quieting title.’”) (citations omitted)</ref><ref name="Green v Mansour">''Green v. Mansour'', 474 U.S. 64, 72 (1985) (“The propriety of issuing a declaratory judgment may depend upon equitable considerations”).</ref> A declaratory judgment does not by itself order any action by a party, or imply [[damages]] or an [[injunction]], although it may be accompanied by one or more other remedies.

A declaratory judgment is generally distinguished from an [[advisory opinion]] because the latter does not resolve an actual [[case or controversy]]. Declaratory judgments can provide [[legal certainty]] to each party in a matter when this could resolve or assist in a disagreement. Often an early resolution of [[legal rights]] will resolve some or all of the other issues in a matter.

A declaratory judgment is typically requested when a party is threatened with a [[lawsuit]] but the lawsuit has not yet been filed; or when a party or parties believe that their rights under law and/or [[contract]] might conflict; or as part of a [[counterclaim]] to prevent further lawsuits from the same plaintiff (for example, when only a contract claim is filed, but a copyright claim might also be applicable).  In some instances, a declaratory judgment is filed because the statute of limitations against a potential defendant may pass before the plaintiff incurs damage (for example, a malpractice statute applicable to a [[certified public accountant]] may be shorter than the time period the IRS has to assess a taxpayer for additional tax due to bad advice given by the CPA).

Declaratory judgments are authorized by statute in most common-law jurisdictions. In the [[United States]], the [[Federal government of the United States|federal government]] and most states enacted statutes in the 1920s and 1930s authorizing their courts to issue declaratory judgments.<ref>See Declaratory Judgment Act, 28 U.S.C.S. § 2201</ref>

==Cease and desist==
The filing of a declaratory judgment [[lawsuit]] can follow the sending by one party of a [[cease and desist|cease-and-desist]] letter to another party.<ref>{{Cite web |url=http://home.comcast.net/~jlw28129/05Harvey-Appel.pdf |title= |website= |archive-url=https://web.archive.org/web/20080515150138/http://home.comcast.net/~jlw28129/05Harvey-Appel.pdf |archive-date=15 May 2008 |url-status=dead}}</ref>  A party contemplating sending such a letter risks that the recipient, or a party related to the recipient (i.e. such as a customer or supplier), may file for a declaratory judgment in their own [[jurisdiction]], or sue for minor damages in the law of unjustified threats.<ref name="cd1">{{cite web |url=http://www.houstoninternetlaw.com/Cease%20and%20Desist.html |title=Cease and Desist Letter |access-date=October 21, 2011 |archive-url=https://web.archive.org/web/20110820171039/http://www.houstoninternetlaw.com/Cease%20and%20Desist.html |archive-date=August 20, 2011 |url-status=dead }}</ref><ref name="cd2">{{cite web|url=https://ocpatentlawyer.com/cease-and-desist-letters/|title=Cease and Desist letter|date=January 6, 2010|website=Patent Attorney &#124; Orange County &#124; OC Patent Lawyer}}</ref><ref>{{cite web|url=https://www.law.com/legaltechnews/?id=1202492338347|title=Legaltech News|website=Legaltech News}}</ref> This may require the sender to appear in a distant court, at their own expense.  So sending a cease-and-desist letter presents a dilemma to the sender, as it would be desirable to be able to address the issues at hand in a candid manner without the need for litigation. Upon receiving a cease-and-desist letter, the recipient may seek a tactical advantage by instituting declaratory-judgment litigation in a more favorable jurisdiction.<ref name="cd1"/><ref name="cd2"/>

Sometimes the parties agree in advance of discussions that no declaratory-judgment lawsuit will be filed while the negotiations are continuing.  Sometimes a lawsuit is filed, but not served, before sending such a notice, to preserve a jurisdiction advantage without engaging the judicial process fully. Some parties send cease-and-desist letters that make "an oblique suggestion of possible infringement" to lower the risk of the recipient filing a declaratory-judgment lawsuit.<ref>{{cite web|url=http://library.findlaw.com/2003/Oct/31/133125.html |title=Patent Law: "Reasonable Apprehension" After Receipt of Cease-and-Desist Letter Grounds for Declaratory Judgment Action |publisher=Library.findlaw.com |access-date=2012-06-13}}</ref>

==Declaratory judgment actions in patent litigation==
Declaratory judgments are common in [[patent]] litigation, as well as in other areas of [[intellectual property]] litigation, because declaratory judgments allow an alleged infringer to "clear the air" about a product or service that may be a business's focal point.  For example, in a typical [[patent infringement|patent-infringement]] claim, when a patent owner becomes aware of an infringer, the owner can simply wait until he pleases to bring an infringement suit.<ref>But see 35 U.S.C. 286 (imposing a six-year time limitation on damages).</ref>  Meanwhile, the [[monetary damages]] continuously accrue – with no effort expended by the patent owner, apart from marking the patent number on products the patent owner sold or licensed.<ref>{{cite web|url=https://corporate.findlaw.com/intellectual-property/patent-marking-requirements-patented-articles-must-be-marked-as.html|title=Patent Marking Requirements: Patented Articles Must be Marked as Patented in Order For Patentee to Recover Damages Due to Patent Infringement|website=Findlaw}}</ref>  On the other hand, the alleged infringer could do nothing to rectify the situation if no declaratory judgment existed.  The alleged infringer would be forced to continue to operate his business with the cloud of a lawsuit over his head.  The declaratory-judgment procedure allows the alleged infringer to proactively bring suit to resolve the situation and eliminate the cloud of uncertainty looming overhead.

Common claims for declaratory judgment in patent cases are non-infringement, patent invalidity, and un-enforceability. To bring a claim for declaratory judgment in a situation where a patent dispute may exist or develop, the claimant must establish that an [[actual controversy]] exists.<ref>''MedImmune, Inc. v. Genentech, Inc.'', 549 U.S. 118, 126–27 (2007).</ref>  If there is a substantial controversy of sufficient immediacy and reality, the court will generally proceed with the declaratory-judgment action.<ref>''MedImmune, Inc. v. Genentech, Inc.'', 549 U.S. 118, 127 (2007).</ref> The court may even hear the action if the patentee has not filed a cease and desist letter.<ref>{{cite web |url=http://www.houstoninternetlaw.com/Cease%20and%20Desist.html |title=Cease and Desist Letter |publisher=Houstoninternetlaw.com |date=2008-09-23 |access-date=2012-06-13 |archive-url=https://web.archive.org/web/20110820171039/http://www.houstoninternetlaw.com/Cease%20and%20Desist.html |archive-date=August 20, 2011 |url-status=dead }}</ref>  The standard for an actual controversy was most recently addressed by the Supreme Court in ''[[MedImmune, Inc. v. Genentech, Inc.]]'', 549 U.S. 118 (2007).  But even if an actual controversy exists, the declaratory-judgment statute is permissive—a [[district court]], in its discretion, may decline to hear a declaratory-judgment action.<ref>''Grand T. W. R. Co. v. Consolidated Rail Corp.'', 746 F.2d 323, 325 (6th Cir. 1984) (“Title 28 of the United States Code § 2201 provides that in ‘a case of actual controversy within its jurisdiction’ a federal court ‘may’ give a declaratory judgment, a power permissive, not mandatory. Although it is well settled that the granting of a declaratory judgment rests in the "sound discretion" of the court”).</ref>

Usually the claimant is actually making, using, selling, offering to sell, or importing, or is prepared to actually make, use or sell, offer to sell or import an allegedly infringing device or method, and usually the patent owner has claimed that such activities by claimant will result in patent infringement.<ref>35 U.S.C. 271.</ref>  An express threat of litigation is not needed, nor is it a guarantee that jurisdiction will be granted.<ref>[http://www.houstoninternetlaw.com/Cease%20and%20Desist.html ''Grand T. W. R. Co. v. Consolidated Rail Corp.''] {{Webarchive|url=https://web.archive.org/web/20110820171039/http://www.houstoninternetlaw.com/Cease%20and%20Desist.html |date=August 20, 2011 }}, 746 F.2d 323, 325 (6th Cir. 1984).</ref>  Some factors courts have considered in this analysis are whether a patent owner has asserted its rights against an alleged infringer in a royalty dispute, whether the owner has sued a customer of an alleged infringer, or whether an owner has made statements regarding its patents in trade magazines.

If a patent owner does suggest that there is patent coverage of what an alleged infringer is doing or planning to do, the alleged infringer may bring suit.<ref name="cd1"/><ref name="cd2"/> The alleged infringer, as the plaintiff in the suit, can choose the venue subject to constitutional restrictions and the state long-arm statute of the forum in question. The suit can be brought in any forum if the local federal district court can properly obtain personal jurisdiction over the alleged infringer.

Defendants in infringement cases can ask for declaratory judgment as a counterclaim.

A counterclaim of infringement is a [[compulsory counterclaim]] to a claim for declaratory judgment of non-infringement.<ref>''Vivid Techs., Inc. v. Am. Sci. & Eng'g Inc.'', 200 F.3d 795, 802 (Fed. Cir. 1999)</ref> If a patent owner fails to assert an infringement counterclaim in a declaratory-judgment non-infringement suit, the patent infringement claim will be deemed waived.

==See also==
*[[Arrow declaration]]

==References==
{{Reflist}}

==External links==
* [http://www4.law.cornell.edu/uscode/html/uscode28/usc_sup_01_28_10_VI_20_151.html 28 U.S.C. 2201-2] – Declaratory judgment
* [https://www.law.cornell.edu/rules/frcp/Rule57.htm Federal Rules of Civil Procedure, Rule 57]
* {{webarchive |url=https://web.archive.org/web/20050403034016/http://www.law.upenn.edu:80/bll/ulc/fnact99/1920_69/udja22.pdf |date=April 3, 2005 |title=Uniform Declaratory Judgment Act}}
* {{cite journal|ssrn=1483859|last=Bray |first=Samuel L.  |year=2010 |page=1275 |title=Preventive Adjudication |journal=University of Chicago Law Review |volume=77}}

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[[Category:Judgment (law)]]
[[Category:Civil procedure]]
[[Category:Equity (law)]]<!-- Note: relevant to and acts akin to equity, although technically in the US a statutory remedy. See article-->