It’s Not Controversial: Factual and Legal Specificity Needed in Permanent Layoffs | Knobbe Martens


Before Dyk, Taranto and Cunningham. Appeal from the United States District Court for the Eastern District of Texas.

Summary: Plaintiffs for declaratory relief must identify particular facts justifying standing and defendants must make it clear whether motions to dismiss Rule 12(b)(1) are face or factual challenges.

Mitek Systems, Inc. (“Mitek”) sued United Services Automobile Association (“USAA”) for a declaration of non-infringement of four patents related to check photography. Following the transfer, the District Court for the Eastern District of Texas dismissed the case in a nine-page order for lack of jurisdiction or, in the alternative, pursuant to its discretion to dismiss the suits for trial. declaratory. Mitek appealed.

The Federal Circuit reversed the dismissal and sent the case back for retrial, noting several issues that required further analysis. The Federal Circuit explained that a motion for declaratory relief satisfies the case or controversy requirement when “the facts alleged, in all the circumstances, show that there is substantial controversy, between parties with competing legal interests. , of sufficient timeliness and reality to warrant the issuance of a declaratory relief.” The Federal Circuit further explained that parties may proceed through two “procedural routes” when challenging the case requirement or of controversy – facial disputes or factual disputes supported by affidavits, testimonies or other evidence. The Federal Circuit noted that “clarity on the route used is important”. The Federal Circuit concluded that “parties [] discussed the issue of the case or controversy at too high a level of generality”, the questions “require[d] finer analysis. . . and more precise determinations. . . both of the parties and of the district court,” and neither the parties nor the district court made it clear whether the challenge was face or factual. The Federal Circuit also overturned the discretionary dismissal for the same reasons.

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