Bell Semiconductor, LLC v. ASMedia Technology, Inc.

Background

Bell Semiconductor, LLC brought this case against ASMedia Technology, Inc. The opinion describes it as a customer case involving allegations of patent infringement based solely on the use of software supplied by manufacturers. The manufacturers, identified in the opinion as Cadence and Synopsis, filed a separate declaratory-judgment action in the U.S. District Court for the District of Delaware.

A declaratory-judgment action asks a court to determine the parties’ legal rights before or without awarding traditional damages. ASMedia sought to pause this case under the customer-suit exception. That exception can allow a customer case to be stayed while a related case involving the supplier proceeds, particularly when the supplier case may resolve common issues.

Parties’ Positions

ASMedia argued that the Delaware case could determine whether Bell’s allegations should be addressed by the suppliers in one action or by their customers in separate cases. It argued that continuing the New York litigation would waste party and judicial resources and create a risk of inconsistent rulings.

ASMedia also referred to the Delaware court’s consideration of related subject-matter-jurisdiction arguments and to another case in which a court stayed a Bell case under the customer-suit exception. The opinion states that Bell had argued that jurisdiction required either an indemnity obligation or a controversy between the patent holder and the supplier. ASMedia responded that the applicable test was whether there was a reasonable apprehension of alleged liability, and stated that the Delaware court had found indemnity claims providing an independent jurisdictional basis there.

Court’s Ruling

For substantially the reasons stated in ASMedia’s letters, Judge Lorna G. Schofield granted the defendant’s application. The case is stayed based on the customer-suit exception pending resolution of the Delaware declaratory-judgment action filed by Cadence and Synopsis.

The court denied ASMedia’s motion to dismiss without prejudice to renewal. The order does not state that the motion was denied with prejudice or explain what later circumstances would support renewal.

The parties must file a status letter every 45 days updating the court on the Delaware lawsuit. The first letter was due July 14, 2023. The clerk was directed to close the motions listed at Docket Nos. 61, 62, and 80.