AUO v. Trivale — Patent Demand Letters Were Protected Petitioning Activity

Background

AUO sought declarations of noninfringement and invalidity for ten patents and brought state-law interference and unfair-competition claims against Trivale Technologies and IPValue Management. The state claims arose from letters accusing AUO and its customers of patent infringement. The defendants moved to strike those claims under California’s anti-SLAPP statute and to dismiss the patent declarations against IPValue.

The Court’s Holding

The court struck the state-law claims because the challenged letters were protected prelitigation demands under the Noerr-Pennington doctrine. AUO did not plausibly plead the sham-litigation exception: allegations that some patent assertions were later withdrawn and that customers were not told about AUO’s indemnity obligations did not show both objective baselessness and improper motive.

The court also dismissed the patent declaratory-judgment claims against IPValue for lack of subject-matter jurisdiction. AUO offered no competent proof that IPValue owned the patents or held exclusionary rights sufficient to make it a proper declaratory-judgment defendant. AUO received leave to amend both sets of claims.

Key Takeaways

• Patent demand letters generally receive Noerr-Pennington protection as conduct closely related to potential litigation.
• The sham exception requires specific facts supporting both objective baselessness and improper motive.
• A declaratory plaintiff must show that each defendant owns or holds sufficient exclusionary patent rights; economic influence alone is not enough.

Why It Matters

The ruling gives patent owners and licensing entities meaningful protection when they contact accused infringers or customers before suit. At the same time, it shows that corporate affiliation or control theories must be supported with evidence before a non-owner can be kept in a patent declaratory action.