STMicroelectronics patents were allegedly infringed by various SanDisk products. SanDisk sought a declaratory judgment of noninfringement and invalidity of the fourteen ST patents. SanDisk sought a declaratory judgment after engaging in patent licensing discussions with STMicroelectronics. STMicroelectronics contacted SanDisk to discuss a cross-license agreement.
The Federal Circuit articulated a test, based on the principles cited by the Supreme Court in MedImmune, Inc. v. Genentech, Inc., 127 S.Ct. 764, 774 n.11, 2007. Declaratory judgment jurisdiction arises if: (i) a patentee asserts rights under a patent based on certain identified or planned activity of another party; and (ii) that party contends that it has the right to engage in the accused activity without license.
The Federal Circuit found that STMicroelectronics asserted a right to a royalty under its patents based on activity by SanDisk, as described in the infringement presentation by STMicroelectronics. STMicroelectronics communicated to SanDisk that it had determined infringement and asserted the right to a royalty based on this determination. The Federal Circuit found that there was a substantial controversy, between parties having adverse legal interest, to warrant the a declaratory judgment. 
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