Allied Mineral Products, Inc. v. Osmi, Inc.

870 F.3d 1337, 124 U.S.P.Q. 2d (BNA) 1142, 2017 U.S. App. LEXIS 17667
CourtCourt of Appeals for the Federal Circuit
DecidedSeptember 13, 2017
Docket2016-2641
StatusPublished
Cited by8 cases

This text of 870 F.3d 1337 (Allied Mineral Products, Inc. v. Osmi, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allied Mineral Products, Inc. v. Osmi, Inc., 870 F.3d 1337, 124 U.S.P.Q. 2d (BNA) 1142, 2017 U.S. App. LEXIS 17667 (Fed. Cir. 2017).

Opinion

MOORE, Circuit Judge.

The present appeal arises from the dismissal of a declaratory judgment action in the Southern District of Florida. Allied Mineral Products, Inc. (“Allied”) sued three related entities, OSMI, Inc., Stellar Materials, Inc., and Stellar Materials, LLC (collectively “Stellar”), seeking a declaratory judgment that it did not infringe Stellar’s U.S. Patent No. 7,503,974 (the “ ’974 patent”), the patent is invalid, and Stellar committed inequitable conduct. The district court dismissed the complaint for lack of subject matter jurisdiction. Because the district court correctly determined that Stellar’s actions do not create a justiciable case or controversy, we affirm.

Background

This dispute centers on a Mexican infringement suit between Stellar and two of Allied’s Mexican distributors. 1 Stellar and Allied are American companies; Ferro Alloys de Mexico S.A. de C.V. (“Ferro”) and Pyrotek Mexico S. de R.L. de C.V. (“Pyrotek”) are Allied’s Mexican distributors. On June 24, 2015, Stellar sent notice letters to Ferro and Pyrotek accusing them of infringing Stellar’s Mexican Patent No. 279757 (the “Mexican Patent”). Allied manufactures the products accused of infringement in the United States, which are then sold in Mexico by Ferro and Pyrotek. Allied sells the same product in the United States under a different name.

Allied’s U.S. counsel responded to Stellar’s notice letters on behalf of Ferro and Pyrotek. Allied identified itself as the manufacturer of the accused products and argued that the products do not infringe the Mexican Patent. Stellar never responded to Allied’s letter. Instead, Stellar filed infringement actions against Ferro and Py-rotek in Mexico, accusing Ferro and Pyro-tek of infringing at least claim 16 of the Mexican Patent. Claim 16 of the Mexican Patent is a Spanish translation of claim 16 of the ’974 patent.

Allied filed a declaratory judgment action against Stellar in the Southern District of Florida, seeking a declaratory judgment of: (1) non-infringement of the ’974 patent; (2) invalidity; (3) unen-forceability due to inequitable conduct; and (4) tortious interference with business relationships under Florida state law. Stellar moved to dismiss for lack of subject matter jurisdiction, and the district court granted the motion. The district court held that “Stellar’s decision to enforce its Mexican patent under Mexican law against separate entities cannot, without further affirmative action by Stellar, create an actual controversy with Allied with regard to its U.S. Patent.” J.A. 15. The district court found that the complaint was “devoid of any allegations that Stellar has done anything to give Allied a reasonable belief that Stellar intends to enforce its ’974 Patent in the United States.” Id. Allied appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

Discussion

The Declaratory Judgment Act requires “a case of actual controversy.” 28 U.S.C. § 2201(a). There is no bright-line rule for whether a dispute satisfies this requirement, Prasco LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1336 (Fed. Cir. 2008), although the Supreme Court has articulated a number of relevant factors:

Our decisions have required that the dispute be definite and concrete, touching the legal relations of parties having adverse legal interests; and that it be real and substantial and admit of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.... Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.

MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007) (quotations and alterations omitted). We review jurisdictional issues de novo. Prasco, 537 F.3d at 1335.

The totality of-the circumstances in this case does not rise to the level of a case of actual controversy. Declaratory judgment jurisdiction requires some affirmative act by the patentee. SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372, 1381 (Fed. Cir. 2007). Stellar has not directed any actions towards Allied, nor has it litigated or threatened litigation in the United States or on its ’974 patent. All of Stellar’s conduct has been directed towards Allied’s customers Ferro and Pyro-tek, unrelated Mexican entities, and that contact was limited to Stellar’s Mexican Patent and potentially infringing acts in Mexico. Stellar sent notice letters to the customers alone, and although Allied responded on behalf of its customers, Stellar never responded to Allied’s letter. Stellar then sued only the customers, not the manufacturer. Stellar also limited its actions to Mexico. Stellar filed suit in Mexico, suing for infringement of a Mexican patent under Mexican laws. It has not threatened or alleged infringement of the ’974 patent in the United States, much less filed suit. Stellar took no actions directed at Allied, no actions with regard to its ’974 patent, and no actions under U.S. patent laws.

The actions in this ease are even less sufficient than those in Innovative Therapies, Inc. v. Kinetic Concepts, Inc., 599 F.3d 1377 (Fed. Cir. 2010), which we held did not give rise to declaratory judgment jurisdiction. In that case, several of the patentee's employees left the company to start their own firm. The new company (the declaratory judgment plaintiff) wished to sell a competing product- but worried about potential infringement liability. One of the plaintiffs employees called a former colleague at the patentee’s company to raise his concerns, and the patentee’s employee responded that the company would “act aggressively....' You know that.” Id. at 1380. In a subsequent call, the patentee stated it would sue “100% no doubt about it” on “any product that- scratches the surface of our patents.” Id. at 1381. We held that these communications did not produce a controversy of such immediacy and reality to give the district court jurisdiction to hear the case. Id.

The Innovative Therapies plaintiff also sought to rely on the patentee’s litigation history to establish jurisdiction. The paten-tee had a history of litigation to enforce its patents, and it previously asserted the patents at issue in the declaratory judgment action against unrelated third parties. We explained that while the patentee’s litigation history was a circumstance to consider when evaluating jurisdiction, the fact that it had sued other parties without further evidence of acts directed toward the plaintiff was insufficient to confer jurisdiction. Id. at 1382.

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870 F.3d 1337, 124 U.S.P.Q. 2d (BNA) 1142, 2017 U.S. App. LEXIS 17667, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allied-mineral-products-inc-v-osmi-inc-cafc-2017.