Allied Mineral Products, Inc. v. OSMI, Inc. et al. (“Stellar”)

Docket No. 2016-2641

September 13, 2017

Brief summary: DC dismissal for lack of subject matter jurisdiction since Stellar only took action against Allied’s distributors in MX but no action against Allied (in MX or the US).

Summary: Allied sought a DJ that Stellar’s US 7,503,974 is not infringed, invalid, unenforceable for inequitable conduct, and for tortious interference with business relationships under Florida state law. The DC dismissed the complaint for lack of subject matter jurisdiction (no case or controversy, no “reasonable belief that Stellar would enforce the ‘974 patent in the [US]”). Allied’s request arose from Mexican litigation between Stellar and Allied’s distributors in Mexico and regarding Stellar’s Mexican patent (MX 279757). Allied makes the products distributed in Mexico in the US, and sells the same product under a different name in the US. Stellar sent notice letters regarding the MX patent to Allied’s distributors, to which Allied’s US counsel responded, identifying Allied as the manufacturer and arguing the products do not infringe that patent. Stellar then filed suit in MX against Allied’s distributors for infringement of claim 16 of the MX patent, which corresponds to claim 16 of Stellar’s corresponding US patent. The FC panel opinion explained “[t]here is no bright-line rule for whether a dispute satisfies” the “case of actual controversy” requirement of the Declaratory Judgment Act (28 USC § 2201(a); Prasco, FC 2008 (“fear of a future infringement suit is insufficient”); MedImmune, US 2007 (“substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a [DJ]”); SanDisk, FC 2007 (DJ “jurisdiction requires some affirmative act by the patentee”). It also explained that “Steller took no actions directed at Allied” (only the MX distributors), “no actions with regard to its ‘974 patent, and no actions under U.S. patent laws”, these being “even less sufficient than those in Innovative Therapies” (FC 2013). In Innovative, ex-employees started a new company to “sell a competing product but worried about potential infringement liability”. One of these ex-employees was told by a current Innovative employee that “the company would ‘act aggressively…You know that” and made other similar statements. The FC found these statements “did not produce a controversy of such immediacy and reality to give the [DC] jurisdiction”. The ex-employees also unsuccessfully attempted to rely on Innovative’s litigation history, but the FC panel found that while “a circumstance” to consider, there was no evidence Innovative took any action against the new company. Allied compared its case to Arkema (FC 2013), citing the FC’s “reliance on foreign litigation as creating a case of controversy regarding a related US patent.” In that case, however, the FC panel explained, “there was also a companion U.S. litigation over” corresponding US patents which “create[d] a sufficient affirmative act on the part of patentee”. The FC panel also distinguished this case from Arris (FC 2011) which “noted that a manufacturer has standing…if…the manufacturer is obligated to indemnify its customers” or there is a induced or contributory infringement controversy between the parties, neither of which were met in this case. Thus, the DC dismissal for lack of jurisdiction was affirmed.

This entry was posted in Article III disputes, Contributory Infringement, Inducement to Infringe, Infringement. Bookmark the permalink.

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