This case addresses the justiciable controversy requirement for a declaratory judgment action involving a potential indirect infringer.
Both Honeywell and Arkema have invested heavily in a refrigerant known as 1234yf that is now being used in many new automobile air conditioning units. The compound was created as a response to global warming concerns associated with prior refrigerants. Honeywell has several patents associated with the compound, including United States Patent Nos. 8,033,120 and 8,065,882, and European Patent No. 1,716,216. The '120 and '882 patents cover methods of using 1234yf in automobile air conditioning systems.
In 2009, Honeywell sued Arkema in Germany for infringement of the European patent. Arkema responded with a declaratory judgment action in the US over two related patents. Those suits are still ongoing. In late 2011, the ‘120 and ‘882 patents issued and Arkema moved to amend its declaratory judgment complaint to allege non-infringement and invalidity of those patents, premised on a concern that it would be indirectly liable for its future customers' use of 1234yf. The district court refused to allow the amendment because it concluded that the Constitutionally mandated “case or controversy” that undergirds court power did not exist as to those new claims.
In a Rule 54(b) certified appeal, the Federal Circuit reversed the district court's denial of Arkema's motion to supplement its complaint, noting that "On its face, this is a quintessential example of a situation in which declaratory relief is warranted." Slip Op. at 9. The opinion sets out several useful points for evaluating declaratory judgment jurisdiction in an indirect infringement context post-MedImmune.
No actual acts of direct infringement or specific accusations required: the CAFC declined to impose a requirement that there must actually be acts of direct infringement or specific accusations against either the potential direct infringers or Arkema. "There is no requirement that Arkema identify the particular manufacturers that will purchase the 1234yf or the particular automobile purchasers who will purchase the cars from the manufacturers, or the particular dates on which this will occur.  Nor is it necessary that Honeywell have directly accused Arkema of potential indirect infringement." Slip Op. at 11. On the latter point, the CAFC noted that Arkema met even the now-discarded reasonable apprehension of suit test (which although not required, remains sufficient to establish jurisdiction).
No noninfringing uses: Both parties admitted that there are no known methods of using 1234yf in an automobile air conditioning system that do not at least arguably infringe its patents. Given this, "there can hardly be any question that Arkema would arguably be liable for induced infringement if it sells 1234yf for use in automobile air conditioning systems. Where, as here, there is no dispute that the
intended use would be at least arguably infringing and actively encouraged by the declaratory judgment plaintiff, a controversy is “sufficiently real” for the purposes of declaratory judgment jurisdiction." Slip Op. at 13. The court further noted that it is not necessary for a party to concede infringement to demonstrate a justiciable controversy.
Immediacy: the controversy was sufficiently immediate, even if any acts of direct infringement would not occur for at least a year. Honeywell was in the process of signing long-term supply contracts that "have put Arkema in a present position of either committing to contracts that could expose it to liability for indirect infringement or abandoning its plans to supply 1234yf to automobile manufacturers in the United States. Slip Op. at 13. Distinguishing Ass’n of Molecular Pathology v. U.S. Patent & Trademark Office, 689 F.3d 1303, 1321 (Fed. Cir. 2012) [Myriad], the court concluded that "[t]his is not a case where the declaratory judgment plaintiff alleged that it would "consider" potentially infringing activities." Slip Op. at 14.
the CAFC also disagreed with the district court's conclusion that Arkema failed to satisfy the requirement of "reality" due to the lack of fixation of its customers' final designs. Unlike in Matthews Int’l Corp. v. Biosafe Eng’g, LLC,695 F.3d 1322, 1330-31 (Fed. Cir. 2012)
, in which it was unclear whether the final product would be used in a way that would allegedly infringe, the parties' contentions made clear that automobile manufacturers would use 1234yf with a lubricant in automobile air conditioning systems, thus allegedly infringing the patents.