Arkema v. Honeywell: Declaratory Judgment Jurisdiction in the Indirect Infringement Context

by Jason Rantanen 

Arkema v. Honeywell (Fed. Cir. 2013) Download 12-1308.Opinion.2-1-2013.1
Panel: Dyk (author), Plager, O'Malley

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.
 
Reality: 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.

11 thoughts on “Arkema v. Honeywell: Declaratory Judgment Jurisdiction in the Indirect Infringement Context

  1. “China wants to compete with Toyota and Samsung.”

    And they will be able to, because patent system’s are rather good for the progress of the USEFUL ARTS, and the building of businesses therein. Practicioners of which include Toyota and Samsung. Letting patents run amok as we do nowadays however just lays bare how much damage they do to the non-useful arts :(

  2. if this refrigerant is similar to something found in nature

    Oh noes – a completely off-point comment.

    And with so many comments that remain unanswered…

    …like where is my page cite you offered?

  3. I’ve been doing a little doomsday prepping

    You are a bit out of sync with your Mayan calendar.

    (I am sure that you are aware that the backlog – by and large – will still have the old laws applied to it)

  4. 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.

    Oh noes! According to the AMA, if this refrigerant is similar to something found in nature (ignoring any differences between covalent bonds), it’s probably ineligible for patenting.

  5. I’ve been doing a little doomsday prepping, got some good “preps” built. I’ve got a laminated copy of the MPEP printed out in 4-point font and a magnification lens so’s I can continue to examine claims post-apocalypse.

  6. “The opinion sets out several useful points for evaluating declaratory judgment jurisdiction in an indirect infringement context post-MedImmune.”

    Jason,

    Thanks for noting the indirect infringement angle of this case which I too saw before you made this post. What I find surprising regarding the indirect infringement angle is that there is no mention of the recent Akamai-McKesson en banc ruling on indirect infringement. I realize that Dyk was in the dissent in that ruling, but you would have thought there would be at least some mention, even in passing, of Akamai-McKesson as it’s the most recent exposition by the Federal Circuit on when indirect infringement liability occurs.

  7. Actually, you know anon, I think that your way of thinking about his is very good. Perhaps even more interesting is looking at China that has realized that if they want companies to invest in research they need a patent system.

    China wants to compete with Toyota and Samsung. They are building their patent system so that they can spawn such companies.

    Little fed. creatures with tiny brains and large desires…look into the facts.

  8. LOL – second anti-patent crrp-by with the moniker anon.

    Maybe this anon can provide the long sought single example of a modern advanced country that has seen the light and tossed out all of their IP laws…

    What do you say anon?

  9. Dennis- I think that the existence of ongoing litigation involving other family members is definitely relevant, but I don’t see it as dispositive of the case or controversy issue. It seems to me that there might even be a question about justiciable controversy over the addition of claims 6-10 in some circumstances. For example, the DJ plaintiff would probably have a problem if the patent holder gave a Super Sack covenant (or are we now going to call them Already covenants?) on claims 6-10. There might be less extreme examples where a patent holder argued no basis for adding claims 6-10 as well.

    In general, though, I agree that if there’s ongoing litigation between the parties involving closely related patents, a lack of case or controversy over the additional patents is going to be the exception rather than the norm.

  10. Jason, I wonder if this could be treated as a somewhat special case because issue was not whether a lawsuit should proceed but instead whether these two new related patents could be added to the already existing lawsuit. With closely related patents that are owned by the same entity already being litigated then it makes sense to me that a DJ action regarding the new patents is almost assuredly subject to a case-or-controversy. We do this already with claims of a patent. If, for instance, the original complaint alleges a DJ of invalidity of claims 1-5, there won’t be any question about case-or-controversy if the DJ plaintiff then supplements to also add claims 6-10. I don’t see much of an argument for why a patent family should be treated differently. Certainly, most patent holders think in terms of patent families.

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