Foreign Lawsuit Does not Itself Create DJ Jurisdiction in US over Family-Member Patent

Allied Mineral v. OSMI and Stellar Materials (Fed. Cir. 2017)

US-based Allied manufactures a cement specially designed for lining aluminum furnaces.  Allied distributes both in the US and in Mexico (through Ferro Alloys and Pyrotek).  The patentee Steller is also US-based.  However, rather than suing Allied for infringing its US patent, Steller sued only the Mexican distributors in Mexico on its Mexican family member patent. U.S. Patent No. 7,503,974; Mexican Patent No. 279757.

MexPatent

Allied then filed a declaratory judgment action in the US — asking for a declaration that, inter alia, the US patent is invalid, not infringed, and unenforceable.  In the appeal here, the Federal Circuit has affirmed a lower court ruling that the DJ action is not based upon a “case of actual controversy” as required both by the Declaratory Judgment Act as well as the US Constitution.

Courts consider a totality-of-the-circumstances on the case-or-controversy question — asking whether “there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”  Citing to MedImmune v. Genentech, 549 U.S. 118 (2007).

Here, the Mexican lawsuit was quite relevant since a parallel patent was asserted accusing Allied products.  Those same products are also sold Allied in the US, and the main parties are all in the US.   However, after reviewing those facts, the Federal Circuit ruled that they were insufficient to create a sufficient controversy.  Importantly, there was no evidence that (1) the patentee had ever approached Allied; or (2) ever threatened to sue on its U.S. patent.   In Arkema Inc. v. Honeywell International, Inc., 706 F.3d 1351 (Fed. Cir. 2013), the Federal Circuit relied on foreign litigation in finding the a case-or-controversy.   Here, the court distinguished Arkema by pointing to parallel US litigation in that case.  There, “the combination of the German litigation and the U.S. litigation over a related patent” were sufficient to find a case-or-controversy.

12 thoughts on “Foreign Lawsuit Does not Itself Create DJ Jurisdiction in US over Family-Member Patent

  1. Ned, as noted on an earlier blog, since this D.J. suit against the patent was constitutionally improper, the patent owner was not obligated to counter-claim for patent infringement.
    [Of course an IPR, if appropriate, would not have either issue.]

  2. B-b-b-but this does not fit Malcolm’s Lujan-style feelings.

    😉

      1. Read some of the exchanges concerning whether or not mere third party “interests” are enough to generate proper standing to move (or allow) anyone of the public to challenge a duly granted patent.

        Malcolm repeatedly made statements that sounded in the failed stance exemplified in the Lujan case.

        1. Lujan was a case about standing to represent the interests of birds in Egypt. The concurring judges said standing requirements could be met by the purchase of a plane ticket to Egypt.

          Pretty sure even a halfway decent lawyer in her sleep can distinguish Lujan and establish that there’s “standing” to force an agency to reexamine a junk patent that prevents everybody in the country from practicing what is rightfully in the public domain. Maybe I need to buy a computer first. Or maybe I need to scribble a business plan down on a napkin. Big whup.

          1. prevents everybody in the country from practicing what is rightfully in the public domain.

            YET AGAIN – you seem to forget about this thing called presumption of validity.

            As THIS article indicates, your feelings on the matter of standing are simply not in accord with reality.

            1. you seem to forget about this thing called presumption of validity.

              Not at all. The presumption is why a petition must be filed explaining why the PTO made a mistake in granting the patent.

              Basic stuff, “anon.” Unlike you, I’ve thought a lot about this. Unlike you, I acknowledge the existence of junk patents. In fact, I’m really good at identifying them. Lots of us are. You aren’t. You s u c k at it.

              1. You say “basic stuff” and yet continue to get things wrong.

                Think i4i.

                1. I4I was sustaining the requirement of “clear and convincing evidence” in patent suits to invalidate patents. As far as I am aware no one has argued it should apply to reexaminations, IPRs or other post-grant proceedings? Besides the burden definition in the AIA, given the history of the i4i evidentiary burden imposed in the Barbed Wire cases against mere alleged oral recollections of prior art, it is hard to apply that additional burden to IPRs or reexaminations. Because the authenticity of patent or publication prior art is almost never in dispute. But I’m surprised that no one has tried, since any other possible escape from IPRs has been attempted.

                2. It is not attempted for clear and obvious reasons Paul.

                  But that is a non sequitur to the point under discussion.

                  (on another thread you chastise Ned for not getting the context right – How is that glass house (now in shards) of yours?)

                3. Paul, a lot of IPR is fill-in-the-blank type evidence from experts. If we were to ban experts from IPR and simply rely on attorney argument where the evidence, constituting printed publications, was clear and unambiguous, then perhaps we could without adverse effect to the patent owner lower the standard to preponderance of evidence.

                  But almost everything about an IPR involves ambiguity and expert testimony. This is why when the patent is issued, reasonable doubts have to be resolved in favor of the patent owner which is the standard imposed by the clear and convincing evidence standard.

                4. ..and that standard – being taken away at the institution decision point – is just one of the sticks in the bundle of property rights of granted patent.

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