Allied Mineral v. Osmi was decided on September 13, 2017 on appeal from the Southern District of Florida. In June 2015, Stellar sent notice letters to two Mexican companies, accusing them of infringing Stellar’s Mexican patent. The Mexican companies were distributors of Allied, an American company. Allied manufactures the products accused of infringement in the United States, which are then sold in Mexico by these two companies. Allied responded to Stellar’s notice letters on behalf of its distributors. Stellar then filed an infringement action in Mexico against the distributors. Allied subsequently filed a declaratory judgment action against Stellar, seeking a declaration of noninfringement, invalidity, unenforceability, and tortious interference. The district court dismissed the complaint for lack of subject matter jurisdiction. Allied appealed.
The Federal Circuit affirmed the dismissal of the case for lack of subject matter jurisdiction.
“The totality of the circumstances in this case [did] not rise to the level of a case of actual controversy” sufficient to confer jurisdiction. “Declaratory judgment jurisdiction requires some affirmative act by the patentee.” Here, Stellar had not directed any actions towards Allied, nor had it litigated or threatened litigation in the U.S. or on its American patent. All of Stellar’s conduct had been directed towards Allied’s customers, “unrelated Mexican entities,” and that contact “was limited to Stellar’s Mexican Patent and potentially infringing acts in Mexico.”
Allied as a manufacturer did not have standing to bring the declaratory judgment action. “[A] manufacturer has standing to bring a declaratory action if: (1) the manufacturer is obligated to indemnify its customers in the event of an infringement suit; or (2) there is a controversy between the patentee and the manufacturer as to the manufacturer’s liability for induced or contributory infringement based on acts of direct infringement by the customers.” Neither factor was satisfied. Allied did not allege that it was obligated to indemnify the Mexican distributors against allegations of infringement of the Mexican patent. Nor had there been any infringement allegations involving any U.S. patent: Stellar had not implicitly accused Allied of infringing its American patent based on its customers’ direct infringement of the Mexican patent in Mexico.
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“[T]he fear of a future infringement suit is insufficient to confer jurisdiction.”
Allied Mineral Products, Inc. v. Osmi, Inc., 870 F.3d 1337 (Fed. Cir. 2017)