# United States Court of Appeals **for the Federal Circuit**

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ALLIED MINERAL PRODU CTS, INC., AN OHIO CORPORATION, Plaintiff

- Appellant

v.

OSMI, INC., STELLAR MATERIALS, INC., STELLAR MATERIALS, L LC, Defendants

- Appellees

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2016

- 2641

______________________ Appeal from the United States District Court for the Southern District of Florida in No. 9:15

- cv

- 81753

- KAM, Judge Kenneth A. Marra.

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Decided: September 13, 2017

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J AMES D AVID L ILES , Porter, Wright, Morris & Arthur LLP, Cincinnati, OH, argued for plaintiff

- appellant.

J OHN D AVID L UKEN , Dinsmore & Shohl LLP, Cinci nnati, OH , argued for defendants -appellees. Also repr esented by M ARK S CHNEIDER , Troy, MI.

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Before M OORE , R EYNA , and S TOLL , Circuit Judges.ALLIED MINERAL PRODU CTS , INC

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M OORE , Circuit Judge

. The present appeal arises from the dismissal of a d eclaratory judgment action in the Southern District of Florida. Allied Mineral Products, Inc. (“Allied”) sued three related entities, OSMI, Inc., Stellar Materials, Inc.

, and Stellar Materials, LLC (collectively “Stellar”), seeking a declaratory judgment that it did not infringe Stel lar’s U.S. Patent No. 7,503,974 (the “’974 patent”) , the patent i s invalid, and Stellar committed inequitable conduct. The district court dismissed the complaint for lack of subject matter jurisdiction. Because the district court correctly determined tha t Stellar’s actions do not create a justiciable case or controversy, we affirm.

B ACKGROUND This dispute centers on a Mexican infringement suit between Stellar and two of Allied’s Mexican distribut o rs. 1 Stellar and All ied are American companies; Ferro All oys de Mexico S.A. de C.V. (“Ferro”) and Pyrote k Mexico S. de R.L. de C.V. (“Pyrotek”) are Allied’s Mexic an distributors

. On June 24, 2015, Stellar sent notice letters to Ferro and Pyrotek accusing them of infringing Stellar’s Mexican Patent No. 279757 (t he “Mexican Patent”). Allied man ufactures t he products accused of infringement in the United States, which are then sold in Mexico by Ferro and Pyrotek . Allied sells the same product in the U nited States under a different name

. Allied’s U.S. counsel responded to Stellar’s notice le tters on behalf of Ferro and Pyrotek

. Allied identified itself as the manufacturer of the accused products and argued that the products do not infringe the Mexican Patent. Stellar never responded to Allied’s letter . I nstead, Stellar filed infringement actions against Ferro and

1 All facts come from Allied’s complaint and are

pr e sumed true for the purposes of th e motion to dismiss

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Pyrotek in Mexico , accusing Ferro and Pyrotek of infrin ging at least claim 16 of the Mexican P atent

. C laim 16 of the Mexican Patent is a Spanish translation of claim 16 of the ’974 patent.

A llied filed a declaratory judgment action against Ste llar in the Southern District of Florida, seeking a declar atory judgment of: (1) non

- infringement of the ’974 patent; (2) invalidity; (3) unenforceability due to inequitable conduct; and (4) tortious int erference with business relationships under Florida state law. Stellar moved to dismiss for lack of subject matter jurisdiction, and the district court granted the motion. The district court held that “ Stellar’s decision to enforce its Mexican patent und er Mexican law against separate entities cannot, without further affirmative action by Stellar, create an actual controversy with Allied with regard to its U.S. Patent.” J.A. 15. The district court found that the co mplaint was “devoid of any allegations that Stellar has done anything to give Allied a reasonable belief that Stellar intends to enforce its ’ 974 Patent in the United States.” Id

. Allied appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

D ISCUSSION The Declaratory Judgment Act requires “a c ase of actual controversy.” 28 U.S.C. § 2201(a). There is no bright

- line rule for whether a dispute satisfies this requirement, Prasco LLC v. Medicis Pharm. Corp. , 537 F .3d 1329, 133 6 (Fed. Cir. 2008), although t he Supreme Court has articul ated a number of relevant factors:
Our decisions have required t hat the dispute be definite and concrete, touching the legal relations of parties having adverse legal interests; and that it be real and substantial and admit of specific r elief through a dec ree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothet ical state ofALLIED MINERAL PRODU CTS , INC

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facts

. . . . Basically, the question in each case is whether the facts alleged, under all the circu mstances, show that there is a substantial contr oversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.
MedImmune, Inc. v. Genentech, Inc. , 549 U.S. 118, 127 (2007) (quotations and alterations omitted ) . We review jurisdictional issues de novo. Prasco , 537 F.3d at 1335. The totality of the circumstances in this case do es not rise to the level of a case of actual controversy. Declarat ory judgment jurisdiction requires some affirmative act by the patentee. SanDisk Corp. v. STMicroelectronics, Inc.

, 480 F.3d 1372, 1381 (Fed. Cir. 2007). Stellar has not directed any actions towards Allied, nor has it litigated or threatened litigation in the United States or on its ’974 patent

. All of Stellar’s conduct has been directed towards Allied’s customers Ferro and Pyrotek, unrelated Mexican entities , and that contact was limited to Stellar’s Mexican Patent and potentially infringing acts in Mexi co . Stellar sent notice letters to the customers alone, and al though Allied responded on behalf of its customers, Stellar never responded to Allied’s letter. Stellar then sued only the customers, not the manufacturer. Stellar also limited its actions to Mexico. Stellar filed suit in Mexico, suing for infringement of a Mexican patent under Mexican laws. It has not threatened or alleged infringeme nt of the ’974 patent in the United States , much less filed suit. Stellar took no actions directed at Allied , no actions with regard to its ’974 patent, and no actions under U.S. patent laws.

The actions in this case are even less sufficient than those in Innovative Therapies, Inc. v. Kinetic Concepts, Inc. , 599 F.3d 1377 (Fed. Cir. 2013), which we held did not give rise to declaratory judgment jurisdiction. In that case, several of the patentee’s employees left the company to start their own firm . The new company (the declarat ory judgment plaintiff) wished to sell a competing productALLIED MINERAL PRODU CTS , INC

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but worried about potentia l infringement liability. One of the plaintiff’s employees called a former colleague at the patentee ’s company to raise his concerns, and the paten tee’s employee responded that th e company would “act aggressively

. . . . You know that.” Id . at 1380. In a subsequent call, the patentee stated it would sue “100% no doubt about it” on “any product that scratches the surface of our patents.” Id . at 1381. We held that these communications did not produce a controversy of such immediacy and reality to give t he district court jurisdiction to hear the case. Id

. The Innovative Therapies plaintiff also sought to rely on the patentee’s litigation history to establish jurisdiction. The patentee had a history of litigation to enforce its patents, and it previously asserted the patents at issue in the declaratory judgment action against unrelated third parties. We explained that while the patentee’s litigation history was a circumstance to consider when evaluating jurisdiction, the fact that it ha d sued other parties wit hout further evidence of acts directed toward the plaintiff was insufficient to confer jurisdiction. Id . at 1382.

Unlike Innovative Therapies , there ha ve been no veiled threats of litigation or even any direct communic ation from Stellar to Allied. T here are no allegations that Stellar has a history of litigating its patents in the United States. In light of this precedent, the district court co rrectly held that it lacked jurisdiction to hear the case. Allied seeks to analogize its case to Arkema Inc. v. Honeywell Int ernationa l, Inc. , 706 F.3d 1351 (Fed. Cir. 2013)

, citing our reliance on a foreign litigation as crea ting a case or controversy regarding a related U.S. patent. The declaratory judgment in Arkema , however, diffe red significantly from this case. It is correct that the court considered the fact that the patentee had filed suit in Germany

, alleging infringement of a German patent covering a refrigerant used in automobile air conditioning systems. In Arkema , howeve r, there was also a compa n-ALLIED MINERAL PRODU CTS , INC

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ion U.S. litigation over two of the patentee’s U.S. patents covering the same refrigerant. While the suit was in discovery, the patentee obtained two additional U.S. patents covering the same refrigerant, both of which claimed priority to the patents

- in

- suit in the U.S. i nfringement suit . The plaintiff moved to amend its co mplaint to include a declaration that the new patents were also invalid, but the district court denied the motion. We reversed. We explained that the combi nation of the German litigation and the U.S. litigation over a related patent “creates a sufficient affirmative act on the part of the patentee for declaratory judgment purposes.” Id . at 1358.

In Arkema , i t was not the foreign lawsuit alone that provided jurisdiction; it was the foreign lawsuit coupled with the U.S. lawsuit over a related patent. Id. More over, i n Arkema , both the foreign lawsuit and the U.S. lawsuit on related patents were directed at the same alleged infringer. Here, Stellar has not su ed Allied at all, not in the foreign suit and not for infringing any U.S. patents related to the ’974 patent

. Arkema is not contro lling.

This case is also distinguishable from cases where we have held that a patentee’s suit against a customer gave the manufacturer standing to seek declaratory relief against the patentee. In Arris Group v. British Teleco mmunications PLC , 639 F.3d 1368 (Fed. Cir. 2011) , w e noted that a manufacturer has standing to bring a decla ratory action if: (1) the manufacturer i s obligated to i ndemnify its customers in the event of an infringement suit; or (2) there i s a controversy between the patentee and the manufacturer as to the manufacturer’s liability for induced or contributory infringement based on acts of direct infrin gement by the customers. Id . at 1375. The Arris patentee accused a customer of infringing claims of four U.S. patents in which a manufacturer’s product functioned as a material component. We held that theALLIED MINERAL PRODU CTS , INC

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allegations of direct infringement of U.S. paten ts against the manufacturer’s customers w ere an implicit allegation of indirect infringement against the manufacturer

. Id

. at 1381. This gave the district court jurisdiction over the manufacturer’s declaratory judgment action. Id

. The dispute between Allied and Stellar does not sati sfy either factor articulated in Arris

. Allied does not alleg e in the complaint that it is obligated to indemnify Ferro and Pyrotek against allegations of infringement of the Mexican Patent. Nor have there been any infring ement allegations against either company in the United States or any infringement allegations involving any U.S. patent

. 2 There is no Arris

- level controversy between Allied and Stellar ; Stellar has not implicitly accused Allied of i nfrin g ing the ’974 patent in the U nited S tates based on its customers’ direct infringement of the Mexican Patent in Mexico

. Allied argues it has been forced into an unwinnable business position ; it can either continue to sell products in the U nited S tates knowing it may be the target of an infringement suit, or it can cease selling products it believes it has a right to sell. But we have held that the fear of a future infringement suit is insufficient to confer jurisdiction. Prasco , 537 F.3d at 1338. In Prasco , we rejected a declaratory judgment plaintiff’s argument that it suffered actual harm when i t merely feared a future infringement suit. Id . at 1339. And in Arris , we noted the fear of future lost business because of infringement threats against a customer was
, by itself

, insufficient to create standing for the manufacturer. Arris , 639 F.3d at 1374

– 75. Allied’s fear alone does not give the district

2 We do not address whether an agreement to i nde m nify for foreign infringement of a foreign patent gives rise to declaratory judgment jurisdiction over a counte rpart U.S. patent.ALLIED MINERAL PRODU CTS , INC

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court jurisdiction. See Prasco , 537 F.3d at 1341

– 42 (“Al though we understand [the declaratory judgment plai ntiff’s] desire to have a definitive answer on whether its products infringe defendants’ patents, were the district court to reach the merits of this case, it would merely be providing an advisory opinion. This is impermissible under Article III.”); s ee also City of Los Angeles v. Lyons

, 461 U.S. 95, 103 (1983) (holding that a plaintiff’s subje ctive fear of future injury did not confer jurisdiction over his claims). Considering the totality of the circumstances, we agree with the district co urt that there is not a substa ntial controversy of sufficient immediacy and reality to confer declaratory judgment jurisdiction. Stellar sent notice letters to Ferro and Pyrotek in Mexico, and it sued Ferro and Pyrotek in Mexico. Stellar did not even r es pond to Allied’s letter about the Mexican Patent on behalf of Ferro and Pyrotek. Nor has Stellar taken any action in the United States or any action on the ’974 patent

. Allied has failed to establish a case or controversy regarding Stellar’s U.S. patent in the United States under Article III.

C ONCLUSION The judgment of the district court dismissing the case for lack of jurisdiction is affirmed.

AFFIRMED

C OSTS
Costs to Stellar.