Federal Circuit Denies Request for Declaratory Judgment Based on Foreign Infringement Action

In Allied Mineral Products, Inc. v. OSMI, Inc., No. 2016-2641, the Federal Circuit affirmed the Southern Florida district court’s dismissal of a declaratory judgment action for lack of subject matter jurisdiction because Allied failed to show “a case of actual controversy.” 

OSMI and Stellar (“Stellar”) brought a patent infringement lawsuit in Mexico against Allied’s Mexican distributors, alleging that they infringed Stellar’s Mexican patent. Allied then filed a request for declaratory judgment in the U.S., requesting the district court find non-infringement, invalidity, and unenforceability of Stellar’s U.S. patent. 

The Federal Circuit held that Stellar’s infringement action filed in Mexico does not constitute an affirmative act to meet the actual controversy requirement. The Federal Circuit emphasized that all of Stellar’s conduct was limited to the infringement action in Mexico based on the Mexican patent and was only directed against the Mexican entities.

Furthermore, the Federal Circuit held that a lawsuit against Allied’s distributors alone does give Allied standing to seek declaratory judgment. Manufacturer standing is appropriate only if the manufacturer is obligated to indemnify its customers or the manufacturer is subject to liability for induced or contributory infringement. Neither element was met in this case. The Federal Circuit thus affirmed the district court’s dismissal of the complaint for lack of subject matter jurisdiction.