Addressing the case and controversy requirement in the context of indirect infringement, the U.S. Court of Appeals for the Federal Circuit reversed a district court’s denial of a motion to supplement a complaint to add declaratory judgment allegations, where the supplement sought to add non-infringement and invalidity allegations to patents that issued during ongoing litigation.  Arkema Inc. v. Honeywell Int’l, Inc., Case No. 12-1308 (Fed. Cir., Feb. 5, 2013) (Dyk, J.).

The plaintiffs, Arkema and Arkema France, and defendant, Honeywell International, compete in the manufacture and sale of automotive refrigerants.  Honeywell owns a number of U.S. patents relating to 1234yf refrigerant, a refrigerant with low global warming potential, and methods of using the same in automobile air conditioning systems. 

The instant appeal arose out of a much broader scope of litigations.  Honeywell began the dispute by suing Arkema in Europe.  Arkema then filed a declaratory judgment suit in the United States.  As discovery proceeded in the U.S. action, two additional patents issued to Honeywell directed to methods for using the 1234yf refrigerant.  Arkema sought to supplement its pleadings in the United States to add declaratory judgment claims, arguing that by entering into contracts to supply 1234yf refrigerant, it would not incur liability as an indirect infringer of Honeywell’s newly issued method patents.  The district court denied Arkema’s attempt to supplement its pleadings, finding no Article III case or controversy as Arkema was not currently or imminently in danger of facing liability for contributory infringement or induced infringement where it had not yet sold 1234yf refrigerant.  Arkema appealed.

The Federal Circuit reviewed the district court’s determination that Arkema’s claims were not justiciable de novo.  The Court followed that Supreme Court’s test for determining when an action for declaratory judgment presents a justiciable controversy set forth in MedImmune, which looks at “whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”  Using this standard, the Federal Circuit found that a case and controversy existed.

The Federal Circuit relied on, in part, the undisputed fact that Arkema had concrete plans for offering 1234yf to automobile manufacturers for use in automobile air conditioning systems and desired to enter into contracts with automobile manufacturers to supply the refrigerant.  Also, the Court noted that Honeywell had already shown a propensity to engage Arkema in litigation asserting Honeywell’s patent rights.

The Federal Circuit rejected the district court’s view that Arkema was required to show which customer had committed an act of direct infringement.  The Court stated that there was 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.  The Court instead relied on the certainty that the 1234yf that Arkema wished to sell would be placed in car air conditioners and that Honeywell believed that use of that refrigerant infringes its patents.

The Federal Circuit also rejected the notion that Arkema was required to show that Honeywell directly accused Arkema of indirect infringement, citing the Court’s well established precedent that related litigation can form the basis for declaratory judgment.  The Federal Circuit found that there were no known methods of using 1234yf refrigerant that Honeywell would not argue were within the scope its patent claims. 

Finally, the Federal Circuit found that Arkema’s present need to decide whether to enter into long-term contracts, even ones that do not begin for a year or more, was sufficiently immediate to warrant a justiciable controversy.

Addressing the case and controversy requirement in the context of indirect infringement, the U.S. Court of Appeals for the Federal Circuit reversed a district court’s denial of a motion to supplement a complaint to add declaratory judgment allegations, where the supplement sought to add non-infringement and invalidity allegations to patents that issued during ongoing litigation.  Arkema Inc. v. Honeywell Int’l, Inc., Case No. 12-1308 (Fed. Cir., Feb. 5, 2013) (Dyk, J.).

The plaintiffs, Arkema and Arkema France, and defendant, Honeywell International, compete in the manufacture and sale of automotive refrigerants.  Honeywell owns a number of U.S. patents relating to 1234yf refrigerant, a refrigerant with low global warming potential, and methods of using the same in automobile air conditioning systems. 

The instant appeal arose out of a much broader scope of litigations.  Honeywell began the dispute by suing Arkema in Europe.  Arkema then filed a declaratory judgment suit in the United States.  As discovery proceeded in the U.S. action, two additional patents issued to Honeywell directed to methods for using the 1234yf refrigerant.  Arkema sought to supplement its pleadings in the United States to add declaratory judgment claims, arguing that by entering into contracts to supply 1234yf refrigerant, it would not incur liability as an indirect infringer of Honeywell’s newly issued method patents.  The district court denied Arkema’s attempt to supplement its pleadings, finding no Article III case or controversy as Arkema was not currently or imminently in danger of facing liability for contributory infringement or induced infringement where it had not yet sold 1234yf refrigerant.  Arkema appealed.

The Federal Circuit reviewed the district court’s determination that Arkema’s claims were not justiciable de novo.  The Court followed that Supreme Court’s test for determining when an action for declaratory judgment presents a justiciable controversy set forth in MedImmune, which looks at “whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”  Using this standard, the Federal Circuit found that a case and controversy existed.

The Federal Circuit relied on, in part, the undisputed fact that Arkema had concrete plans for offering 1234yf to automobile manufacturers for use in automobile air conditioning systems and desired to enter into contracts with automobile manufacturers to supply the refrigerant.  Also, the Court noted that Honeywell had already shown a propensity to engage Arkema in litigation asserting Honeywell’s patent rights.

The Federal Circuit rejected the district court’s view that Arkema was required to show which customer had committed an act of direct infringement.  The Court stated that there was 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.  The Court instead relied on the certainty that the 1234yf that Arkema wished to sell would be placed in car air conditioners and that Honeywell believed that use of that refrigerant infringes its patents.

The Federal Circuit also rejected the notion that Arkema was required to show that Honeywell directly accused Arkema of indirect infringement, citing the Court’s well established precedent that related litigation can form the basis for declaratory judgment.  The Federal Circuit found that there were no known methods of using 1234yf refrigerant that Honeywell would not argue were within the scope its patent claims. 

Finally, the Federal Circuit found that Arkema’s present need to decide whether to enter into long-term contracts, even ones that do not begin for a year or more, was sufficiently immediate to warrant a justiciable controversy.