Federal Circuit Upholds the Dismissal of a Declaratory Judgment Action for Failure to Satisfy Constitutional Requirements

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Rather than waiting to be sued, a potential patent infringer might file a case in federal court asking that the patent be declared not infringed, invalid or unenforceable. The Federal Circuit upheld a District Court’s dismissal of a declaratory judgment patent suit filed by Matthews International Corporation in Matthews Int’l Corp. v. Biosafe Engineering, LLC (Fed. Cir. Sept. 25, 2012) (available here), because Matthews’ claims did not satisfy the Constitutional requirements for declaratory judgment jurisdiction under Article III.

In the case, Biosafe Engineering, LLC and Digestor, LLC together own five method patents and one system patent related to the application of alkaline hydrolysis to the disposal of various types of waste, such as medical waste, infectious agents and hazardous materials. Matthews sells a Bio Cremation™ product under an exclusive license from Resomation Ltd. The product uses an alkaline hydrolysis process, rather than incineration, to “cremate” human remains. Matthews filed suit against Biosafe, seeking a declaratory judgment of noninfringement, invalidity, and unenforceability of the method and system patents. At the time the suits were filed, Matthews had sold three units, but none of these units had been installed at customers’ facilities. Biosafe moved to dismiss all counts of Matthews’ amended complaint for lack of declaratory judgment jurisdiction. The District Court granted Biosafe’s motion to dismiss, concluding that Matthews had not made a “meaningful preparation” to conduct potentially infringing activity. Because the potentially infringing features of the product were “fluid and indeterminate,” Matthews’ claim “lack[ed] the necessary reality to satisfy the constitutional requirements for declaratory judgment jurisdiction.”

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