Jurisdiction For A DJ Patent Action Requires Sufficient Immediacy And Reality

In Matthews International Corp. v. Biosafe Engineering, LLC, No. 12-1044 (Fed. Cir. Sept. 25, 2012), the Federal Circuit affirmed the district court's determination that the dispute lacked sufficient immediacy and reality to support the exercise of DJ jurisdiction.

Matthews International Corporation ("Matthews") manufactures and sells cremation equipment, caskets, and bronze memorials, including a Bio Cremation" product that uses an "environmentally friendly" alkaline-hydrolysis process rather than incineration for cremation. Biosafe Engineering, LLC and Digestor, LLC (collectively "Biosafe") hold several patents related to the application of alkaline hydrolysis to the disposal of various types of waste, including five method patents ("the Method Patents") and one system patent ("the System Patent").

Matthews filed suit against Biosafe, seeking a DJ of noninfringement, invalidity, and unenforceability of the Method Patents. Matthews later amended its complaint to include the System Patent. At the time of the amended complaint, Matthews had sold three Bio Cremation" units, but none of them had been installed by its customers. Matthews's suit also included state-law claims of trade libel, defamation, and tortious interference with contractual relations. The district court granted Biosafe's motion to dismiss for lack of DJ jurisdiction and for failure to adequately plead the state-law claims. Matthews appealed.

"Until some specific and concrete evidence regarding how Matthews' customers plan to use the cremation units is available, any judicial determination regarding whether such use would infringe the Method Patents would be premature." Slip op. at 9-10.

On appeal, the Federal Circuit held that the trial court correctly concluded that Matthews's dispute with Biosafe lacked the requisite immediacy and reality to support the exercise of DJ jurisdiction. The Court stated that "in determining whether a justiciable controversy is present, the analysis must be calibrated to the particular facts of each case, with the fundamental inquiry being '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.'" Slip op. at 7-8 (quoting MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007)).

Regarding "immediacy," the Federal Circuit found that there was no evidence as to...