Today, February 5, 2013, in Arkema Inc. v. Honeywell Int’l, Inc., No. 2012-1308, the Federal Circuit (Dyk, Plager, and O’Malley) found that an Article III case or controversy over indirect infringement liability existed between two competitors in the automobile refrigerant market.  This case provides incremental insight into the circumstances under which a vendor might proactively seek declaratory relief to provide guidance to itself and its customers.

Arkema sought declaratory judgment that in selling refrigerant to automobile manufacturers, it would not incur liability for indirectly infringing two Honeywell patents on methods of using refrigerant in automobile cooling systems.  The district court found that there was no justiciable controversy between the parties.  On appeal, describing this case as “a quintessential example of a situation in which declaratory relief is warranted,” the Federal Circuit reversed and remanded.

The Federal Circuit identified several ways in which the district court erred.  First, a party seeking a declaratory judgment of no indirect infringement need not offer evidence of actual underlying acts of direct infringement, nor specific accusations against itself or its customers.  Here, infringement claims brought by the defendant in other domestic and foreign actions over closely related patents relating to automobile refrigerants was a “sufficient affirmative act” to establish declaratory judgment jurisdiction.  The Federal Circuit also ruled that the district court was too restrictive in requiring Arkema to show “specific planned activity” by its customers, such as “sufficiently fixed” plans for using the refrigerant.  The Court also ruled that, even though any alleged acts of direct infringement (commercial launch of products) might not take place for over a year, presently-occurring acts in preparation that could lead to indirect infringement (signing of long-term supply contracts) were sufficiently immediate.