Amana Refrigeration, Inc. v. Quadlux, Inc.

• Decision Date: 05 April 1999
• Docket Number: No. 98-1200,98-1200
• Citation: 50 USPQ2d 1304,172 F.3d 852
• Parties: AMANA REFRIGERATION, INC., Plaintiff-Appellant, v. QUADLUX, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 852

172 F.3d 852

50 U.S.P.Q.2d 1304

AMANA REFRIGERATION, INC., Plaintiff-Appellant, v. QUADLUX, INC., Defendant-Appellee.

No. 98-1200.

United States Court of Appeals, Federal Circuit.

April 5, 1999.

Stephen J. Holtman, Simmons, Perrine, Albright & Ellwood, P.L.C., Cedar Rapids, Iowa, argued, for plaintiff-appellant. With him on the brief were David A. Hacker, and Gregory G. Williams.

Richard L. Spinogatti, Proskauer Rose LLP, New York, New York, argued, for defendant-appellee. With him on the brief was Scott A. Eggers. Of counsel on the brief were Roger T. Stetson, and Michael R. Reck, Belin Lamson Zumbach Flynn, Des Moines, Iowa. Of counsel was Margaret C. Callahan.

Before MAYER, Chief Judge, ARCHER, Senior Circuit Judge, and LOURIE, Circuit Judge.

MAYER, Chief Judge.

Amana Refrigeration, Inc. ("Amana") appeals the order of the United States District Court for the Northern District of Iowa in Amana Refrigeration, Inc. v. Quadlux, Inc., No. 96-CV-350 (N.D.Iowa Dec. 24, 1997), which granted Quadlux, Inc.'s ("Quadlux") motion to dismiss Amana's action seeking declaratory and injunctive relief pertaining to the validity and infringement of Quadlux's U.S. Patent No. 5,517,005 (the " '005 patent"), and damages for defamation and trade libel. We affirm.

Background

Quadlux, a California corporation with its principal place of business in California, owns the '005 patent, which claims a "Visible Light and Infra- Red Cooking Apparatus" that cooks food as quickly as a microwave oven, but with results similar to those achieved in a conventional oven. Quadlux manufactures and sells a commercial embodiment of its invention, the "FlashBake" oven. Amana, a Delaware corporation with its principal place of business in Iowa, commenced negotiations with Quadlux to license the FlashBake technology in August 1993, and the two companies entered into a confidentiality agreement. Quadlux representatives made two visits to Amana headquarters in Iowa over the course of the negotiations, but negotiations ended unsuccessfully in February 1994, after Quadlux decided to license the technology to another appliance manufacturer.

Amana then developed and started to market its WAVE ovens. Like Quadlux's FlashBake ovens, the WAVE ovens use a combination of visible and infrared radiation to cook food. On November 21, 1996 counsel for Quadlux sent a warning letter to Amana in Iowa, enclosing a copy of the '005 patent, which had issued May 14, 1996, and stating that Quadlux intended to enforce both the patent and the confidentiality agreement. Additionally, Quadlux sent letters terminating its contractual relationship with three distributors in Maryland, Ohio, and Illinois because those distributors dealt with Amana, whom Quadlux asserted was "going to proceed with the introduction of a copy of the FlashBake oven."

Amana sued Quadlux in the United States District Court for the Northern District of Iowa, seeking, inter alia, declaratory judgments of patent invalidity and noninfringement, and damages for defamation and trade libel, both Iowa state law claims. In response, Quadlux filed a July 31, 1997, declaration by its president and chief executive officer, Phillip Samper, covenanting not to "assert any claim of patent infringement against Amana under [the '005 patent] as it presently reads, with respect to any product currently advertised, manufactured, marketed or sold by Amana, or any product which was advertised, manufactured, marketed or sold by Amana prior to the date of this declaration."

The trial court dismissed Amana's declaratory judgment actions as moot in light of the Quadlux covenant, and dismissed Amana's defamation and trade libel claims for lack of personal jurisdiction over Quadlux. Amana appeals.

Discussion

Actual Controversy

Under the Declaratory Judgment Act, 28 U.S.C. § 2201(a) (1994), a district court has jurisdiction over a declaratory judgment action only when there is an "actual controversy." "Whether an actual controversy exists upon particular facts is a question of law, and is subject to plenary appellate review." BP Chems. Ltd. v. Union Carbide Corp., 4 F.3d 975, 978, 28 USPQ2d 1124, 1127 (Fed.Cir.1993). For an actual controversy to exist, "[t]here must be both (1) an explicit threat or other action by the patentee, which creates a reasonable apprehension on the part of the declaratory plaintiff that it will face an infringement suit, and (2) present activity which could constitute infringement or concrete steps taken with the intent to conduct such activity." Id. at 978, 28 USPQ2d at 1126.

Although an actual controversy may have existed before Quadlux filed its covenant not to assert a patent infringement claim against Amana, it is not necessary for us to address that issue. "[A]n actual controversy must be extant at all stages of review, not merely at the time the complaint is filed," Preiser v. Newkirk, 422 U.S. 395, 401, 95 S.Ct. 2330, 45 L.Ed.2d 272 (1975) (citation omitted), and it is clear that no controversy survives the Quadlux covenant. We have held that a covenant not to sue for any infringing acts involving products "made, sold, or used" on or before the filing date is sufficient to divest a trial court of jurisdiction over a declaratory judgment action. See Super Sack Mfg. Corp. v. Chase Packaging Corp., 57 F.3d 1054, 1060, 35 USPQ2d 1139, 1144 (Fed.Cir.1995). Similarly, Quadlux's promise not to assert any infringement claim against Amana under the patent as it presently reads, with respect to any product previously or currently advertised, manufactured, marketed, or sold by Amana, removed any reasonable apprehension that Amana will face an infringement suit based on its activities before the filing date.

Amana argues that the Quadlux covenant did not remove Amana's reasonable apprehension of being sued with regard to its new products "in the pipeline," but not advertised, manufactured, marketed, or sold before the filing date. However, an actual controversy cannot be based on a fear of litigation over future products. See id. ("The residual possibility of a future infringement suit based on [the alleged infringer's] future acts is simply too speculative a basis for jurisdiction over [the alleged infringer's] counterclaim for declaratory judgments of invalidity."). The Quadlux covenant ensures that Quadlux is forever estopped from asserting liability against Amana in connection with any products that Amana advertised, manufactured, marketed, or sold before July 31, 1997, and that resolves the controversy.

Amana also argues that Quadlux's promise not to assert a claim based on the patent "as it presently reads" subjects Amana to risk of further litigation on the '005 patent subject matter because of the potential grant of a reissue patent. We rejected this argument in Spectronics Corp. v. H.B. Fuller Co., 940 F.2d 631, 637, 19 USPQ2d 1545, 1550 (Fed.Cir.1991), holding that "[a]lthough Spectronics may have some cause to fear a suit for future infringement of substantively non-identical claims after reissue, it has no cause for concern that it can be held liable for practicing the invention claimed in the '366 patent." Here, as in Spectronics, the future existence of a reissue patent is wholly speculative and, therefore, cannot create a present controversy.

Personal Jurisdiction

We turn now to Amana's assertion that the district court had personal jurisdiction over Quadlux for the purposes of Amana's trade libel and defamation claims. Amana contends that the court erred in analyzing the personal jurisdiction issue under Eighth Circuit law rather than Federal Circuit law.

Although under our courtesy rule we are generally guided by the law of the regional "circuit to which district court appeals normally lie, unless...