ArcelorMittal v. AK Steel Corp.

• Decision Date: 16 May 2017
• Docket Number: 2016-1357
• Citation: 856 F.3d 1365
• Parties: ARCELORMITTAL, ArcelorMittal Atlantique et Lorraine, Plaintiffs-Appellants v. AK STEEL CORPORATION, Severstal Dearborn, Inc., Wheeling-Nisshin Inc., Defendants-Appellees
• Court: U.S. Court of Appeals — Federal Circuit

856 F.3d 1365

ARCELORMITTAL, ArcelorMittal Atlantique et Lorraine, Plaintiffs-Appellants

v.AK STEEL CORPORATION, Severstal Dearborn, Inc., Wheeling-Nisshin Inc., Defendants-Appellees

2016-1357

United States Court of Appeals, Federal Circuit.

Decided: May 16, 2017

Constantine L. Trela, Jr. , Sidley Austin LLP, Chicago, IL, argued for plaintiffs-appellants. Also represented by Bryan C. Mulder ; Jeffrey B. Bove , Ratner Prestia, Wilmington, DE.

Christopher Neil Sipes , Covington & Burling LLP, Washington, DC, argued for defendants-appellants. Also represented by Jeffrey Howard Lerner, Roderick R. Mckelvie .

Before Moore, Wallach, and Hughes, Circuit Judges.

Dissenting opinion filed by Circuit Judge Wallach.

Hughes, Circuit Judge.

Plaintiffs sued Defendants in 2010 for infringing U.S. Patent No. 6,296,805. After our most recent remand in this case, the district court invalidated claims 24 and 25 of U.S. Patent No. RE44,153, the reissue of the '805 patent. We conclude that the district court possessed subject matter jurisdiction when it granted summary judgment, that the court properly followed our most recent mandate, and that the court properly exercised its discretion to deny ArcelorMittal's Rule 56(d) request. Accordingly, we affirm.

I

A

The dispute between Plaintiffs (collectively, ArcelorMittal) and Defendants (Civ. No. 10-050-SLR (the 050 case)) began in January 2010, when ArcelorMittal first filed a complaint in the United States District Court for the District of Delaware alleging that Defendants infringed the '805 patent. Defendants counterclaimed for declarations of non-infringement and invalidity of the '805 patent. After a five-day trial, a jury found that Defendants did not infringe the then-asserted claims, and that the claims were invalid as anticipated and obvious.

In November 2012, we reversed the district court's claim construction in part and concluded that, as a matter of law, the claims were not anticipated. ArcelorMittal France v. AK Steel Corp. , 700 F.3d 1314, 1317 (Fed. Cir. 2012)(ArcelorMittal I ). We then remanded for limited proceedings to address only literal infringement and commercial success. Id. at 1326.

Thereafter, in April 2013, the United States Patent & Trademark Office (PTO) reissued the '805 patent as the RE '153 patent. ArcelorMittal subsequently filed two patent infringement suits in the United States District Court for the District of Delaware against the defendants based on events occurring after the RE '153's issuance that allegedly infringed the RE '153 patent: (1) Civ. No. 13-685-SLR, against AK Steel (the 685 case); and (2) Civ. No. 13-686-SLR, against Severstal Dearborn and Wheeling-Nisshin (the 686 case). The following month, ArcelorMittal moved to amend its complaint in the 050 case to substitute allegations of infringement of the RE '153 patent for the allegations of infringement of the surrendered '805 patent. Defendants moved in June 2013 for summary judgment on the grounds that claims 1–23 of the RE '153 patent were improperly broadened, and thus invalid.

The district court concluded that summary judgment was warranted because claims 1–23 had been improperly broadened, and denied the pending motion to amend the complaint as moot. ArcelorMittal filed a letter seeking to clarify the status of claims 24 and 25, claiming that they were not asserted in the 050 case. In an order governing the 050, 685, and 686 cases, the district court clarified that it was invalidating not just RE '153 claims 1–23, but also claims 24 and 25.

ArcelorMittal appealed. We affirmed the invalidity of claims 1–23 of the RE '153 patent, but reversed as to the invalidity of claims 24 and 25 after finding those claims were not broadened on reissue. ArcelorMittal France v. AK Steel Corp. , 786 F.3d 885, 892 (Fed. Cir. 2015) (ArcelorMittal II ). We remanded for "further proceedings consistent with [that] opinion and our mandate in ArcelorMittal I ." Id.

B

In July 2015, on remand in the 685 case, ArcelorMittal moved to amend its complaint to substitute allegations of infringement of U.S. Patent No. RE44,940 —a continuation of the application resulting in the RE '153 patent—for the allegations of infringement of the RE '153 patent.

Two months later, in the 050 case, ArcelorMittal moved to dismiss for lack of jurisdiction because, according to ArcelorMittal, claims 24 and 25 of the RE '153 patent—the only claims not invalidated—were not part of the case on remand. In its supporting brief, ArcelorMittal contended that, based on pretrial elections made with respect to the '805 patent, it had only asserted five claims of the RE '153 patent, all of which had been invalidated in ArcelorMittal II . It also said that it was prepared to issue Defendants a covenant not to sue. The same day, Defendants moved for summary judgment of noninfringement and invalidity of claims 24 and 25 of the RE '153 patent. Briefing on both motions completed on October 23, 2015. To its reply brief in support of its motion to dismiss, ArcelorMittal attached an unsigned draft covenant not to sue.

Four days later, the district court held a telephonic hearing on the pending motions. More than three weeks after the hearing, ArcelorMittal submitted to the court a letter attaching an executed covenant not to sue Defendants and their customers under the RE '153 patent. Although the covenant was facially unconditional, ArcelorMittal said in its enclosing letter that it was "tender [ing] the covenant conditioned on resolution of its motion to amend (D.I. 31) in the 685 case." J.A. 5218. ArcelorMittal further explained that it imposed that condition to "avoid mooting the 685 case" by "divesting the [c]ourt of jurisdiction" and that it stood "ready to deliver the covenant unconditionally upon resolution of" the motion to amend. Id.

In one order, the trial court granted Defendants' motion for summary judgment, denied ArcelorMittal's motion to dismiss for lack of subject matter jurisdiction in the 050 case, and granted ArcelorMittal's motion to amend its complaint in the 685 case. ArcelorMittal appeals the denial of its motion to dismiss for lack of subject matter jurisdiction and the grant of summary judgment of invalidity of RE '153 claims 24 and 25. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

II

We review the court's denial of a motion to dismiss for lack of subject matter jurisdiction de novo and the underlying factual findings for clear error. Hewlett-Packard Co. v. Acceleron LLC , 587 F.3d 1358, 1361 (Fed. Cir. 2009). Under MedImmune, Inc. v. Genentech, Inc. , courts may hear declaratory judgment actions if "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." 549 U.S. 118, 127, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007) (quoting Md. Cas. Co. v. Pac. Coal & Oil Co. , 312 U.S. 270, 273, 61 S.Ct. 510, 85 L.Ed. 826 (1941) ) (emphasis added).

A

ArcelorMittal first argues that it never asserted RE '153 claims 24 and 25 in the 050 litigation against Defendants. We disagree. After the first remand, AK Steel moved for summary judgment of non-infringement of claims 1–23 of the RE '153 patent. In its supporting brief, AK Steel expressed its view that the court's grant of the motion "would leave claims 24–25 of the [RE '153 ] patent for the limited determination on obviousness remanded by the Federal Circuit." J.A. 4540. Though ArcelorMittal opposed the motion for other reasons, it did not dispute AK Steel's statement that claims 24 and 25 would remain for the court's further resolution. Then, in the second appeal, ArcelorMittal (1) argued that, "even if only reissue claims 24 and 25 remain, there is evidence that those claims were infringed during the time period at issue in the 050 case," and (2) asked us to "remand the 050 case so that the district court can address infringement of reissue claims 24 and 25" even if we affirmed the invalidity of claims 1–23. J.A. 5199–5200. We granted ArcelorMittal that relief by "remand[ing] for further proceedings" because we declined "to reach the merits" on claims 24 and 25, which we held were improperly invalidated. ArcelorMittal II , 786 F.3d at 892.

ArcelorMittal now argues that we remanded the 050 case in ArcelorMittal II so that ArcelorMittal could consider whether to assert claims 24 and 25, which it says the district court introduced into the case by invalidating them sua sponte. We find that ArcelorMittal's statements to this court and its tacit acceptance of Defendants' representations about the litigation status of claims 24 and 25 reflect ArcelorMittal's continued attempt to assert those claims in the 050 case. Also, our mandate contemplated "further proceedings" in the 050 case, which were necessary only because ArcelorMittal told us that it was asserting RE '153 claims 24 and 25. In light of "all the circumstances," there was a substantial controversy between the parties over RE '153 claims 24 and 25. See MedImmune , 549 U.S. at 127, 127 S.Ct. 764. Therefore, the district court correctly considered RE '153 claims 24 and 25 to be asserted on remand.

B

Next, ArcelorMittal argues that its dispute with Defendants became moot when ArcelorMittal conditionally tendered its covenant to Defendants. We hold that it did not.

Defendants' counterclaims arise under the Declaratory Judgment Act, which states that, "[i]n a case of actual controversy within its jurisdiction ... any court of the United States ... may declare the rights and other legal relations of any interested party seeking such declaration." 28 U.S.C. § 2201. Because "the phrase ‘case of actual controversy’ in the [Declaratory Judgment] Act refers to the type of ‘Cases' and ‘Controversies' that are justiciable under Article III," these requirements are coextensive. MedImmune , 549 U.S. at 127, 127 S.Ct. 764 (citing Aetna Life Ins. Co. v. Haworth , 300 U.S. 227, 240, 57 S.Ct. 461, 81 L.Ed. 617 (1937) ); see also Prasco, LLC v....