California - The Federal Circuit on Tuesday shut the door on a patent infringement dispute between two companies over a means of cremating human remains without incinerating them, ruling that Matthews International Corp. could not obtain a declaratory judgment that it did not infringe Biosafe Engineering LLC's patents.
The district court correctly determined that Matthews' claims lacked "sufficient immediacy and reality" to support the exercise of declaratory judgment jurisdiction, the Federal Circuit ruled.
Matthews is a leader in the "death care" industry, according to the Federal Circuit. It manufactures cremation equipment, caskets and bronze memorials and sells them to funeral homes.
Matthews is currently marketing a product called Bio Cremation, which uses an alkaline hydrolysis process, rather than incineration, to cremate human remains. According to Matthews, the Bio Cremation equipment offers an "environmentally friendly" alternative to traditional flame-based cremation.
Resomation Ltd. is a Scottish company that manufactures and licenses equipment that employs an alkaline hydrolysis process to dispose of human remains. Resomation has granted Matthews an exclusive license to market and sell its alkaline hydrolysis equipment in the United States.
Biosafe, meanwhile, acquired several patents related to the application of alkaline hydrolysis to the disposal of various types of waste, such as medical waste, infectious agents, and hazardous materials.
In February 2011, Matthews sued Biosafe seeking a declaratory judgment of non-infringement, invalidity, and unenforceability of the patents. By the time it filed an amended complaint in May 2011, Matthews had sold three Bio Cremation units, but none of these units had been installed in customers' facilities.
Matthews alleged that Biosafe had wrongly accused it of patent infringement, and had made false accusations about Matthews to Matthews' customers, potential customers, and employees.
Biosafe also "launched a bad faith whispering campaign in the funeral home marketplace, by making accusations and veiled threats to potential customers" that Matthews' Bio Cremation equipment infringed Biosafe's patents, according to Matthews.
The district court granted Biosafe's motion to dismiss in September 2011, finding that Matthews had not made "meaningful preparation" to conduct potentially infringing activity.
Because the potentially infringing features of the Bio Cremation system were "fluid and indeterminate," Matthews' claim lacked the necessary reality to satisfy the constitutional requirements for declaratory judgment jurisdiction, the district court ruled.
The Federal Circuit agreed, ruling that Matthews' dispute with Biosafe lacks immediacy because there is no evidence as to when, if ever, the Bio Cremation equipment will be used in a manner that could potentially infringe the Biosafe patents.
"A party may not obtain a declaratory judgment merely because it would like an advisory opinion on whether it would be liable for patent infringement if it were to initiate some merely contemplated activity," the appeals court said.