Ssi Technologies, LLC v. Dongguan Zhengyang Electronic Mechanical Ltd. ( 2023 )

Case: 21-2345 Document: 65 Page: 1 Filed: 02/13/2023
United States Court of Appeals
for the Federal Circuit
______________________
SSI TECHNOLOGIES, LLC,
Plaintiff-Appellant
v.
DONGGUAN ZHENGYANG ELECTRONIC
MECHANICAL LTD.,
Defendant-Cross-Appellant
______________________
2021-2345, 2022-1039
______________________
Appeals from the United States District Court for the
Western District of Wisconsin in No. 3:20-cv-00019-jdp,
Judge James D. Peterson.
______________________
Decided: February 13, 2023
______________________
SHANE A. BRUNNER, Michael Best & Friedrich, LLP,
Madison, WI, argued for plaintiff-appellant. Also repre-
sented by MICHAEL BESS, Chicago, IL; J. RYAN GRAY, Ra-
leigh, NC; MELANIE J. REICHENBERGER, Milwaukee, WI;
DEREK C. STETTNER, Menomonee Falls, WI.
JOSEPH KUO, Saul Ewing Arnstein & Lehr LLP, Chi-
cago, IL, argued for defendant-cross-appellant. Also repre-
sented by ELIZABETH A. THOMPSON.
______________________
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2 SSI TECHNOLOGIES, LLC v.
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Before REYNA, BRYSON, and CUNNINGHAM, Circuit Judges.
BRYSON, Circuit Judge.
Appellant SSI Technologies, LLC, (“SSI”) brought this
action against appellee Dongguan Zhengyang Electronic
Mechanical LTD (“DZEM”), alleging that DZEM infringes
two of SSI’s patents. DZEM asserted counterclaims for in-
validity of the asserted patents and for tortious interfer-
ence with prospective business relations. The district court
granted summary judgment to DZEM on the infringement
claims and dismissed DZEM’s invalidity counterclaims.
The court also granted summary judgment to SSI on the
tortious interference counterclaim. We affirm in part, re-
verse in part, vacate in part, and remand.
I
A
SSI has asserted U.S. Patent Nos. 8,733,153 (“the ’153
patent”) and 9,535,038 (“the ’038 patent”) against DZEM in
this case. The patents are generally directed to sensors for
determining the characteristics of fluid in a container, such
as a fuel tank. SSI’s commercial embodiments of the as-
serted patents and DZEM’s accused products are systems
that determine the quality and volume of diesel exhaust
fluid (“DEF”) that is used in emission-reduction systems for
diesel truck engines.
1
Claim 1 is generally representative of the five asserted
claims of the ’153 patent for purposes of this appeal. It re-
cites:
1. A system for determining a quality of a fluid in
a tank, the system comprising:
a transducer configured to generate a sound wave
and to detect an echo of the sound wave, the trans-
ducer positioned near the bottom of the tank such
that the sound wave travels toward a fixed object,
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the fixed object positioned a known distance away
from the transducer;
a temperature sensor configured to detect a tem-
perature of the fluid; and
a controller configured to
produce a signal to drive the transducer to
produce the sound wave,
receive an indication of the detected echo
from the transducer,
receive an indication of the temperature of
the fluid from the temperature sensor, and
determine whether a contaminant exists in
the fluid based on the temperature of the
fluid, a time period from when the sound
wave is produced to when the echo is de-
tected, and at least one of the group of a)
whether a measured volume is out of range
and b) a dilution of the fluid is detected
while the measured volume of the fluid de-
creases.
’153 patent, cl. 1 (emphasis on disputed limitation).
The specification of the ’153 patent describes an exem-
plary sensor system containing two transducers, a “level”
transducer and a “quality” transducer. Id. at col. 6, ll.
5–12. The level transducer is positioned at the bottom of
the tank and emits ultrasonic sound waves upward toward
the surface of the fluid. Id. at Fig. 3 & col. 6, ll. 10–12. The
quality transducer is positioned at the bottom of the tank
and emits ultrasonic sound waves toward a reflector that
is also positioned at the bottom of the tank. Id. at Fig. 3 &
col. 6, ll. 8–10. Based on the time of flight of the sound
wave emitted from the level transducer to the surface of
the fluid, the system can calculate the volume of the fluid
in the tank. Id. at col. 10, line 40, through col. 11, line 9.
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Similarly, the system can determine the quality of the fluid
(i.e., the concentration of the DEF) by using the time of
flight of the sound wave, which is the elapsed time for the
sound wave emitted from the quality transducer to travel
to and back from the reflector. Id. at col. 9, ll. 17–50.
The ’153 patent also discloses an error-detection mech-
anism by which the system can “detect failures of various
components of the system.” Id. at col. 12, ll. 38–40. First,
the system can determine that an error exists “when it de-
tects the concentration level of the [DEF] decreasing (i.e.,
becoming diluted) at the same time as the level of the
[DEF] is decreasing.” Id. at col. 12, ll. 40–43. Such condi-
tions indicate an error “[b]ecause the [DEF] cannot become
diluted when the level of the [DEF] is decreasing.” Id. at
col. 12, ll. 51–53. Second, the system can determine that
an error exists when “the calculated level [of DEF] will ex-
ceed the known actual maximum level” of the tank. 1 Id. at
col. 12, ll. 57–60.
2
Claim 9 of the ’038 patent, the main claim of that pa-
tent that is at issue in this appeal, recites:
1 The specification of the ’153 patent uses the terms
“measured” and “calculated” interchangeably. At one
point, the specification discloses that the controller can per-
form a “plausibility check” by “comparing the calculated
level against the absolute physical capacity for the tank
110.” ’153 patent, col. 11, ll. 34–38. In the following sen-
tence, the specification notes that “[t]he controller 400 gen-
erates a diagnostic output . . . whenever the measured
level exceeds the capacity of the [DEF] tank.” Id. at col. 11,
ll. 39–41. Those two sentences describe the same function-
ality, and we therefore interpret the term “calculated,” as
used in the ’153 patent, to be equivalent to the term “meas-
ured.”
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9. A sensor operable to sense a characteristic of a
fluid, the sensor comprising:
a sensing area configured to contain the fluid;
a chimney configured to exhaust entrapped air
from the sensing area; and
a filter covering the sensing area, the filter config-
ured to
allow a liquid portion of the fluid to enter
the sensing area, and
substantially prohibit one or more gas bub-
bles of the fluid from entering the sensing
area; and
a transducer configured to
output a pulse of sound through the liquid
portion of the fluid contained within the
sensing area,
receive the reflected pulse of sound, and
output a characteristic of the fluid based on
the received pulse of sound.
’038 patent, cl. 9 (emphasis on disputed limitation).
Like the system disclosed in the ’153 patent, the sensor
of the ’038 patent operates by measuring the time of flight
of an “ultrasonic pulse wave [that] travel[s] the distance of
the sensing area and return[s] to the output point.” Id. at
col. 2, ll. 10–12. The invention of the ’038 patent seeks to
address the problem of “erratic measurement results” that
may occur due to “air bubbles [that] are embedded in the
fluid.” Id. at col. 2, ll. 13–18. Accordingly, the specification
of the ’038 patent discloses a sensor having a filter that
“blocks, or inhibits, air bubbles from entering a sensing
area of the fluid sensor.” Id. at col. 2, ll. 4–7.
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B
1
The dispute in the district court regarding the ’153 pa-
tent turned mainly on the limitation in claim 1 that recites
a controller configured to
determine whether a contaminant exists in the
fluid based on the temperature of the fluid, a time
period from when the sound wave is produced to
when the echo is detected, and at least one of the
group of a) whether a measured volume is out of
range and b) a dilution of the fluid is detected while
the measured volume of the fluid decreases.
’153 patent, cl. 1. The district court construed the second
item of the Markush group in that limitation, “a dilution of
the fluid is detected while the measured volume of the fluid
decreases,” to require that the contaminant determination
actually consider the measured volume of the fluid. SSI
Techs., LLC v. Dongguan Zhengyang Elec. Mech. LTD, 559
F. Supp. 3d 821, 829 (W.D. Wis. 2021). 2
In support of its construction, the district court relied
on the prosecution history of the ’153 patent. As the court
observed, the inventors amended claim 1 during prosecu-
tion to add the requirement that the controller base its con-
tamination determination on “at least one of the group of
a) whether a measured volume is out of range and b) a di-
lution of the fluid is detected while the measured volume of
the fluid decreases.” Id. at 829–30; J.A. 1093. The court
concluded that the amendment to claim 1 was designed to
2 The parties agreed that the first item of the
Markush group, “whether a measured volume is out of
range,” did not apply to DZEM’s accused sensors. SSI, 559
F. Supp. 3d at 828.
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incorporate the error-detection capability recited in the
specification. SSI, 559 F. Supp. 3d at 829–30.
In light of the court’s construction and the parties’
agreement that DZEM’s accused sensor “doesn’t base the
contamination determination on any consideration of the
measured volume of the fluid,” the district court granted
summary judgment that DZEM did not infringe the claims
of the ’153 patent. Id. at 830.
2
With respect to the ’038 patent, the dispute in the dis-
trict court turned mainly on the district court’s construc-
tion of the term “filter” and its application of that
construction in its infringement analysis. The district
court adopted DZEM’s proposed construction of “filter,”
construing the term to mean “a porous structure defining
openings, and configured to remove impurities larger than
said openings from a liquid or gas passing through the
structure.” Id. at 831–32.
DZEM’s accused sensors include a rubber cover, which
SSI argues is the filter recited in claim 9 of the ’038 patent.
The rubber cover, shown below, has four small openings on
its underside, each measuring approximately 2 millimeters
by 10 millimeters.
Id. at 833.
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The district court held that DZEM did not infringe
claim 9 because the rubber cover was not “porous” and
therefore the accused sensors did not contain a “filter” as
required by claim 9. Id. at 834. The court contrasted the
openings in DZEM’s rubber cover, which the court de-
scribed as “relatively large,” with the apertures disclosed
in the ’038 patent, which the court described as “tiny.” See
id. at 832, 834. The court also held that SSI had forfeited
its argument that DZEM infringed claim 9 of the ’038 pa-
tent under the doctrine of equivalents. Id. at 834.
C
DZEM’s counterclaim for tortious interference is based
on letters that SSI sent to several domestic and foreign
companies advising them of SSI’s lawsuit against DZEM.
Some of the letters added that SSI was seeking German
patent protection for its sensors. DZEM alleges that the
companies that SSI contacted were customers of DZEM.
The district court granted summary judgment to SSI
on the tortious interference counterclaim on the ground
that “SSI’s communications with companies in countries
where SSI enjoys patent protection were protected” under
the Noerr-Pennington doctrine, which “prohibits suits
based on a defendant’s petition to the government for re-
dress of grievances.” SSI, 559 F. Supp. 3d at 835–37. With
respect to SSI’s alleged communications with companies in
other countries, the court granted summary judgment in
favor of SSI because DZEM did not “adduce evidence that
it had prospective contracts with those companies.” Id. at
837.
In light of its decision to grant summary judgment of
non-infringement of the ’153 and ’038 patents, the district
court also dismissed without prejudice DZEM’s counter-
claims for invalidity of those patents. The court explained
that “[n]othing in DZEM’s complaint or any of the parties’
briefing suggests that DZEM faces any risk of future pros-
ecution under either of the patents-in-suit, so there is no
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need for the court to determine whether the patents are
invalid.” Id. at 835. This appeal followed.
II
A
SSI argues that the district court erred in construing
claim 1 of the ’153 patent to require that the contaminant
determination take into account the measured volume of
the fluid. In so construing the claim, the district court re-
lied on the prosecution history of the ’153 patent. In par-
ticular, the court observed that the inventors amended
claim 1 during prosecution to incorporate the error-detec-
tion capability described in the specification. SSI, 559 F.
Supp. 3d at 829–30. We discern no error in the district
court’s analysis.
The specification of the ’153 patent discloses two types
of errors that the system may detect: (1) whether the meas-
ured volume exceeds the maximum volume of the tank; and
(2) whether the system detects the DEF being diluted at
the same time that the level of the fluid is decreasing. ’153
patent, col. 11, ll. 35–42; id. at col. 12, ll. 38–60. Those two
potential errors correspond closely to the two alternative
limitations added to amended claim 1, which are “a)
whether a measured volume is out of range and b) a dilu-
tion of the fluid is detected while the measured volume of
the fluid decreases.” See J.A. 1093. Those two potential
errors also appear in dependent claims 30 and 31, respec-
tively, although the patent uses slightly different language
in those claims. Nonetheless, in view of the parallelism be-
tween the amendment to claim 1 and the error-detection
capabilities disclosed elsewhere in the ’153 patent, we
agree with the district court that the amendment to claim
1 was intended to capture the error-detection capability of
the controller.
To determine whether one of the two errors described
above has occurred, the controller must necessarily com-
pare its measured volume either to the actual capacity of
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the tank or to a previous volume measurement. That fact
strongly supports the district court’s construction of the
claim, which requires the contamination determination to
be based in part on whether an error has occurred—a de-
termination that is itself based on the measured volume of
the fluid.
The district court’s construction is further supported by
the use of the phrase “measured volume” in claim 1. SSI’s
position is that the “dilution” limitation of claim 1 is satis-
fied so long as the volume of the liquid in the tank is de-
creasing, which is true any time the engine of the vehicle
is running. See J.A. 208. However, if that were true, the
word “measured” would be superfluous, as the word “vol-
ume” alone would be sufficient to give the claim the scope
that DZEM proposes. The use of the term “measured vol-
ume” therefore indicates that claim 1 requires that the vol-
ume of the liquid in the tank must be determined and
considered as part of the contamination analysis recited in
claim 1. See Merck & Co. v. Teva Pharms. USA, Inc., 395
F.3d 1364, 1372 (Fed. Cir. 2005) (“A claim construction that
gives meaning to all the terms of the claim is preferred over
one that does not do so.”).
Having discerned no error in the district court’s con-
struction of claim 1, we agree with the district court that
there is no genuine dispute of material fact regarding in-
fringement of that claim. SSI has pointed to evidence that
DZEM’s accused sensors are capable of measuring the vol-
ume of the fluid in the tank. See, e.g., J.A. 208, 787. How-
ever, SSI has offered no evidence that DZEM’s accused
sensors base their contaminant determinations on that vol-
ume measurement. Because the claim requires the control-
ler to be “configured to consider whether the fluid volume
is decreasing in making the contamination determination,”
see SSI, 559 F. Supp. 3d at 829, SSI’s evidence is insuffi-
cient to create a triable issue regarding infringement. We
therefore affirm the district court’s grant of summary judg-
ment of non-infringement of the ’153 patent.
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B
SSI next argues that the district court erred in grant-
ing summary judgment of non-infringement of the ’038 pa-
tent because the court applied an impermissibly narrow
construction of the term “filter.” SSI also argues that the
district court erred in concluding that SSI forfeited its
claim of infringement under the doctrine of equivalents.
We agree with SSI on both points.
1
Adopting DZEM’s proposed construction of “filter,” the
district court construed that term to mean “a porous struc-
ture defining openings[] and configured to remove impuri-
ties larger than said openings from a liquid or gas passing
through the structure.” SSI, 559 F. Supp. 3d at 831–32.
SSI proposed to the district court and maintains here that
the term “filter” should be construed to mean “a device con-
taining openings through which liquid is passed that blocks
and separates out matter, such as air bubbles.” Appellant’s
Br. 19. On their face, those constructions do not appear to
differ significantly. However, the district court’s applica-
tion of DZEM’s construction makes clear that there is a
substantial difference between the two constructions.
In explaining its construction, the district court stated
that DZEM’s construction was persuasive in part because
the discussion in the specification regarding filters indi-
cated that “the effective aperture size is tiny—100 mi-
crons.” SSI, 559 F. Supp. 3d at 832; see also ’038 patent,
col. 5, ll. 13–17 (“It has been found through empirical test-
ing . . . that an aperture size of 100 microns reduces the
quantity of gas bubbles within a sensing area sufficiently
enough to enable continuous measurements . . . .”). The
court held that DZEM’s filters, by contrast, are not covered
by claim 9 because the four openings in those filters are
“relatively large.” SSI, 559 F. Supp. 3d at 834. According
to the court, DZEM’s accused sensor “deflects larger bub-
bles, and . . . admits fluid with smaller bubbles into the
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sensing area through four openings and then ventilates the
smaller bubbles from four side slits.” Id. As a result, the
court stated, DZEM’s sensor “does not have a filter that ex-
cludes bubbles by straining fluid through a porous surface.”
Id. It is clear from that analysis that the district court un-
derstood the word “porous” to require that the filter open-
ings be smaller than a certain unspecified maximum size.
The specification of the ’038 patent, however, contains
no requirement regarding the size of the filter openings.
Although it is true that each embodiment disclosed in the
’038 patent contains a mesh filter, which has very small
openings, the scope of a claim is not ordinarily limited to
preferred embodiments or specific examples in the specifi-
cation. See Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d
1313, 1328 (Fed. Cir. 2002). And while the specific embod-
iments of the filters disclosed in the ’038 patent specifica-
tion contain small holes, the general references to a “filter”
in the specification are quite broad and do not reflect an
intent to limit the term “filter” to the disclosed embodi-
ments:
• “The filter blocks, or inhibits, air bubbles from
entering a sensing area of the fluid sensor.” ’038
patent, col. 2, ll. 6–7.
• “FIG. 5 illustrates a filter, or filter shroud, 250
for prohibiting, or inhibiting, the flow of gas, such
as but not limited to, gas bubbles (i.e., gas
trapped in a liquid). In some embodiments, the
filter 250 includes mesh, or one or more, mesh
screens, 255 and a frame 260.” Id. at col. 4, ll.
49–53 (emphasis added).
• “Thus, the invention provides, among other
things, a sensor system including a filter for pre-
venting gas bubbles from entering the sensor sys-
tem.” Id. at col. 6, ll. 7–9.
In view of those statements in the specification, we do
not construe the term “filter” to require openings that are
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smaller than a particular size. Rather, a filter need only
perform the function set forth in claim 9 of the patent: to
“substantially prohibit one or more gas bubbles of the fluid
from entering the sensing area.”
Like the claim language, the specification makes clear
that the filter of the ’038 patent is not required to screen
all bubbles from the sensing area of the sensor system, but
only to “reduce[] the quantity of gas bubbles within a sens-
ing area sufficiently enough to enable continuous measure-
ments” by the sensors. ’038 patent, col. 5, ll. 14–17. Gas
bubbles that “have a diameter smaller than the aperture
size of the mesh screens” will pass through the filter. Id.at col. 5, ll. 10–12. In other words, as long as the openings
in the filter are small enough to prevent at least some gas
bubbles from entering the sensing area, the openings need
not be smaller than any particular maximum size.
Because the construction adopted by the district court
could give rise to further disputes regarding the meaning
of the word “porous”—a term that does not appear in the
’038 patent—we adopt SSI’s construction of the term “fil-
ter.” That is, we hold that the term “filter” is properly con-
strued to mean “a device containing openings through
which liquid is passed that blocks and separates out mat-
ter, such as air bubbles.” In light of our disposition of that
issue, we vacate the district court’s grant of summary judg-
ment with respect to the ’038 patent in its entirety, and
remand for further proceedings consistent with this opin-
ion.
2
In granting summary judgment of non-infringement of
the ’038 patent, the district court concluded that SSI had
failed to develop its argument that DZEM’s accused sen-
sors infringed under the doctrine of equivalents and there-
fore had forfeited it. Id. The district court added that SSI’s
equivalents argument also failed on the merits because “no
reasonable jury could find that [the] DZEM sensor’s way of
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achieving the function [excluding gas particles] is substan-
tially the same as that claimed in the ’038 patent.” Id.We disagree with the district court’s conclusion that
SSI forfeited its doctrine-of-equivalents infringement the-
ory. SSI’s summary judgment brief contained a two-page
argument on the doctrine of equivalents, to which DZEM
responded in its reply brief. J.A. 1167–69 (SSI brief); SSI
Techs., LLC v. Dongguan Zhengyang Elec. Mech. LTD, No.
20-cv-19, Dkt. No. 130 at 33–34 (W.D. Wis. May 27, 2021)
(DZEM reply). The discussion in SSI’s brief cited a portion
of SSI’s expert’s report, which set forth the function, way,
and result of the operation of DZEM’s accused products.
J.A. 1168. SSI contended that the expert’s analysis estab-
lished the basis for SSI’s claim of equivalence. Id. SSI’s
discussion of the doctrine of equivalents in its briefing and
its evidence in support of that discussion, although rela-
tively limited, was sufficient to preserve that theory of in-
fringement. Accordingly, SSI will not be precluded from
arguing on remand that DZEM’s accused sensors infringe
under the doctrine of equivalents.
C
DZEM argues that the district court erred in granting
summary judgment in favor of SSI on DZEM’s tortious in-
terference counterclaim. Specifically, DZEM argues that
SSI’s communications with DZEM’s customers are not pro-
tected under the Noerr-Pennington doctrine. Even if the
Noerr-Pennington doctrine is applicable, DZEM argues, the
“sham litigation” exception to that doctrine applies to this
case and renders SSI’s communications actionable.
When a plaintiff brings a state-law tort claim that
arises out of “a patentholder's good faith conduct in com-
munications asserting infringement of its patent and warn-
ing about potential litigation,” we have held that “federal
patent law preempts state-law tort liability.” Globetrotter
Software, Inc. v. Elan Comput. Grp., Inc., 362 F.3d 1367,
1374 (Fed. Cir. 2004). In Globetrotter, we adopted the
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standard of objective baselessness from Noerr as part of the
test for determining whether pre-litigation communica-
tions regarding patent infringement are unprotected. See
id. at 1375–77 (citing E. R. R. Presidents Conf. v. Noerr Mo-
tor Freight, Inc., 365 U.S. 127 (1961), and Pro. Real Est.
Invs., Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49(1993)). Thus, in order to assert a claim “that a patent
holder has engaged in wrongful conduct by asserting
claims of patent infringement,” the plaintiff “must estab-
lish that the claims of infringement were objectively base-
less.” Id. at 1377. Objective baselessness must be
established before the court may consider the subjective
motivations of the patentee. See id. at 1375–76 & n.8; GP
Indus., Inc. v. Eran Indus., Inc., 500 F.3d 1369, 1375 (Fed.
Cir. 2007).
The district court held that SSI’s infringement claims
were not objectively baseless, and we discern no error in
that conclusion. In particular, the district court pointed to
SSI’s expert report regarding infringement as evidence
that the suit was not objectively baseless. SSI, 559 F.
Supp. 3d at 836. We have held that the existence of an
expert opinion can be evidence that a party’s position is not
unreasonable, even if there is conflicting expert testimony
in the record. 800 Adept, Inc. v. Murex Sec., Ltd., 539 F.3d
1354, 1371 (Fed. Cir. 2008). DZEM was required to estab-
lish by clear and convincing evidence that SSI’s infringe-
ment suit was objectively baseless, but it failed to introduce
any evidence of objective baselessness. See Dominant Sem-
iconductors Sdn. Bhd. v. OSRAM GmbH, 524 F.3d 1254,
1263–64 (Fed. Cir. 2008). In view of SSI’s expert report
and DZEM’s failure to adduce evidence of objective base-
lessness, the district court properly granted summary judg-
ment that SSI’s communications to outside parties,
including those DZEM claimed to be its customers or pro-
spective customers, were protected.
DZEM separately argues that SSI’s communications to
DZEM’s foreign customers are not protected because “SSI
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could not obtain [government] action where it has no rights
to do so [i.e., no patent protection].” Cross-Appellant’s Br.
55. We disagree that those communications were not pro-
tected. Each letter sent by SSI, on its face, refers only to
alleged infringement of a United States patent. See, e.g.,
J.A. 2102–03, 2111–13. Foreign entities can infringe a
United States patent if they make, use, or sell an infringing
product in the United States, or import an infringing prod-
uct into the United States. See 35 U.S.C. § 271(a). The
argument that SSI could not obtain government action
against the foreign entities to which it sent letters is there-
fore unpersuasive.
Accordingly, we affirm the district court’s grant of sum-
mary judgment to SSI on the tortious interference counter-
claim.
D
DZEM also argues that the district court erred in dis-
missing DZEM’s invalidity counterclaims without preju-
dice in light of the court’s grant of summary judgment of
non-infringement. We review a district court’s decision to
dismiss an invalidity counterclaim without prejudice for an
abuse of discretion. Flexuspine, Inc. v. Globus Med., Inc.,
879 F.3d 1369, 1375–76 (Fed. Cir. 2018).
A district court lacks jurisdiction over a declaratory
judgment counterclaim if that claim does not present a jus-
ticiable case or controversy under Article III of the Consti-
tution. MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118,
126–27 (2007). In general, a determination of non-infringe-
ment does not moot a counterclaim of invalidity such that
there is no Article III case or controversy. Fort James Corp.
v. Solo Cup Co., 412 F.3d 1340, 1348–49 (Fed. Cir. 2005);
Korszun v. Pub. Techs. Multimedia, Inc., 96 F. App’x 699,
700 (Fed. Cir. 2004); see generally Cardinal Chem. Co. v.
Morton Int’l, Inc., 508 U.S. 83 (1993). Moreover, once the
case-or-controversy requirement has been satisfied, juris-
diction continues “absent further information.” Benitec
Case: 21-2345 Document: 65 Page: 17 Filed: 02/13/2023
SSI TECHNOLOGIES, LLC v. 17
DONGGUAN ZHENGYANG ELECTRONIC MECHANICAL LTD.
Australia, Ltd. v. Nucleonics, Inc., 495 F.3d 1340, 1344–45
(Fed. Cir. 2007) (emphasis omitted). DZEM’s invalidity
counterclaims therefore likely satisfied the case-or-contro-
versy requirement even after the district court granted
summary judgment of non-infringement.
However, even in cases in which a district court has ju-
risdiction to hear a declaratory judgment claim, the Declar-
atory Judgment Act permits the court to decline to exercise
jurisdiction over the claim as a matter of discretion. Wilton
v. Seven Falls Co., 515 U.S. 277, 286–87 (1995). Consistent
with that principle, we have repeatedly held that a district
court “faced with an invalidity counterclaim challenging a
patent that it concludes was not infringed may either hear
the claim or dismiss it without prejudice.” Liquid Dynam-
ics Corp. v. Vaughan Co., 355 F.3d 1361, 1371 (Fed. Cir.
2004); Flexuspine, 879 F.3d at 1376; Phonometrics, Inc. v.
N. Telecom Inc., 133 F.3d 1459, 1468 (Fed. Cir. 1998); Nys-
trom v. TREX Co., 339 F.3d 1347, 1351 & n.* (Fed. Cir.
2003); Benitec, 495 F.3d at 1353 & n.4 (Dyk, J., dissenting);
AstraZeneca LP v. Breath Ltd., 542 F. App’x 971, 981–82
(Fed. Cir. 2013), as amended (Dec. 12, 2013).
In this case, the district court dismissed the invalidity
counterclaims without prejudice because “[n]othing in
DZEM’s complaint or any of the parties’ briefing suggests
that DZEM faces any risk of future prosecution under ei-
ther of the patents-in-suit, so there is no need for the court
to determine whether the patents are invalid.” SSI, F.
Supp. 3d at 834–35. We discern no abuse of discretion in
the district court’s decision to dismiss the counterclaims on
that basis. See AstraZeneca, 542 F. App’x at 982 (affirming
dismissal of invalidity counterclaim in light of the district
court’s observation that “the non-infringement judgment
firmly and clearly resolves the case, and [the defendant]
has not shown how a judgment of invalidity would provide
any additional benefit” (citation omitted)).
Because we vacate the district court’s summary judg-
ment decision with respect to the ’038 patent, we also
Case: 21-2345 Document: 65 Page: 18 Filed: 02/13/2023
18 SSI TECHNOLOGIES, LLC v.
DONGGUAN ZHENGYANG ELECTRONIC MECHANICAL LTD.
vacate the dismissal of the invalidity counterclaim regard-
ing the ’038 patent. As to the ’153 patent, however, the
district court permissibly exercised its discretion in dis-
missing the invalidity counterclaims in light of the absence
of any apparent risk of future actions against DZEM. We
therefore affirm the dismissal of the invalidity counter-
claim regarding the ’153 patent.
***
In summary, we reverse the district court’s construc-
tion of the term “filter” as used in the claims of the ’038
patent and vacate the district court’s grant of summary
judgment with respect to the ’038 patent. We affirm the
district court’s grant of summary judgment with respect to
the ’153 patent and DZEM’s counterclaim for tortious in-
terference. We vacate the dismissal of the invalidity coun-
terclaim regarding the ’038 patent but affirm the dismissal
of the invalidity counterclaim regarding the ’153 patent.
No costs.
AFFIRMED-IN-PART, REVERSED-IN-PART,
VACATED-IN-PART, AND REMANDED