The US Court of Appeals for the Federal Circuit affirmed a district court’s dismissal of a declaratory judgment action, explaining that declaratory judgment jurisdiction does not “arise merely on the basis that a party learns of the existence of a patent owned by another or even perceives such a patent to pose a risk of infringement, without some affirmative act by the patentee.” Mitek Sys., Inc. v. United Servs. Auto. Ass’n, Case No. 23-1687 (Fed. Cir. June 12, 2025) (Taranto, Schall, Chen, JJ.)

Mitek develops a mobile image capture software development kit called MiSnap. United Services Automobile Association (USAA) sent letters to and filed infringement claims against several of Mitek’s bank customers. Mitek sought a declaratory judgment that it and its customers did not infringe four USAA patents related to mobile check deposits, arguing that it had standing based on a reasonable apprehension of suit and indemnity demands from its customers. The district court dismissed the declaratory judgment action, which Mitek appealed. The Federal Circuit vacated and remanded the district court’s dismissal, finding that the decision lacked adequate explanation and support.

On remand, the district court again analyzed Mitek’s two jurisdictional bases for its declaratory judgment action: potential liability for infringement and alleged demands for indemnity made by licensees after USAA sent letters seeking to license USAA patents. The district court again dismissed the case, determining that Mitek could not establish a case or controversy between USAA and Mitek as to infringement, and determining that indemnification agreements and USAA’s letters to Mitek customers did not create a reasonable potential for Mitek’s indemnification liability. Even if it had jurisdiction, the district court stated that it would exercise its discretion to decline jurisdiction, because the best means by which Mitek could defend the MiSnap software used by the banks was to intervene in a future litigation brought by USAA against a Mitek customer regarding the asserted patents. Mitek again appealed.

The threshold question for declaratory judgment jurisdiction is “whether 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 to warrant the issuance of a declaratory judgment.”

Regarding Mitek’s infringement basis, the Federal Circuit found that Mitek did not establish a reasonable potential of the suit for infringement. The Court’s consideration also included post-filing events, including settlements of related customer suits and Patent & Trial Appeal Board decisions invalidating asserted patent claims. These developments further undermined any ongoing controversy. The Court then addressed the allegations of direct infringement, induced infringement, and contributory infringement:

• Direct Infringement. Mitek admitted that MiSnap alone did not perform all elements of any asserted claim. USAA also never accused MiSnap of satisfying every limitation of an asserted claim. Instead, MiSnap’s “unadulterated” software implemented by third-party banks failed to meet certain elements of the asserted claims. And although Mitek stated that it evaluated the complete mobile deposit system, Mitek could not have had a reasonable apprehension of suit based on testing its [...]
  
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