Case 2:20-cv-00115-JRG Document 74 Filed 05/20/22 Page 1 of 27 PageID #: 1340
`
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`MITEK SYSTEMS, INC.,
`Plaintiff-Appellant
`
`v.
`
`UNITED SERVICES AUTOMOBILE ASSOCIATION,
`Defendant-Appellee
`______________________
`
`2021-1989
`______________________
`
`Appeal from the United States District Court for the
`Eastern District of Texas in No. 2:20-cv-00115-JRG, Chief
`Judge J. Rodney Gilstrap.
`______________________
`
`Decided: May 20, 2022
`______________________
`
`BRIAN MACK, Quinn Emanuel Urquhart & Sullivan,
`LLP, San Francisco, CA, argued for plaintiff-appellant.
`Also represented by DAVID EISEMAN, IV.
`
`LISA GLASSER, Irell & Manella LLP, Newport Beach,
`CA, argued for defendant-appellee. Also represented by
`MICHAEL DAVID HARBOUR, JASON SHEASBY, Los Angeles,
`CA.
`
` ______________________
`
`Before DYK, TARANTO, and CUNNINGHAM, Circuit Judges.
`
`

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`MITEK SYSTEMS, INC. v.
`UNITED SERVICES AUTOMOBILE ASSOCIATION
`
`TARANTO, Circuit Judge.
`In November 2019, Mitek Systems, Inc. brought suit in
`the United States District Court for the Northern District
`of California against United Services Automobile Associa-
`tion (USAA). It sought a declaratory judgment, under the
`Declaratory Judgment Act, 28 U.S.C. § 2201(a), that Mitek
`and its customers have not infringed, either directly or in-
`directly, any valid and enforceable claim of USAA’s U.S.
`Patent Nos. 8,699,779, 9,336,517, 8,977,571, and 9,818,090
`(hereinafter referred to as the patents-in-suit). In re-
`sponse, USAA filed a motion making two requests. It
`sought dismissal of the complaint on the grounds that
`there was no case or controversy between USAA and Mitek
`as required by Article III of the Constitution, so the case
`should be dismissed under Federal Rule of Civil Procedure
`12(b)(1) for lack of subject-matter jurisdiction, and in any
`event, the court should exercise discretion not to hear
`Mitek’s claim for declaratory relief. In the alternative,
`USAA requested transfer of the action to the United States
`District Court for the Eastern District of Texas pursuant to
`28 U.S.C. § 1404.
`In April 2020, the California court, without ruling on
`the dismissal part of the motion, ordered the case trans-
`ferred to the Texas forum. Mitek Systems, Inc. v. United
`Services Automobile Association, No. 19-cv-07223, 2020
`WL 1922635 (N.D. Cal. Apr. 21, 2020) (Transfer Order). In
`April 2021, the Texas court dismissed for want of a case or
`controversy and stated that, even if jurisdiction existed, it
`would exercise its discretion to decline to entertain the de-
`claratory-judgment action. Order, Mitek Systems, Inc. v.
`United Services Automobile Association, No. 2:20-cv-00115
`(E.D. Tex. Apr. 28, 2021), ECF No. 69 (Dismissal Order);
`see also J.A. 11–19. On Mitek’s appeal, we vacate the
`Texas court’s dismissal and remand for further proceed-
`ings. The remand is to the Texas court because we affirm
`the California court’s transfer order.
`
`

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`MITEK SYSTEMS, INC. v.
`UNITED SERVICES AUTOMOBILE ASSOCIATION
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`3
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`I
`A
`USAA, a reciprocal inter-insurance exchange, is orga-
`nized under Texas law and has its principal place of busi-
`ness in San Antonio, Texas. USAA owns the four patents-
`in-suit, all of which address the use of a mobile device to
`capture an image of a bank check and to transmit it for de-
`posit. The related ’779 and ’517 patents describe an “align-
`ment guide . . . in the field of view of a camera associated
`with a mobile device used to capture an image of a check.”
`’779 patent, col. 1, lines 40–42; ’517 patent, col. 1, lines 51–
`53. “When the image of the check is within the alignment
`guide in the field of view, an image may be taken by the
`camera and provided from the mobile device to a financial
`institution.” ’779 patent, col. 1, lines 42–45; ’517 patent,
`col. 1, lines 53–56. Similarly, the related ’571 and ’090 pa-
`tents describe “[t]he monitoring” of an image of a check
`that is in the field of view of the camera, which “may be
`performed by the camera, the mobile device and/or finan-
`cial institution that is in communication with the mobile
`device.” ’571 patent, col. 1, lines 38–43; ’090 patent, col. 1,
`lines 51–56. “When the image of the check in the field of
`view passes monitoring criteria,” such as criteria for proper
`lighting or framing, “an image may be taken by the camera
`and provided from the mobile device to a financial institu-
`tion.” ’571 patent, col. 1, lines 43–46; id., col. 3, lines 58–
`61; ’090 patent, col. 1, lines 56–59; id., col. 4, lines 10–13.
`For the purposes of this appeal, Mitek deemed claim 1
`of the ’779 patent to be representative, which recites:
`1. A system for depositing a check, comprising:
`a mobile device having a camera, a display and a
`processor, wherein the processor is configured to:
`project an alignment guide in the display of
`the mobile device, the display of the mobile
`
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`MITEK SYSTEMS, INC. v.
`UNITED SERVICES AUTOMOBILE ASSOCIATION
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`device displaying a field of view of the cam-
`era;
`monitor an image of the check that is
`within the field of view;
`determine whether the image of the check
`aligns with the alignment guide;
`automatically capture the image of the
`check when the image of the check is deter-
`mined to align with the alignment guide;
`and
`transmit the captured image of the check
`from the camera to a depository via a com-
`munication pathway between the mobile
`device and the depository.
`’779 patent, col. 18, lines 36–51.
`B
`Mitek is a Delaware corporation and has its headquar-
`ters and principal place of business in San Diego, Califor-
`nia.1 Mitek created software for mobile check capture that
`provides “automatic image capture technology,” J.A. 494
`(Carnecchia Decl. ¶ 3) (capitalization altered), which ena-
`bles the “instant capture of quality images with a mobile or
`desktop device,” J.A. 36 (Compl. ¶ 28). It licenses the soft-
`ware, through a product it calls MiSnap™, in the form of a
`development kit to financial institutions, often indirectly
`through third-party providers of services to such
`
`
`1 We recite facts from the complaint and from addi-
`tional evidence submitted in the district court—without en-
`dorsing the assertions of fact—that play roles in the
`disposition of the motions at issue discussed later in this
`opinion.
`
`

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`MITEK SYSTEMS, INC. v.
`UNITED SERVICES AUTOMOBILE ASSOCIATION
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`institutions. J.A. 29, 36 (Compl. ¶¶ 3, 28); J.A. 494–96
`(Carnecchia Decl. ¶¶ 2–7).
`Mitek alleges that, in early 2017, USAA (through its
`attorneys at Epicenter Law, based in Burlingame, Califor-
`nia) began sending licensing letters to financial institu-
`tions, including Mitek customers. J.A. 29–30 (Compl. ¶ 8).
`After a Mitek customer, Wells Fargo Bank (headquartered
`in San Francisco), received its letter from USAA, USAA
`and Wells Fargo held discussions in May and June of 2018.
`J.A. 30 (Compl. ¶¶ 9–10). But in June 2018, USAA sued
`Wells Fargo for infringement of the patents-in-suit in the
`Eastern District of Texas. See Complaint, United Services
`Automobile Association v. Wells Fargo Bank, N.A.,
`No. 2:18-cv-00245 (E.D. Tex. June 7, 2018), ECF No. 1. In
`its First Amended Complaint against Wells Fargo, USAA
`mentioned Mitek and/or MiSnap™ at least twice. J.A. 93–
`95 (First Am. Compl. ¶¶ 29, 36). As the case progressed,
`USAA served Mitek with a subpoena pursuant to Federal
`Rules of Civil Procedure 26, 34, and 45 and obtained docu-
`ments, source code, and testimony from Mitek regarding
`the operation of MiSnap™. J.A. 633–57. The case went to
`trial on October 30, 2019, on two of the four patents-in-suit
`(the ’571 and ’090 patents), and Mitek and its product were
`frequently mentioned in the litigation of USAA’s infringe-
`ment charge. E.g., J.A. 515–17; J.A. 686; J.A. 720–23.
`On November 1, 2019, the third day of the Wells Fargo
`trial, Mitek filed a complaint against USAA in the North-
`ern District of California, seeking a declaratory judgment
`that “Mitek and its customers have not infringed, either di-
`rectly or indirectly, any valid and enforceable claim” of any
`of the patents-in-suit. J.A. 38–42 (Compl. ¶¶ 35–58,
`Prayer for Relief A–D). In the section of this declaratory-
`judgment complaint addressing jurisdiction, Mitek made a
`number of allegations.
`First, Mitek alleged that USAA “sent over 1,000 patent
`licensing demand letters to financial [institutions] across
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`MITEK SYSTEMS, INC. v.
`UNITED SERVICES AUTOMOBILE ASSOCIATION
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`the country, most of which are Mitek customers,” and that
`“[t]hese letters explained that ‘USAA has asked Epicenter
`Law to approach financial institutions to offer a license, on
`reasonable terms, as fair compensation for the continued
`use of [its] patent-protected invention.’” J.A. 29–30
`(Compl. ¶ 8) (quoting J.A. 44 (Compl. Ex. A)). According to
`Mitek, “at least some of these letters included one or more
`‘claim charts’ detailing Mitek’s customers’ infringement of
`one or more of the Patents-in-Suit as well as a ‘Patent List’
`identifying one or more of the Patents-in-Suit.” J.A. 30
`(Compl. ¶ 8) (citing J.A. 43–82 (Compl. Ex. A)). Mitek also
`alleged that “[i]n response to USAA’s massive patent en-
`forcement and letter writing campaign, Mitek has received
`demands for indemnification from its customers and sup-
`pliers pursuant to” contractual agreements with its cus-
`tomers, which include “indemnification provisions relating
`to actual or alleged patent infringement by Mitek’s tech-
`nology.” J.A. 31–32 (Compl. ¶ 13). To support these
`claims, Mitek attached one letter as an exhibit: a USAA
`licensing letter sent to Mitek customer Mission Federal
`Credit Union on January 22, 2018, which included a claim
`chart for claims of U.S. Patent No. 8,708,227 (not one of the
`patents-in-suit and from a different family), and a Patent
`List that included over 70 patents, including three of the
`four patents-in-suit. J.A. 43–82 (Compl. Ex. A). Mitek did
`not give concrete examples regarding indemnification or
`attach any documents embodying an indemnification
`agreement or a demand for indemnification from any of its
`customers.
`Second, concerning the Wells Fargo litigation, Mitek
`alleged that USAA “implicitly accused Mitek of encourag-
`ing and contributing to the infringement of each of the Pa-
`tents-in-Suit by supplying its MiSnap™ technology to
`financial institutions for incorporation within their mobile
`banking applications,” J.A. 30–31 (Compl. ¶¶ 11–12), and
`Mitek attached USAA’s First Amended Complaint against
`Wells Fargo as an exhibit, J.A. 83–131 (Compl. Ex. B).
`
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`MITEK SYSTEMS, INC. v.
`UNITED SERVICES AUTOMOBILE ASSOCIATION
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`Elaborating on the allegation, Mitek asserted that “[o]n in-
`formation and belief, in the Wells Fargo lawsuit, USAA has
`accused Wells Fargo Bank of infringing each of the Pa-
`tents-in-Suit at least in part by virtue of Wells Fargo
`Bank’s use of Mitek’s software and technology, including
`MiSnap™,” and that “USAA also alleged in the Wells Fargo
`lawsuit that the accused Mitek technology being used by
`Wells Fargo has no substantial non-infringing uses.” J.A.
`31 (Compl. ¶ 12). Mitek concluded: “Mitek therefore has a
`real and substantial apprehension of imminent litigation
`between Mitek and USAA for direct infringement, induce-
`ment, and contributory infringement of the Patents-in-
`Suit.” J.A. 31 (Compl. ¶ 12).
`Five days after Mitek filed its declaratory-judgment
`complaint in the California forum, the jury in the USAA
`case against Wells Fargo in the Texas forum rendered a
`verdict for USAA. See Jury Verdict, United Services Auto-
`mobile Association v. Wells Fargo Bank, N.A., No. 2:18-cv-
`00245 (E.D. Tex. Nov. 6, 2019), ECF No. 322. A couple of
`months later, after USAA obtained an additional verdict
`against Wells Fargo on two other patents, a news article
`commented that USAA “hailed the latest decision and sug-
`gested [that] other banks should be on alert if they use the
`same technology” as Wells Fargo. J.A. 768–70 (also stating
`“[t]hese lawsuits have repercussions for the industry, be-
`cause Mitek’s technology is used by 6,500 other institu-
`tions”).
`
`C
`On January 15, 2020, in Mitek’s declaratory-judgment
`action in California, USAA moved for dismissal under Rule
`12(b)(1) for lack of subject-matter jurisdiction, or for dis-
`missal based on the discretion granted to the district court
`by the Declaratory Judgment Act. J.A. 254–73. In the al-
`ternative, USAA sought transfer to the Eastern District of
`Texas. J.A. 273–77. In support of its motion, USAA
`
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`MITEK SYSTEMS, INC. v.
`UNITED SERVICES AUTOMOBILE ASSOCIATION
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`submitted additional evidence, including documents and
`transcripts from the Wells Fargo litigation. J.A. 278–80.
`On April 21, 2020, the California district court granted
`USAA’s motion to transfer the declaratory-judgment action
`to the Eastern District of Texas, without ruling on the mo-
`tion to dismiss. Transfer Order, 2020 WL 1922635, at *1.
`After determining that the action could have been filed in
`the Eastern District of Texas, the California district court
`analyzed whether the convenience of parties and wit-
`nesses, and the interests of justice, weighed in favor of a
`transfer. Id. at *3. The court determined that the re-
`quested transfer would “facilitate at the very least coordi-
`nation” with the Wells Fargo litigation (tried by Judge
`Gilstrap in the Eastern District of Texas), which involved
`the same patents and technology; that Mitek’s choice of fo-
`rum in the Northern District of California was entitled to
`little deference; and that witness convenience was a neu-
`tral consideration. Id. at *3–5.
`On July 15, 2020, Judge Gilstrap, having received the
`transferred case, heard argument from counsel on the mo-
`tion to dismiss. J.A. 957–1014. Eight months later, in
`March 2021, Mitek filed a supplemental brief, informing
`the court of subsequent developments and submitting ad-
`ditional evidence. J.A. 1015–19. Specifically, Mitek in-
`formed the court that, in February 2021, Wells Fargo and
`USAA had settled their dispute but that, in December
`2020, USAA had filed suit against another Mitek customer,
`PNC Bank, for infringement of two of the four patents-in-
`suit and that PNC had, through a third-party intermedi-
`ary, made an indemnity demand. J.A. 1016–17; see also
`J.A. 1035–36.
`The next month, on April 28, 2021, the district court
`granted USAA’s motion to dismiss, ruling that there was
`no case or controversy between the parties. Dismissal Or-
`der at 8. The district court viewed Mitek’s basis for subject-
`matter jurisdiction as resting on either (1) the Wells Fargo
`
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`MITEK SYSTEMS, INC. v.
`UNITED SERVICES AUTOMOBILE ASSOCIATION
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`litigation or (2) USAA’s letters to Mitek customers and in-
`demnification demands assertedly received by Mitek, but
`the court found each basis insufficient to support jurisdic-
`tion. Id. at 2–8. Alternatively, the district court noted that
`“[e]ven if the Court’s determination that subject matter ju-
`risdiction is lacking were later set aside, the Court would
`similarly and for the same reasons exercise its discretion
`and decline to exercise jurisdiction over Mitek’s declaratory
`judgment action.” Id. at 8–9.
`Mitek timely appealed. We have jurisdiction pursuant
`to 28 U.S.C. § 1295(a)(1).
`
`II
`A
`Whether the district court had subject-matter jurisdic-
`tion is a question we review de novo. Microsoft Corp. v.
`DataTern, Inc., 755 F.3d 899, 903 (Fed. Cir. 2014). But the
`evaluation is based on the particular facts (determined ac-
`cording to the procedural posture). The Supreme Court has
`recognized that its precedents “do not draw the brightest of
`lines between those declaratory-judgment actions that sat-
`isfy the case-or-controversy requirement and that do not,”
`and that, where jurisdiction is being assessed based on the
`complaint, “[b]asically, the question in each case 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.”
`MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127
`(2007) (citation omitted). That formulation—which “sum-
`marize[s]” a formulation focusing on whether the dispute
`is “definite and concrete, touching the legal relations of
`parties having adverse legal interests,” is “real and sub-
`stantial,” and “[admitting] of specific relief through a de-
`cree of a conclusive character”—indicates the importance
`of identifying the particular facts that may bear on
`
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`MITEK SYSTEMS, INC. v.
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`whether the standard is met in a given case, in light of “all
`the circumstances.” Id. (citation omitted).
`The case-or-controversy inquiry has a dual temporal fo-
`cus. First, “[a] declaratory judgment plaintiff must plead
`facts sufficient to establish jurisdiction at the time of the
`complaint, and post-complaint facts cannot create jurisdic-
`tion where none existed at the time of filing.” Microsoft,
`755 F.3d at 906; see also Matthews Int’l Corp. v. Biosafe
`Engineering, LLC, 695 F.3d 1322, 1331 (Fed. Cir. 2012);
`Innovative Therapies, Inc. v. Kinetic Concepts, Inc., 599
`F.3d 1377, 1383–84 (Fed. Cir. 2010). Second, a case or con-
`troversy must remain present throughout the course of the
`suit. See Preiser v. Newkirk, 422 U.S. 395, 401–02 (1975);
`Int’l Medical Prosthetics Research Associates, Inc. v. Gore
`Enterprise Holdings, Inc., 787 F.2d 572, 575 (Fed. Cir.
`1986).
`Different procedural routes are available to identify the
`facts underlying the case-or-controversy determination,
`and clarity about which route is used is important, in part
`because the parties should know what opportunities they
`have for establishing facts of potential significance and,
`later, because the standard of appellate review is affected
`by the route taken. Thus, when determining whether there
`was standing at the time of the filing of the action based on
`pre-complaint events, and whether standing was main-
`tained thereafter, the district court may rely on pleaded
`and undisputed facts or on findings that resolve factual dis-
`putes, reflecting the different possible treatments of a mo-
`tion to dismiss for lack of jurisdiction under Rule 12(b)(1).
`Under Fifth Circuit precedent, which we follow on a non-
`patent-specific issue such as this, a Rule 12(b)(1) motion
`sometimes calls for adjudication of factual disputes and
`sometimes does not:
`[T]he district court is to accept as true the allega-
`tions and facts set forth in the complaint. Addition-
`ally, “the district court is empowered to consider
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`MITEK SYSTEMS, INC. v.
`UNITED SERVICES AUTOMOBILE ASSOCIATION
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`11
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`matters of fact which may be in dispute.” The dis-
`trict court consequently has the power to dismiss
`for lack of subject matter jurisdiction on any one of
`three separate bases: (1) the complaint alone;
`(2) the complaint supplemented by undisputed
`facts evidenced in the record; or (3) the complaint
`supplemented by undisputed facts plus the court’s
`resolution of disputed facts.
`Choice Inc. of Texas v. Greenstein, 691 F.3d 710, 714 (5th
`Cir. 2012) (citations omitted); see also Montez v. Dep’t of the
`Navy, 392 F.3d 147, 149 (5th Cir. 2004); Robinson v.
`TCI/US West Communications Inc., 117 F.3d 900, 904 (5th
`Cir. 1997). In the specific setting of a case-or-controversy
`challenge, the Fifth Circuit has said that a challenge is
`“factual” rather than “facial” “if the defendant ‘submits af-
`fidavits, testimony, or other evidentiary materials.’” Supe-
`rior MRI Services, Inc. v. Alliance Healthcare Services, Inc.,
`778 F.3d 502, 504 (5th Cir. 2015) (citation omitted). “To
`defeat a factual attack, a plaintiff ‘must prove the existence
`of subject-matter jurisdiction by a preponderance of the ev-
`idence’ and is ‘obliged to submit facts through some eviden-
`tiary method to sustain his burden of proof.’” Id. (citation
`omitted).2
`
`
`2 The Fifth Circuit’s approach reflects the generally
`recognized facial/factual distinction in the treatment of ju-
`risdictional challenges. See, e.g., 5B C. Wright, A. Miller &
`M. Kane, Federal Practice & Procedure Civil § 1350 (3d ed.
`Apr. 2022 Update) (Wright & Miller); 5C Wright & Miller
`§ 1363; Cedars-Sinai Medical Center v. Watkins, 11 F.3d
`1573, 1583–84 (Fed. Cir. 1993); Indium Corp. of America v.
`Semi-Alloys, Inc., 781 F.2d 879, 884 (Fed. Cir. 1985).
`
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`MITEK SYSTEMS, INC. v.
`UNITED SERVICES AUTOMOBILE ASSOCIATION
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`B
`In this case, Mitek’s jurisdictional argument rests on
`two bases. Mitek builds on our recognition of certain suffi-
`cient conditions for finding a case or controversy:
`[W]here a patent holder accuses customers of direct
`infringement based on the sale or use of a supplier’s
`equipment, the supplier has standing to commence
`a declaratory judgment action if (a) the supplier is
`obligated to indemnify its customers from infringe-
`ment liability, or (b) there is a controversy between
`the patentee and the supplier as to the supplier’s
`liability for induced or contributory infringement
`based on the alleged acts of direct infringement by
`its customers.
`Arris Group, Inc. v. British Telecommunications PLC, 639
`F.3d 1368, 1375 (Fed. Cir. 2011). Reversing the order, and
`urging that it need not concede an indemnity obligation for
`customers’ demands for indemnification to suffice, Mitek
`asserted in the district court, and asserts here, that it
`meets the MedImmune standard on each of two bases:
`(a) its potential liability for infringement; and (b) the al-
`leged demands for indemnity made by many of its licensees
`after USAA sent them letters seeking to sell them licenses
`to USAA patents. Mitek Opening Br. 14–26.
`To a large extent, the parties have debated the case-or-
`controversy issue at too high a level of generality. The is-
`sues raised by Mitek’s asserted bases of jurisdiction, we
`conclude, require finer parsing of the issues and more par-
`ticularized determinations than we have before us, both
`from the parties and from the district court. Moreover, the
`district court was unclear in identifying whether it was
`treating the Rule 12(b)(1) motion as a facial challenge or as
`a factual challenge, in whole or in part, and the parties
`themselves have been unclear about this. We hold that fur-
`ther proceedings are needed in order for the case-or-contro-
`versy determination to be made and that, subject to
`
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`MITEK SYSTEMS, INC. v.
`UNITED SERVICES AUTOMOBILE ASSOCIATION
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`forfeiture determinations we leave initially to the district
`court, the proceedings should include additional fact-find-
`ing proceedings. We therefore vacate the jurisdictional dis-
`missal. We remand for further proceedings on the
`jurisdictional issue—and also, as we conclude in Part III
`infra, on the issue of discretion-based dismissal.
`1
`Mitek’s first asserted basis of a case or controversy is
`its potential liability to USAA for infringement. In arguing
`for the existence of a case or controversy on that basis, at
`least as of the time of filing of the declaratory-judgment ac-
`tion, Mitek focused on what had occurred in USAA’s suit
`against Wells Fargo. The trial in the Wells Fargo case was
`in progress at the time Mitek filed for a declaratory judg-
`ment on November 1, 2019. Though the jury rendered a
`verdict in USAA’s favor a few days later, the case was not
`resolved until more than a year later, shortly before the
`district court ruled on the motion to dismiss, which had
`been filed in January 2020 and on which the district court
`in Texas had heard argument in July 2020.
`The district court concluded that “the Wells Fargo Case
`could not have provoked in Mitek a reasonable apprehen-
`sion of suit by USAA.” Dismissal Order at 6.3 The district
`
`
`3 The Supreme Court in MedImmune rejected a gen-
`eral requirement of a reasonable apprehension of suit. 549
`U.S. at 132 n.11; see also SanDisk Corp. v. STMicroelec-
`tronics, Inc., 480 F.3d 1372, 1380 (Fed. Cir. 2007). Here,
`however, the district court’s use of that concept is directly
`responsive to Mitek’s particular theory as to whether Arti-
`cle III standing existed under the MedImmune standard.
`See also Streck, Inc. v. Research & Diagnostic Systems, Inc.,
`665 F.3d 1269, 1282 (Fed. Cir. 2012) (“[I]n the wake of
`MedImmune, ‘proving a reasonable apprehension of suit is
`one of multiple ways that a declaratory judgment plaintiff
`
`

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`14
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`MITEK SYSTEMS, INC. v.
`UNITED SERVICES AUTOMOBILE ASSOCIATION
`
`court did not determine that USAA had disclaimed any in-
`terest in suing Mitek or had made a strategic decision (e.g.,
`that all actions for infringement of the patents-in-suit
`should be against banks and other Mitek customers, not
`Mitek) that a suit against Mitek was not reasonably possi-
`ble. And we find several ways in which the reasons the
`district court did give are inadequate on the record before
`us.
`
`The court reasoned that “Mitek sitting on its hands
`during the Wells Fargo Case and neglecting to intervene is
`probative (and perhaps the best indicator) as to . . . any ac-
`tual apprehension Mitek felt with regard to litigation by
`USAA.” Id. at 4. But the court did not explain why Mitek’s
`“neglecting to intervene”—a point distinct from the simple
`fact that USAA had not (yet) sued Mitek or might even pre-
`fer to sue individual banks—has particular weight as a ba-
`sis
`for concluding that Mitek had no reasonable
`apprehension of itself being sued. Assessing the weight of
`the choice not to intervene (in USAA’s first suit on these
`patents) would require considering the legal, factual, and
`contextual factors bearing on the opportunity for interven-
`tion and the benefits of intervention in another’s suit com-
`pared to alternatives. The district court’s opinion does not
`include such an analysis of the intervention choice, and in
`the absence of such an analysis, we do not see how the de-
`cision not to intervene in the first suit on the patents counts
`materially against a finding of a reasonable apprehension
`of suit.
`The district court also reasoned that the substance of
`the evidence in the Wells Fargo case undermined Mitek’s
`assertion that it faced potential liability for infringement.
`The court explained: “The repeated testimony given during
`the Wells Fargo trial was that without significant
`
`can satisfy the more general all-the-circumstances test’ to
`establish jurisdiction.” (citation omitted)).
`
`

`

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`MITEK SYSTEMS, INC. v.
`UNITED SERVICES AUTOMOBILE ASSOCIATION
`
`15
`
`customization by Wells Fargo, the Mitek Mi-Snap product
`does not infringe the asserted patent.” Id. at 4–5. Seem-
`ingly on that basis, the court concluded that the Wells
`Fargo litigation did not contain implied accusations of in-
`fringement by Mitek and, in fact, “gave Mitek every reason
`to think that USAA does not intend to pursue any claim for
`patent infringement against Mitek.” Id. at 4.
`This reasoning is not sufficiently complete to support
`the conclusion drawn. Determining whether Mitek reason-
`ably might be liable for infringement requires “look[ing] to
`the elements of the potential cause of action” and consider-
`ing both the patent claims at issue and the alleged facts
`concerning Mitek and its customers in light of those ele-
`ments. Microsoft, 755 F.3d at 903–05. Although Mitek is
`not obligated to prove, for jurisdictional purposes, that it
`infringes the patents-in-suit (which is what it ultimately
`seeks to disprove in the case), “there must be allegations by
`the patentee or other record evidence that establish at least
`a reasonable potential that [infringement claims against
`Mitek] could be brought.” Id. at 905. This requires sepa-
`rate consideration of the separate types of infringement
`(notably, direct infringement, inducement of infringement,
`and contributory infringement) of the claims of the patents-
`in-suit, and of the bearing on any infringement of such
`claims of the fact stressed by the district court—namely,
`that bank customers customize Mitek’s software.
`The district court did not conduct an analysis at this
`level of specificity. The district court’s reference to custom-
`ization does not identify the choices that Mitek’s customers
`make and tie those choices to the coverage of a claim; con-
`sequently, the reference does not show that, without the
`customer’s choices, Mitek’s product itself is not within the
`claim coverage. And even if customization is how a Mitek
`customer comes within a claim element, the need for such
`customization does not exclude Mitek liability for induce-
`ment under 35 U.S.C. § 271(b)—if, for example, Mitek pro-
`vides manuals, along with the software, that meet the
`
`

`

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`16
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`MITEK SYSTEMS, INC. v.
`UNITED SERVICES AUTOMOBILE ASSOCIATION
`
`standard of taking an affirmative act to encourage infringe-
`ment with the knowledge that the induced acts constitute
`patent infringement. Global-Tech Appliances, Inc. v. SEB
`S.A., 563 U.S. 754, 765–66 (2011); see, e.g., J.A. 720–22 (ev-
`idence potentially relevant to inducement). Analysis of
`that possibility appears to be needed. So too of any possi-
`bility of contributory infringement if MiSnap™ is not suit-
`able for substantial non-infringing uses. 35 U.S.C.
`§ 271(c); see, e.g., J.A. 434–35, 566–67 (evidence potentially
`relevant to contributory infringement). Even direct in-
`fringement may warrant more analysis than is reflected in
`the district court’s opinion. See J.A. 31 (Compl. ¶ 12); see
`also J.A. 478.4
`The required analysis also should be clear about
`whether the Rule 12(b)(1) motion is being treated as pre-
`senting a facial or a factual challenge and whether the pre-
`conditions for treating such a motion as a factual challenge
`were met. The district court, though seeming to recognize
`that facts were placed in dispute, was less than clear about
`this distinction. Compare Dismissal Order at 2 (implying
`in legal standard section that the court was going to decide
`the motion on the complaint alone, accepting as true the
`allegations and facts set forth therein), with id. at 4–5
`(seemingly treating USAA’s moti