Personal Jurisdiction is Not Established by Prior Lawsuit or Sending Infringement Notice Letters

A patentee does not subject itself to personal jurisdiction in a state by either (1) filing a lawsuit in another state seeking nationwide injunction, or (2) sending infringement notice letters into the state, without also traveling to the state to discuss the alleged infringement.

The Federal Circuit recently affirmed the District Court for the Eastern District of Tennessee’s dismissal of a declaratory judgment action based on a finding of lack of personal jurisdiction over the defendant. The Federal Circuit held that a defendant’s request for an injunction in a different forum, which may extend into the present forum if granted, does not satisfy the “minimum contacts” prong of the test for personal jurisdiction. The Federal Circuit also made a distinction between (1) merely sending infringement notice letters into a forum and (2) sending a letter andtravelingto the forum state to discuss the alleged infringement. The Court held that letters alone do not satisfy the “minimum contacts” prong of the test. Maxchief Investments Limited v. Wok & Pan, Ind. Inc., No. 18-1121, 2018 U.S. App. LEXIS 33437 (Fed. Cir. Nov. 29, 2018) (Before Dyk, Reyna, and Hughes, Circuit Judges) (Opinion for the Court, Dyk, Circuit Judge).

Plaintiff-Appellant Maxchief Investments Limited (“Maxchief”) manufactures plastic folding tables. Its principal place of business is in China, but the company distributes products through Meco Corporation (“Meco”), a Tennessee company. Meco, in turn, sells the tables to retailers such as Staples and The Coleman Company.

Wok & Pan, Ind., Inc. (“Wok”) competes with Maxchief in the plastic folding table industry. Wok, also headquartered in China, is the owner of four patents directed to folding tables. In February 2015, Wok filed suit in the Central District of California against Staples alleging infringement of its patents by selling tables manufactured by Maxchief. Staples, in turn, requested indemnity by Meco, and Meco requested indemnity by Maxchief.

On September 2, 2016, Maxchief filed the present case in the Eastern District of Tennessee, seeking a declaration of non-infringement or invalidity. Wok moved to dismiss the claims for lack of personal jurisdiction, which the district court granted. The district court held that Maxchief failed to allege Wok had sufficient minimum contacts with Tennesseebecause although Wok sought to enforce its patents in California, it did not seek to enforce its patents in Tennessee. Maxchief subsequently appealed the ruling.

[[Advertisement]]

Maxchief argued the district court had proper personal jurisdiction for two reasons. First, Maxchief argued that the California case created sufficient contacts in Tennessee because Wok sought a broad injunction against “all those in active concert” with Staples, including its “distributors,” which would include Meco, a Tennessee company. To Maxchief, the possibility of responding to an injunction in Tennessee by altering its activities in the state satisfied the “minimum contacts” prong of the test for personal jurisdiction.

The Federal Court dismissed this argument by citing Walden v. Fioreand distinguishing Calder v. Jones. The Court held that the lawsuit in California was not “expressly aimed” at conduct in Tennessee; rather, it was directed at actions taken by Staples, a California resident, in California. The court held that, like in Walden, the lawsuit in California did not create sufficient contacts with Tennessee merely because Wok knew Staples had a connection to a Tennessee distributor.

Second, Maxchief argued that “Wok created minimum contacts related to patent enforcement by sending an infringement notice letter to Maxchief’s lawyer in Tennessee.” The letter alleged infringement not by Staples or Meco, but by Coleman, a Kansas company. Maxchief had support for this argument in Xilinx v. Papst Licensing GmbH & Co, 848 F.3d 1346 (Fed. Cir. 2017), where the Federal Circuit held that personal jurisdiction exists over a declaratory judgment action when a patentee sends notice letters to and visits the plaintiff in the forum state.

The Federal Circuit rejected the argument on two grounds. First, even if the notice letter constituted a proper minimum contact, the letter alleged infringement by Coleman, a Kansas company. The letter would, therefore, constitute a contactwith Kansas and not Tennessee. Second, the Court held that “merely sending notice letters of patent infringement does not satisfy the ‘fair play and substantial justice’ prong of the personal jurisdiction inquiry, because principles of fair play ‘afford a patentee sufficient latitude to inform others of its patent rights without subjecting itself to jurisdiction in a foreign forum.’” (citing Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355 (Fed. Cir. 1998). Therefore, the Federal Circuit distinguished (1) only sending infringement notice letters and (2) sending notice letters andtravelingto the forum state to discuss the infringement with the plaintiff.

The Court also discussed a state tortious interference claim in its decision. The Court proceeded to affirm the district court’s dismissal of the declaratory judgment claim of non-infringement or invalidity, holding that Wok lacked sufficient contacts with the forum state of Tennessee for personal jurisdiction.

The Author

Robert Schaffer

Robert Schaffer is an intellectual property partner at Troutman Sanders. Bob applies more than 30 years of experience to IP counseling and litigation. His work includes patent procurement, strategic planning and transactional advice, due diligence investigations, district court patent cases, and Federal Circuit appeals. He regularly handles complex and high-profile domestic and international patent portfolios, intellectual property agreements and licensing, IP evaluations for collaborations, mergers, and acquisitions. In disputed court cases Bob’s work includes representing and counseling client in ANDA litigations, complex patent infringement cases and appeals, and multidistrict and international cases. In disputed Patent Office matters his work includes representing and counseling clients in interferences, reexaminations, reissues, post-grant proceedings, and in European Oppositions. For more information and to contact Bob please visit his profile page at the Troutman Sanders website.

Robert Schaffer

Joseph Robinson has over 20 years of experience in all aspects of intellectual property law. He focuses his practice in the pharmaceutical, life sciences, biotechnology, and medical device fields. His practice encompasses litigation, including Hatch-Waxman litigation; licensing; counseling; due diligence; and patent and trademark prosecution. He has served as litigation counsel in a variety of patent and trademark disputes in many different jurisdictions, and has also served as appellate counsel before the Court of Appeals for the Federal Circuit. Joe also focuses on complex inter partes matters before the U.S Patent and Trademark Office, inventorship disputes, reexaminations and reissues. His experience includes numerous interferences, a particular advantage in new U.S. Patent and Trademark Office post-grant proceedings. He also counsels on patent–related U.S. Food and Drug Administration issues, including citizen petitions, Orange Book listing, and trademark issues. For more information and to contact Joe please visit his profile page at the Troutman Sanders website.

Robert Schaffer

Dustin Weeks is an associate in the intellectual property practice group at Troutman Sanders. His practice spans all areas of intellectual property law, including patent prosecution, patent litigation (including Hatch-Waxman litigation), and client counseling. He represents clients ranging from start-ups and solo inventors to Fortune 500 companies. Dustin works closely with his clients to learn their business objectives so that he can tailor strategies to procure, protect, and enforce their intellectual property. Dustin specializes in post-grant proceedings (e.g. Inter Partes Reviews) before the Patent Trial and Appeal Board (PTAB) where he has extensive experience representing both patent owners and petitioners across a wide range of technologies, including wireless networking, pharmaceuticals, MEMs devices, medical devices, and electro-mechanical consumer devices. Dustin's broad experience in patent prosecution, counseling, and patent litigation uniquely positions him to navigate the blended practice of post-grant proceedings.

For more information or to contact Dustin, please visit his Firm Profile Page.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently No Comments comments. Join the discussion.

Post a Comment

Respectfully add to the discussion.

Name *
Email *
Website

Our website uses cookies to provide you with a better experience. Read our privacy policy for more information.Accept and Close