Posts Tagged: "personal jurisdiction"

On April 18, the United States Court of Appeals for the Federal Circuit (CAFC) reversed and remanded the U.S. District Court for the Northern District of California’s decision dismissing Apple Inc.’s complaint for declaratory judgment of noninfringement for lack of personal jurisdiction. Apple brought the complaint against patent owner Zipit Wireless, Inc. The CAFC found the district court erred in interpreting precedential cases as applying a bright-line rule that patent infringement notice letters and related communications can never form the basis for personal jurisdiction.

The Federal Circuit’s decision in In re HTC Corp., 889 F.3d 1349 (Fed. Cir. 2018), considered whether the TC Heartland decision extended to foreign defendants to afford them the protections of the special patent venue statute, 28 U.S.C. § 1400(b). By finding that no such protections existed, the Federal Circuit reaffirmed the longstanding rule that suits against foreign (alien) defendants “are wholly outside the operation of all the federal venue laws, general and special.” HTC, 889 F.3d at 1354 (citing Brunette Machine Works, Ltd. v. Kockum Industries, Inc., 406 U.S. 706, 714 (1972)). While foreign defendants can still try to persuade a district court judge to transfer a case to a new venue on the basis of the parties’ convenience, the venue laws otherwise offer no protection for foreign defendants.

The United States Court of Appeals for the Federal Circuit recently reversed a district court’s grant of motion to dismiss a declaratory judge action against Plano Encryption Technologies LLC (PET). The district court, which is situated in the Northern District of Texas, held that PET’s contacts with the Northern district did not subject it to personal jurisdiction and venue was thus improper. On appeal, the Federal Circuit reversed and remanded for further proceedings… While personal jurisdiction and venue are fact-dependent inquiries, sending patent enforcement letters to a recipient located and doing business in a forum can be enough to establish personal jurisdiction over the sending party in the forum such that venue is proper in the forum. Such a finding may be particularly true when the sending party’s “sole business is to enforce its intellectual property.”

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.

The Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office denied the Motion to Dismiss filed by the Saint Regis Mohawk Tribe. The Tribe asserted sovereign immunity and requested the IPRs be dismissed. The PTAB denies the request finding an IPR to not be an exercise of power over the Tribe… And therein lies the problem the PTAB faces. The Administrative Patent Judges routinely demonstrate an acute lack of understanding relative to very basic legal matters.

NexLearn sued Allen in district court, alleging patent infringement and breach of contract, based on a nondisclosure agreement (NDA) that allowed Allen to use a trial version of NexLearn’s software product… An interactive website that invites a sale into a forum, when no such sale has occurred, is not evidence of minimum contacts to demonstrate the defendant purposefully availed itself of the forum state. A substantial connection with a forum, not an attenuated affiliation, is required for specific personal jurisdiction.

In two recent decisions following T. C. Heartland, district courts have applied two different methodologies in resolving motions to change venue… In the first decision a trial judge in the Eastern District of Virginia denied the venue motion, filed three days after T.C. Heartland but also on the eve of trial.  Cobalt Boats, LLC v. Sea Ray Boats, Inc. (June 7, 2017)… In the second decision, a district court in the Southern District of Ohio applied the standards in § 1400(b) and transferred the action because neither of two defendants resided in the district and neither had a permanent and continuous presence in Ohio.

In New World International v. Ford Global Techs, FGTL sued New World for patent infringement in Michigan. New World countersued in Texas, seeking a declaratory judgment that FGTL’s patents are invalid and were not infringed. FGTL moved to dismiss the Texas action for lack of personal jurisdiction. New World argued that Texas had specific personal jurisdiction over the declaratory judgment action, because LKQ, FGTL’s exclusive licensee, had sent multiple cease and desist letters to New World in Texas. These letters and the exclusive license between LKQ and FGTL was alleged to be sufficient minimum contacts by FGTL with Texas. The district court disagreed and dismissed the declaratory judgment action for lack of personal jurisdiction. New World appealed, and the Court affirmed.

The current extraterritorial reach of U.S. trade secret law may seem ironic given trade secret law’s “local” roots. In the United States, common law trade secret principles emerged through a diverse patchwork of state court decisions addressing local commercial disputes. These local common law principles were first distilled in the Restatement of Torts and the Restatement of Unfair Competition and then codified in the Uniform Trade Secrets Act in 1979. Underscoring the local prerogative of trade secret law, state legislatures modified and tailored the Uniform Trade Secrets Act to reflect their state-specific concerns and needs. For many years, despite a push for national uniformity, a number of states chose not to adopt a statutory scheme at all (some still haven’t).

Non-practicing entities are especially likely to be subject to personal jurisdiction because the nature of their business involves asserting and litigating patent rights in foreign courts. This is especially true if the non-practicing entity has had other litigations in the state… Papst is a non-practicing entity engaged in the business of acquiring and asserting patent rights incorporated under the laws of Germany and having its principal place of business there. In October 2012, Papst acquired the patents-in-suit and investigated Xilinx, a Delaware corporation with headquarters in San Jose, California. Papst sent two patent-infringement notice letters to Xilinx in 2014 encouraging Xilinx to take a patent license. Three representatives from Papst traveled to California in October 2014 to meet with Xilinx to discuss Papst’s infringement allegations and Xilinx’s potential licensing.

Polar argued on appeal that the district court erred in finding that Suunto did not have sufficient contacts in Delaware. The Court agreed with Polar. The Court held that there were sufficient contacts, because there was evidence Suunto purposefully shipped at least ninety-four accused products to Delaware retailers and fully expected that its products would then be sold in Delaware. The record also showed that Suunto entered into a distribution agreement with ASWO to market and distribute its products in the United States. It was Suunto who physically fulfilled orders, packaged products, and prepared shipments intended for Delaware. Suunto did not simply leave the products on a dock in Finland. Because Suunto purposefully availed itself of the Delaware market, the Court concluded that Suunto had sufficient minimum contacts with Delaware.

The Federal Circuit held that Mylan Pharmaceuticals, Inc. (“Mylan”), a generic drug manufacturer, was subject to specific personal jurisdiction in Delaware because Mylan had filed an abbreviated new drug application (“ANDA”) and “contemplate[d] plans to engage in marketing of the proposed generic drugs” in the state.[1] The ruling affirmed two different decisions by judges in the United States District Court for the District of Delaware that Mylan was subject to specific jurisdiction in Delaware.[2] However, as noted below, it looks like Mylan intends to seek panel or en banc rehearing and possibly pursue a petition for certiorari if the Federal Circuit does not grant the rehearing or re-hears the case and continues to find personal jurisdiction.

In this issue of the Federal Circuit Review: (1) Personal Jurisdiction Remains Unchanged – Federal Circuit Declines “Stream-of-Commerce” Theory; (2) Court Denies Fee Award Under Octane But Recognizes “Troll”-Like Behavior is Relevant Consideration; (3) 35 U.S.C. § 324(e) Does Not Bar Judicial Review of Initial USPTO Determination That Patent is for a “Covered Business Method” (Versata I); and (4) 35 U.S.C. § 324(e) Bars District Court Review of USPTO Decision to Institute CBM Review (Versata II).