Intellectual Property Law

Patentee's commercial sales not relevant for personal jurisdiction in DJ action

By McKee, Voorhees & Sease, P.L.C.

In a decision addressing personal jurisdiction in declaratory judgment actions, the Federal Circuit affirmed a district court's dismissal of an action against a foreign patent owner.  The plaintiff sought a declaration that two patents owned by a Taiwanese company were invalid and not infringed in the plaintiff's home forum, the Northern District of Alabama.  The patentee sells products covered by the patent in that district and sent a cease and desist letter to the DJ plaintiff there.

The district court dismissed the case for lack of personal jurisdiction.  Citing the Federal Circuit's Red Wing Shoe decision, the district court observed a cease and desist letter alone is insufficient to confer personal jurisdiction.  Further, the district court rejected the contention that the sales in the district subjected the patentee to general jurisdiction.

The Federal Circuit affirmed, stating explicitly that the contact relevant for specific personal jurisdiction in a declaratory judgment case are those relating "to the activities of the defendant patentee in enforcing the patent or patents in suit," making the "relevant inquiry . . . to what extent the defendant patentee has purposefully directed" its enforcement activity "at residents of the forum."  Based on this standard, the patentee's sales of goods covered by the patent are irrelevant to personal jurisdiction in the declaratory judgment context, as such sales are irrelevant to enforcement of the patent.

Here, the Federal Circuit had little trouble affirming the district court, as the only non-cease and desist contacts with the forum alleged to support jurisdiction were the patentee's sales.  While the court was concerned about the potential for foreign patentees to avoid personal jurisdiction in declaratory judgment cases, the court observed the District Court for the District of Columbia is always available under § 293. 

Judge Newman dissented, and would have held the patentee's sales and other contacts supporting the related state law claims were sufficient to confer personal jurisdiction in this case.  She also criticized the majority's reference to § 293, observing it would be unlikely the state law claims would be permitted to be adjudicated in that forum.

More detail of Avocent Huntsville Corp. v. Aten Int'l Co. after the jump.

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Full post as published by FileWrapper on May 20, 2009 (boomark / email).