The World in U.S. Courts: Fall 2015 - Personal Jurisdiction/Forum Non Conveniens
Plaintiff corporations, designers and manufacturers of a type of semiconductor, sought declaratory judgments from the U.S. District Court for the Northern District of California that their products did not infringe certain patents held by the Defendant, a German corporation specializing solely in the monetization and licensing of intellectual property rights. The Defendant moved to dismiss the Plaintiffs' suit for lack of personal jurisdiction.
The Court observed that personal jurisdiction over Papst was to be determined first with regard to the scope of jurisdiction under California law, and then was to be measured against the Due Process Clause U.S. Constitution. The Court noted, however, that California asserted jurisdiction to the full extent of the Due Process clause, and so only a single inquiry need be made.
The Court quickly disposed of the plaintiffs' claim of general personal jurisdiction over Papst, finding that the requirement of the U.S. Supreme Court's Daimler decision that general jurisdiction could ordinarily be asserted against a non-U.S. corporation only where the corporation could be considered "at home" could not be satisfied. While a closer question, the Court also found insufficient contacts to support specific personal jurisdiction. Applying Federal Circuit law because this is a patent case, the Court first noted that in declaratory judgment actions for non-infringement, such as the one presented here, only activities related to the "enforcement" of the patent or the "defense of the validity" of the patents-in-suit are relevant to the jurisdictional determination. In other words, evidence of activities such as a defendant's "manufacturing, use, offer for sale, or sale of goods" in the State would not bear on the specific jurisdiction analysis. By contrast, actions such as "initiating judicial or extra-judicial patent enforcement within the forum, or entering into an exclusive license agreement or other undertaking which imposes enforcement obligations with a party residing or regularly doing business in the forum," would be relevant.
The Court considered a large number of potential factual bases for specific jurisdiction, but rejected them all. Thus, Papst's cease-and-desist letters to Plaintiffs were found insufficient to create personal jurisdiction. So, too, were Papst's meetings with Plaintiffs in California (which were merely part of an attempt to license the patents), its maintenance of a "license targets" list; its retention of California patent counsel, who only made three maintenance fee payments over a twenty year term; and its hiring of a Texas attorney to undertake extrajudicial patent enforcement activities. The Court also rejected as unsubstantiated Plaintiff's claims that Defendant had threatened their customers.
Finding no basis for the assertion of general or specific jurisdiction over Papst, the Court dismissed the case.