CAFC Reverses WDWA Decision on Personal Jurisdiction

In Campbell Pet Co. v. Maile, the Federal Circuit reversed an order finding personal jurisdiction lacking over an out-of-state defendant who had attended a trade show in Seattle and made verbal threats of patent infringement litigation. This decision reverses Judge Leighton's decision finding personal jurisdiction absent under Federal Circuit law (see my previous post on this decision here, where my description of the district court's order is rather prescient).

Here is some good coverage of the decision from the PLI patent law blog:

In June 2007, Ms. Miale (hereinafter "defendant") attended a three-day convention in Seattle, Washington, sponsored by the American College of Veterinary Internal Medicine. During that convention, the defendant demonstrated her products and offered them for sale. In the course of the convention, she took two orders for tables from residents of Virginia and New York, for a total purchase price of $9,400. Plaintiff Campbell also had a display at the convention featuring its products. In the course of the convention, the defendant and her mother confronted several of Campbell’s employees who were attending the convention and accused them of infringing the Miale patents.
In the month following the convention, Ty-Lift sent a letter to Campbell claiming that Campbell’s mobile folding stretcher infringed the Miale patents. Shortly thereafter, Campbell filed suit in the United States District Court for the Western District of Washington seeking a declaration of noninfringement and invalidity with respect to the Miale patents. In response, Ty-Lift moved to dismiss the complaint for lack of personal jurisdiction. The district court did granted the motion to dismiss, deciding that the level of contact between the defendants and the forum state was not sufficiently “substantial” and “continuous and systematic” to justify the exercise of general jurisdiction.
The Federal Circuit agreed that the district court was clearly correct in ruling that it did not have general jurisdiction over the defendants, but did not agree that there should be no specific jurisdiction. Specifically, in order to determine whether specific jurisdiction exists the court must determine whether the defendant has purposefully established minimum contacts with the forum state: (1) whether the defendant “has purposefully directed his activities at residents of the forum”; and (2) whether “the litigation results from alleged injuries that arise out of or relate to those activities.” When considering these inquiries the district court characterized the defendants actions at the June 2007 convention as constituting nothing more than attempts to inform Campbell of suspected infringement. This determination is what the Federal Circuit took issue with and ultimately disagreed with.
Employees’ affidavits asserted that the defendant did more at the trade show than simply inform Campbell that its animal stretchers might infringe her patents. The affidavits state that the defendant attempted to have plaintiff’s allegedly infringing products removed from the convention and that she told the plaintiff's customers that the products being sold were infringing. The Federal Circuit noted that it is critically important to the issue of personal jurisdiction that the defendant's patent rants were targeted at injuring the plaintiff's business in Washington and, therefore, could fairly be characterized as attempts to limit competition at the Seattle convention. Those efforts go beyond simply informing the accused infringer of the patentee’s allegations of infringement and open the defendant up to suit in Washington.

Judge Leighton Dismisses Patent Case for Lack of Personal Jurisdiction

I'm beginning to wonder whether specific personal jurisdiction in the Western District of Washington can ever exist over an out of state defendant in a patent case. Perhaps it's too early to call this a "trend," but Judge Leighton's recent decision (November 2, 2007) dismissing a DJ complaint under Rule 12(b)(2), The Campbell Pet Co. v. Theresa Miale, (C07-5375 RBL) follows closely after a similar ruling by Judge Zilly in October, High Maintenance Bitch v. Uptown Dog Club, Inc. (C07-0888 TSZ).

In both cases, Defendants sold products within this judicial district, and both operated interactive web sites where people from Washington could purchase those products. The Campbell Pet Co. case involved a complaint for declaratory judgment that US Pat. Nos. 6,199,508 and 6,230,622 were invalid and not infringed by Campbell's sale of certain mobile folding stretchers for transporting injured animals. The accused products in Campbell Pet Co. were all made and sold in Vancouver, Washington. Further, over 40 people were employed by Campbell in Washington. No doubt these people were selling items in Washington accused of infringing both patents in suit. The existence of a reasonable apprehension of suit concerning these items was apparently not challenged by the Defendants, i.e., they did not deny the fact that they had accused a Washington company of infringement, and that these accusations placed a cloud of infringement over the products made and sold by Plaintiff's 40 Vancouver-based employees. Indeed, some of the accusations giving rise to DJ subject matter jurisdiction were carried out by the Defendants in person at a trade show in Seattle. Apparently threats of infringement were made directly to the plaintiffs, and then again to the trade show's organizer. Again, all of this happened in Seattle.

In dismissing the complaint for lack of personal jurisdiction, Judge Leighton's opinion focuses on the complaint's challenge to the validity of the patents, and reasons that the "sporadic sales and marketing of [Defendant's] products in the State of Washington has no nexus with the validity of the patents at issue." Of course, focusing on the sales of Defendants into Washington may be only tangentially relevant to the personal jurisdiction inquiry where the claims arise under the Declaratory judgment Statute. When claims are in the nature of declaratory judgment, the suit "arises from" or is most related to the threat of infringement. Defendant's sale of products into Washington should be of lesser importance to determine whether the exercise of jurisdiction over Defendants comports with due process. The transaction giving rise to the complaint most certainly occurred in Washington, and this should have been given some weight by the Court in my view.

complaintcampbellpetco.pdf
OrderDismissCampbellPet.pdf

Judge Zilly Dismisses "Dog" of a Patent Case

Plaintiff, High Maintenance Bitch, a local maker of dog accessories, sued a Texas defendant, Uptown Dog, Inc. for infringement of a number of design patents. A small operation by any measure, Uptown was run by the company's co-founder out of her home. Defendant Uptown had made only one isolated sale into the sate of Washington over the last three years through its interactive web site. On this basis, Uptown sought dismissal of the complaint for lack of personal jurisdiction. Despite Uptown's interactive web site and the existence of at least one sale into the state of Washington, Judge Zilly dismissed the complaint, calling Plaintiff's allegations of jurisdiction "frivolous" and granting Uptown its attorney's fees. Read the opinion here by clicking the following link. hmb%20order.pdf