Personal Jurisdiction in a Patent Declaratory Judgment Action ("PJ in a DJ")
The Federal Circuit’s recent decision in Radio Systems Corp. v. Accession, Inc., Case No. 2010-1390, 2011 U.S. App. LEXIS 8465 (Fed. Cir. April 25, 2011), found here, does not plow much new ground, but it provides a helpful primer on personal jurisdiction over a patentee in a declaratory judgment action.
In Radio Systems, the patentee (Accession) was in New Jersey, and the declaratory judgment plaintiff (Radio Systems) was in Tennessee. Over the course of three years:
- The inventor corresponded with Radio Systems by mail and email about the issuance of the patent and his desire to license his product to the plaintiff for commercialization;
- The inventor travelled to Tennessee and met with Radio Systems to demonstrate his product and show a product video;
- Accession’s counsel contacted Radio Systems’ counsel by telephone and mail. Those communications included an outline of Accession’s infringement allegations and an assertion that the interference proceedings would be warranted between Radio Systems’ patent and the Accession patent;
Based on these actions, Radio Systems brought a patent declaratory judgment action in Tennessee. The District Court dismissed the case for lack of jurisdiction, and the Federal Circuit affirmed.
In its decision, the Federal Circuit reiterated its prior holdings that an action for declaratory judgment must arise of efforts by the patentee to enforce the patent in suit, not just to commercialize the patent. The Court’s discussion of its authority in the area provides a helpful summary of the activities that do and do not create jurisdiction.
Activities that Do Not Create Jurisdiction
- Attempts to commercialize a patent by selling a product or licensing a patent are insufficient, even where the patentee travels to the forum state. Radio Systems; Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324, 1332 (Fed. Cir. 2008);
- Ordinary cease and desist notices sent to an alleged infringing party in the forum state is insufficient. Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355 (Fed. Cir. 1998);
- Entering into non-exclusive licenses with residents of the forum to sell the patented product is not enough. Red Wing Shoe at 1359;
Activities that Do Create Jurisdiction
- Hiring an attorney in the forum state who communicated with the declaratory judgment plaintiff relating to enforcement of the patent is enough. Electronics for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1351 (Fed. Cir. 2003);
- Enlisting a third party to remove to remove the accused products from a trade show is sufficient. Campbell Pet Co. v. Miale, 542 F.3d 879 (Fed. Cir. 2008);
- Entry into an exclusive license with an entity in the forum state is sufficient. Breckenridge Pharm, Inc. v. Metabolite Labs., Inc., 444 F.3d 1356, 1366-67 (Fed. Cir. 2006);
- Contracting with an exclusive distributor to sell the patented product in the forum state, where the agreement is analogous to a patent license, is sufficient. Genetic Implant Sys., Inc. v. Core Vent Corp., 123 F.3d 1455, 1458 (Fed. Cir. 1997);
- Suing another infringer on the same patent in the forum is enough. Viam Corp. v. Iowa Exp.-Imp. Trading Co., 84 F.3d 424, 430 (Fed. Cir. 1996);
- Exclusive licensing of the accused infringer’s competitor in the forum is enough. Akro Corp. v. Luker, 45 F.3d 1541, 1548-49 (Fed. Cir. 1995);
For patentees, the bottom line is that while sending a cease and desist letter to an accused infringer will create subject matter jurisdiction for a declaratory judgment action, a patentee can still control the forum for patent litigation by avoiding any other enforcement activities in the forum state.
