MEMORANDUM AND ORDER

KAREN KLEIN, Magistrate Judge

Before the court is plaintiffs' Motion for Preliminary Injunction in which plaintiffs seek a court order preliminarily enjoining defendant from further infringing United States Patent Nos. 6, 331, 008, and D466, 832, both relating to snowmobile skis. (Doc.#10). Also before the court is plaintiffs' Motion to Exclude Post-Hearing Evidence Submission by Defendant. (Doc. #43). For the following reasons, plaintiffs' Motion for Preliminary Injunction is GRANTED. Plaintiffs' Motion to Exclude Post-Hearing Evidence Submission by Defendant is DENIED.

JURISDICTION AND VENUE

Before the court can enter into a discussion on the preliminary injunction motion raised by plaintiffs, it must first determine whether there is personal jurisdiction over defendant and whether venue is proper. This is an issue raised by defendant in its response brief. The court finds that there is personal jurisdiction, but that venue is more proper in Minnesota.

In determining whether this court has personal jurisdiction over the defendant, a nonresident, the court must ask two questions: (1) whether the applicable state long-arm statute is satisfied; and (2) whether the court's exercise of jurisdiction would violate the Due Process Clause of the Constitution. See eg. Minnesota Mining and Manufacturing Co. v. Nippon Carbide Ind. Co., Inc., 63 F.3d 694 (8th Cir. 1995). North Dakota's long-arm statute provides:

Personal Jurisdiction Based Upon Contacts. A court of this state may exercise personal jurisdiction over a person who acts directly or by an agent as to any claim for relief arising from the person's having such contact with this state that the exercise of personal jurisdiction over the person does not offend against traditional notions of justice or fair play or the due process of law, under one or more of the following circumstances:

(A) transacting any business in this state;

(B) contracting to supply or supplying service, goods, or other things in this state;

(C) committing a tort within or without this state causing injury to another person or property within this state;

(D) committing a tort within this state, causing injury to another person or property within or without this state; . . .

N.D.R.Civ.P. 4(b)(2). North Dakota has interpreted its long-arm statute to be coextensive with the limits of due process so the court must only look to whether jurisdiction offends due process. Hebron Brick Co. v. Robinson Brick Tile Co., 234 N.W.2d 250, 255-56 (N.D. 1975).

Because subject matter jurisdiction exists by way of federal question, and not diversity of parties, the due process analysis is under the Fifth Amendment, and not the Fourteenth Amendment. Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1564 (Fed. Cir. 1994). "The Supreme Court's constitutional jurisprudence of personal jurisdiction, however, includes only state and diversity cases," which are governed by the Fourteenth Amendment. Akro Corp. v. Luker, 45 F.3d 1541, 1544 (Fed. Cir. 1995). The Eighth Circuit "has nonetheless applied the [Fourteenth Amendment] `minimum contacts' standard of International Shoe and its progeny to questions of personal jurisdiction in federal question cases, such as those arising under the patent laws."Id. at 1545.

The Supreme Court stated in International Shoe Co. v. Washington, that "due process requires . . . that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice."" 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct 339, 343, 85 L.Ed. 278(1940)).

There are five factors in determining whether the requirements of International Shoe are met: (1) the nature and quality of the contacts with the forum state; (2) the quantity of the contacts with the forum state; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties. Poreter v. Berall 293 F.3d 1073, 1076 (8th Cir. 2002) (citing Land-O-Nod Co. v. Bassett Furniture Indus., 708 F.2d 1338, 1340 (8th Cir. 1983)). The last two factors, however, are not determinative, and the court "must not lose sight of `the central concern of the inquiry' which is `the relationship among the defendant, the forum, and the litigation.'" Land-O-Nod Co., 708 F.2d at 1339 (citing Shaffer v. Heitner 433 U.S. 186, 204 (1977); Scullin Steel Co. v. National Railway Utilization Corp., 676 F.2d 309, 313 (8th Cir. 1982)).

Defendant sold the allegedly infringing skis to residents in North Dakota, shipped these skis to the State of North Dakota, and advertised in national magazines and on the internet to potential customers in North Dakota, establishing the requisite minimum contacts for jurisdiction. Defendant admits to selling at least three sets of skis to residents of North Dakota. There seems to be little information and much question as to how these sales came about, where the sales initiated from, and whether there were indeed more sales than the number reported.

These three sets have come to light because they were shipped to the state. Defendant admits to regularly soliciting sales across the nation by advertising in snowmobile magazines. These magazines potentially reach North Dakota. Also, defendant has a web-site that solicits sales from across the nation, including North Dakota, as evidenced by a drop-down menu listing North Dakota as a state for winch one can choose to receive a price quote on snowmobile skis. Although a passive web-site is not sufficient to confer personal jurisdiction, defendant's web site was more than "Zippo-passive" in nature. Zippo Mfg Co. v. Zippo Dot Com. Inc., 952 F. Supp. 1119, 1124 (W.D.Pa. 1997). Defendant's web-site allows a potential customer to exchange information with a host computer, constituting a mid-spectrum activity. Multi-Tech Systems. Inc. v. VocalTec Communications, Inc., 122 F. Supp.2d 1046, 1050 (D. Minn. 2000). At the mid-spectrum the level of the exchange and the level of the interactivity must be assessed to determine personal jurisdiction.Id. Alone, the web-site is insufficient to convey personal jurisdiction. The magazine advertisements alone are also insufficient. But combined with sales of skis and shipment of those goods, these factors make exercise of personal jurisdiction appropriate.

Lastly, defendant argues that if the court finds personal jurisdiction, it should transfer venue to the District of Minnesota. In the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought for the convenience of parties and witnesses. 28 U.S.C.A. § 1404(a). This court finds that although personal jurisdiction is proper, venue is more proper in Minnesota. The parties are Minnesota residents, the witnesses are Minnesota residents, and a majority of the activity occurred in Minnesota. There is also a pending case in Minnesota that includes related parties and many of the same underlying facts.

PRELIMINARY INJUNCTION

Plaintiffs seek a court order preliminarily enjoining defendant from manufacturing, marketing, selling, importing, or otherwise promoting its ULTRA III FLEX brand snowmobile skis. At the heart of the issue is defendant's use of flanged bushings, recessed holes and a similar ornamental design to that of plaintiffs' patent designs.

A. Post-Hearing Submission

At the hearing the court queried counsel for defendant about the existence of any written opinion defendant received in advance of producing the skis as to invalidity of plaintiffs' United States Patent No. 6,331,008 (`008). Counsel did not know whether such an opinion existed and asked for leave to submit it if it did exist. The court granted this limited request.

After the hearing defendant submitted the affidavit of Richard O. Bartz, signed on January 24, 2003. Interestingly, defendant through this affidavit, for the first time, denies infringing plaintiffs' `008 Patent. Attached to Mr. Bartz's affidavit are copies of three letters he wrote in 2002 as counsel for Plastic Specialties, the company whose assets defendant purchased, including the mold from which defendant produces the alleged infringing skis. In addition to the fact that Mr. Bartz was not expressing an opinion to or on behalf of defendant in these letters, he also did not directly state or justify an opinion on either validity or infringement of plaintiffs' `008 Patent.

Mr. Bartz's affidavit does not conform to the limits the court set for defendant's post-hearing submission, and the court declines to accept this last minute submission. It opens up new issues and creates undue prejudice to plaintiffs. Defendant had an opportunity to submit such information with its pre-hearing brief but failed to do so. Plaintiffs have requested that the court exclude the post-hearing evidence submission by defendant. Although the court will permit defendant's submission to remain in the record, the court will not rely upon it, except as mentioned in the following discussion.

B. Preliminary Injunction Factors

The court must consider four factors in determining whether to grant a preliminary injunction relating to patent law: (1) reasonable likelihood of success on the merits; (2) irreparable harm; (3) balance of hardships in favor of the movant; and (4) the impact of the injunction on public interest. Hybritech Inc. v. Abbott Laboratories, 849 F.2d 1446, 1451 (Fed. Cir. 1988).

1. Reasonable Likelihood of Success on the Merits

Factor one merits much discussion: the probability the movant will succeed on the merits. Once a patent is granted by the United States Patent Office, it enjoys a statutory presumption of validity. 35 U.S.C. § 282. It is widely agreed that the burden to prove a patent invalid is a heavy burden. To overcome the presumption of validity, the defendant must present clear and convincing evidence supporting the invalidity of the patent. Apotex USA, Inc. v. Merck Co., Inc., 254 F.3d 1031, 1036 (Fed. Cir. 2001).

a. The 008 Patent

Defendant cites several facts to support its allegation that plaintiffs' `008 Patent is invalid. Defendant alleges that because the crux of the patent includes flanged bushings with recessed holes, or bores, it lacks novelty, and the use of flanged bushings in recessed bores is "obvious to a mechanical design engineer of ordinary skill and product and machine design." Defendant's Memorandum in Opposition to Motion for Preliminary Injunction, at 6. Defendant cites other patents using flanged bushings, including a wheel structure, to support the non-novelty and thus the invalidity of the patent. Although flanged bushings may not be a novel idea, the question is whether the idea was novel to one skilled in the art of snowmobile skis. Plaintiffs point out that defendant's expert is not an expert in the snowmobile industry, and has no experience in the industry. Simply because flanged bushings have been utilized in other areas of mechanical design is not determinative for snowmobile skis. Plaintiffs, in fact, cited in their application to the United States Patent and Trademark Office ("USPTO") other examples of flanged bushings. The USPTO carefully examines each request and compares the request to those patents already issued in making its determination of whether there is patentable subject matter not yet contained in prior art. The patent office issued the `008 Patent containing the flanged bushings to plaintiffs. In granting the patent the USPTO presumably made the determination that use of flanged bushings was a novel and unique idea to the art of snowmobile skis.

Defendant cites a Polaris ski that utilizes the same concept as contained in plaintiffs' patent. Defendant alleges the ski was produced in the early 1990's, and since plaintiffs' patent was not issued until much later, the patent is invalid. Evidence has shown however, that the Polaris ski in question was in fact not produced until after plaintiffs' patent application was filed.

Subsequent to the hearing, defendant has offered the affidavit of Richard O. Bartz and supporting documents as further evidence that plaintiffs' patent is invalid. Defendant adds that the actual language defendant is allegedly infringing upon is an amendment to the patent, which should not have been allowed because it added new matter to the patent application. The purported additional matter describes the holes, the bushings and their shapes. Defendant's submission after oral argument seeks to introduce new allegations that have not been fully developed in this case, and thus cannot carry considerable weight. Without further information, the court has no choice but to conclude that the USPTO fully examined the issue defendant now raises in making its determination on whether to allow the amendment.

Lastly, defendant, in the Bartz affidavit, seeks to deny it is infringing upon plaintiffs' patent. Defendant had not, until this point, denied it was infringing upon plaintiffs' `008 Patent. Defendant now asserts that it does not assemble the flanged bushings and pins on the skis it sells, and that it sells the skis without the bushings in the recessed holes, requiring the consumer to purchase the bushings, pins and nuts separately. Defendant, because of these facts, now alleges that its product does not "literally" infringe on plaintiffs' `008 Patent. Again, defendant's submission cannot be fully analyzed because of the untimeliness of its assertion. The court declines to make assumptions into issues not developed, which should have been brought forth earlier. Further, it appears that even though defendant may not assemble the bushings and pins on the skis, it manufactures the skis with apertures virtually identical to plaintiffs' patent into which flanged bushings would fit.

Defendant has the burden to prove the `008 Patent invalid. It has failed to do so. Even defendant's new information fails to present clear and convincing evidence of the invalidity of the patent. Simply because the general use of flanged bushings in recessed bores is not a new idea does not mean the use is not novel in the snowmobile industry. Defendant has produced little to persuade the court otherwise.

With the presumption of validity intact, plaintiffs allege they will prevail on the merits because the language of Claims 1 and 2 of the `008 Patent is clear and unambiguous and defendant's ski has each and every element of Claims 1 and 2 of plaintiffs' patent.

Patent infringement analysis involves a two step process: (1) the proper construction of the asserted claim, and (2) a determination as to whether the product infringes the asserted claim as properly construed.Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1581-82 (Fed. Cir. 1996) (citing Markman v. Westview Instruments. Inc., 52 F.3d 967, 976 (Fed. Cir. 1995)). Claim construction is an issue of law. Markman, 52 F.3d at 970-71. The second step, requiring a determination that every claim limitation or its equivalent be found in the defendant's device, is a question of fact. All Dental Prodx. LLC v. Advantage Dental Products, Inc., 309 F.3d 774, 778 (Fed. Cir. 2002).

Plaintiffs allege defendant is infringing upon Claims 1 and 2 of the `008 Patent. The two Claims read as follows:

[Claim] 1. A one piece base, adjustable flex ski for use on a vehicle, said ski comprising:

a molded one piece flexible elongate ski having an upper surface, a bottom surface, and a first portion and second portion extending upward from said upper surface, said first portion and said second portion are spaced apart from each other;

a first aperture within said first portion;

a second aperture within said second portion concentric with said first aperture and opposite said first aperture;

a first bushing member positioned within said first aperture;

a second bushing member position within said second aperture, wherein said bushing members receive a pin member, wherein a mount nut is secured to an end of said pin member for securing said ski to said vehicle; and

wherein said first aperture and said second aperture each have a first portion having a first diameter and a second portion having a second diameter wherein said second diameter is larger than said first diameter, and wherein said first bushing member and said second bushing member each have a first segment corresponding to said first portion and a second segment corresponding to said second portion of said apertures, wherein said second segment of said first bushing member is opposite said second segment of said second bushing member.

[Claim] 2. The one piece base ski of Claim 1, wherein said first aperture and said second aperture have a circular shape, and wherein said first bushing member and said second bushing member have an outer circular shape corresponding to said apertures. United States Patent No. 6,331,008 B2 as amended (the `008 Patent).

The language of Claim 1 and 2 is clear and unambiguous. The Claim describes a one-piece flexible ski with two portions extending upward and spaced apart, the mounting saddle. The two portions each have holes, the apertures, aligned with each other. Each aperture has two concentric portions, with the second portion having a larger diameter than the first portion. Bushings fit within each aperture and are flanged to correspond to the first and second portion of the hole. The bushings receive a pin and a mounting nut is secured to the end of the pin to attach the ski to the snowmobile. The holes and bushings are circular in shape.

A comparison of the `008 Patent with defendant's ski reveals identical products. At oral argument two skis were presented, the C A ski from plaintiffs, and the ULTRA III FLEX from defendant. The structure described in Claim 1 and 2 of the `008 Patent was present in both skis. Defendant's mounting structure exactly matched that of the plaintiffs' `008 Patent, and as shown in plaintiffs' exhibit ski.

b. The `832 Patent

Plaintiff alleges that it is likely to succeed on the merits of it patent infringement claims for Unites States Patent No. D466,832 (`832), as well. This patent involves the ornamental design for a snowmobile ski. In addition to using exactly the same mounting design, the appearance of the skis brought to oral argument was remarkable, down to the bright green color.

Without glancing at the brand name imprinted on the ski, the court could not have told them apart. The only observable difference was the preload member on the front of each ski. Defendant alleges that it was issued a patent (United States Patent No. D466,831(`831)) for the ornamental design of a snowmobile ski, and that its ski comports with the specifications of its `831 Patent. The differences in design between the two patents are as follows: the tip of the ski in plaintiffs' patent is at a greater angle than the tip illustrated in defendant's patent design, and plaintiffs' patent contains a preload member whereas defendant's does not. Defendant alleges that plaintiffs are infringing on defendant's more modern, lighter and sleeker design and not the other way around. Both patents were issued on the same day. Simply by looking at defendant's ski that was on display in the courtroom, it is apparent that it closely resembles that of plaintiffs' patented design. Defendant's ski tip slopes at a similar angle as that of plaintiffs' design, rather than the flatter model depicted in defendant's patent. And, defendant's ski contains a preload member similar to the one plaintiffs' patent depicts. The court cannot determine on the record presented which design is more modern, lighter or sleeker. It appears more likely from the evidence that defendant's product violates plaintiffs' design patent rather than vice versa.

Plaintiffs have shown a reasonable likelihood of success on the merits of their claim for patent infringement as to the `008 and `832 Patents. The court relies primarily on the `008 Patent in making its determination, but at the same time recognizes the significance of the `832 Patent. Upon inspection of the patents, as issued, plaintiffs have brought forth sufficient evidence to show that they are likely to prevail in proving their patents are being infringed upon by defendant's ULTRA III FLEX ski.

2. Irreparable Harm

"A strong showing of likelihood of success on the merits coupled with continuing infringement raises a presumption of irreparable harm to the patentee." Reebok Int'l Ltd, v. J. Baker. Inc., 32 F.3d 1552, 1556 (Fed. Cir. 1994). This rebuttable presumption shifts the burden of production onto the alleged infringer. Id.

Defendant has failed to identify any persuasive evidence to show plaintiffs' patents are invalid. Plaintiff has presented a strong case for patent infringement, and defendant continues to produce the infringing skis; therefore there is a presumption of irreparable harm to plaintiffs, the patentee.

Even with this presumption, plaintiffs argue for almost nine pages in their brief how they have and will suffer irreparable injury if the injunction does not issue. Plaintiffs cite their loss of WSA racers to defendant and defendant's attempts to acquire more, their 70% reduction in overall sales and 80% reduction in sales to snowmobile racers this year, greatly due to defendant's infringing product, and defendant's significant price undercutting, which is forcing plaintiffs to reduce their prices in order to remain marketable. Plaintiffs allege that if they must engage in a pricing war with defendant, they will likely be forced out of business, because C A is a small family-run business, whose main source of revenue deals directly with the infringed-upon patents. Plaintiffs argue that now is the time to actively market to snowmobilers for next season via the internet, trade shows, magazine advertisements, and product endorsements by professional racers through use of the company's skis on their sleds, and if the injunction does not issue, plaintiffs' relationship with their customers will be irreparably injured, their reputation in the industry will diminish, and their position in the market will be lost. Distributors are currently preparing their catalogs for next season: plaintiffs argue if defendant's ski is included in major distributor catalogs it will be impossible to stop the infringing behavior for the 2003/2004 season. Plaintiffs state that money damages could not compensate them if the injunction does not issue.

Defendant alleges plaintiffs' losses have been due to weather, plaintiffs' inferior product, poor marketing conditions, and non-compliance with racing association requirements. Defendant denies that harm will result to plaintiffs if a preliminary injunction does not issue. In fact, defendant alleges that very little will change for plaintiffs if it does issue.

Plaintiffs have demonstrated that irreparable harm will ensue if the court declines to issue the preliminary injunction, and defendant has cited nothing to persuade the court otherwise. Plaintiffs have already seen a loss in sales. Some loss could be due to weather conditions, but in snowmobile racing snow is made when it is lacking. Some loss could also be due to the poor economy. Poor weather and a poor economy, however, do not fully explain plaintiffs 80% reduction in sales to racers, and a 70% reduction in sales overall. Is stands to reason that if defendant is selling a like product at a significantly lower price, consumers will choose the less expensive product. Plaintiffs dispute that they have an inferior product, and note that their product is extremely durable and has been known in the industry for durability. Brief mention was made that plaintiffs did produce one batch of yellow skis in which the yellow coloring was improperly mixed, causing defective skis, but the problem had been fixed and also rectified with customers. Plaintiffs also deny defendant's allegation that their skis do not meet racing association standards. Plaintiffs further note that they had been experiencing extreme growth prior to defendant's infringement. Defendant cites no convincing evidence for the court to find that factors other than defendant's infringing ski have caused plaintiffs to lose sales. Lastly, distributor catalogs are an important aspect of both plaintiffs' and defendant's business. Plaintiffs estimate catalog sales constitute 80% of their business. If defendant is allowed to market its skis in these distributor catalogs, the infringing behavior will continue, and plaintiffs, because they are unable to sustain a price war with defendant, will suffer permanent loss of market.

Defendant bears the burden of rebutting the presumption of irreparable harm in this instance. It has not met its burden. Burden aside, plaintiffs have demonstrated irreparable harm will ensue if the injunction does not issue.

3. Balance of Hardships

The court must next balance the hardship to plaintiffs if no injunction is issued against the hardship to the defendant if the injunction is ordered. The scale tips in plaintiffs' favor because of the fact that it is a small family-owned business, of which 95% of its total revenues stem from the sale of snowmobile skis. Defendant has a wider range of products such as assembly services, CAD services, fabrication services, machining services, custom metal fabrication, fixture design, laser cutting, OEM contract manufacturing, project manufacturing, surface preparation and coating, and agricultural products which will assure the stability of the company. Lastly, defendant was on notice that plaintiffs held patent rights prior to defendant's acquisition of the assets of Plastic Specialties, which had been fabricating skis for plaintiffs.

4. Impact of the Injunction on Public Interest

There is a strong public interest in protecting the rights secured by patents. Smith Intl., Inc. v. Hughes Tool Co., 718 F.2d 1573, 15781 (Fed. Cir. 1983). Inventors must be allowed to reap benefits of their labor, otherwise advancement and development will cease.Id. The scale of public interest tips in favor of protecting plaintiffs' patent rights.

C. Preliminary Injunction Conclusion

After careful consideration of all four factors, the court concludes it is proper to grant the preliminary injunction. Plaintiffs have demonstrated a reasonable likelihood of success on the merits for both the `008 Patent and the `832 Patent, and have shown they will suffer irreparable harm if the court does not grant the injunction. The balance of hardship tips in plaintiffs' favor, and public interest favors protecting patent rights.

BOND

The court is inclined to require a bond in this matter. While plaintiffs' suggested bond of $10,000 seems rather small to protect the defendant, the court recognizes that defendant has recently entered into the snowmobile industry and only a small percentage of its total revenue is derived from the sale of snowmobile skis. These facts, together with plaintiffs' likelihood of success on the merits, justify a downward departure from an amount that would fully protect defendant, but $10,000 is too low to ensure "the payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained." Fed.R.Civ.Pro. 65(c). On the other hand the $500,000 bond suggested by defendant is too great. The court deems a $50,000 bond to be proper in this case.

CONCLUSION

Based on the foregoing, IT IS ORDERED:

1) Plaintiffs' Motion for Preliminary Injunction is GRANTED. (Doc. #10). Defendant is hereby preliminarily enjoined from (1) inducing infringement or contributing to the infringement of United States Patent Nos. 6,331,008, and D466,832, and (2) importing, manufacturing, selling, offering for sale or otherwise distributing in the United States the ULTRA III FLEX brand snowmobile ski, or any other snowmobile ski product that infringes upon plaintiffs' United States Patent Nos. 6,331,008, and D466,832; provided that plaintiff first give security in the sum of $50,000 for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined, such bond to be approved by the Court or by the Clerk of the Court no later than February 28, 2003.

2) Plaintiffs' Motion to Exclude Post-Hearing Evidence Submission by Defendant is formally DENIED, but the submission has limited effect. (Doc. #43).

3) This court will transfer venue of this case to the District of Minnesota, but it will first afford the parties an opportunity to attempt settlement of this case with the court's assistance. If the parties desire such assistance, they shall so advise the court by February 28, 2003. If the court receives no request by that date, the clerk of court will transfer the record to the District of Minnesota.