Opinion
00 Civ. 7191 (HB)
February 13, 2001
MEMORANDUM OPINION ORDER
Plaintiffs A. Meyers Sons Corp. ("Meyers") and Cleaner's Supply, Inc. ("CSI") bring this patent action for a declaratory judgment of non-infringement. Defendant Clipps, Inc. ("Clipps") moves to dismiss the action for lack of personal jurisdiction, to transfer the action for improper venue or to stay the action pending resolution of a related action in the Eastern District of Missouri. For the following reasons, the defendant's motion to dismiss is granted on the grounds of personal jurisdiction.
BACKGROUND
The facts in this case are straightforward. Defendant Clipps holds a patent on a clip, the "Resilient Clip," that is used by drycleaners and others to attach clothing to hangers. Clipps is an Indiana corporation with its principal place of business in Missouri. Clipps does not sell a product but instead has entered into a licensing agreement with Laidlaw Corporation which entitles Laidlaw to manufacture the Resilient Clips and to sell them through distributors. Laidlaw's distributor' Jamaica and Syracuse sell Resilient Clips in New York.
Clipps discovered what it believes to be an infringing product when one of its shareholders received a catalog from CSI at his home/office in Missouri. Clipps responded by sending a cease and desist letter to CSI. CSI is a New York corporation with its primary offices in Conklin, New York. The clips contained in the CSI catalog were manufactured by Meyers. Meyers is a New York corporation with its principal place of business in New York City.
As the parties were unable to resolve the matter, Clipps initiated a suit for patent infringement against CSI in the Eastern District of Missouri on September 13, 2000. On September 22, 2000, Meyers and CSI initiated this action.
DISCUSSION
A. Personal Jurisdiction
Determining whether jurisdiction exists over an out-of-state defendant involves two inquiries: whether a forum state's long-arm statute permits service of process and whether assertion of personal jurisdiction violates due process. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-76(1985). As I find that jurisdiction violative of due process, I need not consider whether New York's long arm statute would convey personal jurisdiction.
To determine whether due process is satisfied, a court must consider three factors: whether the defendant purposely directed its activities at residents of the forum, whether the claim arises out of or relates to the defendant's activities with the forum, and whether assertion of personal jurisdiction is reasonable and fair. See Burger King, 471 U.S. at 471-76. In patent infringement cases, including those for a declaratory judgment, courts apply Federal Circuit law, rather than that of regional circuits, to determine due process requirements for personal jurisdiction. See Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1358 (Fed. Cir. 1998).
The Federal Circuit caselaw is clear that sending infringement letters to a party in the forum state is, without more, an insufficient ground on which to base personal jurisdiction. See Akro Corp. v. Luker, 45 F.3d 1541, 1543 (Fed. Cir. 1995). Plaintiff does not dispute this principal but argues that this Court has personal jurisdiction over the defendant as a result of the sales of the Resilient Clips in New York. In support of its argument, plaintiffs rely on Genetic Implant Systems, Inc. v. Core-Vent Corp., 123 F.3d 1455 (Fed. Cir. 1997), where the plaintiff was also seeking a declaratory judgment of non-infringment, and the defendant moved to dismiss for lack of personal jurisdiction. There, the court held that it did have personal jurisdiction over the defendant as the defendant had reached out to the forum state by "engag[ing] in a program to develop a market in Washington, including founding teaching centers in Seattle staffed by local periodontists, developing Washington customer lists through the teaching centers, and advertising in publications distributed to potential Washington customers." Id at 1458. The court also stated that "most significant, since 1991, [plaintiffs] have contracted with [a distributor] to sell [defendant's] patented products in Washington." Id The court noted that the plaintiffs distributor had two sales representatives in Washington and had sold a substantial dollar amount of the defendant's patented products. Id.
Although the court in Genetic considered the defendant's relationship with its distributors to be a significant factor in its personal jurisdiction analysis, that case is not determinative here. While the defendant in Genetic used a distributor, the court made clear that the defendant was actively involved in the sales of its product in the forum state from manufacturing to advertising to setting up teaching centers. In sharp contrast, here Clipps is not involved in any aspect of the sale of the Resilient Clip and had insufficient contact with New York to warrant personal jurisdiction.
A case decided by the Federal Circuit only a year after Generic supports this conclusion. In Red Wing Shoe Company, Inc. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355 (2d Cir. 1998), as in Genetic, the plaintiff had brought an action for a declaratory judgment for noninfringement, and the defendant moved to dismiss for a lack of personal jurisdiction. The main issue was, as here, whether the sales of the patented product by defendant's licensee were sufficient to confer personal jurisdiction. The court concluded that they were not, stating that,
In simple terms, doing business with a company that does business in Minnesota is not the same as doing business in Minnesota. Indeed, as stated above, the Supreme Court has made clear that contacts resulting from the "unilateral activity of another party or third person" are not attributable to a defendant.Id. Unlike the defendant in Genetic, the defendant in Red Wing had no other contact with the forum state of Minnesota beyond its relationship with its licensee. The defendant merely licensed his product to a licensee that manufactured the patented product and then sold it in Minnesota, among other places. For that reason, the holding in Red Wing is controlling here. In fact, these facts present an easier question since Clipps is an additional step removed from New York as Laidlaw itself does not sell here but merely contracts with distributors that do. Plaintiffs do not even allege that Clipps has any contact with New York distributors.
Therefore, based on the holding in Red Wing, it is clear that this Court does not have personal jurisdiction over Clipps.
CONCLUSION
As I find that the Court does not have personal jurisdiction in this matter, this lawsuit is dismissed. and the clerk is instructed to close the case.