First published in LES Insights

A nonpracticing entity based in New York had twice licensed its patents to companies doing business in Texas. It sent a cease-and-desist letter to a Texas company, demanding that the company take a license to its patents. The Texas company filed suit in a Texas district court, seeking a declaratory judgment of patent invalidity and noninfringement. The court, however, dismissed the case, holding that the patent owner’s letter did not create personal jurisdiction in Texas. In reaching its conclusion, the court also found that the patent owner’s other licensing activities, including granting nonexclusive licenses to two other businesses operating in the state, did not give the court personal jurisdiction over the patent owner.