Plaintiff Trustees of Boston University (“BU”) brought this patent infringement suit against Everlight Electronics Co., Ltd. (“Everlight”), a Taiwanese company, and defendant Everlight Americas, Inc. (“Everlight Americas”), Everlight’s Texas-based subsidiary. Judge Saylor denied Everlight’s motion to dismiss for lack of personal jurisdiction for the reasons discussed below.
As a threshold matter, there was no dispute that the Court had personal jurisdiction over Everlight Americas. BU contended Everlight must also be subject to personal jurisdiction in the Commonwealth because Everlight and Everlight Americas should not be recognized as separate entities. The Court rejected BU’s invitation to address this contention. It noted that, in determining whether or not corporate entities should be disregarded, the Court must apply the twelve Pepsi-Cola factors. This application is necessarily a fact-intensive inquiry and, given the early stage of the litigation, the factual record was not sufficiently developed. Judge Saylor further noted that “a decision to disregard corporate separateness of defendants would have potentially substantial repercussions going well beyond the issue of jurisdiction.” As a result, the Court declined to entertain the question of whether or not Everlight and Everlight Americas should be treated as separate corporations.
The Court, nonetheless, found that it had personal jurisdiction over Everlight. It did so after an in depth discussion of the “purposeful availment” prong of the constitutional test. Judge Saylor first acknowledged the unsettled debate over whether a defendant can be subject to personal jurisdiction in a forum merely because a product that the defendant placed in the stream of commerce ultimately reached the forum state. The Court then went on to analyze Everlight’s contacts under the differing tests announced by Justice Brennan and Justice O’Connor in Asahi Metal Industry Co. v. Superior Court of California, Solamo County, 480 U.S. 102 (1987). Under both tests, Everlight was found to be subject to personal jurisdiction in Massachusetts. The facts most relevant to this finding were that Everlight directed its customers to distributors in Massachusetts, advertised in publications circulated in Massachusetts, and met with BU in Massachusetts concerning licensing. In addition, the Court found that Everlight intentionally established a distribution channel, knowing that the end of that channel was Massachusetts.
The Court also found that the relatedness and fairness prongs of the due process test were satisfied. With respect to fairness, the Court noted that it was not an unfair burden for Everlight to have to litigate in Massachusetts because the patent laws of the United States will apply in all forums. No alternative United States forum that would be more convenient for Everlight had been identified.
