While sending letters into a forum is not enough for personal jurisdiction to be “fair and reasonable,” if a party “does more,” then jurisdiction may become reasonable
The alleged infringer appealed the U.S. District Court for the Northern District of California’s decision dismissing a declaratory judgment action for non-infringement against a patentee for lack of personal jurisdiction. On appeal, the Federal Circuit found it fair and reasonable for California to exercise specific personal jurisdiction over the patentee, and thus, reversed and remanded.
The Federal Circuit reviewed the district court’s personal jurisdiction determination de novo. California’s long-arm statute permits service of process to the full extent allowed by the due process clause, and thus, the inquiry was whether jurisdiction comports with due process, which is a three-factor test: (1) whether the defendant “purposefully directed” its activities at forum residents; (2) whether the claim “arises out of or relates to” the defendant’s activities in the forum; and (3) whether asserting jurisdiction is “reasonable and fair.” The first two factors were not contested and the inquiry became whether jurisdiction was “reasonable and fair,” which, in addition to the specific facts giving rise to, or relating to, the litigation also includes “other [relevant] factors” such as: (1) “the burden on the defendant;” (2) “the forum [s]tate’s interest in adjudicating the dispute;” (3) “the plaintiff’s interest in obtaining convenient and effective relief;” (4) “the interstate judicial system’s interest in obtaining the most efficient resolution of controversies;” and (5) “the shared interest of the several [s]tates in furthering fundamental substantive social policies.”
The patentee argued that “the burden on the defendant” made the exercise of jurisdiction unreasonable. The “reasonable and fair” analysis only defeats otherwise constitutional jurisdiction in “the rare situation” where the plaintiff’s and state’s interests are “clearly outweighed by the burden of subjecting the defendant to litigation within the forum.” The patentee argued that its contacts with the alleged infringer in California were “the rare situation” because sending warning letters could not satisfy the fairness prong. The Federal Circuit reasoned, however, that the patentee did more than send letters noting it also traveled to California to meet the alleged infringer, litigated often “in fora far from its home office” as a foreign entity, and previously availed itself of the California federal courts at least seven times. Accordingly, the Federal Circuit held the patentee would not be subject to undue burden and thus, was subject to personal jurisdiction in California.