The U.S. Court of Appeals for the Ninth Circuit recently held that a California court had specific personal jurisdiction over a non-U.S. defendant due to a patent infringement case that the defendant had filed in that forum more than 40 years ago. Mattel, Inc. v. Greiner Hausser, Case No. 02-56292 (9th Cir., Dec. 22, 2003).
This case involved the toy giant Mattel who was initially sued by a German company Greiner & Hausser GmbH (G&H) in California in 1961. In that case, G&H alleged that Mattel had discovered the original German Barbie doll (Bild-Lilli) in Switzerland while one of its co-founders was vacationing. G&H alleged that Mattel developed a similar doll named Barbie, now possibly the most famous toy in history. The complaint in that case alleged that Mattel violated G&H’s 1960 patent for the "doll hip joint" employed in the G&H Bild-Lilli doll. After the California lawsuit had been pending for one year the parties filed a stipulation of dismissal with the district court that stated that all claims "were dismissed with prejudice." Subsequently, in 1964, Mattel and G&H entered into several agreements relating to Barbie and Bild-Lilli whereby Mattel purchased the patent rights to Bild-Lilli.
In May of 2001, G&H filed a lawsuit in Germany against Mattel alleging fraud in connection with the 1964 agreements. Mattel responded by initiating its own action for declaratory relief and injunctive relief in federal district court in California by asking the court to rule on the German matter. The district court held that it did not have personal jurisdiction over G&H and dismissed the suit. Mattel appealed.
In overturning the district court’s decision, the Ninth Circuit applied the three factors of the International Shoe analysis. The court held that the first factor, "purposeful availment," was met because when G&H filed a lawsuit against Mattel in 1961 it purposefully "availed [itself] of the privilege of conducting [its] activities in California when [they] invoked the benefits and protections afforded by California law."
The Court also found that the second factor, "relatedness" (the relationship between the claim and the forum related activities), was met under California’s "but for" test, i.e., but for the actions of G&H in the forum Mattel’s claim against G&H would not have arisen. The Court reasoned that even though G&H’s original suit occurred more than 40 years ago, G&H’s 2001 suit in Germany claiming that Mattel violated G&H’s intellectual property rights before the 1964 agreements was premised on the same claims made in the 1961 lawsuit in California. Additionally, the Court noted that if G&H is entitled to file a suit on the same issue it argued more than 40 years ago, there is no reason why that time period "should cost Mattel the ability to file its claim against G&H in California."
Turning to the third factor, "reasonableness," the Court articulated seven sub-factors applied in a balancing test to determine whether the exercise of personal jurisdiction over G&H was reasonable. Finding that four of the factors (G&H interjected itself into California by filing suit here in 1961; there was no real burden on G&H of defending in California since it had previously shown an ability to do so; the sovereignty of the United States and integrity of the federal courts in California have a stronger claim than German courts because this matter was first presented in California; and California’s interest in adjudicating the dispute is stronger because federal courts had issued an order of stipulation that was being disregarded by G&H in the German court) favored Mattel, the court determined that exercise of personal jurisdiction was reasonable.
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