By David Wille

BAKER & BOTTS, L.L.P.
Dallas, Texas

Part I. General Background

 A. State Long-Arm Statutes
B. Minimum Contacts Test
C. Transient Jurisdiction

How to Establish Personal Jurisdiction in an IP Case

 For the past fifty years, the requirements for personal jurisdiction, at least at a general level, have been fairly constant. Despite this consistency, defendants often make unsuccessful personal jurisdiction challenges and plaintiffs often file cases in places where jurisdiction is questionable. Such behavior indicates both the tactical importance of the venue of a case and the difficulty in apply personal jurisdiction rules. Parties apparently perceive both the characteristics of the court in which the case is tried and the characteristics of the community where the case is tried as potentially important factors in case outcome. In addition, parties cannot easily determine whether or not jurisdiction is proper in a particular forum.

Perhaps defendants contest personal jurisdiction with some frequency in intellectual property (IP) cases because such cases often involve parties from different states and/or different countries. Given the choice, most parties would prefer to litigate in their home state or, for strategic reasons, in some other forum. With wide disparities in the amount of time that it takes to reach trial in federal district courts, parties may challenge personal jurisdiction in an attempt to either speed the case up or slow it down by obtaining a dismissal that requires the case to be filed in a different district. Local bias in favor of the plaintiff or against the defendant may also prompt a defendant to challenge personal jurisdiction. Some defendants may also believe that they can avoid suit altogether by obtaining a dismissal for lack of personal jurisdiction because the plaintiff will not expend the effort to file suit in another state or, more commonly, in another country. Some of these same considerations may cause plaintiffs to file a case in a venue where personal jurisdiction over one or more defendants is questionable. Whatever their reasons, litigants often view the location of an IP case as important and personal jurisdiction is an important determinant of that location.

Although strategic considerations may stimulate the behavior of plaintiffs and defendants, uncertainty in jurisdictional doctrine plays a role in the frequency of jurisdictional challenges. Personal jurisdiction doctrine, although based on a few consistent tests, produces inconsistent outcomes in similar cases. Because the Supreme Court has not clearly delineated the policy justifications for limits on personal jurisdiction, courts struggle in difficult cases to reach the correct outcome. With no policy considerations with which to analyze the issue, cases close to the line fall on one side of the line or the other in large measure due to the discretion of particular judges. Because different judges will exercise their discretion differently, personal jurisdiction cases with identical or nearly identical facts will often be decided differently. IP cases frequently produce inconsistent outcomes, leading to increased strategic behavior by defendants and plaintiffs. If jurisdictional rules were absolutely certain (perhaps an unrealistic goal), then plaintiffs would be highly unlikely to file cases where no jurisdiction existed because defendants would be unlikely to waive their objections to personal jurisdiction. Similarly, defendants would rarely challenge personal jurisdiction in cases where jurisdiction was proper because such challenges would be fruitless and would subject defendants to potential sanctions. Thus, uncertainty in existing rules increases the frequency of strategic behavior.

Because jurisdictional rules will not become clear overnight and the venue of a case will remain important, strategic behavior by IP litigants in the context of personal jurisdiction is likely to continue in the future. This paper discusses some of the common problems encountered in obtaining personal jurisdiction over defendants in IP cases. Because the topic of the paper is how to obtain personal jurisdiction in an IP case, the paper provides more details about what plaintiffs can do to obtain jurisdiction than about what defendants can do to avoid jurisdiction. In addition to discussing existing case law, I provide some brief views on what I consider to be the proper resolution of some controversial jurisidictional issues that commonly arise in IP cases. Such resolution may increase certainty as to the outcome of personal jurisdiction issues, and, consequently, decrease litigation over those issues.

I. General Background

 Personal jurisdiction requirements are no different in IP cases than in any other type of case. Courts must follow traditional personal jurisdiction doctrine. The requirements for personal jurisdiction will be familiar to most: (1) a statute (frequently referred to as a long-arm statute) or rule must authorize service of process,(see endnote 1) and (2) the defendant must have "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" (see endnote 2) This Part will briefly summarize each of these requirements and summarize the law of transient jurisdiction.

A. State Long-Arm Statutes

 The first issue to address when considering a defendant's amenability to personal jurisdiction is whether service of process is authorized by a statute or rule. With one limited exception, (see endnote 3) Congress has not provided a statute authorizing personal jurisdiction in suits for patent infringement, copyright infringement, or trademark infringement. In the absence of such a statute, the Federal Rules of Civil Procedure, until recently, required that a federal district court apply the jurisdictional statute or rule for the state in which the court sits (see endnote 4). This rule still applies in the majority of cases. However, Rule 4 of the Federal Rules of Civil Procedure, as amended in 1993, now allows a federal court to exercise personal jurisdiction in federal question cases where it is constitutional for the United States to do so, but where the defendant would not be subject to the jurisdiction of the courts of any particular state (see endnote 5).

This change was made in response to the Supreme Court's decision in Omni Capital Intl. v. Rudolf Wolff & Co.,(see endnote 6) where the Court observed that a district court could not exercise jurisdiction over a defendant even if jurisdiction was constitutional where no statute or rule allowed for the exercise of jurisdiction (see endnote 7). In many states, the new rule is arguably irrelevant because they have either passed a long arm statute that extends to the limits of the due process clause or have interpreted an existing long arm statute in that manner (see endnote 8). Still, cases could arise where a court believes that a defendant does not have minimum contacts with any particular state, but has sufficient contacts with the United States to make jurisdiction constitutional. In such cases, the new rule would allow jurisdiction. For limited cases, then, the Federal Rules of Civil Procedure now embrace a national contacts theory.

In considering personal jurisdiction in most cases, the plaintiff should first consider whether the long arm statute (or rule) for the forum of choice has an applicable provision sufficient to obtain jurisdiction. In most infringement cases, this requirement will be a mere formality. If the state long arm statute does not extend to the limits of due process, then the long arm statute will likely have a provision relating to tortious acts and/or tortious injury. Because infringement suits involve torts, these long arm provisions are applicable and may be used to obtain jurisdiction. In addition, many long arm statutes have potentially applicable provisions asserting jurisdiction over any party doing business within the state. Thus, although state long arm statutes should not be ignored, rarely, if ever, will a state long arm statute present a barrier to jurisdiction in an infringement case (see endnote 9). Declaratory judgment cases are another story, as discussed below.

B. Minimum Contacts Test

 As a matter of due process, a court may not exercise personal jurisdiction over a defendant unless that defendant has "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" (see endnote 10) Although the minimum contacts test sounds reasonable in theory, the nebulous standard is difficult to apply in practice. Modern manifestations of the minimum contacts test focus on seemingly unrelated factors that have been applied inconsistently by the Supreme Court. Although one can certainly question whether any summary of current law accurately describes that law, a few general factors stand out in the case law (see endnote 11). Unfortunately, the Court has not established a firm theoretical basis for these principles.

A defendant cannot be subjected to jurisdiction in a state in which he has no contacts (see endnote 12). When a defendant does have contacts, the Supreme Court requires those contacts to have been the result of an act by the defendant. There must be some act by which the defendant purposefully avails itself of the benefits and protections of a state's laws (see endnote 13). Purposeful availment appears to be required because defendants should be able to structure their conduct with some assurance "as to where that conduct will and will not render them liable to suit." (see endnote 14). However, purposeful contacts need not be physical ones. Communications with a resident of a state may be sufficient to create jurisdiction (see endnote 15). With increasing IP litigation concerning the Internet, this rule will become increasingly important. Even if the defendant has purposeful contacts with a state, however, the exercise of jurisdiction still must be fair (see endnote 16). To decide whether jurisdiction is fair, a court should balance the burden on the defendant, the forum state's interest in adjudicating the dispute, the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and the shared interest of the several states in furthering substantive policies (see endnote 17).

The Supreme Court has distinguished between specific jurisdiction and general jurisdiction (see endnote 18). In cases of general jurisdiction, the court seeks to determine whether the defendant has so many contacts with the jurisdiction that the defendant should be treated as a resident of the state, always subject to jurisdiction no matter what the facts of the case. This Paper addresses specific jurisdiction in IP cases. General jurisdiction is not discussed as it will involve many issues unrelated to intellectual property law. To obtain specific jurisdiction, a court seeks to determine whether the defendant has minimum contacts related to the cause of action. For example, the court seeks to determine whether an element of the cause of action occurred in the state, either in whole or in part.

C. Transient Jurisdiction

 State long-arm statutes and minimum contacts will be the relevant considerations in most cases. However, one should always consider the potential for transient jurisdiction. A court may exercise personal jurisdiction over a defendant who is either a resident of the state in which the court sits or who is served with process within the state's borders. Although controversial, the Supreme Court has consistently approved of the practice of exercising jurisdiction based solely upon service within a state's borders (see endnote 19).

Thus, a plaintiff seeking to obtain jurisdiction in a particular state should consider whether the defendant is a resident of the state. In addition, the plaintiff should consider the possibility of serving a defendant with process in the state in which jurisdiction is desired. Trade shows, industry conferences, conventions, and meetings of standards bodies all present opportunities for obtaining transient jurisdiction.

Plaintiffs should be careful, however, to avoid taking actions to trick the defendant into traveling to the state. A traditional exception to transient jurisdiction concerns the luring the defendant into a state for purposes of creating jurisdiction (see endnote 20). More innocent actions, however, may be enough to bring this rule into play. In Elm Lubricants, Inc., v. Microfral S.A.R.L., (see endnote 21) the French defendant suggested a meeting in Chicago to discuss settling a patent license dispute. The plaintiff agreed to the meeting and claimed that it fully intended to engage in good faith negotiations when it agreed to the meeting. The defendant was served at his hotel the night before the meeting. The court denied personal jurisdiction.

First, the court reasoned that the defendant would not have come to the forum unless the plaintiff was willing to engage in settlement negotiations. Even if the defendant would have come to forum anyway, his initiation of the meeting was irrelevant to the jurisdictional issue because the plaintiff's misrepresentation need not be the sole cause of the defendants presence in the jurisdiction for the jurisdictional exception to apply. The court emphasized that but for plaintiff's agreement to negotiate, defendant would not have been present in the forum.

Second, the court found the plaintiff's initial willingness to negotiate irrelevant. At some point, the plaintiff decided that it would sue, rather than negotiate. When the plaintiff changed its mind, it had a duty to inform the defendant that negotiations were no longer feasible. Policy considerations influenced the court. The court felt that a contrary holding might discourage parties from attempting to settle their differences prior to litigation. In addition, problems of proof would make it difficult for a court to determine whether the plaintiff intended to negotiate in good faith initially, or instead intended to sue the defendant all along.

This case illustrates that plaintiffs should be careful not to induce defendants to enter a state for purposes of service of process. Actions that the plaintiff considers innocent may later prevent jurisdiction. Instead, the plaintiff seeking to establish transient jurisdiction should only serve a defendant that had a purpose for entering the state other than some contact with the plaintiff. Of course, if the defendant has minimum contacts with the state anyway, then service in the forum state will be unnecessary.


ENDNOTES

 1. Omni Capital Intl. v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987).
2. International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (citations omitted).
3. The patent statutes provide for personal jurisdiction in the District of Columbia over alien owners of patents not residing in the United States as to certain disputes. 35 U.S.C. § 293. Although such parties may designate an agent for service of process, the District court for the District of Columbia has jurisdiction if no such agent is appointed in cases affecting the patent or rights thereunder. Id. For interpretations of this statute, see National Patent Development Corp. v. T.J. Smith & Nephew Ltd., 9 U.S.P.Q.2d 1529 (D.C. Cir.) vacated 11 U.S.P.Q.2d 1211 (D.C. Cir. 1989); Neidhart v. Neidhart S.A., 184 U.S.P.Q. 393 (D.C. Cir. 1975).
4. Fed. R. Civ. P. 4(k)(1) (If no federal rule exists, then service is effective if the defendant "could be subjected to the jurisdiciton of a court of general jurisdiction in the state in which the district court is located "); Omni Capital Intl. v. Rudolf Woff & Co., 484 U.S. 97, 101-04 (1987).
5. Fed. R. Civ. P. 4(k)(2) ("If the exercise of jurisdiction is consistent with the Constitution and laws of the United States, serving a summons or filing a waiver of service is also effective, with respect to claims arising under federal law, to establish personal jurisdiction over the person of any defendant who is not subject to the jurisdiction of the courts of general jurisdiction of any state.").
6. 484 U.S. 97, 104 (1987).
7. See Fed. R. Civ. P. 4 (Advisory Committee Notes, 1993 Amendments).
8. For a list of states that have such long-arm statutes, see David Thatch, Personal Jurisdiction and the World-Wide Web: Bits (and Bytes) of Minimum Contacts, 23 Rutgers Computer & Tech. L. J. 143, 147 n.l4 (1997).
9. Sometimes, however the long-arm statute will present a barrier. I DeSantis v. Hafner Creations, Inc., 41 U.S.P.Q.2d 1931 (E.D. Va. 1996), the defendant advertised a product allegedly infringing a patent in Virginia. Because Virginia's long-arm statute regarding tortious acts committed outside of the state and causing injury in the state also required the defendant to derive substantial revenue or regularly solicit business in the state, personal jurisdiction was denied as no products were sold in the state.
10. International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (citations omitted).
11. See 1 Robert C. Casad, Jurisdiction in Civil Actions, § 2.05 at 2-98--2-99 (1991).
12. 1 Casad, supra note 12 at § 2.05, p. 2-99. An exception to this rule arguably would be jurisdiction under the new version of Rule 4 of the Federal Rules of Civil Procedure discussed in the text. Under that rule, jurisdiction is proper in a state with which the defendant has no contacts if the defendant does not have minimum contacts with any state. The Supreme Court has yet to determine whether national contacts satisfy the requirements of the due process clause of the Fifth Amendment in such circumstances. On the one hand, national contacts might allow a defendant to be sued anywhere in the country on a federal claim. One can take the position that personal jurisdiction is limited only by the scope of a sovereign's territorial power and because Congress has national power to regulate, personal jurisdiction is not limited to any particular location for federal claims. On the other hand, the Court has also injected issues of fair play and substantial justice into the jurisdictional calculus. Thus, one might argue that a defendant with national contacts but no minimum contacts with any particular state should be susceptible to suit only in a state with which he has some contacts, even if not constitutionally sufficient contacts for a court of that state to subject him to jurisdiction.
13. Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985).
14. World-Wide Volkswagen v. Woodson, 444 U.S. 286, 297 (1980).
15. Burger King Corp., 471 U.S. at 476.
16. Burger King Corp., 471 U.S. at 478.
17. Burger King Corp., 471 U.S. at 476.
18. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408 (1984).
19. Burnham v. Superior Court, 110 S. Ct. 2105 (1990).
20. Burnham v. Superior Court, 110 S. Ct. 2105, 2112 (1990) (most states had statutes or common law rules that exempted defendants from jurisdicition who were brought into the forum by force or fraud). Other courts have observed that service can be quashed if the defendant was tricked into coming to the state. Allen v. Ferguson, 791 F.2d 611, 613 (7th Cir. 1986); Stanko v. Lemond, 1991 U.S. Dist. LEXIS 11052 (E.D. Pa. 1991); Elm Lubricants Inc. v. Microfral S.A.R.L., 91 F.R.D. 235 (N.D. Ill. 1981); Sunshine Kitchens, Inc. v. Alanthus Corp., 65 F.R.D. 4 (S.D. Fla. 1974).
21. 91 F.R.D. 235 (N.D. Ill, 1981).

For further information please contact Mitch Lukin.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.