Monday, October 22, 2012

"Technology Patents" case and personal jurisdiction

The background for the Technology Patents case:

On November 8, 2007, Technology Patents LLC (“TPL”) sued more than 100 domestic and foreign defendants for infringement of U.S. Patents No. 6,646,542 (“the ’542 patent”) and No. RE39,870 (“the ’870 patent”). The allegations concerning the ’542 patent were subsequently withdrawn, so only the ’870 patent is at issue in this appeal. The defendants can be classified into three groups: (1) the domestic carriers and handset companies, including AT&T, T-Mobile, Sprint, Motorola, and others (collectively, “the domestic carriers”); (2) the software providers, including Microsoft, Yahoo, and Clickatell (collectively, “the software providers”); and (3) the foreign carriers, including T-Mobile operating in various coun- tries, Vodaphone operating in various countries, and many others (collectively, “the foreign carriers”).

The district court dismissed the case against the foreign carriers for lack of personal jurisdiction, and it granted summary judgment of noninfringement in favor of the domestic carriers and the software providers, but on separate grounds. TPL appeals from all three orders. We reject TPL’s request that we reinstate the claims against the domestic carriers and the foreign carriers; as to the claims against the software providers, we affirm the district court’s order in part and vacate that order in part, and we remand to the district court for further proceedings on that aspect of the case.

Of multiple actors:

The district court found that TPL’s contentions with respect to those claims failed because those claims require multiple actors and TPL failed to show that the defendants have direction or control over the end users. In so ruling, the district court relied on this court’s cases involving “joint” or “divided” infringement. See BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007); Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008). Although this court has recently revisited the issue of divided infringement in the en banc decision in Akamai Technolo- gies, Inc. v. Limelight Networks, Inc., No. 2009-1372 et al. (Fed. Cir. Aug. 31, 2012), that decision does not affect our analysis because claims 11, 12, 14, 21-24, and 26-28 do not present an issue of joint or divided infringement. That is because, contrary to the district court’s ruling, those claims do not require performance by multiple actors. Representative claim 11 requires action only by the originating user, and TPL’s claim charts for each of the listed claims do not require multiple actors. Fur- thermore, TPL appears to have raised a single-actor theory in an August 4, 2008, opposition to a motion to dismiss. In that pleading, TPL argued that “[t]he sender puts the invention into action or service, and controls the transmission of messages.” TPL cited NTP, Inc. v. Re- search in Motion, Ltd., 418 F.3d 1282, 1313-17 (Fed. Cir. 2005), for support. In that case, we noted that “[t]he ordinary meaning of ‘use’ is to ‘put into action or service.’” Id. at 1317. And in Centillion Data Sys., LLC v. Qwest Communications International, Inc., 631 F.3d 1279, 1284 (Fed. Cir. 2011), we held that “to ‘use’ a system for pur- poses of infringement, a party must put the invention into service, i.e., control the system as a whole and obtain benefit from it.”

Of long arm jurisdiction:

The district court dismissed the claims against the foreign carriers for lack of personal jurisdiction. The court held that it lacked personal jurisdiction over the foreign carriers under Fed. R. Civ. P. 4(k)(1) because Maryland’s long-arm statute does not confer jurisdiction over the foreign carriers. It further held that even if Maryland’s long-arm statute conferred personal jurisdic- tion over the foreign carriers, personal jurisdiction could not be exercised over those defendants consistent with due process because the foreign carriers do not have sufficient “minimum contacts” with the State of Mary- land. The district court also held that it lacked personal jurisdiction over the foreign carriers under Fed. R. Civ. P. 4(k)(2), referred to as the “federal long-arm statute,” Synthes (U.S.A.) v. G.M. Dos Reis Jr. Ind. Com de Equip. Medico, 563 F.3d 1285, 1290 (Fed. Cir. 2009), because the foreign carriers do not have sufficient contacts with the United States as a whole such that the exercise of per- sonal jurisdiction over them would comport with due process.

Note footnote 1:

A federal court generally may not rule on the merits of a case without first determining that it has jurisdiction over the subject matter and the parties. Sinochem Int’l Co. v. Malaysian Int’l Shipping Co., 549 U.S. 422, 430-31 (2007). In a case such as this one, however, where the court plainly has subject matter jurisdiction and has personal jurisdiction over the domestic carriers, and where the merits issues are the same for both the domes- tic and foreign carriers, it is permissible for the court to address the merits of the claims against the foreign carriers before addressing the issue of personal jurisdic- tion as to those defendants. See Chevron Corp. v. Na- ranjo, 667 F.3d 232, 246 n.17 (2d Cir. 2012). We have already ruled in favor of the domestic carriers on the merits, so even if we were to hold that the district court has personal jurisdiction over the foreign carriers, the consequence would be to reinstate the plaintiff’s claims against those defendants only to have them promptly dismissed on the merits.


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