Avocent Huntsville Corp. v. Aten International Co., Ltd., (2008)

United States Court of Appeals for the Federal Circuit

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Avocent Huntsville Corp. v. Aten International Co., Ltd., (2008)

UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

United States Court of Appeals for the Federal Circuit

AVOCENT HUNTSVILLE CORP. and AVOCENT REDMOND CORP.,

Plaintiffs-Appellants,

v.

ATEN INTERNATIONAL CO., LTD.,

Defendant-Appellee.

James D. Berquist, Davidson Berquist Jackson & Gowdey, LLP, of Arlington, Virginia, argued for plaintiffs-appellants. With him on the brief were J. Scott Davidson and Donald L. Jackson.

Steven D. Hemminger, Akin, Gump, Strauss, Hauer & Feld LLP, of Palo Alto, California, argued for defendant-appellee. E. Robert Yoches, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, of Washington, DC, and Ming-Tao Yang, of Palo Alto, California, for defendant-appellee.

Appealed from: United States District Court for the Northern District of Alabama

Judge C. Lynwood Smith, Jr.

United States Court of Appeals for the Federal Circuit

AVOCENT HUNTSVILLE CORP. and AVOCENT REDMOND CORP.,

Plaintiffs-Appellants,

v.

ATEN INTERNATIONAL CO., LTD.,

Defendant-Appellee.

Appeal from the United States District Court for the Northern District of Alabama in case no. 07-CV-625, Judge C. Lynwood Smith, Jr.

DECIDED: December 16, 2008

Before NEWMAN, SCHALL, and LINN, Circuit Judges.

Opinion for the court filed by Circuit Judge LINN. Dissenting opinion filed by Circuit Judge NEWMAN.

LINN, Circuit Judge.

This appeal concerns the personal jurisdiction of a U.S. district court over a Taiwanese company in a suit for declaratory judgment of non-infringement and invalidity of two U.S. patents owned by that Taiwanese company. Because the plaintiffs failed to allege that the Taiwanese company purposefully directed any activities beyond merely sending notice letters at residents of the forum and that the declaratory judgment action arose out of or related to those activities, we affirm the district court's dismissal of all claims for lack of personal jurisdiction.

I. BACKGROUND

Avocent Huntsville Corp. ("Avocent Huntsville") and Avocent Redmond Corp. ("Avocent Redmond") (collectively "Avocent") are subsidiaries of Avocent Corporation, a Delaware corporation located in Huntsville, Alabama. Avocent develops and markets computer hardware devices. Aten International Co., Ltd. ("Aten International") is a corporation formed under the laws of Taiwan, with its principal place of business in Taipei, Taiwan. One of Aten International's U.S. subsidiaries, Aten Technology, Inc. ("Aten Technology"), is located in Irvine, California. IOGEAR, which is located at the same address as Aten Technology, is also affiliated with Aten International.

Avocent and Aten International compete in the manufacture and sale of keyboard-video-mouse switches ("KVM switches"), which allow a computer user or users to share a single keyboard, video device, and mouse, or multiple sets of keyboards, video devices, and mice. It is undisputed that various Aten International products are available for sale within Alabama. Avocent has alleged that Aten International purposefully directed these products to Alabama both by injecting them into the stream of commerce and through direct sales activities. Specifically, Avocent has alleged the sale and delivery to Alabama of a product purchased through the "Clearance Center" webpage of the ATEN-USA.com website published by Aten International, the existence of products manufactured by Aten International and offered for sale at Best Buy and CompUSA retail stores in Alabama, the availability of Aten International products through nationwide and Internet retailers, and the availability of these products through a government contractor located in Alabama.

Aten International is the assignee of U.S. Patent Nos. 6,957,287 ("the '287 patent") and 7,035,112 ("the '112 patent"), both of which relate to KVM switches. This appeal relates to Aten International's attempts to enforce these patents against Avocent.

Aten International's enforcement efforts are reflected in three letters. The first is a letter dated May 28, 2004, from counsel for Aten Technology to John Cooper, the CEO and President of Avocent Corporation, stating:

Pursuant to Section 154(d) of the U.S. Patent Act, please be advised that the U.S. Patent Office has published a patent application owned by our client Aten Technology, Inc. A copy of the published patent application is attached. We suggest that you review the claims as we believe they are relevant to a product your company is making, using, selling, offering to sell and/or importing.

J.A. at 473.1 A copy of the published patent application leading to the '112 patent was attached to this letter. The second is a letter da...

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