3D Systems, Inc. v. Aarotech Laboratories, Inc.
| Decision Date | 12 November 1998 |
| Docket Number | No. 97-1514,97-1514 |
| Citation | 1998 WL 789842,48 USPQ2d 1773,160 F.3d 1373 |
| Parties | 3D SYSTEMS, INC., Plaintiff-Appellant, v. AAROTECH LABORATORIES, INC., Aaroflex, Inc. and Albert C. Young, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Federal Circuit |
Richard J. Codding, Loeb & Loeb LLP, Los Angeles, CA, argued, for plaintiff-appellant. With him on the brief were Stuart Lubitz and Don F. Livornese.
Charles G. Smith, Kinsella, Boesch, Fujikawa & Towle, LLP, Los Angeles, CA, argued, for defendants-appellees. With him on the brief were George T. Kliavkoff and Anna Kogan.
Before NEWMAN, BRYSON, and GAJARSA, Circuit Judges.
3D Systems, Inc. (3D) appeals the decision of the United States District Court for the Central District of California dismissing its complaint against Aarotech Laboratories, Inc. (Aarotech), Aaroflex, Inc. (Aaroflex), and Albert C. Young (Young) for lack of personal jurisdiction. See 3D Sys., Inc. v. Aarotech Lab., Inc., No. CV 97-0231-WDK (C.D.Cal. July 23, 1997). We affirm the district court's determination that it did not have personal jurisdiction over Aarotech and Young. However, because the district court does have personal jurisdiction over Aaroflex, we reverse and remand for further proceedings consistent with this opinion.
3D filed this patent infringement suit against Aarotech, Aaroflex, and Young (collectively, the defendants), alleging infringement of six of its patents. 3D also alleged that the defendants had engaged in trade libel and unfair competition. 3D additionally sought a declaratory judgment that it had not committed trade libel against the defendants. Upon the defendants' motion to dismiss for lack of jurisdiction, the district court determined that 3D had not established the elements for personal jurisdiction required by the Ninth Circuit's due process test, and 3D is incorporated under the laws of California with its principal place of business in the state of California. 3D manufactures and sells stereolithography equipment, which is also known as rapid prototyping (RP) equipment, and is the largest manufacturer of such equipment in the United States. This equipment is used to produce three-dimensional prototype models of products during the design and development phase of such products. 3D holds numerous patents in the RP field.
dismissed the claims against all of the defendants for lack of personal jurisdiction.
Aarotech is incorporated under the laws of Oklahoma with its principal place of business in the state of Virginia. Aarotech has taken no actions directly in the state of California, but is identified as the parent company of Aaroflex in a number of letters and promotional materials sent by Aaroflex to California residents. Aarotech maintained a World-Wide-Web page which described certain Aaroflex products, and received e-mail messages through its World-Wide-Web gateway requesting that information on Aaroflex's products be sent to California addresses. Upon receipt, Aarotech forwarded these e-mail messages to Aaroflex.
Aaroflex, a subsidiary of Aarotech, is incorporated under the laws of West Virginia with its principal place of business in the state of Virginia. Aaroflex is also in the business of selling RP equipment, and makes a product called the Solid Imager which competes with 3D's RP equipment. Aaroflex has sold fewer than five such machines and had yet to actually deliver a completed machine as of the date of the district court's decision. Aaroflex has not sold an RP machine in California, but it has sent eight letters containing price quotations and descriptions of the merchandise for sale to four different companies in California. These letters by their terms state that they are not offers, and will not become offers, until they are executed by the recipient and returned to Aaroflex. Additionally, Aaroflex sent promotional materials, e.g., videos and sample parts, and letters to at least eighteen other prospective buyers in California. These letters provided information on RP equipment, and solicited orders for models produced by the RP machine. Generally, letters were sent either by Aaroflex's president (Young), Aaroflex's Vice-President for Marketing, Aaroflex's corporate counsel, or Aaroflex's sales representative covering the state of California. There is no evidence that any of these Aaroflex personnel actually visited the state of California in connection with their sales activity. In sum, Aaroflex provided potential California customers with price quotations, brochures, specification sheets, videos, and sample parts related to its Solid Imager product.
Aaroflex maintained a presence on the World-Wide-Web through the Aarotech website, and several Aaroflex personnel posted messages to an RP newsgroup discussing Aaroflex's technology and its history. At least five of the e-mail messages forwarded from Aarotech requested that information about Aaroflex's RP products be sent to California. Aaroflex was listed as a participant in an RP conference in California, but did not attend. Aaroflex purchased component parts for RP equipment from California companies, including lasers, computers, and laser chillers. Aaroflex also pursued discussions with a California software company for use of that company's products with Aaroflex's Solid Imager.
Young is the President and Chairman of the Board of Aaroflex, and the Chief Executive Officer of both Aarotech and Aaroflex, and resides in the Washington, D.C. area. Young sent letters on behalf of Aaroflex regarding its RP equipment to several California companies. Young also corresponded on behalf of Aaroflex with a California company regarding the use of that company's software with Aaroflex's Solid Imager.
Whether or not a court has personal jurisdiction over a party is a question of law that we review de novo. See Graphic Controls Corp. v. Utah Med. Prods., Inc., 149 F.3d 1382, 1384, 47 USPQ2d 1622, 1624 (Fed.Cir.1998); Dainippon Screen Mfg. Co., Ltd. v. CFMT, Inc., 142 F.3d 1266, 1269, 46 USPQ2d 1616, 1619 (Fed.Cir.1998). Personal jurisdiction over an out-of-state defendant is appropriate if the relevant state's long-arm statute permits the assertion of jurisdiction Our analysis must begin with the choice of law issue presented in this appeal, namely, which federal circuit court of appeals' personal jurisdiction law is properly applied in the constitutional due process analysis. The district court held, and the defendants concur, that the Ninth Circuit's federal due process analysis applied to the personal jurisdiction issue in this case. 3D argues that the issue of jurisdiction is bifurcated, namely that Ninth Circuit law should apply to personal jurisdiction for the purposes of the state law claims, and Federal Circuit law to the patent claims. We disagree with all of these positions.
without violating federal due process. See Graphic Controls, 149 F.3d at 1385, 47 USPQ2d at 1625; Dainippon, 142 F.3d at 1269-70, 46 USPQ2d at 1619; Genetic Implant Sys., Inc. v. Core-Vent Corp., 123 F.3d 1455, 1458, 43 USPQ2d 1786, 1788 (Fed.Cir.1997). Because California's long-arm statute is coextensive with the limits of due process, see Cal.Civ.Proc.Code § 410.10 (West 1997); see also Fireman's Fund Ins. Co. v. National Bank of Coops., 103 F.3d 888, 893 (9th Cir.1996); Vons Cos., Inc. v. Seabest Foods, Inc., 14 Cal.4th 434, 444, 58 Cal.Rptr.2d 899, 926 P.2d 1085, 1091 (Cal.1996), our only inquiry is whether or not exercising personal jurisdiction over the defendants in California comports with federal due process, see Dainippon, 142 F.3d at 1270, 46 USPQ2d at 1619-20; Akro Corp. v. Luker, 45 F.3d 1541, 1544, 33 USPQ2d 1505, 1507 (Fed.Cir.1995).
The Federal Circuit has exclusive jurisdiction over an appeal from a district court when that court's jurisdiction is based at least in part on a claim arising under the patent laws of the United States. See 28 U.S.C. §§ 1295(a), 1338(a) (1994). When claims not arising under the patent laws are also part of the case, the district court has jurisdiction over those claims which "are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy ." 28 U.S.C. § 1367 (1994). 3D brought an action for patent infringement based on federal law and trade libel and unfair competition claims based on state law. In this case, 3D's trade libel and unfair competition claims go hand-in-hand with its patent infringement claims. All of the claims arise out of Aaroflex's sales activity for RP equipment in California, and therefore these claims were properly brought in the district court under the supplemental jurisdiction provision of 28 U.S.C. § 1367. 1 In addition, 3D's declaratory judgment action against the defendants also arises out of related facts, because the resolution of the patent infringement issue will be a significant factor in determining whether or not 3D libeled the defendants. 2
The district court erred by applying Ninth Circuit law in its federal due process analysis when it determined that personal jurisdiction over the defendants was improper. While we defer to the interpretation of a state's long-arm statute given by that state's highest court, particularly whether or not the statute is intended to reach the limit of federal due process, see Graphic Controls, 149 F.3d at 1386, 47 USPQ2d at 1625, when analyzing personal jurisdiction for purposes of compliance with federal due process, Federal Circuit law, rather than regional circuit law, applies, see Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1564-65, 30 USPQ2d 1001, 1006 (Fed.Cir.1994); see also Akro, 45 F.3d at 1543, 33 USPQ2d at 1506 (declaratory judgment action). The district court improperly applied Ninth Circuit law in the federal due process analysis, contrary to clear Federal Circuit precedent. Because of supplemental jurisdiction under 28 U.S.C. § 1367, as described...
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