45 F.3d 1541 (Fed. Cir. 1995), 94-1229, Akro Corp. v. Luker

Docket Nº:94-1229.
Citation:45 F.3d 1541
Party Name:33 U.S.P.Q.2d 1505 The AKRO CORPORATION, Plaintiff-Appellant, v. Ken LUKER, Defendant-Appellee.
Case Date:January 20, 1995
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

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45 F.3d 1541 (Fed. Cir. 1995)

33 U.S.P.Q.2d 1505

The AKRO CORPORATION, Plaintiff-Appellant,


Ken LUKER, Defendant-Appellee.

No. 94-1229.

United States Court of Appeals, Federal Circuit

January 20, 1995

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James D. Myers, Bell, Seltzer, Park & Gibson, P.A., Charlotte, NC, argued for plaintiff-appellant. With him on the brief were Dickson M. Lupo and George M. Taulbee.

Bruce H. Wilson, Oldham, Oldham & Wilson Co., L.P.A., Akron, OH, argued for defendant-appellee. With him on the brief were Mark A. Watkins and Kenneth A. Godlewski.

Before MICHEL, Circuit Judge, BENNETT, Senior Circuit Judge, and RADER, Circuit Judge.

MICHEL, Circuit Judge.

Akro Corporation (Akro) appeals from the February 9, 1994 judgment of the U.S. District Court for the Northern District of Ohio, No. 5:93CV2207, dismissing Akro's action for declaratory judgments of noninfringement, invalidity, and unenforceability. The trial court entered judgment pursuant to Federal Rule of Civil Procedure 12(b)(2), dismissing Akro's action for want of personal jurisdiction over Ken Luker (Luker), the defendant patentee. Because the trial court erred in concluding that its exercising personal jurisdiction over Luker would transgress the boundary Fifth Amendment due process circumscribes for such exercise, we reverse and remand.


Akro, the plaintiff accused infringer, is an Ohio corporation with facilities for manufacturing floor mat carpets in both Canton and Holmesville, Ohio. Luker, the defendant patentee, is an individual who resides in and conducts business from Orange County, California. He is the named inventor and owner of U.S. Patent No. 4,871,602 (the '602 patent), directed to a vehicle floor mat having a high density, long wearing band formed integrally with the remainder of the mat. Luker has never been in Ohio, and no one is or has ever been his agent or personal representative in Ohio.

Luker, through his counsel, sent Akro a warning letter, dated October 4, 1990, which contained the following:

It is my understanding that you are aware of the patent held by Mr. Luker and are intentionally manufacturing and selling floor mats using said patent in full disregard of Mr. Luker's patent rights.

Please be advised that our office is investigating this matter and will seek remedies for our client should there be a patent infringement. Such remedies would include injunctive relief, compensatory damages and attorneys' fees.

Akro referred this letter to its patent counsel, located in North Carolina.

Akro and Luker, through their respective counsel, attempted to negotiate a settlement to their dispute. The negotiations lasted almost three years but eventually reached an impasse. During the period from February 6, 1991 to October 13, 1993, while the negotiations proceeded, Luker's counsel reiterated the accusations of infringement and the threats of litigation in six separate warning letters to Akro's counsel.

The warning letters also make it clear that Luker had entered into an exclusive license

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agreement with Pretty Products, an Ohio corporation that manufactures floor mat carpets and is one of Akro's competitors in the marketplace in Ohio. Though the text of the license agreement is not of record in this case, Luker's letters to Akro are, and they contain clear statements as to four of the agreement's features: (1) the agreement became effective on March 17, 1992; (2) Pretty Products is licensed to practice the '602 patent; (3) Luker "has obligations under the [agreement] to defend and pursue any infringement against his patent occurring from the date of the [agreement] and thereafter;" and (4) Pretty Products is empowered to sue on Luker's behalf those parties that infringe the '602 patent.

The last of Luker's warning letters, dated October 13, 1993 and faxed to Akro's counsel that same day, contained the following:

Mr. Luker believes that he has accepted an extremely low settlement amount in an effort to resolve this matter. We believe that this resolution has been prolonged unnecessarily and must be completed by Friday, October 15, 1993.

If the matter cannot be resolved timely, then Mr. Luker has decided to proceed with an infringement action for both the time period which he solely held the patent rights, as well as for the time period held by his exclusive licensee.

Akro filed its declaratory judgment action against Luker two days later in the U.S. District Court for the Northern District of Ohio.

Luker did not answer the allegations in Akro's complaint. Instead, on January 14, 1994, Luker filed a Rule 12(b)(2) motion to dismiss Akro's suit for lack of personal jurisdiction. He also filed a supporting affidavit. Though it contained neither denials of nor rebuttals to the allegations in Akro's complaint, it did state that Luker had never been in Ohio, and that Pretty Products was not his agent in Ohio or anywhere else.

On February 9, 1994, the trial court, applying the law of the Sixth Circuit and without benefit of a hearing, granted Luker's motion to dismiss Akro's declaratory judgment action. Akro timely filed the instant appeal.


I. Choice of Law & Standard of Review

We apply the law of the Federal Circuit, rather than that of the regional circuit in which the case arose, when we determine whether the district court properly declined to exercise personal jurisdiction over an out-of-state accused infringer. Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1564, 30 USPQ2d 1001, 1006 (Fed.Cir.), cert. dismissed, --- U.S. ----, 115 S.Ct. 18, 129 L.Ed.2d 917 (1994). The jurisdictional issue presented by an out-of-state patentee is no less intimately involved with the substance of the patent laws than that of an out-of-state accused infringer. Consequently, the instant case, like Beverly Hills Fan, presents a question of Federal Circuit law.

Where, as here, the facts upon which jurisdiction turns are undisputed, the matter presents a pure question of law, reviewable de novo. Id.; North American Philips Corp. v. American Vending Sales, Inc., 35 F.3d 1576, 1578, 32 USPQ2d 1203, 1204 (Fed.Cir.1994). In addition, where the plaintiff's factual allegations "are not directly controverted, [they] are taken as true for purposes of determining jurisdiction...." Beverly Hills Fan, 21 F.3d at 1563, 30 USPQ2d at 1005.

II. Analysis

  1. Amenability to Service

    Amenability to service and the exercise of personal jurisdiction are linked together in the federal courts. The Supreme Court clarified the relationship between these two principles in Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987). According to the Court,

    [B]efore a court may exercise personal jurisdiction over a defendant, there must be more than notice to the defendant and a constitutionally sufficient relationship between the defendant and the forum. There also must be a basis for the defendant's amenability to service of summons. Absent consent, this means there must be

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    authorization for service of summons on the defendant.

    Id. at 104, 108 S.Ct. at 409. More specifically, "under Rule 4(e), 1 a federal court normally looks either to a federal statute or to the long-arm statute of the State in which it sits to determine whether a defendant is amenable to service...." Id. at 105, 108 S.Ct. at 410.

    Akro has not referred us to a federal statute that provides for Luker's amenability to service independent of Rule 4(e), 2 and we are aware of no such statute. We must therefore determine whether Akro can serve Luker under Ohio statutes and rules and, if so, whether jurisdiction can be maintained consistent with due process.

  2. The Reach of Ohio's Long-Arm Statute

    The Ohio long-arm statute provides, in relevant part, that an Ohio court "may exercise personal jurisdiction over a person ... as to a cause of action arising from the person's ... [t]ransacting any business in this state...." OHIO REV.CODE ANN. Sec. 2307.382(A)(1) (1991). The complementary procedural rule, Ohio Civil Rule 4.3(A)(1), authorizes out-of-state service of process on a defendant who is "[t]ransacting any business in" Ohio, and its reach is equal to that of the long-arm statute. Goldstein v. Christiansen, 70 Ohio St.3d 232, 638 N.E.2d 541, 544 (1994); Kentucky Oaks Mall Co. v. Mitchell's Formal Wear, Inc., 53 Ohio St.3d 73, 559 N.E.2d 477, 479 (1990), cert. denied, 499...

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