Amp Inc. v. Methode Electronics, Inc.

• Decision Date: 12 May 1993
• Docket Number: No. 1:CV:92-248.,1:CV:92-248.
• Citation: 823 F. Supp. 259
• Parties: AMP INCORPORATED, Plaintiff, v. METHODE ELECTRONICS INCORPORATED, Defendant.
• Court: U.S. District Court — Middle District of Pennsylvania

823 F. Supp. 259

AMP INCORPORATED, Plaintiff, v. METHODE ELECTRONICS INCORPORATED, Defendant.

No. 1:CV:92-248.

United States District Court, M.D. Pennsylvania.

May 12, 1993.

Jay L. Seitchik, AMP Inc., Harrisburg, PA, for plaintiff.

Craig A. Stone, Mette, Evans & Woodside, Harrisburg, PA, for defendant.

MEMORANDUM

McCLURE, District Judge.

BACKGROUND

Amp Incorporated (Amp) filed this action against Methode Electronics Incorporated (Methode) to recover for the alleged infringement of its patent rights in two connector assembly designs.¹ Amp bases its right to sue on its status as exclusive licensee of United States Patent No. 4,979,792 (the '792 patent) issued December 25, 1990 and of United States Patent No. 5,076,656 (the '656 patent) issued December 31, 1991. Amp alleges that Methode has manufactured and sold connector assemblies embodying Amp's patented, trademark designs.

Based on these acts, Amp alleges the violation of: 1) United States patent law (Counts I and II); 2) federal statutes prohibiting unfair competition, 15 U.S.C. § 1125(a)² (Count III); and 3) Pennsylvania common law (Count IV). (Plaintiff's amended complaint, Record Document No. 8)³

As recourse for these injuries, Amp seeks: 1) a ruling that Methode has infringed the '792 and '656 patents and an order permanently enjoining further acts of infringement; 2) damages for patent infringement pursuant to 35 U.S.C. § 284;⁴ 3) treble damages pursuant to 35 U.S.C. § 284 for willful violation of the '792 patent; 4) attorneys' fees pursuant to 35 U.S.C. § 285;⁵ 5) an order permanently enjoining Methode from: a) manufacturing, selling, or otherwise using a connector assembly that is confusingly similar in design to Amp's connector assembly; b) infringing Amp's trade dress; c) unfairly competing with Amp; d) causing a likelihood of confusion, deception or mistake; and 7) an accounting by Methode for all profits received from any business activities conducted by Methode through unfair competition and directing Methode to account for all damages, including attorneys' fees sustained by Amp on account of the unfair competition and awarding Amp three times that amount; 8) the costs of this action; and 9) such other relief as the court may deem proper.

There are currently four motions before the court: 1) defendant's motion to dismiss or transfer venue (Record Document No. 3); 2) defendant's motion to dismiss plaintiff's patent infringement claims (Record Document No. 2) due to the alleged failure to join a necessary and indispensable party; 3) plaintiff's motion to compel discovery on the question of venue (Record Document No. 43); and 4) plaintiff's motion to add an additional plaintiff (Record Document No. 45).

For the reasons discussed below, we will issue an order: 1) denying defendant's motion to dismiss or transfer venue (Record Document No. 3); 2) denying as moot defendant's motion to dismiss Count I of plaintiffs complaint for patent infringement (Record Document No. 2); 3) denying plaintiff's motion to compel discovery on the question of venue and jurisdiction as moot (Record Document No. 43); and 4) granting plaintiff's motion to add Whitaker Corporation as a party plaintiff (Record Document No. 45).

DISCUSSION

Motion to dismiss or transfer venue

Defendant moves to dismiss this action pursuant to Fed.R.Civ.P. 12(b)(2) and (3) on the grounds that Methode has insufficient contacts with Pennsylvania to justify this court's exercise of personal jurisdiction over it. Defendant seeks, in the alternative, an order transferring this action to the United States District Court for the Northern District of Illinois pursuant to 28 U.S.C. § 1404(a), where, it argues, venue is proper.

Under Rule 4(e) of the Federal Rules of Civil Procedure, the service of process rules of the state where the court sits govern personal jurisdiction issues. Bane v. Netlink, Inc., 925 F.2d 637, 639 (3d Cir.1991). This rule applies to actions grounded in federal law, including patent law, as well as those grounded in state law. Max Daetwyler Corp. v. R. Meyer, 762 F.2d 290, 293 (3d Cir.1985) (patent infringement action).

Pennsylvania's long-arm statute, 42 Pa. Cons.Stat.Ann. § 5322(b) provides that in personam jurisdiction may be exercised "to the fullest extent allowed under the Constitution of the United States and may be based on the most minimum contact with this Commonwealth allowed under the Constitution of the United States." 42 Pa.Cons.Stat.Ann. § 5322(b) (Purdon 1981). The statute's express incorporation of the federal due process standard makes the court's inquiry "principally one into the constitutional propriety of the exercise of jurisdiction." Daetwyler, supra, 762 F.2d at 293.

Because this is a federal question case and a federally created right is at issue, we examine due process in light of the Fifth Amendment rather than the Fourteenth. The standards applied are the same as those in a Fourteenth Amendment analysis. Dakota Industries, Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1389 n. 2 (8th Cir.1991); Daetwyler, supra, 762 F.2d at 293; and Applied Biosystems, Inc. v. Cruachem, Ltd., 772 F.Supp. 1458 (D.Del.1991).

Once a defendant has properly raised a jurisdictional defense, the plaintiff bears the burden of proving that minimum constitutional requirements are satisfied. To sustain its burden, the plaintiff cannot rely on the allegations of the complaint, but must produce supporting affidavits "or other competent evidence". North Penn Gas Co. v. Corning Natural Gas Corp., per curiam, 897 F.2d 687, 689 (3d Cir.), cert. denied, 498 U.S. 847, 111 S.Ct. 133, 112 L.Ed.2d 101 (1990).

Personal jurisdiction is a fact-specific inquiry. The focus is on the relationship among the defendant, the forum state and the litigation. Daetwyler, supra, 762 F.2d at 293. Jurisdiction may be based either on the conduct of the non-resident defendant which gave rise to the cause of action (specific jurisdiction), or on the defendant's general contacts with the forum state, provided those contacts are "continuous and systematic", (general jurisdiction). Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 473 n. 15, 105 S.Ct. 2174, 2181, 2182 n. 15, 85 L.Ed.2d 528 (1985) and Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8 and 9, 104 S.Ct. 1868, 1872 n. 8 and 9, 80 L.Ed.2d 404 (1984).

Exercise of jurisdiction over the non-resident defendant must also be consistent with "traditional notions of fair play and substantial justice" whether specific or general jurisdiction is invoked. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945).

"General jurisdiction exists when there are sufficient contacts to justify an assertion of `personal jurisdiction over a defendant in a suit not arising out of or related to the defendant's contacts with the forum.'" Covenant Bank for Savings v. Cohen, 806 F.Supp. 52, 55 (D.N.J.1992), quoting Hall, supra, 466 U.S. at 414 n. 9, 104 S.Ct. at 1872 n. 9. "Mere minimum contacts" are not enough to establish general jurisdiction—"The nonresident's contacts to the forum must be continuous and substantial." Provident National Bank v. California Federal Savings & Loan Association, 819 F.2d 434, 437 (3d Cir.1987). Accord: Hall, supra, 466 U.S. at 415-16, 104 S.Ct. at 1872.

"The constitutionality of an exercise of specific jurisdiction turns on whether the defendant has `purposefully directed' its activity toward the forum state." Applied Biosystems, supra, 772 F.Supp. at 1470. Due process requires the plaintiff to prove that the defendant "purposefully established `minimum contacts'" with the forum state such that it could "reasonably anticipate being haled into court there", Burger King, supra, 471 U.S. at 474, 105 S.Ct. at 2183; World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980) and Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958). "If the sale of a product in the forum state ... arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States...". World-Wide Volkswagen, supra, 444 U.S. at 297, 100 S.Ct. at 567.

There must be evidence that the defendant "purposefully directed" its activities at residents of the forum state, "deliberately engaged" in "significant activities" in the state, or created "continuing obligations" with state residents; and that the litigation stems from injuries or harm arising out of such activities. Burger King, supra, 471 U.S. at 475-76, 105 S.Ct. at 2183-84 (Citations omitted.)

In cases involving sale or distribution of a product, the foreseeability requirement translates into a condition that the plaintiff demonstrate that it was reasonably foreseeable that the defendant's conduct could lead to its being haled into court in the forum state, not just a "mere likelihood" that the defendant's product would find its way there. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980). Accord: Max Daetwyler, supra, 762 F.2d at 295.

In such cases, the courts have applied a stream of commerce theory to sustain jurisdiction over a non-resident manufacturer who made a deliberate decision to market its product in the forum state, then placed that product in the "stream of commerce". Proof of a "deliberate decision to market" can take the form of evidence that the manufacturer 1) designed the product for that state's market; 2) advertised in the forum state; 3) established consumer communication channels within the state; or 4) marketed its product through a distributor who served as the defendant's sales agent for that state. Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 112, 107 S.Ct. 1026, 1032, 94 L.Ed.2d 92 (1987) (plurality opinion). However, "a defendant's awareness that the...