Avery Dennison Corp. v. Alien Technology Corp., 08 CV 795.
| Citation | 632 F.Supp.2d 700 |
| Decision Date | 04 December 2008 |
| Docket Number | No. 08 CV 795.,08 CV 795. |
| Parties | AVERY DENNISON CORPORATION, Plaintiff, v. ALIEN TECHNOLOGY CORPORATION, Defendant. |
| Court | U.S. District Court — Northern District of Ohio |
Jay R. Campbell, Joshua M. Ryland, Kyle B. Fleming, Mark C. Johnson, Todd R. Tucker, Renner, Otto, Boisselle & Sklar, Cleveland, OH, for Plaintiff.
Deborah A. Coleman, Michael J. Garvin, Shannon V. McCue, Cleveland, OH, for Defendant.
Before the Court is Defendant Alien Technology Corporation's ("Alien") Motion to Dismiss or to Transfer Venue (Doc. 12). In its motion, Alien requests that the Court either (1) dismiss the case for lack of personal jurisdiction, (2) dismiss the case for improper venue, or (3) transfer the case to the United States District Court for the District of North Dakota. The Plaintiff, Avery Dennison Corporation ("Avery"), opposes all aspects of the motion, which is now ripe for adjudication.1 For the reasons fully articulated below, Alien's motion to dismiss or to transfer venue is DENIED.
This is a patent case involving radio frequency identification or "RFID." As described by Avery, RFID "is an advanced communication technology that uses radio waves to read information stored on microchips for identification purposes." (Doc. 16.) RFID systems are similar to bar coding systems in that they facilitate the identification and tracking of a particular object. There are two components to RFID systems: the RFID reader and the RFID inlay. The reader retrieves information remotely from the inlay. The inlay is a tag attached to, or incorporated in, the object to be tracked. It generally consists of a microchip connected to an antenna. One of the engineering challenges in manufacturing the inlay is finding a way to attach the microchip to the antenna in a quick, effective, and inexpensive manner. This lawsuit focuses on Avery's patented "Strap Attach Method" for connecting the microchip to the antenna.
Avery and Alien are both participants in the emerging market for the development and sales of RFID. The parties' had a contractual relationship in 2002 to jointly develop an inexpensive method to use Alien's Fluidic Self Assembly ("FSA") process in connection with Avery's Strap Attach Method for producing RFID inlays. According to Avery, the partnership did not produce the desired results and was terminated in 2006. Avery alleges that, while Alien did not manufacture or market RFID prior to its relationship with Avery, it entered the RFID industry as a result of that relationship. Avery's lawsuit alleges that Alien used Avery's patented methods to do so.
Avery brought this lawsuit against Alien alleging infringement of seven patents, specifically, U.S. Pat. Nos. 6,951,596; 7,292,148; 7,361,251; 7,368,032; 7,307,527; 7,359,823; 7,298,266. The first four patents relate to processes for making RFID; the other three patents relate to methods of reading, testing, and communicating RFID. In sum, Avery alleges that Alien is unlawfully selling RFID that were manufactured using Avery's Strap Attach Method.
Alien's motion raises several issues. First, Alien contends that this Court does not have personal jurisdiction over it. Second, Alien argues that, even if the Court has personal jurisdiction, venue is improper in this district. In the alternative, Alien requests that the Court transfer the case to the United States District Court for the District of North Dakota, asserting that it is a more convenient forum for resolution of the issues presented. The Court will address each of these issues in turn, after first describing the location of the parties' various activities.
Both parties are Delaware corporations. Avery's principal place of business is in Pasadena California, within the Central District of California. Alien's principal place of business is in Morgan Hill, California within the Northern District of California.
Avery is an international company with offices throughout the United States and the world. Avery has key RFID facilities in Concord, Mentor, Painesville and Strongsville, Ohio, all within the Northern District of Ohio. These Ohio facilities (Doc. 14 at 14.) Avery also has RFID facilities in South Carolina, Georgia, and Irwindale, California. The inventors of the patents at issue reside in South Carolina and Great Britain.
Alien markets RFID tags internationally. Most pertinent to this Order, however, are its connections to Ohio, North Dakota, and California.
Alien's principle place of business is in Morgan Hill, California, and a great deal of its employees and corporate records are located there. Alien also tests RFID tags in Morgan Hill. The inventors that may act as witnesses with respect to Alien's inventorship defense reside in California and Pennsylvania. The marketing of all of Alien's products is supervised by marketing personnel in California who work with its network of distributors.
Alien's manufacturing facilities are in Fargo, North Dakota. Alien purchased the machine which employs the allegedly infringing method from Toray International, Inc., a Japanese company, and that machine is now located at Alien's facility in Fargo. Consequently, the assembly line employees who work with the machine and those employees who ship and bill for the assembled products are also located in North Dakota. The products manufactured in North Dakota are then shipped to distributors located "all over the world" (Tr. at 17) who then sell the RFID product with the oversight of the marketing personnel in California.
Alien is registered to do business in Ohio. It has an RFID educational and resources center—the "RFID Solutions Center"—in Miamisburg, Ohio, within the Southern District of Ohio. According to Alien, the RFID Solutions Center is "a resources facility that provides educational classes, professional services, and tagged unit testing in real-world environments." (Doc. 12 at 4.) Alien does not manufacture RFID tags or perform the challenged tests at the RFID Solutions Center. Alien also has development alliances with five Ohio universities, all of which are primarily located within the Southern District of Ohio. Ohio State University ("OSU") is one of the universities with whom Alien has a development alliance. OSU's main campus is located in the Southern District of Ohio, but it has two local branches within the Northern District of Ohio. Additionally, Alien's "most valued" RFID customer is the Kennedy Group, located in Willoughby, Ohio, and its "most valuable" distributor, Bluestar, has an office in Strongsville, Ohio. Both Willoughby and Strongsville, Ohio are within the Northern District of Ohio.
In a patent case, the Court must apply the law of the Federal Circuit in analyzing personal jurisdiction. See LSI Indus. Inc. v. Hubbell Lighting, Inc., 232 F.3d 1369, 1371 (Fed.Cir.2000). Under Federal Circuit law, because the parties have not conducted jurisdictional discovery, the plaintiff only bears the burden of establishing a prima facie case of personal jurisdiction (as opposed to meeting a preponderance of the evidence standard). See Trintec Indus. Inc. v. Pedre Promotional Prods., Inc., 395 F.3d 1275, 1282 (Fed.Cir. 2005); see also Deprenyl Animal Health, Inc. v. Univ. of Toronto Innovations Found., 297 F.3d 1343, 1347 (Fed.Cir. 2002). Further, the Court will construe the pleadings and affidavits in the light most favorable to Avery. Id.
In general, personal jurisdiction involves a two-pronged inquiry: first, whether the defendant is amenable to process in the forum state and, second, whether exercising personal jurisdiction over the defendant comports with the requirements of federal due process. Id. With respect to the first prong, the Federal Circuit "defer[s] to a state's highest court to interpret whether a defendant is amenable to process in the forum state." Id. This requirement may be satisfied by conduct covered by the Ohio long-arm statute, or, if Ohio recognizes the concept, by fulfilling the requirements of "general jurisdiction."2 Id. In this case, Alien contends that prong one can not be satisfied. First, Alien argues that this Court does not have personal jurisdiction over it because Alien is not amenable to service of process under Ohio's long-arm statute. Further, Alien contends that Ohio law—as it has been interpreted by the Federal Circuit—simply does not recognize the concept of general jurisdiction.
Avery implicitly concedes, as it must on the facts presented, that the Ohio long-arm statute does not reach Alien. Instead, Avery argues that this Court has personal jurisdiction over Alien based on the existence of general jurisdiction. Avery contends that the Federal Circuit has found that general jurisdiction is a valid basis for the assertion of jurisdiction under Ohio law and that Alien's presence in this district satisfies the requirements for the exercise of such jurisdiction.
Thus, the first question the Court must resolve is whether general jurisdiction is a valid legal basis upon which to premise jurisdiction over an out-of-state defendant sued in this district. As discussed below, the Court finds that the Federal Circuit has concluded that personal jurisdiction may be premised on facts supporting general jurisdiction even where Ohio's long-arm statute would not authorize the assertion of specific jurisdiction against that same defendant.
The parties vigorously debate the...
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