Bally Gaming Inc. v. Kappos

• Decision Date: 03 June 2011
• Docket Number: Civil Action No. 10–1906 (JEB).
• Citation: 789 F.Supp.2d 41
• Parties: BALLY GAMING, INC., Plaintiff,v.David KAPPOS, et al., Defendants.
• Court: U.S. District Court — District of Columbia

789 F.Supp.2d 41

BALLY GAMING, INC., Plaintiff,

v.David KAPPOS, et al., Defendants.

Civil Action No. 10–1906 (JEB).

United States District Court, District of Columbia.

June 3, 2011.

Paul L. Hickman, Glenn E. Von Tersch, Technology & Intellectual Property Strategies Group P.C., Palo Alto, CA, Audrey P. Rasmussen, Hall, Estill, Hardwick, Gable, Golden & Nelson, Washington, DC, William C. Milks, III, Hall Estill, Tulsa, OK, for Plaintiff.John G. Interrante, U.S. Attorney's Office, Washington, DC, Andrew C. Aitken, Aitken Law Offices, Wheaton, MD, for Defendants.

MEMORANDUM OPINION AND ORDER

JAMES E. BOASBERG, District Judge.

Defendants Betty Ringo and James Pearson, contending that this Court lacks personal jurisdiction over them, have moved to dismiss this patent infringement suit. Because the Court finds personal jurisdiction proper under 35 U.S.C. §§ 291 and 146, as well as under the Due Process Clause of the Fifth Amendment, their effort does not succeed.¹

I. Factual Background

Plaintiff Bally Gaming, Inc. owns United States Patent 5,816,918 (the “Kelly '918 Patent”). Compl., ¶ 6 (Background). Defendants Ringo and Pearson own United States Patent 5,711,715 (the “Ringo '715 Patent”). Id., ¶¶ 3–4. Defendant David Kappos is the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office. Id., ¶ 2. This case arises from Plaintiff's efforts to secure a “confirmation of patentability of all pending claims” relating to the Kelly ' 918 Patent. Id., ¶ 21. More specifically, Plaintiff appeals from a decision of the United States Patent and Trademark Office's Board of Patent Appeals and Interferences affirming the USPTO's denial of Plaintiff's pending patent claims on the ground that “the Kelly '918 Patent interferes with and is anticipated or rendered obvious by” the Ringo '715 Patent. Id., ¶¶ 8–9 (Background), 14–15. Plaintiff contends that the “claimed invention of the Kelly '918 Patent was conceived prior to conception of the alleged invention of the Ringo '715 Patent,” and that “Director [Kappos] erred in denying petitions to suspend the rules or to otherwise allow submission of evidence of prior invention by the inventors of the Kelly '918 Patent before invention of the Ringo '715 Patent.” Id., ¶¶ 20, 16.

Plaintiff is a corporation organized under the laws of, and having its principal place of business in, Nevada. Id., ¶ 1. Defendant Ringo is a Texas resident. Id., ¶ 3; Mot. at 2. Defendant Pearson is a Florida resident who operates a small business in Tennessee. Compl., ¶ 4; Mot. at 2. Ringo and Pearson assert, and Plaintiff does not contest, that they have no contacts with the District of Columbia beyond the fact of their patent ownership. Mot. at 3.

Plaintiff filed its Complaint on November 5, 2010, seeking issuance of a reexamination certificate under 35 U.S.C. § 145 and review of agency action under 5 U.S.C. §§ 701–706, and alleging an interfering patents claim under 35 U.S.C. § 291. On April 12, 2011, Defendants Ringo and Pearson filed their Motion to Dismiss for Lack of Personal Jurisdiction under Federal Rule of Civil Procedure 12(b)(2), which the Court now considers.

II. Legal Standard

To survive a motion to dismiss under Rule 12(b)(2), Plaintiff bears the burden of “establishing a factual basis for the [Court's] exercise of personal jurisdiction over the defendant.” Crane v. New York Zoological Society, 894 F.2d 454, 456 (D.C.Cir.1990) (citing Reuber v. United States, 750 F.2d 1039, 1052 (D.C.Cir.1984), overruled on other grounds by Kauffman v. Anglo–American School of Sofia, 28 F.3d 1223 (D.C.Cir.1994)). To meet this burden, Plaintiff “must allege specific facts connecting the defendant with the forum.” Capital Bank Int'l Ltd. v. Citigroup, Inc., 276 F.Supp.2d 72, 74 (D.D.C.2003) (citing Second Amendment Foundation v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C.Cir.2001)). In determining whether a basis for personal jurisdiction exists, “factual discrepancies appearing in the record must be resolved in favor of the plaintiff.” New York Zoological Society, 894 F.2d at 456 (citing Reuber, 750 F.2d at 1052).

III. Analysis

Plaintiff asserts that personal jurisdiction over Ringo and Pearson is conferred on this Court by the nationwide-service-of-process provision of 35 U.S.C. § 146, as incorporated in 35 U.S.C. § 291, the statute under which Plaintiff brings its interference claim. Opp. at 3. Defendants Ringo and Pearson raise two arguments in denying that personal jurisdiction exists. First, they maintain that “Section 291's authorization of ‘service’ on U.S. citizens or nationwide service is incomplete and ambiguous at best.” Reply at 4. In the alternative, they contend that, “notwithstanding the existence of a statutory basis for the exercise of jurisdiction over the defendants,” id. at 2, to so find in the present case would violate their Fifth Amendment Due Process rights “[b]ecause [they] lack ‘minimum contacts' [with the District of Columbia] and did not ‘purposefully avail’ themselves of the laws of the District of Columbia.” Mot. at 6. The Court addresses each in turn.

A. 35 U.S.C. § 146

Federal Rule of Civil Procedure 4(k)(1)(C) provides: “Serving a summons ... establishes personal jurisdiction over a defendant ... when authorized by a federal statute.” Title 35, section 291 of the U.S.Code gives the owner of an interfering patent a private cause of action against the owners of the first patent and explicitly addresses the question of jurisdiction by invoking the provisions of 35 U.S.C. § 146. Section 146 contains a nationwide-service-of-process provision that, in certain specified circumstances, vests jurisdiction over patent interference claims in this Court:

If there be adverse parties residing in a plurality of districts not embraced within the same state, or an adverse party residing in a foreign country, the United States District Court for the District of Columbia shall have jurisdiction and may issue summons against the adverse parties directed to the marshal of any district in which any adverse party resides.

As the plain language of the statute indicates, § 146 gives this Court jurisdiction over Defendants in this patent interference case.

Discussing 35 U.S.C. § 72a, the precursor to § 146, the U.S. Court of Appeals for the District of Columbia Circuit described the origin and purpose of the provision: “The purpose of the statute is to make possible the adjudication of all issues involved, between all adverse parties, in one proceeding and in one forum. The District of Columbia was selected by Congress as being the forum in which this fundamental objective of equity can best be achieved, when adverse parties reside in a plurality of districts not within the same state.” Robinson v. Wayne, 136 F.2d 767, 769 (D.C.Cir.1943) (upholding jurisdiction). In 1960, the D.C. Circuit considered the scope of § 146 and clarified that “adverse parties residing in a plurality of districts” refers to a plurality of defendants residing in different districts, rather than one plaintiff and one defendant residing in different districts. Hayes v. Livermont, 279 F.2d 818 (D.C.Cir.1960).

Section 146 strikes an important balance by ensuring that, in cases involving defendants residing in different states, plaintiffs have a forum— i.e., the District of Columbia—in which to seek relief; at the same time, defendants in patent cases are afforded the process they are due. As the D.C. Circuit has explained, “ § 146 permits claims that cannot be enforced elsewhere to be enforced here, and does not create an option of enforcing here claims that can be enforced elsewhere.” Chris Laganas Shoe Co. v. Watson, 221 F.2d 881, 882–83 (D.C.Cir.1955). The defendants in that case included one private-party defendant, a New York corporation, and the Commissioner of Patents. Id. at 882. The D.C. Circuit held that, since the Commissioner was not a necessary party, jurisdiction was improper because were no defendants residing in different states. Id. at 882–83. The court reasoned: “ ‘To hold that the plaintiff by making a mere formal party a codefendant can compel the real defendant, the real party in interest, to come from any part of the United States and defend his rights in the District of Columbia would conflict with the general purpose of Congress as appears from the fact that ordinarily suits in the federal courts must be brought in the district in which the defendant resides.’ ” Id. at 883 (quoting Coe v. Hobart Mfg. Co., 102 F.2d 270, 271 (D.C.Cir.1939)).

More recently, two courts in this district have applied § 146 in resolving motions to dismiss for lack of personal jurisdiction in the way the D.C. Circuit envisioned. The plaintiffs in both cases relied solely on § 146 as the basis of the court's personal jurisdiction over the defendants, and the courts in each considered the purpose and scope of § 146 in deciding the motions to dismiss. In Shell Research Ltd. v. Matthewson, No. 89–0160, 1990 WL 198646 (D.D.C. Nov. 21, 1990), the court explained: “The purpose of the special jurisdictional provisions of 35 U.S.C. § 146 is to provide plaintiffs with a last resort in the District Court for the District of Columbia if they cannot otherwise join all necessary parties in another federal district court.” Id. at *1 (citing Chris Laganas, 221 F.2d at 882). That case turned on a factual question relating to the identity and number of entities with legal rights or interests in the patent at issue. Id. The court found Coopers, Inc., a Delaware corporation, to be the only adverse party to the action for purposes of § 146. Id. at *2. Because there were not adverse parties residing in a plurality of states and the plaintiff's claim could properly be brought in the district of Delaware, the court found “ § 146 does not empower this Court to assert personal jurisdiction over defendants” and dismissed the action. Id.

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