BIB Mfg. Co. v. Dover Mfg. Co.

• Decision Date: 09 October 1992
• Docket Number: No. N 91-0074 C.,N 91-0074 C.
• Citation: 804 F. Supp. 1129
• Parties: BIB MANUFACTURING CO., Plaintiff, v. DOVER MANUFACTURING CO. and Roger A. Draft, Defendants.
• Court: U.S. District Court — Eastern District of Missouri

804 F. Supp. 1129

BIB MANUFACTURING CO., Plaintiff, v. DOVER MANUFACTURING CO. and Roger A. Draft, Defendants.

No. N 91-0074 C.

United States District Court, E.D. Missouri, N.D.

October 9, 1992.

COPYRIGHT MATERIAL OMITTED

Lionel Lucchesi, Polster, Polster & Lucchesi, St. Louis, Mo., Robert Clayton, II, Clayton & Rhodes, Hannibal, Mo., for plaintiff.

John D. Hussman, Mark T. Keaney, Lewis, Rice & Fingersh, St. Louis, Mo., for defendant Draft.

MEMORANDUM

GUNN, District Judge.

This matter is before the Court on several motions.

Plaintiff BIB Manufacturing Company brings this action against Dover Manufacturing Company and Roger A. Draft. In BIB's first count it seeks a declaration that it has not infringed defendants' patents. The remainder of the complaint consists of one count alleging violation of the Lanham Trade-Mark Act, 15 U.S.C. §§ 1051-1127, and another asserting tortious interference with a business relationship.

Draft, an individual residing in Michigan, has exclusively licensed two of his patents to Dover, a Delaware corporation principally located in New York. The licensing agreement authorizes Dover to make, in accordance with the patents-in-suit, overflow shut-off valves for underground fuel storage tanks and pay Draft a royalty from the sale of these valves. The licensing agreement also provides that Draft shall have the first right to initiate litigation for patent infringement. Upon notice from Draft that he does not intend to pursue such litigation, Dover may then assume litigation responsibility. BIB, a Missouri corporation having its regular place of business in Hannibal, Missouri, also manufactures overflow shut-off valves.

On April 26, 1991, attorney Richard C. Cooper of Price, Heneveld, Cooper, DeWitt & Litton wrote a letter to BIB in Missouri demanding that it cease and desist infringement of both patents. Cooper sent a copy of this letter to one of BIB's customers located in California. The letter does not explicitly state who Cooper represented. In fact, BIB's customer assumed that Cooper represented Dover and stated so in a letter to BIB inquiring about Cooper's allegations. Another letter from Cooper to BIB's attorney, dated June 13, 1991, expressed Cooper's concerns that the "making, using or selling of the infringing product will certainly be considered willful and in blatant disregard of the rights of Mr. Draft and OPW Division of Dover Corporation and will be treated accordingly." Both Draft and Dover were copied on this letter. Eventually BIB and Cooper entered into settlement discussions that ultimately failed. This suit commenced, followed promptly by Draft filing suit against BIB in the United States District Court for the Western District of Michigan. Draft and Dover both maintain that during all of these activities Cooper solely represented Draft. Beyond his involvement in these activities, Draft has no other contacts with Missouri.

In passing on a motion to dismiss for lack of jurisdiction over a non-resident, a federal court with jurisdiction based on diversity is required to engage in a two-step inquiry. The Court must determine whether defendant committed one of the acts enumerated in the state long-arm statute and whether the exercise of personal jurisdiction over defendant comports with the Due Process Clause of the Fourteenth Amendment. Land-O-Nod Co. v. Bassett Furniture Indus., Inc., 708 F.2d 1338 (8th Cir.1983).

Plaintiff, the party seeking to invoke federal jurisdiction, has the burden of establishing that jurisdiction exists, and this burden may not be shifted to the challenging party. Mountaire Feeds, Inc. v. Agro Impex, S.A., 677 F.2d 651, 653 n. 3 (8th Cir.1982). While the facts are viewed in the light most favorable to the plaintiff, "there must nonetheless be some evidence upon which a prima facie showing of jurisdiction may be found to exist." Aaron Ferer & Sons Co. v. Diversified Metals Corp., 564 F.2d 1211, 1215 (8th Cir.1977) (citations omitted).

The Due Process Clause of the Fourteenth Amendment places limits upon the power of a court to exercise personal jurisdiction over a non-resident defendant by requiring the defendant to have certain minimum contacts with the forum state so that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945); Land-O-Nod, 708 F.2d at 1340. "In judging minimum contacts, a court properly focuses on `the relationship among the defendant, the forum, and the litigation.'" Calder v. Jones, 465 U.S. 783, 788, 104 S.Ct. 1482, 1486, 79 L.Ed.2d 804 (1984) (citations omitted). The defendant's contacts with the forum state must be purposeful and such that defendant "should reasonably anticipate being haled into court there." World Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980). In this circuit, the due process standard has devolved into a consideration of five factors:

(1) the nature and quality of the contacts with the forum state; (2) the quantity of the contacts with the forum state; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties.

Aaron Ferer & Sons, 564 F.2d 1211, 1215.

BIB premises this Court's personal jurisdiction over Draft on Cooper's communications with BIB or a BIB attorney as well as Dover's Missouri sales of products exploiting Draft's patents. As to BIB's first count under the Declaratory Judgment Act, 28 U.S.C. § 2201-2202, the Court concludes that this circuit's five-step inquiry yields the same outcome as that reached by the many courts which conclude that subjecting a defendant to the foreign jurisdiction of an alleged infringer simply on the basis of written notice of infringement would offend "traditional notions of substantial justice and fair play."¹Cascade Corp. v. Hiab-Foco AB, 619 F.2d 36 (9th Cir.1980); KVH Indus., Inc. v. Moore, 789 F.Supp. 69 (D.R.I.1992); Medeco Security Locks, Inc. v. Fichet-Bauche, 568 F.Supp. 405, 408 (D.Va.1983); Harley-Davidson Motor Co. v. Strada, 78 F.R.D. 521, 524-25 (E.D.Wisc.1978); Conwed Corp. v. Nortene, S.A., 404 F.Supp. 497, 504-06 (D.Minn.1975). Draft's contacts with Missouri are minimal, were conducted through the mails and via facsimile communications and not through the personal presence of his attorney or himself, and although these communications gave rise to this request for declaratory relief, they have no bearing on the underlying question whether Draft's patents have been infringed. Moreover, the patent laws countenance the sending of written notice of infringement prior to litigation and thus should not subject a patent-holder to jurisdiction in a foreign forum. The cease-and-desist letters as well as the resulting settlement efforts standing on their own will not suffice to confer this Court with personal jurisdiction over Draft.

Plaintiff also relies, principally in connection with Counts II and III, on a cease-and-desist letter sent to BIB's customer in California. The Eighth Circuit, however, reasons that the "interference with renewal contracts outside the state of Missouri causing damages to plaintiff in Missouri" will not sustain the Court's personal jurisdiction over defendant. Keystone Publishers Serv., Inc. v. Ross, 747 F.2d 1233, 1234 (8th Cir.1984).

Lastly, BIB seeks to impute Dover's sales activities in Missouri to Draft. BIB cites no apposite authority for its argument that...