Celgard, LLC v. SK Innovation Co.
| Decision Date | 06 July 2015 |
| Docket Number | No. 2014–1807.,2014–1807. |
| Citation | 115 U.S.P.Q.2d 1569,792 F.3d 1373 |
| Parties | CELGARD, LLC, Plaintiff–Appellant v. SK INNOVATION CO., LTD., Defendant–Appellee. |
| Court | U.S. Court of Appeals — Federal Circuit |
Martin Richard Lueck, Robins, Kaplan, Miller & Ciresi, LLP, Minneapolis, MN, argued for plaintiff-appellant. Also represented by Andrew Douglas Hedden, Jamie R. Kurtz ; Bryan J. Vogel, New York, N.Y.
J. Michael Jakes, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Washington, DC, argued for defendant-appellee. Also represented by Charles Thomas Collins–Chase, Hala S. Mourad ; Cortney Scott Alexander, Atlanta, GA; Charles Hyuk Suh, Reston, VA.
Before NEWMAN, REYNA, and WALLACH, Circuit Judges.
Celgard, LLC appeals the dismissal of its patent infringement suit by the United States District Court for the Western District of North Carolina for lack of personal jurisdiction. The district court determined it lacked personal jurisdiction over SK Innovation Co., Ltd. (“SKI”) under either a purposeful-direction theory or a stream-of-commerce theory. For the reasons set forth below, we affirm the dismissal.
I. Background
Celgard is a developer and manufacturer of battery membranes. The membranes Celgard develops are used to separate chemical cell components in lithium-ion batteries, preventing contact between the positive and negative electrodes. Celgard developed a separator technology that uses a ceramic composite coating that helps prevent electrical shorting. Celgard obtained a patent for the ceramic-coated separator technology, United States Patent No. 6,432,586 (“'586 patent”). This technology is used in rechargeable batteries in several emerging industries, including electronic vehicles (“EV”) and consumer electronic (“CE”) devices such as laptops and cellular phones. Celgard is headquartered in Charlotte, North Carolina.
SKI is a manufacturer of separators for use in lithium-ion batteries. SKI mainly supplies the separators to third-party manufacturers. But SKI also manufactures batteries that include the separators it produces. SKI's principal place of business is in Seoul, Korea. All of SKI's design, manufacturing, and sales operations are based in Korea.
In April 2013, Celgard sued SKI for infringement of the '586 patent in the Western District of North Carolina. Celgard alleged in the complaint that SKI's separators infringed the '586 patent. Celgard sought to establish the district court's jurisdiction based on allegations that SKI purposefully directed activities at the forum state through sales and offers for sale of its accused separators to residents of North Carolina. J.A. 66. The complaint did not specify to whom the offers or sales were made.
SKI moved to dismiss the complaint for lack of personal jurisdiction on the basis of an absence of evidence that SKI ever sold or offered for sale the accused products in North Carolina. J.A. 129–31. In support of its motion, SKI provided a sworn declaration from a senior manager of SKI, stating that all of SKI's sales are to customers outside of the United States. J.A. 111. The declarant stated that SKI had no knowledge of any established sales channels in North Carolina for its battery separators, and that SKI had no control over where or to whom SKI's customers subsequently sold or distributed batteries incorporating SKI's separators. Id. SKI, through the declarant, agreed to be subject to specific personal jurisdiction in New York State. J.A. 113.
Celgard opposed SKI's motion. In its opposition, Celgard continued to assert that SKI was subject to personal jurisdiction under a purposeful-direction theory, based on offers for sale to a customer in North Carolina. J.A. 146. Celgard argued that jurisdiction was proper under a stream-of-commerce jurisdictional theory, based on alleged sales by SKI to third-party manufacturers of CE devices who, in turn, offer the devices for sale in North Carolina. Id. Celgard also filed an alternative motion for jurisdictional discovery related to sales and offers for sale of the accused products in North Carolina. J.A. 307.
The district court granted Celgard's motion to conduct jurisdictional discovery. J.A. 85. It also denied SKI's motion to dismiss for lack of personal jurisdiction without prejudice to SKI's right to renew its motion following jurisdictional discovery. J.A. 108. During jurisdictional discovery, Celgard deposed SKI's 30(b)(6) witness, subpoenaed numerous third parties, and obtained discovery from EV distributor Kia Motors of America (“KMA”) and CE manufacturers Dell and Apple. Appellant's Br. 10; cf. J.A. 704, 725. Neither party requested a jurisdictional hearing, and the court did not conduct one.
After the close of jurisdictional discovery, SKI renewed its motion to dismiss for lack of personal jurisdiction. SKI argued that jurisdictional discovery failed to establish jurisdiction on the basis of sales or offers for sale of the accused products in North Carolina, or that SKI directed any activities to that state. J.A. 701–03. SKI further argued that Celgard could not base jurisdiction on a stream-of-commerce theory because Celgard produced no evidence that any of SKI's accused products had been present in North Carolina. J.A. 704. Celgard opposed SKI's renewed motion to dismiss.
SKI's motion came before a magistrate judge, who recommended that SKI's motion to dismiss be granted and that the case be dismissed for lack of personal jurisdiction. J.A. 8. The magistrate judge explained that jurisdictional discovery “revealed precious little, if any contacts between SKI and North Carolina.” J.A. 4. The magistrate judge found that there was no evidence of SKI having sold or offered to sell its products into the forum state. J.A. 7. Further, none of SKI's products had been found in North Carolina. The magistrate judge also found that there was no evidence that SKI had made any sales or offers to sell in North Carolina. J.A. 7. Thus, the magistrate judge concluded that there was no basis to exercise personal jurisdiction over SKI under either a purposeful-direction or stream-of-commerce theory. J.A. 7.
Celgard moved for reconsideration of the magistrate judge's recommendation. The magistrate judge denied Celgard's motion for reconsideration. After Celgard objected to the magistrate judge's recommendation and the denial of its motion for reconsideration, the district court judge adopted the magistrate judge's recommendation and dismissed the case for lack of personal jurisdiction. J.A. 16.
Celgard appeals the dismissal for lack of personal jurisdiction. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).
I. Discussion
On appeal, Celgard contends two types of contacts establish personal jurisdiction in North Carolina. First, Celgard argues a “purposeful direction” jurisdictional theory, under which the advertisements of two Kia automobile dealers located in North Carolina, which suggest that the 2015 Kia Soul EV would be available for purchase in North Carolina in late 2014, confer personal jurisdiction upon the district court. Second, Celgard advances a “stream of commerce” theory, relying on SKI's sales in the CE market to original equipment manufacturers (“OEMs”) who distribute the products nationwide, including in North Carolina.
We review a district court's determination on personal jurisdiction without deference, applying our own law when a patent question exists. Grober v. Mako Prods., Inc., 686 F.3d 1335, 1346 (Fed.Cir.2012) (citations omitted).
Our determination of whether a defendant is subject to specific personal jurisdiction in the forum state involves two inquiries: first, whether the forum state's long-arm statute permits service of process and, second, whether the assertion of jurisdiction is consistent with due process. Elecs. for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1349 (Fed.Cir.2003).
Due process requires that the defendant have sufficient “minimum contacts with [the forum state] such that maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (quotation marks and citation omitted). We determine whether the due process requirement for specific personal jurisdiction is met by considering (1) whether the defendant purposefully directed its activities at residents of the forum state, (2) whether the claim arises out of or relates to the defendant's activities with the forum state, and (3) whether assertion of personal jurisdiction is reasonable and fair. Grober, 686 F.3d at 1346 (quoting Elecs. for Imaging, 340 F.3d at 1350 ). The plaintiff bears the burden of affirmatively establishing the first two elements of the due process requirement. Elecs. for Imaging, 340 F.3d at 1350. If the plaintiff meets its burden, the burden shifts to the defendant to prove that personal jurisdiction is unreasonable. Id. “The first two factors correspond with the ‘minimum contacts' prong” of International Shoe, “and the third factor corresponds with the ‘fair play and substantial justice’ prong.” Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1360 (Fed.Cir.2001).
The parties dispute whether Celgard must prove the existence of personal jurisdiction under a prima facie standard or a preponderance of the evidence standard. Celgard contends that it need only make a prima facie showing of jurisdiction because the district court did not hold an evidentiary hearing. SKI disagrees, arguing that the burden is one of a preponderance of the evidence because the parties conducted extensive jurisdictional discovery and no jurisdictional hearing was necessary. The district court agreed with Celgard and applied the prima facie standard.
We agree with the district court. When the district court's determination of personal jurisdiction is based on affidavits and other written materials, and no jurisdictional hearing is conducted, the...
To continue reading
Request your trial
-
Slyce Acquisition Inc. v. Syte - Visual Conception Ltd.
...an evidentiary hearing regarding jurisdiction, the "plaintiff usually bears only a prima facie burden." Celgard, LLC v. SK Innovation Co., Ltd. , 792 F.3d 1373, 1378 (Fed. Cir. 2015). Personal jurisdiction is proper where the state long-arm statute permits service of process on the defendan......
-
First Cmty. Bank, N.A. v. First Tenn. Bank, N.A.
...there was no evidentiary hearing, the preponderance standard applied under those circumstances. See also Celgard, LLC v. SK Innovation Co., 792 F.3d 1373, 1378 (Fed.Cir.2015) (stating that the preponderance standard applies when parties have conducted jurisdictional discovery and jurisdicti......
-
Susan McKnight, Inc. v. United Indus. Corp.
...is sufficient to establish jurisdiction, or whether intent that the products reach the forum is required." Celgard, LLC v. SK Innovation Co., 792 F.3d 1373, 1381 (Fed. Cir. 2015) (summarizing the plurality and differing opinions in Asahi ). In Asahi, Justice O'Connor, along with four other ......
-
Indag GmbH & Co. Betriebs KG v. IMA S.P.A.
...permits service of process and (2) whether the assertion of jurisdiction is consistent with due process. Celgard, LLC v. SK Innovation Co. , 792 F.3d 1373, 1377–78 (Fed.Cir.2015). This second factor, under the Due Process Clause, constrains the courts' “authority to bind a nonresident defen......
-
Case Comments
...was affirmed without the need to decide the limits of the stream-of-commerce theory of jurisdiction. Celgard, LLC v. KS Innovation Co., 792 F.3d 1373, 115 U.S.P.Q2d 1569 (Fed. Cir. 2015).PATENTS - REEXAMINATION If "a substantive change has been made to the original claims during reexaminati......