Davlyn Mfg. Co., Inc. v. H&M Auto Parts, Inc.

• Decision Date: 18 August 2005
• Docket Number: No. Civ.A. 04-5516.,Civ.A. 04-5516.
• Parties: DAVLYN MANUFACTURING CO., INC., Plaintiff, v. H&M AUTO PARTS, INC., d/b/a H&M Company Incorporated, Henry C. Hight, Jr., and Tape & Technologies Incorporated, Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

414 F.Supp.2d 523

DAVLYN MANUFACTURING CO., INC., Plaintiff, v. H&M AUTO PARTS, INC., d/b/a H&M Company Incorporated, Henry C. Hight, Jr., and Tape & Technologies Incorporated, Defendants.

No. Civ.A. 04-5516.

United States District Court, E.D. Pennsylvania.

August 18, 2005.

COPYRIGHT MATERIAL OMITTED

Gary Allen Rosen, Patrick Madamba, Jr., Law Offices of Gary A. Rosen, PC, Philadelphia, PA, for Plaintiff.

Richard M. Jordan, White and Williams, for Defendant.

MEMORANDUM AND ORDER

JOYNER, District Judge.

Via the instant motion, Defendants Tape & Technologies, Incorporated and Henry C. Hight, Jr. seek, once again, to dismiss this patent infringement action for lack of personal jurisdiction. For the reasons that follow, Defendants' motion shall be granted and this action shall be dismissed with respect to the moving Defendants only.

Facts

Plaintiff Davlyn Manufacturing Co., Inc. ("Davlyn"), a Pennsylvania corporation, is the assignee of three patents describing oven door gaskets used to seal the heat within conventional home ovens. Plaintiff filed the instant patent infringement action against Defendant H&M Auto Parts, Inc. ("H&M") on November 29, 2004, alleging that H&M's sale of oven door gaskets and clips to Electrolux Home Products ("Electrolux/Frigidaire"), the maker of Frigidaire brand appliances, infringed upon Plaintiffs patents. Plaintiff amended its Complaint on December 21, 2004, joining Defendants Tape & Technologies, Incorporated ("T & T") and Henry C. Hight, Jr ("Hight Jr.").

Defendant H&M is a Texas corporation headquartered in San Antonio, with additional offices in El Paso and Helotes. (Flack Depo., pp. 45, 47-50). H&M does business in Pennsylvania and does not contest this Court's jurisdiction. (Flack Depo., pp. 91-93). H&M was established in 1957 by Henry Hight, Sr. ("Hight Sr."), who is a current 60% shareholder. (Hight Aff. ¶ 4). The remaining seven shareholders, who all hold positions as officers and directors, are Hight Sr.'s children: Defendant Henry C. Hight, Jr., Robert Hight, Stephen Hight, Susannah Herman, Hallie Rowe, Joe Hight, and Nancy Flack. (Flack Depo., pp. 10-11; Pl. Exh. D; Hight Aff. ¶ 4).

During the time that they were employed at H&M, Defendant Hight Jr., a Vice President of H&M, and his wife, Sylvia Hight, a sales employee, developed an oven gasket for use in home ovens. (Flack Depo., pp. 65-67; Hight Aff. ¶ 11). In 2003, they arranged for a Chinese vendor to manufacture the allegedly infringing oven gaskets, and Hight Jr. made two sales on behalf of H&M. (Flack Depo., pp. 31-32, 64-65). In June of 2003, 11,000 gaskets were shipped to Electrolux/Frigidaire. (Id. at pp. 65, 82-84; Pl. Exh. O). In August of 2003, 3,000 gaskets were shipped to G.E. Roper Corporation ("GE"), the maker of General Electric brand appliances. (Flack Depo., pp. 65, 82-84; Pl. Exh. O).

Defendant H&M contends that, at some point prior to October 2003, Hight Sr. decided to discontinue the sale of oven gaskets, and instructed Hight Jr. and Sylvia Hight not to make any further sales or purchases of gaskets on behalf of H&M. (Flack Depo., pp. 30-37, 106-107, 114-115). Hight Sr. also allegedly told Hight Jr. and Sylvia Hight that "he wouldn't like" it if they purchased the gaskets on their own, independently of H&M. (Id. at p. 34). Nevertheless, Hight Jr. and Sylvia Hight made additional, allegedly unauthorized, purchases under the H&M name, and as well as at least one additional sale to Electrolux/Frigidaire, which was invoiced on December 19, 2003. (Id. at pp. 31-32, 74-78, 95; Pl. Exhs. P, R). H&M became aware of some of these purchases because the shipping and billing address used was that of H&M's Helotes office, where Hight Jr. and Sylvia Hight are headquartered. (Flack Depo., pp. 32-33; Pl. Exhs. P, R).

On January 16, 2004, H&M was notified by a letter from Plaintiff's counsel that its sale of oven gaskets potentially infringed upon Davlyn's patents. (Pl.Exh. Q). H&M did not respond to Plaintiffs correspondence until April 12, 2004, when Nancy Flack, President of H&M, wrote, "We understand that there are patent issues. After the receipt of your letter we discontinued all sales to Frigidaire on this item." (Pl.Exh. V).

Shortly after H&M's receipt of the January 16, 2004 letter from Plaintiffs counsel, Sylvia Hight sent the following e-mail from her H&M e-mail account to the Chinese manufacturer regarding a purchase order that had been placed on January 16, 2004: "We have been having many issues here regarding the patent and the potential lawsuit ... I'll need to forward the P.O. But because of the potential suit. I need to write and wire it another way ... I'll wire the money but I think I need to send it by another company name." (P1. Exh. R). A subsequent email from Sylvia noted, "The company name that we are going to use is `H&M' Tape & Technologies Company." (Pl.Exh. R). Thereafter, a purchase order dated January 30, 2004 was issued by "H&M Tape & Technologies" for 50,000 units from the Chinese manufacturer, for shipment to "H&M Tape & Technologies" at the address of H&M's Helotes office. (Pl.Exh. S).

Hight Jr. Incorporated H&M Tape & Technologies Incorporated on February 4, 2004, and formally changed the company's name to Tape & Technologies Incorporated on April 5, 2004. (Pl.Exhs.F, G). The business address of T & T's registered agent, Hight Jr., is the same address as H&M's Helotes office. (Pl.Exh. G).

Procedural History

Davlyn filed its Complaint against H&M on November 29, 2004 before the United States District Court for the Eastern District of Pennsylvania, unaware that the allegedly infringing gaskets were being sold by any other company. Defendant H&M was served with the Complaint on December 9, 2004, and Defendant Hight Jr. was notified of the suit at some point prior to December 13, 2004. (Flack Depo., pp. 91-93). Plaintiff first learned that another company was involved in the sale of the gaskets on December 21, 2004, by the following correspondence from H&M's counsel: "H&M made one small sale of the accused product to both Frigidaire and GE. However, once they received the cease and desist letter from your client, they made no further sales ... I have a copy of an email from Louise Wang at Electrolux (Frigidaire) stating, `this is to confirm that Tape & Technology was the supplier who was selling us the fiberglass door seal from Feb.04 to Oct.04.'" (Pl.Exh. Z). Upon receiving notice of T & T's involvement, Davlyn amended its Complaint on December 21, 2004, adding T & T and Hight Jr. as defendants. On January 5, 2005, Davlyn was served with a complaint in a declaratory judgment action that had been filed by T & T in the United States District Court for the Western District of Texas on December 16, 2004.

On January 10, 2005, Defendants T & T and Hight Jr. moved to dismiss this action for lack of personal jurisdiction, or in the alternative, to transfer the action to the United States District Court for the Western District of Texas. This Court denied the Motion without prejudice, and granted 60 days leave to conduct jurisdictional discovery.

On January 31, 2005, Plaintiff Davlyn moved before the United States District Court for the Western District of Texas to dismiss the action pending there, or in the alternative, to transfer venue to the Eastern District of Pennsylvania. Upon consideration of the record, the court found that T & T and Hight knew of the pending suit against H&M in the Eastern District and "clearly filed [the declaratory judgment action] in anticipation of litigation."

Tape & Technologies v. Davlyn Manufacturing Co., Inc., 2005 U.S. Dist LEXIS 8291 at 8, 2005 WL 1072169 at *3 (W.D.Tex.2005). While recognizing that the evidence "weigh[ed] against the exercise of the Court's discretion to hear the declaratory judgment action," the court denied the motion to dismiss only because "there exists some question as to whether the Eastern District of Pennsylvania would be able to exercise personal jurisdiction over Plaintiff." Tape & Technologies, 2005 U.S. Dist LEXIS 8291 at *10, 2005 WL 1072169 at *4.

Before this Court, Defendants T & T and Hight Jr. now renew their motion to dismiss or, in the alternative, to transfer.

Standard of Review: Personal Jurisdiction

Questions of personal jurisdiction in patent actions are governed by Federal Circuit law, rather than that of the regional circuit in which the actions arise. Akro Corp. v. Luker, 45 F.3d 1541, 1543 (Fed. Cir.1995).

In order to establish personal jurisdiction in a patent infringement action over a non-resident defendant, a plaintiff must show both that jurisdiction exists under the forum state's long-arm statute, and that the exercise of jurisdiction would be consistent with the requirements of due process. Commissariat A L'Energie Atomique v. Chi Mei Optoelectronics Corp., 395 F.3d 1315, 1319 (Fed.Cir.2005). Of course, Pennsylvania's long-arm statute is coextensive with the limits of due process, extending jurisdiction to the "fullest extent allowed under the Constitution of the United States." Resnick v. Manfredy, 52 F.Supp.2d 462, 466 (E.D.Pa.1999).

In order to be subject to personal jurisdiction, due process requires that a nonresident defendant have certain "minimum contacts" with the forum state "such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." LSI Indus. v. Hubbell Lighting, Inc., 232 F.3d 1369, 1375 (Fed. Cir.2000) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). The minimum contacts requirement helps ensure that non-residents have fair warning that a particular activity may subject them to litigation within the forum state. Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1565 (Fed.Cir.1994) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286; 297, 100 S.Ct. 559, 62...