Ensign-Bickford Co. v. ICI EXPLOSIVES USA INC., Case No. 2:92-CV-607 (JAC).

• Decision Date: 31 March 1993
• Docket Number: Case No. 2:92-CV-607 (JAC).
• Citation: 817 F. Supp. 1018
• Court: U.S. District Court — District of Connecticut
• Parties: The ENSIGN-BICKFORD COMPANY, Plaintiff, v. ICI EXPLOSIVES USA INC. and ICI Explosives Canada Inc., a division of ICI Canada Inc., Defendant.

817 F. Supp. 1018

The ENSIGN-BICKFORD COMPANY, Plaintiff, v. ICI EXPLOSIVES USA INC. and ICI Explosives Canada Inc., a division of ICI Canada Inc., Defendant.

Case No. 2:92-CV-607 (JAC).

United States District Court, D. Connecticut.

March 31, 1993.

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James A. Wade and Frank F. Coulom, Jr. (Robinson & Cole), Hartford, CT, for plaintiff.

William R. Murphy (Tyler, Cooper & Alcorn), New Haven, CT, Garland P. Andrews, David L. Hitchcock and Bruce W. Slayden (Richards, Medlock & Andrews), Dallas, TX, for defendant.

RULING ON MOTION TO DISMISS

JOSE A. CABRANES, Chief Judge:

The plaintiff, The Ensign-Bickford Company ("Ensign-Bickford") brings this action for patent infringement against ICI Explosives USA, Inc. ("ICI USA") and ICI Explosives Canada, Inc. ("ICI Canada" or "the defendant"). Pending before the court is ICI Canada's Motion to Dismiss (filed July 23, 1992). The principal issues raised in this motion are (1) whether this court has subject-matter jurisdiction over the claims against ICI Canada and (2) whether this court has in personam jurisdiction over ICI Canada.

The complaint, which was filed on July 14, 1992, alleges that Ensign-Bickford holds United States Letters Patent 3,987,732 (the "'732 patent") for an explosive initiation device marketed under the trade name of E-Z Det; that ICI Canada produces a similar product under the trade name of Handidet; and that ICI USA purchases the Handidet product from ICI Canada and sells it in the United States. On the basis of these allegations, the complaint asserts a patent infringement claim and two related claims against ICI Canada. Count One alleges that by "making, using, and selling" the Handidet device ICI Canada is directly infringing the '732 patent in violation of 35 U.S.C. § 271.¹ Count Two alleges that by manufacturing and selling that device ICI Canada is breaching a January 4, 1990 agreement with Ensign-Bickford. Count Three alleges that by infringing the '732 patent and breaching the January 4, 1990 agreement ICI Canada is carrying out unfair trade practices in violation of the Connecticut Unfair Trade Practices Act ("CUTPA"), Conn.Gen.Stat. § 42-110b et seq. The complaint asserts the same three claims against ICI USA, which is not a party to the present motion.

Defendant ICI Canada filed this motion to dismiss on July 23, 1992, and the plaintiff filed a memorandum in opposition on November 20, 1992.² The court heard oral argument on this motion on November 30, 1992. The parties have been permitted to conduct extensive discovery on jurisdiction-related matters both before and after the hearing. In addition, the parties have also been afforded the opportunity to submit numerous supplemental memoranda as discovery in this matter has progressed.³ The motion became ripe for decision on February 1, 1993.

DISCUSSION

ICI Canada's motion to dismiss raises two principal issues: (1) whether Ensign-Bickford's sole federal claim, which is a patent infringement claim, is sufficient to confer subject-matter jurisdiction on this court, and (2) whether the exercise of personal jurisdiction over ICI Canada in this case is authorized by the Connecticut long-arm statute and is consistent with the Due Process Clause of the Fourteenth Amendment. In addition, ICI Canada seeks dismissal of the plaintiff's pendent state law claims.

I

At the threshold, it is necessary to consider ICI Canada's motion to dismiss the plaintiff's claims for lack of subject-matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1). ICI Canada challenges the court's subject-matter jurisdiction on two grounds. First, the defendant attacks the patent-infringement claim on its face, arguing that the claim does not establish federal jurisdiction because it does not allege that ICI Canada used, made or sold the Handidet device "within the United States" as required by 35 U.S.C. § 271(a).⁴ Second, ICI Canada attacks the truth of the jurisdictional allegations on which the patent-infringement claim is based: the defendant argues that the court should find, based on facts in the record, that ICI Canada never used, sold, or made the Handidet device within the United States.⁵ In response, the plaintiff (1) acknowledges that a patent-infringement claim must allege that the violation occurred in the United States, but asserts that the complaint sufficiently makes this allegation, and (2) presents evidence to show that ICI Canada did use and sell the Handidet device in the United States.⁶ Each of the defendant's challenges to the court's subject-matter jurisdiction will be addressed in turn.

Before turning to the merits of the Rule 12(b)(1) motion, it should be emphasized that the defendant has made two distinct challenges to the court's subject-matter jurisdiction: a facial challenge addressed solely to the pleadings, and a factual challenge addressed to the sufficiency of the evidence underlying the jurisdictional elements of the pleadings.⁷ With respect to the facial challenge, the court may consider only the materials in the complaint itself. With respect to the factual challenge, however, the court may also consider affidavits, deposition testimony, and other materials outside the complaint. See Antares Aircraft, L.P. v. Federal Republic of Nigeria, 948 F.2d 90, 96 (2d Cir.1991), vacated on other grounds, ___ U.S. ___, 112 S.Ct. 3020, 120 L.Ed.2d 892 (1992). The consideration of materials outside the complaint on a motion to dismiss pursuant to Rule 12(b)(1) does not convert the motion to one for summary judgment pursuant to Rule 56. See Moore's Federal Practice ¶ 12.072.—1 (1985).

A

The first issue to be considered is whether the patent-infringement claim alleged in Count One is sufficient on its face to establish subject-matter jurisdiction. Count One alleges that

defendants are willfully and intentionally infringing Letters Patent '732 by making, selling, and using a product marketed under the name "Handidet" and described by defendants as a "Nonelectric, Surface Delay and In-hole Detonator Assembly," with full knowledge of the existence of Letters Patent '732.

Complaint, ¶ 11. It is true, as the defendants point out, that this claim does not specifically allege that the defendants infringed the '732 patent "within the United States." Even so, the plaintiff's patent-infringement allegation is sufficient to establish subject-matter jurisdiction. It is well-established that a court should not dismiss a federal claim for lack of subject-matter jurisdiction based on the pleadings unless the claim "clearly appears to be immaterial and made solely for the purpose of obtaining jurisdiction" or the claim "is wholly insubstantial and frivolous." Spencer v. Casavilla, 903 F.2d 171, 173 (2d Cir.1990) (quoting Bell v. Hood, 327 U.S. 678, 682-83, 66 S.Ct. 773, 776, 90 L.Ed. 939 (1946)). Under this rule, the court should not dismiss a claim for lack of subject-matter jurisdiction even if the court would have dismissed the complaint in response to a motion under Fed.R.Civ.P. 12(b)(6) for failure to state a claim on which relief can be granted. See Spencer, 903 F.2d at 173. In sum, the federal court has subject-matter jurisdiction if the complaint "plainly seeks recovery under the federal Constitution or laws and asserts claims that are neither immaterial nor frivolous." Id. at 173-74.

In the present case, the complaint meets this standard. There is no doubt that the plaintiff seeks relief under federal law; it is clear that the patent-infringement claim is not immaterial to the complaint, since it is based directly on the plaintiff's alleged injury; and, notwithstanding the defendant's objection, it is also clear that the claim is not frivolous on its face. In light of the fact that the complaint meets the standard articulated in Spencer, the complaint is sufficient to survive a Rule 12(b)(1) motion to dismiss for lack of subject-matter jurisdiction. The fact that the complaint might not be sufficient to survive a Rule 12(b)(6) motion to dismiss for failure to state a claim is simply irrelevant here, since the defendant has made no such motion. See Spencer, 903 F.2d at 173 (dismissal should be on the merits, not for lack of jurisdiction, where court concludes that allegations in the complaint are insufficient). Accordingly, the court concludes that the patent-infringement claim alleged in Count One is sufficient on its face to establish subject-matter jurisdiction.

B

The second issue to be addressed is whether the plaintiff's patent-infringement claim is factually sufficient to establish subject-matter jurisdiction. The defendants have challenged the court's subject-matter jurisdiction by arguing that facts in the record establish that ICI Canada never sold or used the Handidet within the United States.⁸ In response, the plaintiff contends that there is a "genuinely disputed question of fact" as to whether ICI Canada used or sold the Handidet device in this country.⁹ The plaintiff also argues, in the alternative, that there is a genuine factual dispute as to whether ICI Canada "induced" ICI USA to infringe the plaintiff's patent.¹⁰

The court may dismiss a facially sufficient complaint for lack of subject-matter jurisdiction if the court finds, based on affidavits or other evidence outside the complaint, that the asserted basis for federal jurisdiction is not sufficient. See KVOS, Inc. v. Associated Press, 299 U.S. 269, 278, 57 S.Ct. 197, 201, 81 L.Ed. 183 (1936) (presentation of "facts dehors the complaint" was "an appropriate method of challenging the jurisdictional allegations of the complaint"); Antares Aircraft, 948 F.2d at 96 (court "may resolve disputed jurisdictional fact issues by reference to evidence outside the pleadings, such as affidavits"). Where the defendant has challenged the factual allegations underlying the plaintiff's claim to federal jurisdiction, the plaintiff bears the burden of presenting evidence to show that federal...