Fujitsu Ltd. v. Belkin Int'l Inc., Case No. 10–CV–03972–LHK.

• Decision Date: 29 March 2011
• Docket Number: Case No. 10–CV–03972–LHK.
• Parties: FUJITSU LIMITED, Plaintiff,v.BELKIN INTERNATIONAL, INC.; Belkin, Inc.; D–Link Corporation; D–Link Systems, Inc.; Netgear, Inc.; Zyxel Communications Corporation; and Zyxel Communications, Inc., Defendants.
• Court: U.S. District Court — Northern District of California

782 F.Supp.2d 868

FUJITSU LIMITED, Plaintiff,
v.
BELKIN INTERNATIONAL, INC.; Belkin, Inc.; D–Link Corporation; D–Link Systems, Inc.; Netgear, Inc.; Zyxel Communications Corporation; and Zyxel Communications, Inc., Defendants.

Case No. 10–CV–03972–LHK.

United States District Court, N.D. California,San Jose Division.

March 29, 2011.

36,769. Cited.

[782 F.Supp.2d 872]

Christopher W. Kennerly, Kevin E. Cadwell, Baker Botts L.L.P., Palo Alto, CA, for Plaintiff.

Duncan Matthew Palmatier, Shiou–Jin Christine Hwang Yang, Law Offices of S.J. Christine Yang, Fountain Valley, CA, for Defendants.

ORDER RE: D–LINK CORPORATION, D–LINK SYSTEMS, INC., ZYXEL COMMUNICATIONS CORPORATION, AND ZYXEL COMMUNICATIONS, INC.'S MOTIONS TO DISMISS LUCY H. KOH, District Judge.

This Order addresses four separate motions to dismiss, each filed by a different Defendant. D–Link Corporation (“D–Link Corp.”) moves to dismiss Plaintiff Fujitsu Limited's claims against it pursuant to Federal Rules of Civil Procedure 12(b)(5) for insufficient service of process and 12(b)(2) for lack of personal jurisdiction. Dkt. No. 53 (“D–Link Corp. Mot.”). ZyXEL Communications Corporation (“ZyXEL Corp.”) moves to dismiss Fujitsu's claims against it pursuant to Rule 12(b)(5) for insufficient service of process. Dkt. No. 54 (“ZyXEL Corp. Mot.”). D–Link Systems, Inc. (“D–Link Systems”) and ZyXEL Communications, Inc. (“ZyXEL U.S.”) move for dismissal pursuant to Rule 12(b)(6) for failure to state a claim. Dkt. Nos. 46 (“D–Link Sys. Mot.”), 48 (“ZyXEL U.S. Mot.”). Fujitsu opposes all of the motions. Dkt. Nos. 87 (“Dismiss Opp'n”), 88 (“Process Opp'n”). After considering the parties' submissions and oral arguments, the Court hereby DENIES D–Link Corp. and ZyXEL Corp.'s motions to dismiss pursuant to Rule 12(b)(5) for insufficient service of process, but quashes Fujitsu's service of process; DENIES D–Link Corp.'s motion to dismiss pursuant to Rule 12(b)(2) for lack of personal jurisdiction; and GRANTS in part and DENIES in part D–Link Systems and ZyXEL U.S.'s motions to dismiss pursuant to Rule 12(b)(6) for failure to state a claim.

I. BACKGROUND A. Fujitsu's Complaint

In its complaint, Fujitsu asserts direct and indirect patent infringement claims against Belkin International, Inc., Belkin, Inc., D–Link Corp., D–Link Systems, Netgear, Inc., ZyXEL Corp., and ZyXEL U.S. (collectively “the Defendants”). Dkt. No. 1 (“Compl.”). Fujitsu claims that the Defendants are infringing United States Patent No. Re. 36,769 (the “Ozawa Patent”). Compl., Ex. A. According to Fujitsu's complaint, the Ozawa Patent, which issued on July 11, 2000, is a reissue of United States Patent No. 5,357,091, which issued on October 18, 1994. Compl. ¶ 11.¹ As described by Fujitsu in its complaint, the Ozawa Patent concerns card type input/output interface devices. Id.

Fujitsu alleges that it owns and has the right to enforce the Ozawa Patent. Id. ¶ 12. Fujitsu claims that each of the Defendants make, use, offer to sell, sell, or import devices within the scope of one or more of the claims of the Ozawa Patent. Id. ¶ 13. Furthermore, Fujitsu alleges that each of the Defendants is actively inducing others to infringe the Ozawa Patent and is contributing to the infringement of the Ozawa Patent. Id. ¶ 14. This allegedly infringing activity by each of the Defendants

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involves the making, using, offering to sell, selling, or importing of wireless interface cards, access points, and routers. Id. ¶¶ 14–18.B. Service of Process on D–Link Corp. and ZyXEL Corp.

D–Link Corp. and ZyXEL Corp. are both corporations organized under the laws of Taiwan with their principal place of business in Taiwan. On October 15, 2010, Chi-yun Hsiao, an attorney in Taiwan, executed service of process on both D–Link Corp. and ZyXEL Corp. by hand delivering Fujitsu's complaint, summons, and other documents to D–Link Corp. and ZyXEL Corp.'s respective headquarters. Process Opp'n 5–6. A D–Link Corp. employee signed a receipt dated October 15, 2010 for D–Link Corp. Id. at 6. A ZyXEL Corp. mailroom stamp served as acknowledgment of receipt for ZyXEL Corp. Id. There is no indication that the documents served were translated into Chinese.

C. D–Link Corp.'s Connections to California

In its complaint, Fujitsu alleges that all of the Defendants committed acts of patent infringement within the State of California. Compl. ¶ 7. Fujitsu also alleges that Defendants purposefully and voluntarily placed their infringing products into the stream of commerce with the expectation that they would be purchased by consumers in the Northern District of California. Id.

D–Link Corp. is a Taiwanese corporation and the parent corporation of D–Link Systems, a California corporation. D–Link Corp. Mot. 1. According to D–Link Corp., D–Link Corp. has not sold any products to D–Link Systems since May 2006. Id. at 4.² Furthermore, D–Link Corp. claims that it does not do any business in California. Id. at 4–5.

According to Fujitsu, D–Link Corp. markets itself as a global company with a regional headquarters in Fountain Valley, California. Process Opp'n 4. Fujitsu also claims that D–Link Corp. maintains a website from which California residents can purchase D–Link Corp.'s products. Id. According to D–Link Corp., D–Link Systems owns and operates the website where U.S. customers can purchase products and D–Link Systems provides those goods purchased by U.S. customers. Dkt. No. 92 (“D–Link Corp. Reply”), at 5. Furthermore, D–Link represents that D–Link Systems conducts and manages its own corporate business with its own management and control structure. Id. at 2.

D. Procedural History

Belkin International, Belkin, and Netgear have all answered Fujitsu's complaint. Dkt. Nos. 21, 23. On October 28, 2010, D–Link Systems and ZyXEL U.S., both California corporations, moved pursuant to Rule 12(b)(6) to dismiss Fujitsu's claims against them for failure to state a claim. On November 5, 2010, D–Link Corp., a Taiwanese corporation, moved pursuant to Rule 12(b)(5) and Rule 12(b)(2) to dismiss Fujitsu's claims against it for insufficient service of process and for lack of personal jurisdiction. Also on November 5, 2010, ZyXEL Corp., a Taiwanese corporation, moved pursuant to Rule 12(b)(5) to dismiss Fujitsu's claims against it for insufficient service of process. The Court held a hearing on Defendants' motions on March 17, 2011.³

[782 F.Supp.2d 874]

II. ANALYSIS A. Motions to Dismiss for Insufficient Service of Process

D–Link Corp. and ZyXEL Corp. both argue that Fujitsu's complaint against them should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(5) because Fujitsu's attempted service on them did not comply with the laws of either Taiwan or the United States. D–Link Corp. Mot. 1; ZyXEL Corp. Mot. 1. ⁴ Fujitsu argues that its service of D–Link Corp. and ZyXEL Corp. complied with the Federal Rules of Civil Procedure and with the accepted practice under Taiwanese law. Process Opp'n 16.

1. Legal Standard

“Before a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied.” Omni Capital Int'l v. Rudolf Wolff & Co., 484 U.S. 97, 104, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987); see also Murphy Bros. v. Michetti Pipe Stringing, 526 U.S. 344, 350, 119 S.Ct. 1322, 143 L.Ed.2d 448 (1999) (“In the absence of service of process (or waiver of service by the defendant), a court ordinarily may not exercise power over a party the complaint names as defendant.”). “Once service is challenged, plaintiffs bear the burden of establishing that service was valid under Rule 4.” Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir.2004) (citing 4A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1083 (3d ed. 2002 & Supp. 2003); Butcher's Union Local No. 498 v. SDC Inv., Inc., 788 F.2d 535, 538 (9th Cir.1986)). Rule 4(h)(2) governs service of process on a corporation “at a place not within any judicial district of the United States” and allows for such process to be made “in any manner prescribed by Rule 4(f) for serving an individual, except personal delivery under (f)(2)(C)(i).” Fed. R. Civ. P. 4(h)(2).

2. Fujitsu's Method of Service

Here, Fujitsu seeks to rely on Rule 4(f)(2)(A).⁵ Process Opp'n 16. Under Rule 4(f)(2)(A), “if there is no internationally agreed means” of service, a corporation may be served at a place not within any judicial district of the United States “by a method that is reasonably calculated to give notice ... as prescribed by the foreign country's law for service in that country in an action in its courts of general jurisdiction.” Fed. R. Civ. P. 4(f)(2)(A).

D–Link Corp. and ZyXEL Corp. claim that Taiwan's rules do not provide a procedure for a private person to effect service of process on a corporation in Taiwan. D–Link Corp. Mot. 6 (citing Dkt. No. 53–2 (“Weng Decl.”)). According to Vanessa Weng, an attorney in Taiwan, Article 123 of the R.O.C. Code of Civil Procedures provides that service shall be effected motu proprio by the Clerk of the Court, except as where it is otherwise provided. Weng Decl. ¶ 4. Article 5 of the R.O.C. Law Governing Extension of Assistance to

[782 F.Supp.2d 875]

Foreign Courts allows foreign parties to request, by letters rogatory, the assistance of the courts of Taiwan in serving civil litigation documents. Id. ¶ 3. When foreign parties make such a request, they must provide Chinese translations and verifications of the translations. Id., Ex. A, at 2. The courts of Taiwan then execute service of process in accordance with the R.O.C. Code of Civil Procedures. Id. Weng also claims that two opinions rendered by the Supreme Court of Taiwan establish that a foreign judgment is not valid unless the Taiwanese defendant is served with the judicial assistance of the R.O.C. Id. ¶ 5. Weng concludes that according to the R.O.C. Code of Civil Procedures and the Supreme Court of Taiwan, the service received by D–Link Corp. and ZyXEL Corp. is...