Gen. Elec. Co. v. Univ. of Va. Patent Found.
| Decision Date | 18 March 2015 |
| Docket Number | Case No. 14-C-1529 |
| Court | U.S. District Court — Eastern District of Wisconsin |
| Parties | GENERAL ELECTRIC Co., Plaintiff, v. UNIVERSITY OF VIRGINIA PATENT FOUNDATION d/b/a UNIVERSITY OF VIRGINIA LICENSING & VENTURES GROUP, Defendant. |
General Electric won the proverbial "race to the courthouse" by filing this action on December 8, 2014 at 11:00 p.m. (CST). The University of Virginia Patent Foundation ("UVAPF" or the "Foundation") filed suit just seconds later in the Western District of Virginia, Charlottesville Division. Univ. of Va. Patent Found. v. Gen. Elec. Co., Case No. 3:13-cv-00051-NKM (W.D. Va.) The reason for this close timing was the parties' agreement to not sue each other regarding their dispute over whether GE's magnetic resonance imaging ("MRI") systems infringe upon U.S. Patent No. 7,164,268 (the "'268 patent") and Reissue Patent No. 44,644 ("RE44,644"). The forbearance agreement applied through December 8, and GE argues that it only had to wait until it became December 9 on the east coast to file suit. The Foundation disagrees, arguing that local time for each party, not absolute time, governs the expiration of the forbearance period. Thus, UVAPF complains that GEwon the race to the courthouse only by breaching the forbearance agreement.
This aspect of the case is interesting, if only because it offers a window into the lives and litigation tactics of patent lawyers. Ultimately, however, the dispute is academic because the Court lacks personal jurisdiction over the Foundation. Therefore, the "first-to-file" rule is irrelevant, and GE's victory in the parties' late-night e-filing race was for naught.
UVAPF is a Section 501(c)(3) nonprofit corporation operated solely for the benefit of the University of Virginia. The Foundation's primary purpose is to promote, encourage and aid scientific investigation at the University. Thus, the Foundation coordinates operations with the Rector and Visitors of the University. It has a modest operating budget that must be approved in accordance with the University's Related Foundations Policy. As a Related Foundation, UVAPF must manage itself "in a manner consistent with [its] own enabling documents and the University's purpose, mission, and procedures." UVAPF has 15 employees, all of whom are located in Charlottesville.
The Foundation owns the patents-in-suit. The '268 patent is entitled "Method and Apparatus for Spin-Echo Train MR Imaging Using Prescribed Signal Evolutions." In plain English, this technology relates to pulse sequences for magnetic resonance imaging scanners. The inventors of thesepatents are professors at the University of Virginia.
GE is a for-profit New York corporation with its principal place of business in Connecticut. GE Healthcare, a major business unit of GE, has a Magnetic Resonance ("MR") division that provides a wide range of technologies and services for clinicians and healthcare administrators, including MRI systems. GE Healthcare's MR division is based in Waukesha, Wisconsin.
GE and UVAPF have been at odds since 2008 over whether GE's MRI systems infringe the '268 patent. In May 2008, UVAPF sued GE in the Western District of Virginia for infringing the '268 patent. Case No. 3:08-cv-0025-NKM (W.D. Va.) That case, which was assigned to the Hon. Norman K. Moon, proceeded through claim construction and multiple summary judgment motions before settling in 2011. Judge Moon is the presiding judge in the currently-pending parallel suit filed by UVAPF. Case No. 3:13-cv-00051-NKM (W.D. Va.)
In the first suit, the technical, marketing operations, financial, customer service, and regulatory personnel from whom documents and other discovery was taken were located in Waukesha. During the course of that action, UVAPF's representatives visited Wisconsin to conduct depositions of GE's MR employees. In addition, the GE legal and management personnel who oversaw the first UVAPF-GE action were located in Waukesha. When theFoundation reached out to settle the case, it directed its correspondence to GE in Wisconsin. The parties settled for $3,000,000.00. This amount represents over half of UVAPF's reported licensing revenue from July 1, 2011 to June 30, 2012.
On April 15, 2014, UVAPF's patent licensing manager initiated the present dispute by sending a letter to GE in Waukesha stating that the '268 patent and RE44644 (the reissue patent) are "currently available for licensing." UVAPF also stated that
On May 16, GE sent UVAPF a letter from Waukesha informing UVAPF that it was in the process of reviewing the patents at issue. On August 6, GE sent another letter from Waukesha stating that, after careful review, it "determined that GE Healthcare's CUBE pulse sequence does not infringe any of the claims of the '268 or '644 patents, and therefore, does not need a license under the patents." On August 7, UVAPF responded to GE's IP counsel in Waukesha via email indicating "confus[ion]" as to
On August 22, the parties negotiated and entered into the aforementioned forbearance agreement. UVAPF agreed to provide GE a claim chart describing how GE's products allegedly infringe the claims of the '268 and '644 patents. In addition, GE and UVAPF both agreed not to file suit against one another during the forbearance period. The parties later extended the forbearance period "through December 8, 2014."
GE had several written, telephonic, and in-person discussions with UVAPF during the forbearance period. Those discussions included two in-person meetings on the GE Healthcare campus in Waukesha, first on September 19 and then on November 17.
The parties were unable to reach agreement regarding UVAPF's allegations of patent infringement. On December 8, at 11:00 p.m. CST - 12:00 a.m. EST - GE filed the complaint in this case to obtain a declaratory judgment that the '268 patent is unenforceable and that GE has not infringed either the '268 or '644 patents. This Court's docket entry indicates that the complaint was filed at 11:00:55 p.m. CST. The Foundation's suit in Virginia was filed at 12:01 a.m. EST. There is no record for the number of seconds after 12:01 that the Virginia complaint was filed. At 12:00 a.m. CST, GE filed an amended complaint here in Wisconsin. The amended complaint is "substantively identical to the original complaint ... being later filed in the event that Central Standard Time, rather than Eastern Standard Time, isfound to apply to the expiration of the Forbearance Period ..."
When confronted with a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of making a prima facie showing that jurisdiction over the defendant is proper. Fed. R. Civ. P. 12(b)(2); Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). Where Elecs. For Imaging, Inc. v. Coyle, 340 F.3d 1344, 1349 (Fed. Cir. 2003).
Federal Circuit law governs this motion because the jurisdictional question is "intimately involved with the substance of the patent laws." Wayne Pigment Corp. v. Halox, 220 F. Supp. 2d 931, 933 (E.D. Wis. 2002) (citing Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1359 (Fed. Cir. 2001)). Nominally, the Court is directed to proceed through a two-step inquiry. First, the plaintiff must show that the forum state's long-arm statute establishes personal jurisdiction over the out-of-state defendant. Second, the plaintiff must showthat due process is satisfied. Tecre Co. v. Buttonpro, Inc., 387 F. Supp. 2d 927, 930 (E.D. Wis. 2005) (citing Genetic Implant Sys., Inc. v. Core-Vent Corp., 123 F.3d 1455, 1458 (Fed. Cir. 1997)). However, Wisconsin's long-arm statute is liberally construed in favor of exercising jurisdiction to the fullest extent allowed under the due process clause. Shared Med. Equip. Group, LLC v. Simi Valley Hosp. & Healthcare Servs., 3 F. Supp. 3d 735, 739 (W.D. Wis. 2014). Accordingly, the two-part inquiry can be collapsed into one: does the exercise of jurisdiction over the Foundation violate due process? See Autogenomics, Inc. v. Oxford Tech. Ltd., 566 F.3d 1012, 1017 (Fed. Cir. 2012) ().
There are two types of personal jurisdiction: specific and general. To establish specific jurisdiction, a plaintiff must demonstrate that the defendant has "purposefully directed" his activities at residents of the forum, and the litigation results from alleged injuries that "arise out of or relate to" those activities. Avocent Huntsville Corp. v. Aten Int'l Co., Ltd., 552 F.3d 1324, 1330 (Fed. Cir. 2008) (). Plaintiffs attempting to establish general jurisdiction "bear a higher burden." Id. Where the plaintiff's claims "do not arise out of or relate to the defendant'scontacts with the forum State, we must explore the nature of [the defendant's] contacts with the [forum State]...
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