Graphic Controls Corp. v. Utah Medical Products, Inc.

• Decision Date: 23 July 1998
• Docket Number: No. 97-1551,97-1551
• Citation: 47 USPQ2d 1622,149 F.3d 1382
• Parties: , 47 U.S.P.Q.2d 1622 GRAPHIC CONTROLS CORPORATION, Plaintiff-Appellant, v. UTAH MEDICAL PRODUCTS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1382

149 F.3d 1382

41 Fed.R.Serv.3d 311, 47 U.S.P.Q.2d 1622

GRAPHIC CONTROLS CORPORATION, Plaintiff-Appellant, v. UTAH MEDICAL PRODUCTS, INC., Defendant-Appellee.

No. 97-1551.

United States Court of Appeals Federal Circuit.

July 23, 1998.

William M. Janssen, Saul, Ewing, Remick & Saul LLP, Philadelphia, PA, argued, for plaintiff-appellant. On the brief were Kevin R. Casey and Allen M. Wheatcraft, Ratner & Prestia, Valley Forge, PA.

Richard D. Burbidge, Burbidge & Mitchell, Salt Lake City, UT, argued, for defendant-appellee. With him on the brief were Terrence M. Connors and Randall D. White, Connors & Vilardo, Buffalo, NY. Also on the brief was Stephen B. Mitchell, Burbidge & Mitchell, Salt Lake City, UT.

Before RICH, PLAGER, and GAJARSA, Circuit Judges.

GAJARSA, Circuit Judge.

DECISION

Graphic Controls Corporation ("Graphic Controls") seeks review of the decision of the United States District Court for the Western District of New York in Graphic Controls Corp. v. Utah Medical Products, Inc., No. 96-CV-0459E(F), 1997 WL 276232 (W.D.N.Y. May 21, 1997). The district court dismissed Graphic Controls's complaint for lack of jurisdiction over defendant Utah Medical Products, Inc. ("Utah Medical"). That judgment was entered upon defendant's motion brought pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. We affirm the decision of the district court.

BACKGROUND

The district court issued its ruling based upon the following jurisdictional facts: ¹ Utah Medical is a corporation incorporated under the laws of the state of Utah with its principal place of business in Utah. Utah Medical is engaged in the business of designing, manufacturing and marketing medical devices, including an intrauterine pressure catheter ("IUPC"). Utah Medical's IUPC is covered by its Patent No. 4,785,822 (the '822 patent). In 1993, Utah Medical had approximately two-thirds of the IUPC market and may have had approximately 90% of this market by 1996. Graphic Controls, a corporation organized under the laws of the state of New York and headquartered in New York, also sells an IUPC device.

Utah Medical has no office, employees, telephone numbers, assets or bank accounts in New York. Until the end of 1995, two independent distributors, Atlantic Medical Systems, Inc. ("Atlantic") and Baystate Anesthesia, solicited sales of Utah Medical's medical products in the northeastern region of the country, including New York. Atlantic is located in New York and Baystate Anesthesia is located in Massachusetts. These distributors also sold the products of other companies. In 1996, Atlantic became Utah Medical's sole distributor in the northeast. In each of the three years, 1994-1996, Utah Medical had less than $450,000 in estimated gross sales in New York, which comprised approximately one percent of Utah Medical's total sales in each of those years. During this period, Utah Medical's IUPC was sold to about 40 hospitals in New York.

Utah Medical has a nationwide toll-free "800" telephone number and makes information available to residents of any state over the Internet. Utah Medical also has a representative in Connecticut who occasionally travels to New York to meet with a distributor and with customers, but does not take orders from customers for sales of Utah Medical products. Utah Medical has also sent letters to hospitals in New York regarding its IUPC device. In addition, Utah Medical receives customer complaints from and offers training to its customers, including those in New York.

Utah Medical sent two letters, the first dated June 7, 1996 and the second dated June 14, 1996, to Graphic Controls in New York alleging that Graphic Controls's IUPC device infringed the '822 patent and that Graphic Controls had made false and misleading representations while promoting its competing product and requesting it to cease such activities. Graphic Controls sent Utah Medical a letter on June 10, 1996 accusing Utah Medical sales representatives of false advertising. A Graphic Controls representative asserted that she received phone calls from Utah Medical sales representatives regarding this June 10 letter from Graphic Controls. Shortly thereafter, Graphic Controls filed suit in the United States District Court for the Western District of New York, seeking declaratory judgment that (a) the '822 patent is invalid or that the patent is not infringed by Graphic Controls and (b) Graphic Controls has not committed acts of unfair competition against Utah Medical.

The district court found that it had no personal jurisdiction over Utah Medical under sections 301 or 302(a)(1) of the New York long-arm statute. See Graphic Controls Corp., 1997 WL 276232, at * 3-5. The court found that it had no jurisdiction under section 301, the general jurisdiction provision, because it found that Utah Medical was not doing business regularly, continuously and systematically in New York. See id. at * 2. The district court then turned to section 302(a)(1), which allows for the assertion of specific jurisdiction over an out-of-state defendant where the plaintiff's cause of action arises from such defendant's commercial activities in New York. See N.Y. Civ. Prac. § 302(a)(1) (McKinney 1990). The district court found no specific jurisdiction under section 302(a)(1) because there was not the necessary nexus between Utah Medical's commercial activity in New York, other than the two cease and desist letters, and the cause of action underlying Graphic Controls's declaratory judgment action. See Graphic Controls Corp., 1997 WL 276232, at * 3. The district court reasoned that the lawsuit would exist regardless of Utah Medical's business activity in New York. The district court also held that the two cease and desist letters met the nexus requirement, but were insufficient to subject Utah Medical to personal jurisdiction pursuant to section 302(a)(1). See Id. Graphic Controls subsequently filed a motion for reconsideration of the May 21 decision. On July 31, 1997, the district court denied the motion. This appeal followed.

DISCUSSION

A. Standard of Review

We review de novo a district court's decision regarding whether it has personal jurisdiction over a defendant. See Genetic Implant Sys., Inc. v. Core-Vent Corp., 123 F.3d 1455, 1457, 43 USPQ2d 1786, 1788 (Fed.Cir.1997); North Am. Philips Corp. v. American Vending Sales, Inc., 35 F.3d 1576, 1578, 32 USPQ2d 1203, 1204 (Fed.Cir.1994).

B. General Jurisdiction

As a preliminary matter, we note that Graphic Controls seeks to preserve its arguments regarding general jurisdiction under section 301 through a footnote in its brief which states that "[t]he argument presented in this Appeal Brief focuses on the 'specific' prong of the [New York long-arm] statute. Graphic Controls's arguments concerning jurisdiction under the 'general' prong are presented [in the appendix]. Graphic Controls hereby reiterates and incorporates the arguments found in the [appendix]." Utah Medical responds to this footnote with a footnote in its brief that incorporates arguments from the appendix as well. Under the Federal Rules of Appellate Procedure, arguments may not be properly raised by incorporating them by reference from the appendix rather than discussing them in the brief. Rule 28(a)(6) provides:

[t]he argument [in the appellant's brief] must contain the contentions of the appellant on the issues presented, and the reasons therefor, with citations to the authorities, statutes, and parts of the record relied on. The argument must also include for each issue a concise statement of the applicable standard of review....

Fed. R.App. P. 28(a)(6). Rule 28(b) provides that the appellee's brief conform to the requirements of Rule 28(a)(6). See Fed. R.App. P. 28(b). In addition, Rule 28(g) provides a page limit for the briefs. See Fed. R.App. P. 28(g). The practice of incorporating arguments by reference from the appendix undermines these explicit rules. The Appellant in this case has not properly raised the issue of general jurisdiction before this court and therefore we cannot and do not render a decision on this issue.

C. Specific Jurisdiction

As presented to us, the question on which this appeal turns is whether Federal Circuit law or New York and Second Circuit law applies to the determination of whether specific personal jurisdiction exists over Utah Medical. Graphic Controls asserts, and we agree, that it appears the district court relied on New York and Second Circuit caselaw to interpret the New York long-arm statute. Graphic Controls essentially argues that the Federal Circuit has held that its law applies to personal jurisdiction determinations in patent cases and therefore the district court should not have deferred to New York or Second Circuit interpretations of the New York long-arm statute. Although Graphic Controls concedes in its opening brief that New York courts and the Second Circuit have consistently interpreted the New York long-arm statute to not extend to the limit of due process, Graphic Controls requests us to disregard this caselaw and interpret the statute to reach to the full extent of due process. Utah Medical responds that the Federal Circuit only applies its own law to the interpretation of the right to due process of law guaranteed by the U.S. Constitution and not to the interpretation of state long-arm statutes. Utah Medical argues that, because the New York long-arm statute does not extend to the full extent of federal due process, the Federal Circuit should apply New York and Second Circuit law in interpreting the long-arm statute. We agree with Utah Medical.

Determining whether jurisdiction exists over an out-of-state defendant involves two inquiries: whether a forum state's long-arm statute permits the assertion of jurisdiction ² and whether assertion of personal jurisdiction violates federal due process. See Genetic Implant Sys., 123 F.3d at 1458, 43 USPQ2d at 1788. With regard to the federal...