Horne v. Adolph Coors Co.

• Decision Date: 22 July 1982
• Docket Number: No. 81-2388,81-2388
• Citation: 217 USPQ 15,684 F.2d 255
• Parties: James Q. HORNE, Jr., Appellant, v. ADOLPH COORS COMPANY; R. S. Woods, Inc. and Kingston Wine and Liquor Shop, Inc.
• Court: U.S. Court of Appeals — Third Circuit

Page 255

684 F.2d 255

217 U.S.P.Q. 15

James Q. HORNE, Jr., Appellant, v. ADOLPH COORS COMPANY; R. S. Woods, Inc. and Kingston Wine and Liquor Shop, Inc.

No. 81-2388.

United States Court of Appeals Third Circuit.

Argued June 16, 1982.

Decided July 22, 1982.

William L. Muckelroy (argued), Trenton, N. J., for appellant.

Ronald M. Sturtz (argued), Robert B. Smith, Hannoch, Weisman, Stern, Besser, Berkowitz & Kinney, P. A., Newark, N. J., Thomas S. Birney, Bradley, Campbell & Carney, Golden, Colo., for appellee, Adolph Coors Co.

Before ALDISERT, GIBBONS and HIGGINBOTHAM, Circuit Judges.

OPINION OF THE COURT

GIBBONS, Circuit Judge.

James Q. Horne, the owner of a United States patent covering a device for depressurizing beverage cans, appeals from an order dismissing his complaint charging patent infringement by Adolph Coors Company (Coors) pursuant to Fed.R.Civ.P. 12(b)(2) for lack of personal jurisdiction over that defendant. Coors has moved to dismiss the appeal for lack of appellate jurisdiction. We hold that we have appellate jurisdiction and we reverse the order dismissing the complaint.

I. Appellate Jurisdiction

Horne, a New Jersey resident, commenced the action under 35 U.S.C. § 271(c) against Coors, a Colorado corporation which produces beer in cans, and against two New Jersey distributors of beer, R.S. Wood, Inc. and Kingston Wine & Liquor Shop, Inc. After it was served with process in Colorado, Coors moved successfully for an order dismissing the complaint against it for lack of personal jurisdiction. That order was entered on June 2, 1981. Horne, on June 15, 1981, filed a motion to vacate or amend the order pursuant to Fed.R.Civ.P. 59. While that motion was pending, he filed a Notice of Appeal on July 1, 1981. A week later the district court denied his Rule 59 motion. Meanwhile on July 6, Horne voluntarily dismissed the complaint against R.S. Wood, Inc. Thereafter on July 28, 1981, a stipulation of dismissal was filed as to the remaining defendant, Kingston Wine & Liquor Shop, Inc. Thus all claims against all parties have been terminated.

Coors does not dispute that the order dismissing the complaint against it for lack of personal jurisdiction is now final within the meaning of Fed.R.Civ.P. 54(b). It urges, however, that no timely notice of appeal was filed. In advancing this argument Coors relies on Fed.R.App.P. 4(a)(4) which provides that "(a) notice of appeal filed before the disposition of any (Rule 59) motions shall have no effect. A new notice of appeal must be filed within the prescribed time measured from the entry of the order disposing of the motion...." Coors urges that since the Rule 59 motion was not disposed of until July 13, 1981, the July 1, 1981 notice of appeal was a nullity.

This Court has definitively rejected Coors position in two recent cases. In Griggs v. Provident Consumer Discount Co., 680 F.2d 927 (3d Cir. 1982), the appellant had filed a Rule 59 motion on November 17, 1981, and a notice of appeal, while the motion was unresolved, on November 19, 1981. We refused to dismiss the appeal, noting that "though a premature notice of appeal is subject to dismissal, we have generally allowed appellant to proceed unless the appellee can show prejudice resulting from the premature filing of the notice." In Griggs we referred to our opinion in Tose v. First Pennsylvania Bank, N.A., 648 F.2d 879, 882 n.2 (3d Cir.), cert. denied, --- U.S. ----, 102 S.Ct. 390, 70 L.Ed.2d 208 (1981), which states:

We are reluctant to treat the default (under Rule 4(a)(4) ) as jurisdictional ... in light of the substantial forfeiture that would result and the absence of any prejudice to appellees resulting from the premature filing.... We have discretion under Appellate Rule 2 to "suspend the requirements or provisions of any of these rules in a particular case ... on (our) own motion," and we exercise our discretion to waive the Rule 4(a) default in this case. We do so "to relieve the litigants of the consequences of default when manifest injustice would otherwise result."

The Griggs and Tose cases construe the 1979 amendment to Rule 4(a) as making no change in the prior rule respecting this court's authority to give effect to notices of appeal filed prematurely. See Foman v. Davis, 371 U.S. 178, 181, 83 S.Ct. 227, 229, 9 L.Ed.2d 222 (1962); Hodge v. Hodge, 507 F.2d 87, 89 (3d Cir. 1975); Hamilton v. Stillwell Van and Storage Co., 343 F.2d 453 (3d Cir. 1965).

No showing of prejudice from the premature filing of the notice of appeal has been made in this case. Thus the Griggs and Tose cases are dispositive, and we will consider the merits of the appeal.

II. Personal Jurisdiction

Service of process was made on Coors pursuant to Fed.R.Civ.P. 4(e), which adopts the long-arm method of service available in the forum state. New Jersey Civil Practice Rule 4:4-4(c) permits service of process upon a foreign corporation to the extent permitted by due process. See Avdel Corp. v. Mecure, 58 N.J. 264, 277 A.2d 207 (1971). Thus our inquiry presents the question whether due process permits the district court to exercise personal jurisdiction over Coors in this patent infringement action.

The complaint alleges that Horne, who resides in North Brunswick, New Jersey, holds United States Patent No. 2,858,721 for a device for depressurizing beverage cans, and that Coors, a brewer, has sold in interstate commerce cans of beer to which are attached a device infringing that patent. Horne charges, further, that many of the infringing devices have found their way through the channels of interstate commerce to distributors in New Jersey where they have been sold to consumers who use the devices.

Coors supported its motion to dismiss with an affidavit by its Senior Vice President for Marketing and Sales, which alleges that Coors is a Colorado corporation which is not qualified to do business in New Jersey, which pays no income tax to that state, maintains no employees or sales agents in New Jersey, owns no real or personal property there, and neither solicits nor accepts orders for its product from New Jersey. The affidavit concedes that Coors beer is sold in the state, but attributes those sales to what it calls a "bootleg" market which it actively discourages. The Coors beer sold by R.S. Wood, Inc. and Kingston Wine & Liquor Shop, Inc. concededly originated with Coors, having been acquired from one of Coors' licensed distributors, if not from Coors itself. Coors prefers to confine its marketing to 19 western states, but has registered its brand name in New Jersey with the Secretary of State and the New Jersey Division of Alcoholic Beverage Control to prevent use of the name by other brewers. ¹

In Paolino v. Channel Home Centers, 668 F.2d 721 (3d Cir. 1981), this court discussed the circumstances in which the International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) due process rule permits a forum to exercise in personam jurisdiction in a suit seeking protection of intangible intellectual property owned by a resident of the forum state. That case recognized the settled distinction between personal jurisdiction in cases in which the defendant's forum-related activities did not give rise to the claim and personal jurisdiction in cases involving specific forum-related acts or series of acts. Id. at 724. See Schwilm v. Holbrook, 661 F.2d 12 (3d Cir. 1981). The district court recognized that distinction, and concluded, we think correctly, that Coors' contacts with New Jersey were insufficient to establish its general amenability to suit in a New Jersey forum. The court then turned to the separate issue of personal jurisdiction for the specific transactions complained of and concluded that due process prohibited the exercise of jurisdiction with respect to those transactions. In reaching that conclusion, however, the court took too broad a view of the due process limitations on a forum's ability to vindicate harm to its residents from purposeful activities engaged in outside the forum's borders.

In Paolino the plaintiff was a Pennsylvania resident who developed an apparatus which he maintained as a trade secret. He disclosed his apparatus in confidence to Air Control Industries, Inc. Allegedly in breach of that confidential relationship, Air Control manufactured the device and sold it to Channel Home Centers in New Jersey. Channel, a retailer, offered the device for sale in Pennsylvania. Although Air Control was a Tennessee corporation, not qualified to do business in Pennsylvania, this court held that the Eastern District of Pennsylvania could, consistent with due process, exercise personal jurisdiction over it in an action charging that it caused injury to Paolino by a breach of a confidential relationship, on a "tort out/harm in" theory. 668 F.2d at 724. Pennsylvania's interest in protecting its residents owning intellectual property from harm that was clearly and specifically foreseeable justified a Pennsylvania forum's exercise of in personam jurisdiction. As to personal inconvenience, we observed that "fairness to the defendant as to a forum must ... take some account of the fact that the defendant's residence is inconvenient for the plaintiff." 668 F.2d at 725. We found "no suggestion (in the record) that litigating in Philadelphia rather than in Nashville with respect to a relationship knowingly undertaken with a Pennsylvania resident would be fundamentally unfair to Air Control." Id.

In Paolino, because the form of intellectual property in issue-a trade secret or confidential disclosure-was a creation of state law, and the cause of action for its protection was one cognizable in state courts, we discussed both federalism concerns and fairness to the defendant in the plaintiff's choice of a forum. Since Paolino the Supreme Court, in Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, --- U.S. ----, ---- n.10, 102 S.Ct. 2099, 2104 n.10, 72 L.Ed.2d 492 (1982),...