Kollmorgen Corp. v. Yaskawa Elec. Corp., Civil Action No. 99-308-R.

• Decision Date: 13 December 1999
• Docket Number: Civil Action No. 99-308-R.
• Citation: 169 F.Supp.2d 530
• Court: U.S. District Court — Western District of Virginia
• Parties: KOLLMORGEN CORPORATION, Plaintiff, v. YASKAWA ELECTRIC CORPORATION, Yaskawa Electric America, Inc., Defendants.

169 F.Supp.2d 530

KOLLMORGEN CORPORATION, Plaintiff, v. YASKAWA ELECTRIC CORPORATION, Yaskawa Electric America, Inc., Defendants.

Civil Action No. 99-308-R.

United States District Court, W.D. Virginia.

December 13, 1999.

William B. Poff, Woods, Rogers & Hazlegrove, P.L.C., Roanoke, VA, John A. Diaz, Alfred P. Ewert, Harry C. Marcus, Robert E. Paulson, Andrew M. Riddles, Kenneth S. Weitzman, Morgan & Finnegan, New York City, for plaintiff.

J. Scott Sexton, Gentry, Locke, Rakes & Moore, Roanoke, VA, William H. Mandir, Eric P. Halber, Sughrue, Mion, Zinn, MacPeak & Seas, PLLC, Washington, DC, for defendants.

MEMORANDUM OPINION

TURK, District Judge.

This case is before the Court on the motion of Defendant Yaskawa Electric Corporation ("YEC") to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). In the alternative, both YEC and Defendant Yaskawa Electric America, Inc. ("YEA"), move to have the case transferred to the United States District Court for the Northern District of Illinois, where YEA has its principal place of business.

Each side filed voluminous papers in support of its position. Arguments were heard by this Court on November 29, 1999. For the reasons that follow, YEC's motion to dismiss, or alternatively to transfer is denied, as is YEA's motion to transfer.

I. OPERATIVE FACTS

Kollmorgen is a corporation, with its principal manufacturing facility in Radford, Virginia, that manufactures electrical devices and components. (Mem. in Opp. at 4) In addition, Kollmorgen holds numerous patents, of which two-U.S. Patent Numbers 4,686,437 and 4,447,771-are the alleged subjects of infringement by defendants YEC and YEA. YEC is a Japanese corporation, based in Tokyo, and engaged in the same type of electrical design and manufacturing business as Kollmorgen. A view of a company website¹ reveals that YEC disburses its products globally through a network of wholly-owned subsidiaries in various countries. (, visited Dec. 10, 1999). YEA, located in Waukegan, Illinois, is YEC's American subsidiary. It is also the only company in the United States which transacts any business directly with YEC. YEA does not purchase goods from any other source besides YEC. Unlike a conventional distributor or sales agent, YEA actually purchases its entire inventory directly from YEC.² YEA then sells the products through its distribution channels to various customers nationwide. There is no evidence that YEC receives any direct share of YEA's sales proceeds; rather, YEC's benefit in this bargain is through YEA's purchase of its products for resale in the United States. If YEA's customers like the products, they will buy more from YEA, who in turn will purchase more from YEC.

One such customer of YEA is Commonwealth Controls, which maintains an office in Roanoke. When Lane Brizendine, investigator for Kollmorgen's counsel, visited Commonwealth Controls' offices back in June, he asked for information regarding electrical controls "or other products made by Yaskawa." (Brizendine Affid. at 2). In response, he was provided with a catalogue, printed by YEA, containing detailed information and schematic drawings of various products available through Commonwealth Controls from YEA.³

II. DISCUSSION: YEC's MOTION TO DISMISS

The issue is whether YEC can be sued in the Western District of Virginia. During argument, YEA's counsel acknowledged that YEA can be sued in the Western District because of its contacts with Commonwealth Controls. (Brizendine Aff. at 1) This admission is bolstered by YEA's website, which contains a page listing "Virginia Contact Information." (Open-Document>, visited December 10, 1999). Commonwealth Controls is specifically listed on the page as Yaskawa's "Motion Control Distributor", and their website address is provided, along with address and phone numbers. Thus, the question becomes whether YEC's contacts with and through YEA make it subject to the jurisdiction of this Court. For the reasons that follow, this Court finds that they do.

A. IN PERSONAM JURISDICTION

The assertion of personal jurisdiction hinges on satisfying two elements: (1) Virginia's long-arm statute, and (2) the Due Process Clause. YEC's business practices and its contacts bring it squarely within the ambit of the long-arm statute, and satisfy the Due Process requirements as well.

1. Virginia's Long-Arm Statute

Even in a purely Federal matter, such as a patent dispute, Federal courts apply the forum state's long-arm statute to determine whether personal jurisdiction exists. See Fed. R. Civ. Pro. 4(e)-(f); See Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1569, 30 U.S. P.Q.2d 1001 (Fed.Cir.1994). Virginia's long-arm statute, VA Code Ann. § 8.01-328.1 (Michie 1999), has been construed repeatedly to be coequal in scope and reach to the Due Process Clause. See e.g., Carter v. Trafalgar Tours, Ltd., 704 F.Supp. 673, 675 (W.D.Va.1989)(Turk, C.J.) The question at this stage becomes whether any of the numerous long-arm provisions can be said to apply to YEC.

In their opening brief, Kollmorgen cites four long-arm provisions which it contends could apply in this case. (Mem. in Opp. at 21). They need not each be considered in detail, because one of them, Virginia Code Ann. § 8.01-328.1(A)(4), has been held by the Federal Circuit to include patent infringement cases like the one here. See Beverly Hills, 21 F.3d at 1571 (holding in a case with virtually identical facts to the present controversy that all elements of Virginia's long-arm statute section (A)(4) were met). Thus, Beverly Hills-which will be discussed in more detail later in this opinion-strongly supports a finding that YEC satisfies Virginia's long-arm statute.

2. Due Process

"The Due Process Clause requires that, in order to subject a defendant who is `not present within the territory of the forum' to personal jurisdiction, the court must first make sure that this party `ha[s] certain minimum contacts ... such that the maintenance of the suit does not offend traditional notions of justice and fair play.'" Motorola, Inc. v. PC-Tel, Inc., 58 F.Supp.2d 349, 352 (D.Del.1999) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)). In order to give non-resident defendants "fair warning" that a given activity subjects them to suit in the forum state, these "minimum contacts must be purposeful." Id; See Burger King v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The defendant's contacts with the forum must be of a kind that would cause the defendant to "reasonably foresee" that it might be "haled before a court" in the forum. Id.; World-Wide Volkswagen v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). And finally, "even if the requisite minimum contacts have been found through an application of the stream of commerce theory or otherwise, if it would be unreasonable for the forum to assert jurisdiction under all the facts and circumstances, then due process requires that jurisdiction be denied." Id.; Beverly Hills Fan, 21 F.3d at 1568.

In other words, Due Process, the second prong of the jurisdictional test, is itself a two-prong analysis: (1) minimum contacts, and (2) fairness to the defendant in spite of its contacts.

a. Minimum Contacts

Because of the importance of maintaining a uniform system of patent laws, the Federal Circuit has declared that Federal Circuit law is to be applied in patent cases on the issue of jurisdiction. See Beverly Hills Fan, 21 F.3d at 1564-5; Amana v. Quadlux, 172 F.3d 852, 856 (Fed.Cir.1999); Schwanger v. Munchkin, Inc., 1999 WL 820449 (Fed.Cir.1999) (unpublished). Further, the Federal Circuit has established a three-prong test for determining whether minimum contacts exist: (1) whether the defendant purposefully directed its activities at residents of the forum; (2) whether the claim arises out of or relates to those activities; and (3) whether assertion of personal jurisdiction is reasonable and fair. See Schwanger at *5, quoting 3D Systems, Inc. v. Aarotech Lab., 160 F.3d 1373, 1378 (Fed.Cir.1998). There is no dispute that the claim in this case arises out of the alleged shipment by YEC and YEA of infringing goods into Virginia. Therefore, the Court need only consider whether YEC purposefully directed its activities at Virginia, and if so, whether jurisdiction is fair.

1. Purposeful Direction at Virginia

In World-Wide Volkswagen, supra, the Supreme Court discussed the requirements of purposeful direction, and opined:

"[I]f the sale of a product of a manufacturer or distributor ... is not simply an isolated occurrence, but arises from the efforts of the [defendants] to serve, directly or indirectly, the market for its product ..., it is not unreasonable to subject it to suit.... The forum state does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State."

444 U.S. at 297-8, 100 S.Ct. 559, quoted in Beverly Hills Fan, 21 F.3d at 1566.

Beverly Hills Fan

The strongest evidence of purposeful direction is Beverly Hills Fan. Factually, it is indistinguishable from the present case. A Chinese corporation manufactured products which where then shipped through an intermediary, Builder's Square, into Virginia and resold. An American company brought a patent infringement suit claiming the Chinese products violated patents held in America. The Federal Circuit held that jurisdiction in Virginia was proper because the

necessary ingredients for an exercise of jurisdiction [were present]: defendants, acting in consort, placed the accused fan in the stream of commerce, they knew the likely destination of the products, and their conduct and connections with the forum state were such that they should reasonably have anticipated being brought into court there.

Id....