Lg Electronics, Inc. v. First Intern. Computer
| Decision Date | 11 April 2001 |
| Docket Number | No. CIV. A. 00-2946(MLC).,CIV. A. 00-2946(MLC). |
| Citation | 138 F.Supp.2d 574 |
| Parties | LG ELECTRONICS INC., Plaintiff, v. FIRST INTERNATIONAL COMPUTER, INC., First International Computer of America, Inc., and Expert Computer Group Corp., Defendants. |
| Court | U.S. District Court — District of New Jersey |
Robert A. White, Jeffrey L. Eichen, argued, Thomas B. Kenworthy, argued, Morgan, Lewis & Bockius, LLP, Princeton, NJ, for Plaintiff.
Richard J. Sexton, Lavin, Coleman, O'Neil, Ricci, Finarelli & Gray, Mount Laurel, NJ, for Defendants First International Computer, Inc. and First International Computer of America, Inc.
John Burlinghame, argued, Squire, Sanders & Dempsey L.L.P., Washington, DC, for Defendants First International Computer, Inc. and First International Computer of America, Inc., pro hoc vice.
Raymond R. Siberine, argued, Carella, Byrne, Bain, Gilfillan, Cecchi, Stewart & Olstein, Roseland, NJ, for Defendant Expert Computer Group, Inc.
This matter comes before the Court upon (1) the motion of defendants First International Computer, Inc. ("FIC") and First International Computer of America, Inc. ("FICA") to dismiss the claims against them for lack of personal jurisdiction or, in the alternative, to transfer venue to the Northern District of California and (2) the motion of Defendant Expert Computer Group Corp. ("Expert") to dismiss plaintiff's claims against it for failure to state a claim upon which relief can be granted or, in the alternative, for summary judgment.1 For the reasons expressed below, the Court will (1) deny without prejudice the motion of FIC and FICA to dismiss the claims against them for lack of personal jurisdiction; (2) sever the claims against FIC and FICA from this action and transfer the severed action to the Northern District of California; (3) deny Expert's motion to dismiss or, in the alternative, for summary judgment; and (4) stay the claims against Expert pending disposition of the transferred action.
On July 24, 2000, plaintiff LG Electronics, Inc. ("LGE") filed its Amended Complaint for patent infringement against FIC, FICA, and Expert. LGE claims that FIC, FICA, and Expert have infringed the following five patents that LGE owns by making, selling, offering to sell, using, or importing into the United States infringing products manufactured by FIC: (1) U.S. Patent No. 4,918,645; (2) U.S. Patent No. 4,939,641; (3) U.S. Patent No. 5,077,733; (4) U.S. Patent No. 5,379,379; and (5) U.S. Patent No. 5,892,509 (the "Patents"). (Am.Compl. ¶¶ 3-13, 16, 20, 24.) LGE has not yet identified the specific FIC products that allegedly infringe the Patents.
LGE is a Korean corporation with its principal place of business in Seoul, Korea. (Am.Compl.¶ 1.) FIC is a Taiwanese corporation with its principal place of business in Taipei, Taiwan. (Id. ¶ 2.) FIC has no offices outside of Taiwan. (Decl. of David Wang ("Wang Decl.") ¶ 3.) FICA, a subsidiary of FIC, is a California corporation with its principal place of business in Fremont, California. (Id. ¶ 7; Am.Compl. ¶ 3.) Fremont is located in Silicon Valley, which is within the jurisdiction of the Northern District of California. Expert, a reseller of computer goods, is a New Jersey corporation with its principal place of business in Fairfax, New Jersey. (Am. Compl.¶¶ 5-6.)
FIC designs and sells computer hardware, such as motherboards, desktop computers, and notebook computers. (Wang Decl. ¶ 2.) FIC sells these computer products to distributers throughout the world. (Decl. of Jeffrey L. Eichen, Esq.) FICA specializes in the wholesale distribution of computer hardware, focusing especially on motherboards and "barebones" desktop computers, i.e. computers without preinstalled processors or memory. (See Decl. of Anderson Lien ("Lien Decl.") ¶¶ 2-3; Eichen Decl. Ex. B.) FICA is FIC's wholesale distributor in the United States (Eichen Decl. Exs. A & B) and obtains the bulk of the products it resells from FIC in Taiwan, where FICA takes possession of the products. (Lien Decl. ¶ 3.) FICA distributes these products to resellers throughout the United States. (Eichen Decl. Ex. B.) Three of the resellers listed on FICA's web site have facilities or offices located in New Jersey. (Eichen Decl. ¶ 17, Ex. B, Ex. C: pages from web site of Bell Microproducts, Inc. at http://www.bellmicro.com>, Ex. D: pages printed from web site of Leadman Electronics USA, Inc. at http://www.leadman.com>, Ex. E: pages printed from web site of Tech Data Corporation at http://www.techdata.com>.) Some retailers with facilities or offices in New Jersey that are not listed as distributors on FICA's web site offer FIC products for sale. (Id. ¶ 18-21, Ex. B, Ex. F: pages printed from web site of Micro Warehouse, Inc. at http://www2.warehouse.com>, Ex. G: pages from web site of PCwonders.com Inc. at http://www.pcwonders.com>, Ex. H: pages printed from web site of Expert Computer Group Corp. at http://www.expertgroup.com>, Ex. I: price sheets received from Expert Computer Group Corp.) One of these retailers is Expert. (Id. ¶ 21, Exs. H, I.) LGE alleges that for at least some of the FIC motherboards sold, or offered for sale, by Expert, Expert must attach a power supply, memory chips or cards, disk drives, processors, input/output devices and other devices (which are often specified by the end consumer) in order to transform a bare motherboard into a working computer system. (Eichen Decl. ¶ 24.)
FICA admits that it has sold only a very small amount of FIC products to distributors in New Jersey. (Lien Decl. ¶ 7.) FICA claims, however, that (1) all such sales were FOB Fremont; (2) there have been no in-person sales to anyone in New Jersey for more than a year; (3) any sales or shipments into New Jersey have represented no more than 0.2 of one percent of FICA's total revenue, as compared with sales in California, which account for over 47 percent of FICA's sales; (4) FICA has had no sales to Expert for more than a year, when Expert ceased to be one of FICA's customers. (Id. ¶¶ 6-7.)
Expert claims that it has never purchased any motherboards or other computer equipment from FIC or FICA. (Decl. of Fu Jung Wang ("Expert Decl.") ¶ 8; Suppl. Decl. of Fu Jung Wang ("Expert Decl. # 2") ¶ 3.) Expert asserts that even though a related corporate entity, Expert Distributing, Inc. ("EDI"), has distributed FIC products in the past, it was only a small distributor of FIC products, it has no existing inventory of FIC manufactured hardware, and it discontinued purchases from FIC and FICA approximately one year ago. (Expert Decl. ¶ 10; Expert Decl. # 2 ¶¶ 4, 6-8.)
FIC and FICA brought a motion to dismiss the claims against them for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) or, in the alternative, to transfer venue to the Northern District of California pursuant to 28 U.S.C. § 1404(a). Expert moves this court to dismiss the claims against it for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6) or, in the alternative, for summary judgment pursuant to Federal Rule of Civil Procedure 56.
The Court of Appeals for the Federal Circuit has jurisdiction over appeals from the district court in patent cases. 21 U.S.C. § 1295(a)(1). Thus, decisions of the Federal Circuit on substantive questions of patent law are binding precedent on district courts. Panduit Corp. v. All States Plastic Mfg. Co., 744 F.2d 1564, 1574-75 (Fed.Cir.1984). The Federal Circuit applies Third Circuit precedent to routine procedural matters in patent infringement cases arising in the district courts within the Third Circuit. See id. The Federal Circuit has found, however, that certain aspects of personal jurisdiction are "intimately related to substantive patent law" and that, consequently, Federal Circuit law, as opposed to Third Circuit law, controls these jurisdictional issues. Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1564 (Fed.Cir.1994).
The Court will first discuss Expert's motion. Then the Court will address the motion of FIC and FICA.
In deciding a motion to dismiss for failure to state a claim under Rule 12(b)(6) the court must "accept as true all the allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the nonmoving party." Rocks v. Phila., 868 F.2d 644, 645 (3d Cir.1989). Dismissal is inappropriate unless it clearly appears that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief. Robb v. Phila., 733 F.2d 286, 290 (3d Cir.1984).
"[W]hoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent." 35 U.S.C. § 271(a). LGE alleges in its Amended Complaint that Expert "has infringed and continues to infringe one or more of the Patents[ ] by making, selling, offering to sell, using, or importing into the United States computer systems embodying the claimed inventions of the Patents[ ], or by contributing thereto or inducing others to do so." (Am.Compl. ¶ 24.) Accepting all of the allegations of the Amended Complaint as true, as we must, the Amended Complaint asserts a valid claim against Expert for patent infringement. We conclude, therefore, that dismissal of LGE's claims against Expert is inappropriate. See Robb, 733 F.2d at 290.
Federal Rule of Civil Procedure 56(c) provides that summary judgment is proper "if...
To continue reading
Request your trial
-
Lipscomb v. Clairvest Equity Partners Ltd. P'ship (In re LMI Legacy Holdings, Inc.)
...Id. at 879–80.90 Atl. Marine, 134 S.Ct. at 581.91 Id.92 Id. at 581–82.93 Id. at 582.94 Id. at 582.95 LG Elecs., Inc. v. First Int'l Computer, Inc. , 138 F.Supp.2d 574, 584 (D.N.J.2001) (quoting Mobil Oil Corp. v. W.R. Grace & Co. , 334 F.Supp. 117 (S.D.Tex.1971) ). See also Wyndham Associat......
-
Lipscomb v. Clairvest Equity Partners Ltd. (In re Lmi Legacy Holdings, Inc.)
...90. Atl. Marine, 134 S. Ct. at 581. 91. Id. 92. Id. at 581-82. 93. Id. at 582. 94. Id. at 582. 95. LG Elecs., Inc. v. First Int'l Computer, Inc., 138 F. Supp. 2d 574, 584 (D.N.J. 2001) (quoting Mobil Oil Corp. v. W.R. Grace & Co., 334 F.Supp. 117 (S.D.Tex.1971)). See also Wyndham Associates......
-
Teleconference Sys. v. Proctor & Gamble
...claim against Enbridge should be severed and stayed while the remainder of the case is transferred. See LG Elecs. Inc. v. First Int'l Computer, Inc., 138 F.Supp.2d 574, 584 (D.N.J.2001) (citations omitted), ("venue defects as to a party whose portion of the action has been severed or settle......
-
Amini Inn. v. Bank & Estate Liquidators
...to the milieu of the infringing device and the hub of activity centered around its production."); LG Elecs., Inc. v. First Int'l Computer, Inc., 138 F.Supp.2d 574, 590 (D.N.J. 2001) (same). A court should consider "the location of a product's development, testing, research and production." ......