LH Carbide Corp. v. Piece Maker Co.

• Citation: 852 F. Supp. 1425
• Decision Date: 18 May 1994
• Docket Number: Cause No. 1:93-CV-312.
• Parties: L.H. CARBIDE CORPORATION, Plaintiff, v. The PIECE MAKER COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Indiana

852 F. Supp. 1425

L.H. CARBIDE CORPORATION, Plaintiff, v. The PIECE MAKER COMPANY, Defendant.

Cause No. 1:93-CV-312.

United States District Court, N.D. Indiana, Fort Wayne Division.

May 18, 1994.

COPYRIGHT MATERIAL OMITTED

Douglas D. Powers, Anthony Niewyk, Albert J. Dahm, Baker and Daniels, Fort Wayne, IN, for plaintiff.

Edward L. Murphy, Jr., Miller Carson Boxberger and Murphy, Fort Wayne, IN, Owen E. Perry, Reising, Ethington, Barnard, Perry and Milton, Troy, MI, for defendant

ORDER

WILLIAM C. LEE, District Judge.

This matter is before the court on Defendant's Motion to Dismiss or Transfer filed on February 4, 1994. In support of its Motion, defendant also filed a Brief In Support and the affidavit of Mr. Patrick A. Smith, President of The Piece Maker Company. Plaintiff filed its Response on April 1, 1994, with various affidavits and exhibits. On April 13, 1994, defendant filed its Reply. Thus, the court finding the matter fully briefed, denies defendant's Motion to Dismiss, but grants defendant's Motion to Transfer.

Background

Plaintiff, L.H. Carbide Corporation (hereinafter: "Carbide"), is an Indiana Corporation with its principal place of business in Fort Wayne, Indiana. Defendant, The Piece Maker Company (hereinafter: "Piece Maker"), is a Michigan Corporation with its principal place of business in Troy, Michigan. Among other things, Carbide designs and manufactures dies for use in stamping, stacking and assembling laminations for forming rotor and stator cores which are used in electrical motors. Carbide also designs and manufactures other equipment that is used in conjunction with these dies in the manufacturing process. Piece Maker, who is a competitor of Carbide, manufactures and reconstructs dies for use in manufacturing rotor and stator cores for electrical motors.

Carbide is the owner of the following patents which concern this cause of action:

1. United States Patent No. 4,619,028, (the '028 Patent) entitled "Apparatus for Manufacture of Laminated Parts";

2. United States Patent No. 4,738,020, (the '020 Patent) entitled "Method for Manufacture of Laminated Parts";

3. United States Patent No. 5,087,849, (the '849 Patent) entitled "Laminated Parts and a Method for Manufacture Thereof"; and

4. United States Patent No. 5,123,155, (the '155 Patent) entitled "Apparatus and Method for Manufacturing Laminated Parts".

Carbide refers to these patents as the "Interlock Patents" because the patents relate to technology that automatically creates lamination stacks made from sheet stock material to form rotor and stator cores for electric motors.

Carbide instituted the present action by filing its Complaint with this court on November 24, 1993, alleging patent infringement. Carbide alleges that Piece Maker is actively inducing its customers to infringe upon the Interlock Patents owned by Carbide. Carbide further alleges that Piece Maker is manufacturing and selling dies to customers that contributorily infringe upon the Interlock Patents.

Discussion

Defendant filed its Motion to Dismiss or Transfer pursuant to Fed.R.Civ.P. 12(b)(2) and (3) on the ground that this court lacks personal jurisdiction over Piece Maker and that venue, consequently, in this district is improper. In the alternative, Piece Maker requests this court to transfer this cause of action to the United States District Court for the Eastern District of Michigan pursuant to 28 U.S.C. § 1404 and § 1406.

When the issue of personal jurisdiction is raised via a motion to dismiss, Fed. R.Civ.P. 12(b)(2), the burden of proof rests upon the party asserting jurisdiction. Wessel Co., Inc. v. Yoffe & Beitman Mgmt. Corp., 457 F.Supp. 939, 940 (N.D.Ill.1978). This burden of proof is met by a prima facie showing that jurisdiction is conferred by the long-arm statute. Neiman v. Rudolph Wolff & Co., Ltd., 619 F.2d 1189, 1190 (7th Cir.), cert. denied, 449 U.S. 920, 101 S.Ct. 319, 66 L.Ed.2d 148 (1980); O'Hare Int'l Bank v. Hampton, 437 F.2d 1173, 1176 (7th Cir.1971); Wessel Co., Inc., 457 F.Supp. at 940. In considering a challenge to personal jurisdiction, a court may receive and weigh affidavits, exhibits or other evidence submitted by the parties, Nelson by Carson v. Park Industries, Inc., 717 F.2d 1120 (7th Cir.), cert. denied, 465 U.S. 1024, 104 S.Ct. 1277, 79 L.Ed.2d 682 (1983), but must construe all facts concerning jurisdiction in favor of the non-movant, including disputed or contested facts. Deluxe Ice Cream Co. v. R.C.H. Tool Corp., 726 F.2d 1209, 1215 (7th Cir.1984); Neiman, 619 F.2d at 1190; United States Railway Equipment Co. v. Port Huron & Detroit Railroad Co., 495 F.2d 1127, 1128 (7th Cir.1974); O'Hare Int'l Bank, 437 F.2d at 1176; Maurice Sternberg, Inc. v. James, 577 F.Supp. 882, 885 (N.D.Ill.1984).

Personal Jurisdiction

Before a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied. Omni Capital Int'l v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104, 108 S.Ct. 404, 409, 98 L.Ed.2d 415 (1987). "Service of summons is the procedure by which a court having venue and jurisdiction of the subject matter of the suit asserts jurisdiction over the person of the party served." Mississippi Publishing Corp. v. Murphree, 326 U.S. 438, 444-45, 66 S.Ct. 242, 245-46, 90 L.Ed. 185 (1946). Thus, before a federal court may exercise personal jurisdiction over a defendant, there must be more than notice to the defendant and a constitutionally sufficient relationship between the defendant and the forum. Omni, 484 U.S. at 104, 108 S.Ct. at 409. There must be a basis for the defendant's amenability to service of summons. Id. This means there must be authorization for service of summons on the defendant. Id.

Although patent infringement cases are grounded in federal law and thus present federal questions, Congress has not enacted a statute governing personal jurisdiction in such cases. Gor-Vue Corp. v. Hornell Elektrooptik AB, 634 F.Supp. 535, 536 (N.D.Ohio 1986). Thus, there is no federal statute authorizing service of summons for patent infringement cases. Therefore, a federal court must look to the law of the state in which the federal court sits to determine whether jurisdiction may be asserted over an out-of-state defendant. Id.

Service of summons in a federal action is covered generally by Rule 4 of the Federal Rules of Civil Procedure. Omni, 484 U.S. at 104, 108 S.Ct. at 409. Rule 4 authorizes service of summons over an out-of-state defendant according to the law of the state where the federal district court sits or where service of summons is to be effected.¹

Ultimately, amenability to extra-territorial personal jurisdiction (service of summons) is a question of due process. Honeywell, Inc. v. Metz Apparatewerke, 509 F.2d 1137, 1143 (1975). The basic tenet of the due process analysis was announced by the Supreme Court of the United States almost fifty years ago where it stated, "a defendant must have certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945).

Judge Tinder of the Southern District of Indiana stated:

Since International Shoe, that case's due process precepts have been much expounded upon but little changed. Court's continue to speak in terms of "minimum contacts" and general and specific jurisdiction, recognizing all the while that the fact intensive nature of the jurisdictional inquiry means that doctrinal statements can only serve as guideposts for the resolution of specific cases.

Boone v. Sulphur Creek Resort, Inc., 749 F.Supp. 195, 199 (S.D.Ind.1990).

Moreover, in the context of federal-question litigation, such as patent infringement, where Congress has provided no federal statutory grant for the exercise of personal jurisdiction over a defendant, and the federal court must look to state law for the authority to exercise personal jurisdiction, there is some question as to whether the court is to be guided by the due process clause of the Fifth Amendment or whether the due process clause of the Fourteenth Amendment, and consequentially, the territorial limitations placed on the states by the Fourteenth Amendment apply.

In Handley v. Indiana & Michigan Elec. Co., 732 F.2d 1265 (6th Cir.1984), the Sixth Circuit Court of Appeals recognized the difficulties in utilizing a state's long-arm statute to effectuate service of summons over a defendant in a case concerning a federally created cause of action, the Jones Act, 46 U.S.C. App. § 688. The court stated that where a federal district court seeks to assert personal jurisdiction over a non-resident defendant of the forum state in relation to a federally created cause of action, a different due process inquiry must be made rather than the standard due process inquiry undertaken pursuant to the Fourteenth Amendment in diversity cases. Id. at 1268. "As part of a national system of courts a federal district court considering a case that arises under federal law is not subject to precisely the same due process limitations which restrict its reach in diversity cases. It is clear, however, that Rule 4, Fed.R.Civ.P., affects personal jurisdiction of district courts by placing territorial limits on their process." Id.

The court then analyzed the district court's utilization of Kentucky's long-arm statute in light of the due process clause of the Fifth Amendment. Id. at 1271. First, the court held that the due process clause of the Fourteenth Amendment in relation to the "minimum contacts" test announced in International Shoe served two distinct functions. One (1), to protect a defendant from burdensome litigation in a distant or inconvenient forum, and two (2), to ensure that State courts do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system. Id. The court...