Orange Elec. Co. v. Autel Intelligent Tech. Corp.
| Decision Date | 21 September 2022 |
| Docket Number | Civil Action 2:21-CV-00240-JRG |
| Parties | ORANGE ELECTRONIC CO. LTD., Plaintiff, v. AUTEL INTELLIGENT TECHNOLOGY CORP., LTD., Defendant. |
| Court | U.S. District Court — Eastern District of Texas |
Before the Court is Defendant Autel Intelligent Technology Corp Ltd.'s (“Autel ITC”) Motion to Dismiss for Lack of Personal Jurisdiction, Insufficient Service of Process, and Failure to State a Claim (the “Motion”). (Dkt. No. 9). Having considered the Motion, the subsequent briefing, and for the reasons set forth herein, the Court finds that the Motion should be DENIED.
On June 30, 2021, Orange Electronic Co. Ltd. (“Orange”) filed suit against Autel ITC, asserting infringement of U.S Patent No. 8,031,064C3 (the “'064 Patent”). (Dkt. No. 1 ¶ 4). Specifically, Orange contends that “Autel [ITC] has manufactured and sold Autel[] [ITC's] [tirepressure-monitoring-system] [(“TPMS”)] products that infringe the Asserted Patent and which include at least, but not limited to, MaxiTPMS TS501, MaxiTPMS TS601, TS401, TS408, TS508, TS608, MS906TS, ITS 600, TS508WF, 1-Sensor (Press-in) M, 1-Sensor (Press-in) R, 1-Sensor (Screw-in) M, 1-Sensor (Screw-in) R, 315MHz MX-Sensor M, 433MHz MX-Sensor M, 315Mhz MX-Sensor R, and 433MHz MX-Sensor R [(collectively, the “Accused Products”)].” (Id. ¶ 18). Orange is located in Taiwan, and Autel ITC is incorporated in China. (Dkt. No. 1 ¶¶ 1, 2; Dkt. No. 9-1 ¶ 3). Autel U.S. Inc. (“Autel US”) is a wholly owned subsidiary of Autel ITC and is headquartered in Port Washington, New York. (Dkt. No. 9-2 ¶ 3).
Autel ITC moves to dismiss the above-captioned case under Rule 12(b)(2) for lack of personal jurisdiction; Rule 12(b)(5) for insufficient service of process; and Rule 12(b)(6) for failure to state a claim upon which relief can be granted. (Dkt. No. 9 at 8).
“Federal Rule of Civil Procedure 12(b)(2) requires a court to dismiss a claim if the court does not have personal jurisdiction over the defendant.” Cunningham v. CBC Conglomerate, LLC, 359 F.Supp.3d 471, 476 (E.D. Tex. 2019). Where a claim involves substantive questions of patent law, the Court applies Federal Circuit law to evaluate personal jurisdiction. NexLearn, LLC v. Allen Interactions, Inc., 859 F.3d 1371, 1375 (Fed. Cir. 2017). However, the Fifth Circuit relies on the same analysis as the Federal Circuit in deciding whether personal jurisdiction exists. Packless Metal Hose, Inc. v. Extek Energy Equip. (Zhejiang) Co., No. 2:09-CV-265-TJW, 2011 WL 504048, at *1 n.1 (E.D. Tex. Feb. 10, 2011).
Personal jurisdiction exists over a defendant where “a forum state's long-arm statute permits service of process and whether assertion of personal jurisdiction violates due process.” NexLearn, 859 F.3d at 1375. “Because Texas's long-arm statute is coextensive with the Due Process Clause of the Fourteenth Amendment, the two inquiries merge.” Carmona v. Leo Ship Mgmt., Inc., 924 F.3d 190, 193 (5th Cir. 2019) (citations omitted). The Due Process Clause requires that a defendant have sufficient minimum contacts with the forum to confer either general or specific personal jurisdiction. Wapp Tech Ltd. P'ship v. Micro Focus Int'l, PLC, 406 F.Supp.3d 585, 592 (E.D. Tex. 2019). For due process to be satisfied pursuant to specific jurisdiction, the 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.'” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (citation omitted). “A court must inquire whether the defendant has ‘purposefully directed his activities' at the forum state and, if so, whether ‘the litigation results from alleged injuries that arise out of or relate to those activities.'” Breckenridge Pharm., Inc. v. Metabolite Labs., Inc., 444 F.3d 1356, 1361-62 (Fed. Cir. 2006) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)). The minimum contacts test is satisfied if a defendant “delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state.” Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1566 (Fed. Cir. 1994) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98 (1980)).
Upon a showing of purposeful minimum contacts, the defendant bears the burden to prove unreasonableness. Elecs. for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1351-52 (Fed. Cir. 2003). In rare circumstances, a defendant may defeat the exercise of personal jurisdiction by “present[ing] a compelling case that the presence of some other considerations would render jurisdiction unreasonable.” Burger King, 471 U.S. at 477.
Personal jurisdiction may also exist under Federal Rule of Civil Procedure 4(k)(2), which provides, “For a claim that arises under federal law, serving a summons . . . establishes personal jurisdiction over a defendant if: (A) the defendant is not subject to jurisdiction in any state's courts of general jurisdiction; and (B) exercising jurisdiction is consistent with the United States Constitution and laws.” FED. R. CIV. P. 4(k)(2); M-I Drilling Fluids UK Ltd. v. Dynamic Air Ltda., 890 F.3d 995, 999 (Fed. Cir. 2018) (quoting Synthes (U.S.A.) v. G.M. Dos Reis Jr. Ind. Come de Equip. Medico, 563 F.3d 1285, 1293-94 (Fed. Cir. 2009)). In analyzing Prong 3 of Rule 4(k)(2), a court must consider whether “(1) defendant purposefully directed its activities at residents of the forum, (2) the claim arises out of or relates to the defendant's activities with the forum, and (3) assertion of personal jurisdiction is reasonable and fair.” M-I Drilling Fluids, 890 F.3d at 999 (citing Synthes, 563 F.3d at 1293-94). The three-step due process analysis under specific jurisdiction and Prong 3 of Rule 4(k)(2) are similar; however, Rule 4(k)(2) “contemplates a defendant's contacts with the entire United States, as opposed to the state in which the district court sits.” Id. (quoting Synthes, 563 F.3d at 1295).
“Where, as here, a district court's disposition as to the personal jurisdictional question is based on affidavits and other written materials in the absence of an evidentiary hearing, a plaintiff need only to make a prima facie showing that defendants are subject to personal jurisdiction.” Coyle, 340 F.3d at 1349. “[A] district court must accept the uncontroverted allegations in the plaintiff's complaint as true and resolve any factual conflicts in the affidavits in the plaintiff's favor.” Id.
Federal Rule of Civil Procedure 12(b)(6) authorizes a court to dismiss a complaint if it “fails to state a claim upon which relief can be granted.” FED. R. CIV. P. 12(b)(6); Motiva Patents, LLC v. Sony Corp., 408 F.Supp.3d 819, 826 (E.D. Tex. 2019). In evaluating a motion to dismiss, the Court must “accept all well-pleaded facts in the complaint as true and view the facts in the light most favorable to the plaintiff.” Motiva Patents, 408 F.Supp. at 827 (quoting O'Daniel v. Indus. Serv. Sols., 922 F.3d 299, 304 (5th Cir. 2019)). The “plaintiff is generally required to provide ‘only a plausible “short and plain” statement of the plaintiff's claim . . .'” Script Sec. Sols. L.L.C. v. Amazon.com, Inc., 170 F.Supp.3d 928, 936 (E.D. Tex. 2016) (Bryson, J.) (quoting Sinner v. Switzer, 562 U.S. 521, 530 (2011); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007).
Autel ITC argues that Orange's allegations concerning specific jurisdiction in its Complaint are conclusory and contain nothing factual which establishes that Autel ITC has purposefully directed its activities to Texas or Orange's claims arise out of any such activity. (Dkt. No. 9 at 13). Autel ITC contends that Orange's allegations as to Autel ITC's activity in the United States are conclusory because Autel ITC does not “(1) manufacture, sell, or offer for sale any Autel products in Texas or anywhere else in the United States, (2) act as the importer of record for any Autel products sold in the United States, or (3) engage in any sales efforts targeting Texas or anywhere else in the United States.” (Id.). Autel ITC alleges that any activity in the United States is performed by Autel US. (Id. at 13-14). Further, Autel ITC argues that personal jurisdiction would be neither reasonable nor fair given that the dispute concerning personal jurisdiction “centers on the activities of Autel US-the entity that Orange omitted from this case” because “joining Autel U.S. as a defendant would defeat venue” in this district. (Id. at 14).
Orange argues that this Court has personal jurisdiction over Autel ITC under Rule 4(k)(2) and specific jurisdiction. (Dkt. No. 11 at 5, 7). Under Rule 4(k)(2), Orange argues that Autel ITC's contractual relationship with Autel U.S. to import and sell Autel ITC's products within the United States is alone sufficient to establish minimum contacts with the United States. (Id. at 6). Orange contends that Autel ITC retained control over recruiting and signing-up U.S. retailers and dealers and directing U.S. customers to U.S. retailers for the Accused Products. (Id.). Under specific jurisdiction, Orange argues that the Court has personal jurisdiction over Autel ITC based on its contacts with Texas because Autel ITC's website directs users to dealers within the Eastern District of Texas. (Id. at 7-8).
In its reply, Autel ITC argues that its website is a passive display of information, which is insufficient to establish purposeful availment for purposes of due process. (See ...
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