Radio Sys. Corp.. v. Accession Inc.

• Decision Date: 25 April 2011
• Docket Number: No. 2010–1390.,2010–1390.
• Citation: 638 F.3d 785
• Parties: RADIO SYSTEMS CORPORATION, Plaintiff–Appellant,v.ACCESSION, INC., Defendant–Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

638 F.3d 785

98 U.S.P.Q.2d 1485

RADIO SYSTEMS CORPORATION, Plaintiff–Appellant,

v.ACCESSION, INC., Defendant–Appellee.

No. 2010–1390.

United States Court of Appeals, Federal Circuit.

April 25, 2011.

R. Bradford Brittian, Pitts & Brittian, P.C., of Knoxville, TN, argued for the plaintiff-appellant. With him on the brief were Robert E. Pitts, Paul A. Forsyth and Matthew J. Stark.Robert J. Basil, Collier & Basil, PC, of New York, NY, argued for the defendant-appellee.Before BRYSON, LINN, and DYK, Circuit Judges.BRYSON, Circuit Judge.

This is another in a series of cases presenting us with the question whether a patentee's activities directed at the forum state were sufficient to give the forum court personal jurisdiction over the patentee in a declaratory judgment action. The district court in this case held that the defendant's activities were not sufficient to give it personal jurisdiction over the defendant, and we agree.

I

Radio Systems Corporation is a Delaware corporation with its principal place of business in Knoxville, Tennessee. It manufactures several pet-related products, including a patented electronic pet access door (the “SmartDoor”), which unlocks in response to a transmitter worn by the pet. Accession, Inc., is a New Jersey corporation with its principal place of business in Hamilton, New Jersey. Accession's sole employee is its president, Thomas Sullivan. Mr. Sullivan is the named inventor of U.S. Patent No. 7,207,141 (“the '141 patent”), issued on April 24, 2007, and assigned to Accession. The '141 patent is directed to a portable pet access door (the “Wedgit”) that can be inserted into sliding glass doors.

In November 2006, Mr. Sullivan sent an unsolicited letter to Radio Systems designed to interest the company in licensing the Wedgit. After Radio Systems did not respond to the solicitation and two subsequent telephone calls, Mr. Sullivan sent another letter to Radio Systems in January 2007 for the same purpose, this time indicating that he had received a notice of allowance from the Patent and Trademark Office (“PTO”) for the pending patent on his device. Radio Systems responded by e-mail, asking for the patent application number. Mr. Sullivan answered by e-mail, providing the application number and suggesting that “we may both benefit from a cooperative effort.” Radio Systems did not respond to that e-mail.

In June 2007, Mr. Sullivan e-mailed Radio Systems again, noting that the ' 141 patent had issued and proposing that Accession supply Radio Systems with Wedgit pet doors for sale to consumers. The parties exchanged correspondence for several months but reached no agreement. Meanwhile, Radio Systems applied for a patent on its SmartDoor device and began marketing it in August 2007.

In February 2009, Mr. Sullivan e-mailed Radio Systems again to tout “mutually beneficial opportunities to bring [the Wedgit] to market.” Radio Systems ultimately agreed to meet with Mr. Sullivan to view a demonstration of the Wedgit. Before the meeting, the parties signed a nondisclosure agreement prepared by Radio Systems. In April 2009, Mr. Sullivan traveled to Tennessee to demonstrate the Wedgit to David Anderson, a Radio Systems representative. According to Mr. Sullivan's account of the meeting, he presented the Wedgit and showed Mr. Anderson a product video. Mr. Anderson asked Mr. Sullivan to leave Wedgit prototypes with Radio Systems for further examination, but Mr. Sullivan declined, saying that he planned to use the prototypes in a focus group presentation. Following the meeting, Mr. Sullivan sent several more e-mails to Radio Systems, but as of July 2009 Radio Systems had expressed no interest in his marketing proposal. At that time, Mr. Sullivan advised Radio Systems that he would continue his efforts to commercialize the Wedgit on his own.

In June 2009, the PTO issued a notice of allowance for Radio Systems' patent on the SmartDoor device. Meanwhile, Accession retained legal counsel in New Jersey. On August 20, 2009, Accession's counsel left a voice message with the PTO examiner for the SmartDoor application, alerting the examiner to the existence of Accession's '141 patent. On the same day, Accession's counsel telephoned Radio Systems' counsel and stated his position that the SmartDoor infringed the '141 patent and that interference proceedings would be warranted between the '141 patent and the SmartDoor application. Later that day, Accession's counsel left a voice message with Radio Systems' counsel indicating that Mr. Sullivan should be named as a co-inventor on the SmartDoor application. On August 25, 2009, Accession's counsel sent an e-mail to Radio Systems' counsel asking whether Radio Systems had brought the '141 patent to the attention of the PTO. The next day, the PTO examiner returned the phone call of Accession's counsel. As a result of that conversation, the PTO withdrew the notice of allowance previously issued for the SmartDoor application. On August 28, 2009, Accession's counsel sent an e-mail to Radio Systems' counsel informing him of the communication with the examiner. Finally, on September 1 and September 23, 2009, Accession's counsel sent letters to Radio Systems outlining Accession's infringement allegations and suggesting that the dispute be settled through a licensing agreement.

On November 5, 2009, Radio Systems filed a complaint in the United States District Court for the Eastern District of Tennessee seeking a declaratory judgment of noninfringement and invalidity with respect to the '141 patent. Accession moved to dismiss the action for lack of personal jurisdiction or, in the alternative, to transfer the case to the United States District Court for the District of New Jersey. The Tennessee district court granted Accession's motion to dismiss in May 2010, and Accession filed an infringement action in the District of New Jersey shortly thereafter. That action has been stayed pending our decision in this appeal.

II

A United States district court may exercise personal jurisdiction over a defendant if the defendant “is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located.” Fed.R.Civ.P. 4(k)(1)(A). The district court's exercise of jurisdiction over an out-of-state defendant must be consistent with both the forum state's long-arm statute and the requirements of due process. See Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 1324, 1329 (Fed.Cir.2008). Because Tennessee's long-arm statute is coterminous with due process limitations, Masada Inv. Corp. v. Allen, 697 S.W.2d 332, 334 (Tenn.1985); see Tenn.Code Ann. § 20–2–214, the jurisdictional issue in this case turns on whether the court's exercise of jurisdiction would be consistent with the requirements of due process.

Radio Systems does not allege that the district court has general jurisdiction over Accession, which has no “continuous and systematic general business contacts” with Tennessee, Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Instead, Radio Systems alleges that the district court has specific jurisdiction over Accession based on events related to the instant dispute.

A

In order to satisfy due process requirements for establishing specific jurisdiction over a defendant, the plaintiff must show that the defendant purposely directed its activities at residents of the forum and that the plaintiff's claim arises from or relates to those activities. In addition, the plaintiff must satisfy the court that the assertion of personal jurisdiction under the circumstances is reasonable and fair. Breckenridge Pharm., Inc. v. Metabolite Labs., Inc., 444 F.3d 1356, 1363 (Fed.Cir.2006). In Red Wing Shoe Co. v. Hockerson–Halberstadt, Inc., 148 F.3d 1355 (Fed.Cir.1998), we held that ordinary cease-and-desist notices sent by a patentee to an alleged infringing party in a different state are not sufficient to subject the patentee to specific jurisdiction in that state. As a matter of patent law policy, we held that “[p]rinciples of fair play and substantial justice afford a patentee sufficient latitude to inform others of its patent rights without subjecting itself to jurisdiction in a foreign forum.” 148 F.3d at 1360–61.

In subsequent cases, we have held that certain other patent enforcement actions, taken in conjunction with the issuance of cease-and-desist letters, are sufficient to support specific jurisdiction over a patentee in a foreign forum. See Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1019 (Fed.Cir.2009) (collecting cases). However, we have held that not all of a patentee's activities in the forum state are sufficient to create a basis for asserting personal jurisdiction. In Avocent Huntsville Corp., we explained that an action for a declaratory judgment “arises out of or relates to the activities of the defendant patentee in enforcing the patent or patents in suit,” and that the relevant inquiry for specific jurisdiction is “to what extent ... the defendant patentee purposefully directed such enforcement activities at residents of the forum and the extent to which the declaratory judgment claim arises out of or relates to those activities.” 552 F.3d at 1332 (internal quotation marks and citations omitted). Thus, only those activities of the patentee that relate to the enforcement or defense of the patent can give rise to specific personal jurisdiction for such an action. Id. at 1336; accord Autogenomics, 566 F.3d at 1020.

The district court in this case concluded that Radio Systems' declaratory judgment action “does not result from alleged injuries that arise out of or relate to” activities by Accession that were purposely directed at Tennessee. The court explained that the only activities relating to the enforcement of Accession's patent that were directed at Tennessee consisted of Accession's counsel's cease-and-desist correspondence with Radio Systems in...