Trintec Industries v. Pedre Promotional Products

• Decision Date: 19 January 2005
• Docket Number: No. 04-1293.,04-1293.
• Citation: 395 F.3d 1275
• Parties: TRINTEC INDUSTRIES, INC. and TIME TO INVENT, LLC, Plaintiffs-Appellants, v. PEDRE PROMOTIONAL PRODUCTS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

395 F.3d 1275

TRINTEC INDUSTRIES, INC. and TIME TO INVENT, LLC, Plaintiffs-Appellants, v. PEDRE PROMOTIONAL PRODUCTS, INC., Defendant-Appellee.

No. 04-1293.

United States Court of Appeals, Federal Circuit.

January 19, 2005.

COPYRIGHT MATERIAL OMITTED

Robert A. Vanderhye, Nixon & Vanderhye, P.C., of Arlington, Virginia, argued for plaintiffs-appellants.

Robert S. Churchill, Eaton & Van Winkle LLP, of New York, New York argued for defendant-appellee. With him on the brief was Robert L. Vogel, Vogel & Slade, of Washington, DC.

Before RADER, Circuit Judge, FRIEDMAN, Senior Circuit Judge, and BRYSON, Circuit Judge.

FRIEDMAN, Senior Circuit Judge.

This appeal challenges the district court's dismissal of a patent suit for lack of personal jurisdiction over the defendant. Trintec Indus., Inc. v. Pedre Promotional Prods. Inc., No. 1:03-CV-01267-RCL (D.D.C. Mar. 25, 2004) (order granting motion to dismiss) ("Dismissal Order"). We vacate and remand for the district court to reconsider in accordance with our opinion.

I

The appellants, Trintec Industries, Inc., a Canadian corporation, and Time To Invent, a District of Columbia corporation (collectively "Trintec"), sued the appellee, Pedre Promotional Products, Inc. ("Pedre"), for patent infringement in the United States District Court for the District of Columbia. The complaint alleged that Pedre infringed two of Trintec's patents, which cover automated small volume production of printed faces for use in wristwatches, clocks and similar instruments. The complaint further alleged that Pedre is a New York corporation with its main office in New York City, and that the district court had venue because Pedre "is a corporation that resides in this judicial district." Compl., June 12, 2003 at ¶¶ 3, 5.

Pedre moved to dismiss "for lack of personal jurisdiction and improper venue, or, in the alternative, [to] transfer[]... this case to the Southern District of New York pursuant to 28 U.S.C. § 1404." Motion to Dismiss, July 16, 2003 at 1. Attached to the motion was a declaration of Anthony Farello, the president of Pedre. Declaration of Anthony Farello, July 15, 2003 ("Farello Decl.") at ¶ 1. Farello stated that Pedre, a New York corporation, has its "sole office and place of business" in New York City. Its business is "manufacturing and importing watches and clocks." Its "manufacturing facilities are in New York," but some of its parts "are sourced out to a manufacturing facility in Rhode Island." It "has no offices, employees, manufacturing facilities or sales representatives in Washington, D.C." Farello Decl. at ¶¶ 3-5.

Farello further stated that "Pedre sells watches and clocks to distributors throughout the United States, who then sell the products to the ultimate user." It "does not directly employ sales representatives" but instead "contract[s] to a sales organization called Multiline Marketing Group, Inc. (`Multiline')" based in Florida. "Multiline is the sales representative for eight product lines including Pedre"; the other seven product lines are from manufacturers with "no connection to Pedre." "Joy Jacobs is the Multiline sales representative whose sales territory includes Washington, D.C." as well as several other nearby states. Although she has never "maintained an office or established an ongoing presence" in the District of Columbia, she "spends approximately four to five days per year visiting clients in Washington, D.C. on behalf of Pedre and the seven other manufacturers whose product lines she represents; these days are spread over two visits annually." Id. at ¶¶ 6-11.

Regarding sales and advertising, Farello stated that "[s]ales to distributors in Washington, D.C. are a minimal part of Pedre's total business. The number of active accounts in the past four years in Washington, D.C. is 17 (only four have been active in the past two years), a minor fraction of the 5,720 active accounts Pedre has opened nationwide during the same period. Many of the distributors do not renew their orders of promotional products from year to year.... Sales to Washington, D.C. distributors accounted for $2,749 in all of 2002 and for $4,176 through the end of June, 2003. By contrast, total annual nationwide sales for Pedre are approximately $3.5 million.... Pedre advertises exclusively in national trade publications and makes no efforts at advertising or promotion in the Washington, D.C. market." Id. at ¶¶ 12-14.

In response, Trintec filed a declaration of Robert A. Vanderhye, its lead counsel and the general manager of the plaintiff Time To Invent. Declaration of Robert A. Vanderhye, July 23, 2003 ("Vanderhye Decl.") at ¶ 1. Vanderhye stated that searches he made on the Internet relating to Pedre products "reveal that Pedre products, including products alleged to infringe the patents in suit, are extensively advertised on a number of web sites to customers and potential customers in Washington, D.C. including on `pedre.com,' Pedre's own web site.... There are literally dozens of other web sites... which also depict and tout Pedre products. Some of these web sites have hyperlinks to pedre.com." Vanderhye Decl. at ¶ 4.

Vanderhye stated that "Pedre offers infringing products, and products produced by infringing methods, for sale in Washington, D.C., over its own personal web site, as well as over other web sites", and that he "was able to directly place orders for the infringing products in Exhibit A over between [two to four different] Pedre sponsored or authorized interactive web sites. While I did not actually complete and submit the orders because of the cost involved, all I had to do to actually submit the orders was to fill out name and billing and shipping address information[,] which had a place for `State' and did not exclude Washington, D.C.[,] provide payment information, and submit (e.g. by e-mail) the multicolor art work to be used on the dials." Id. at ¶¶ 5-6.

Vanderhye further stated that additional interactive features on Pedre's website "invite[ ] customers in Washington, D.C. to create a `CyberWatch TM' over the Internet, allowing creation and approval of a final watch design through interaction with the customer over Pedre's web site," and to "e-mail art to Pedre's art department at the advertised e-mail address `art@pedre.com'. Over the Internet, Pedre also invites customers in Washington, D.C. to call it at its toll free number 1-800-969-2151 to place orders, and allows promotional products companies to customize e-flyers on the Internet for their own purposes, order samples, or contact suppliers by clicking on hyperlinks." Id. at ¶ 9.

Finally, Vanderhye stated that "Pedre advertises on its web site that it `exhibits at national and regional shows across the country,' including two that it says were sited in Washington, D.C. in 2003 (January 30 and July 8).... Pedre states, both on its pedre.com web site and on the Multiline Marketing Group web site, that an indication of its success with color custom watch dial sales is that it has made watch sales to the U.S. Postal Service. The USPS is known to be headquartered in Washington D.C." Id. at ¶¶ 7-8. Attached to Vanderhye's declaration as exhibits were copies of the material he obtained from the Internet. Appellant's Br.App. at A37-43.

The district court granted Pedre's motion and dismissed the complaint. The sole explanation it gave for that action was the following order:

Defendant having moved pursuant to Fed.R.Civ.P. 12(b)(2) and (3) to dismiss the complaint for lack of personal jurisdiction and improper venue or, in the alternative, to transfer this action to the United States District Court for the Southern District of New York pursuant to 28 U.S.C. § 1404; and the Court having considered the submissions of the parties, it is hereby:

ORDERED, that Defendant's Motion to Dismiss the Complaint be, and it hereby is GRANTED, and the Clerk is hereby directed to dismiss the complaint.

SO ORDERED.

Dismissal Order at 1.

II

A. The determination whether a district court has personal jurisdiction over the defendants in a patent infringement case generally involves two inquiries. First, does jurisdiction exist under the state long-arm statute? See, e.g., Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1200 (Fed.Cir.2003); Deprenyl Animal Health, Inc. v. U. of Toronto Innovations, 297 F.3d 1343, 1349-50 (Fed.Cir.2002); Hildebrand v. Steck Mfg. Co., 279 F.3d 1351, 1354 (Fed.Cir.2002); Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1359 (Fed.Cir.2001). Second, if such jurisdiction exists, would its exercise be consistent with the limitations of the due process clause? See, e.g., Silent Drive, 326 F.3d at 1201; Inamed, 249 F.3d at 1359-60.

Sometimes these two inquiries coalesce into one because the reach of the state long-arm statute is the same as the limits of the due process clause, so that the state limitation "collapses into" the due process requirement. Inamed, 249 F.3d at 1360 (noting that California long-arm statute is coextensive with limits of due process); see also Deprenyl, 297 F.3d at 1350 (same, discussing Kansas long-arm statute); HollyAnne Corp. v. TFT, Inc., 199 F.3d 1304, 1307 (Fed.Cir.1999) (same, discussing Nebraska long-arm statute). Here, Trintec and Pedre appear to disagree upon whether the limitations of the District of Columbia's long-arm statute are the same as those of the due process clause.

There are two kinds of personal jurisdiction — specific and general. "Specific jurisdiction `arises out of' or `relates to' the cause of action even if those contacts are `isolated and sporadic.'... General jurisdiction arises when a defendant maintains `continuous and systematic' contacts with the forum state even when the cause of action has no relation to those contacts." LSI Indus. v. Hubbell Lighting, Inc., 232 F.3d 1369, 1375 (Fed.Cir.2000) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-73, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), and Helicopteros Nacionales de...