Universal Stabilization Techs., Inc. v. Advanced Bionutrition Corp.
| Decision Date | 08 May 2017 |
| Docket Number | CASE NO. 17cv87-GPC(MDD) |
| Court | U.S. District Court — Southern District of California |
| Parties | UNIVERSAL STABILIZATION TECHNOLOGIES, INC., Plaintiff, v. ADVANCED BIONUTRITION CORP., Defendant. |
ORDER DENYING DEFENDANT'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION, FOR IMPROPER VENUE AND MOTION TO TRANSFER TO THE DISTRICT OF MARYLAND
[Dkt. No. 12.]
Before the Court is Defendant's motion to dismiss for lack of personal jurisdiction, and improper venue, and alternatively, a motion to transfer the case to the District of Maryland. (Dkt .No. 12.) An opposition was filed as well as a reply. (Dkt. Nos. 15, 20.) Based on the reasoning below, the Court DENIES Defendant's motion to dismiss for lack of personal jurisdiction and improper venue, and also DENIES Defendant's motion to transfer the case to the District of Maryland.
Plaintiff Universal Stabilization Technologies, Inc. ("Plaintiff" or "UST") filed a complaint against Defendant Advanced Bionutrition Corporation ("Defendant" or "ABN") for correction of inventorship of U.S. Patent No. 8,907,245 ("'245 patent") pursuant to 35 U.S.C. § 256, unjust enrichment, declaratory relief, and constructive trust and accounting. (Dkt. No. 1, Compl.)
Plaintiff UST is a Delaware corporation with its principal place of business in San Diego, CA. (Id. ¶ 2.) Dr. Victor Bronshtein ("Dr. Bronshtein"), founder and President of UST, "is a world renowned and recognized expert in the field of preserving biologics including biomacromolecules, bacteria, viruses, and mammalian cells from damage during cryopreservation and preservation in a dry state." (Id.) Defendant ABN is a Maryland corporation with its principal place of business in Columbia, Maryland and is designated as the sole owner of the '245 patent at the U.S. Patent & Tradmark Office. (Id. ¶ 3.)
According to the complaint, ABN contacted UST in San Diego, California seeking a consulting arrangement with Dr. Bronshtein about the preservation of probiotic bacteria using processes and compositions of matter known only to Dr. Bronshtein and UST. (Id.) In 2004, ABN hired UST to assist and disclose information to it related to a project concerning the preservation of probiotic bacteria. (Id. ¶ 7.) Dr. Bronshtein met with ABN and disclosed, in confidence, UST's previously developed know-how that became the claimed subject matter of the '254 patent. (Id.) On January 17, 2012, the '245 patent, concerning the "subject matter of preserving probiotic material," issued and identified Mordechi Harei and Keren Kohavi-Beck as the alleged inventors of the compositions and the processes claimed in the '245 patent. (Id. ¶ 8.) The complaint, in fact, alleges that Dr. Bronshtein is the inventor of the claimed processes of the '245 patent and the subject matter of the '245 patent reflects inventions known and conceived by him and disclosed by him to ABN. (Id. ¶ 9.)
The complaint claims that Dr. Bronshtein was incorrectly not named as the sole inventor of the claimed subject matter of the '245 patent, or in the alternative, incorrectly not named as a co-inventor of the subject matter of the '245 patent. (Id. ¶ 13.) The remaining state and common law causes of action are based on the same underlying facts, and also seek declaratory relief that UST is the owner or co-owner of the '245 patent. (Id. ¶¶ 17, 18, 20.)
Defendant moves to dismiss for lack of personal jurisdiction and impropervenue, and alternatively, moves to transfer the case to the District of Maryland pursuant to 28 U.S.C. § 1404. Plaintiff opposes.
"When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that the court has jurisdiction." In re Western States Wholesale Natural Gas Antitrust Litigation v. Oneok, Inc., 715 F.3d 716, 741 (9th Cir. 2013). If the motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make "a prima facie showing of jurisdictional facts to withstand the motion to dismiss." Bryton Purcell LLP v. Recordon & Recordon, 575 F.3d 981, 985 (9th Cir. 2009). On a prima facie showing, the court resolves all contested facts in favor of the non-moving party. In re Western States, 715 F.3d at 741; AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996) () At the same time, however, the plaintiff cannot establish jurisdiction by alleging bare jurisdictionally-triggering facts without providing some evidence of their existence. Amba Mktg. Sys., Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th Cir. 1977).
"Where, as here, no federal statute authorizes personal jurisdiction, the district court applies the law of the state in which the court sits." Marvix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) (citations omitted). California's long-arm statute is "coextensive with the outer limits of due process under the state and federal constitutions, as those limits have been defined by the United States Supreme Court." Republic Int'l Corp. v. Amco Eng'rs, Inc., 516 F.2d 161, 167 (9th Cir. 1976) (quoting Threlkeld v. Tucker, 496 F.2d 1101, 1103 (9th Cir. 1974)). As such, the Court need only consider the requirements of due process. Due process requires that nonresident defendants have "minimum contact" with the forum state "such that themaintenance 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). Personal jurisdiction can be either "general" or "specific." See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16 (1984).
The parties do not dispute that the Court lacks general personal jurisdiction over ABN1 but are in disagreement as to whether the Court has specific personal jurisdiction over ABN.
Defendant contends that this Court lacks specific jurisdiction over it because it did not purposefully avail itself to the privilege of conducting activities in California and requiring it to be subject to personal jurisdiction in this district would not comport with fair play and substantial justice. In response, Plaintiff contends that this Court may assert specific personal jurisdiction over ABN because it purposely availed itself of the privilege of conducting activities in California.
Specific jurisdiction exists when a case "aris[es] out of or relate[s] to the defendant's contacts with the forum." Helicopteros Nacionales de Colombia, S.A., 466 U.S. at 414 n. 8. The inquiry whether a forum State may assert specific jurisdiction over a nonresident defendant "focuses on 'the relationship among the defendant, the forum, and the litigation." Walden v. Riore, 134 S. Ct. 1115, 1121 (2014). Specific jurisdiction is limited to ruling on "issues deriving from, or connected with, the very controversy that establishes jurisdiction." Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (citation omitted).
Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) (citing Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987)). "A purposeful availment analysis is most often used in suits sounding in contract," while a "purposeful direction analysis . . . is most often used in suits sounding in tort." Id. "[P]urposeful availment" asks whether a defendant has "purposefully avail[ed] [himself] of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Picot v. Weston, 780 F.3d 1206, 1212 (9th Cir. 2015) (quoting Schwarzenegger, 374 F.3d at 802). For tort claims, a "purposeful direction" test looks "to evidence that the defendant has directed his actions at the forum state, even if those actions took place elsewhere." Id. (citing Schwarzenegger, 374 F.3d at 802-03). The plaintiff bears the burden of satisfying the first two prongs and then the burden shifts to the defendant to make a "compelling case" that the third part has not been met. Schwarzenegger, 374 F.3d at 802. "If any of the three requirements is not satisfied, jurisdiction in the forum would deprive the defendant of due process of law." Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th Cir. 2006) (internal citations and quotations omitted).
Here, Defendant argues that the purposeful availment analysis applies because UST's claims do not sound in tort while Plaintiff applies the purposeful direction test without explaining why. Neither party has addressed what analysis should apply to a cause of action for correction of inventorship pursuant to a U.S. patent statute.
Courts in the Ninth Circuit have applied the purposeful direction test in intellectual property infringement cases as they are akin to a tort. See Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998) (trademark); Symantec Corp. v. Acronis, Inc., C 12-05331 SI, 2013 WL 496290, at *3-4 (N.D. Cal. Feb. 7, 2013) (); Mavrix...
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