W.L. Gore & Associates Inc. v. Medtronic Inc.

• Decision Date: 20 April 2011
• Docket Number: Civil Action No. 2:10cv441.
• Citation: 778 F.Supp.2d 667
• Court: U.S. District Court — Eastern District of Virginia
• Parties: W.L. GORE & ASSOCIATES, INC., and Gore Enterprise Holdings, Inc., Plaintiffs,v.MEDTRONIC, INC., and Medtronic USA, Inc., and Medtronic Vascular, Inc., Defendants.

778 F.Supp.2d 667

W.L. GORE & ASSOCIATES, INC., and Gore Enterprise Holdings, Inc., Plaintiffs,

v.MEDTRONIC, INC., and Medtronic USA, Inc., and Medtronic Vascular, Inc., Defendants.

Civil Action No. 2:10cv441.

United States District Court, E.D. Virginia,Norfolk Division.

April 20, 2011.

Ahmed Jamal Davis, Fish & Richardson PC, Washington, DC, Juanita Rose Brooks, Fish & Richardson P.C., San Diego, CA, Susan Morrison Coletti, Timothy Devlin, Fish & Richardson, Wilmington, DE, for Plaintiffs.Dabney Jefferson Carr, IV, Robert Armistead Angle, Troutman Sanders LLP, Richmond, VA, Karen Diane McDaniel, Rachel Clark Hughey, Thomas Joseph Leach, Merchant & Gould PC, Minneapolis, MN, Ryan James Fletcher, Merchant & Gould PC, Denver, CO, for Defendants.

OPINION AND ORDER

MARK S. DAVIS, District Judge.

This matter is before the Court on Defendants' Medtronic, Inc., Medtronic USA, Inc., and Medtronic Vascular, Inc. (collectively “Defendants” or “Medtronic”) motion to dismiss pursuant to Rules 12(b)(2) and 12(b)(6) of the Federal Rules of Civil Procedure.¹ After examining the motion, associated briefs, and the Complaint, the Court finds that oral argument is unnecessary because the facts and legal contentions are adequately presented and oral argument would not aid in the decisional process. Fed.R.Civ.P. 78(b); E.D. Va. Loc. R. 7(J). Therefore, the matter is now ripe for decision and, for the reasons set forth below, Defendants' motion to dismiss is DENIED. However, as discussed below, Plaintiffs are hereby GRANTED leave to amend the Complaint by May 6, 2011 with respect to allegations of indirect infringement.

I. Facts and Procedural History ²

Plaintiffs W.L. Gore & Associates, Inc. and Gore Enterprise Holdings, Inc. (collectively “Plaintiffs” or “Gore”) have brought an action for patent infringement involving United States Patent No. 5,810,870 (the “'870 patent”). The '870 patent, entitled “Intraluminal Stent Graft,” was issued on September 22, 1998 to David J. Myers, James D. Lewis, Wayne D. House and Karl E. Schwarz. Compl. ¶ 11. While the patent was issued to the above mentioned individuals, Gore Enterprise Holdings is the “owner of all right, title and interest in the '870 patent” and W.L. Gore & Associates, Inc. is the “licensee of the '870 patent with rights to practice the '870 patent in the United States.” Compl. ¶¶ 12–13.

On September 3, 2010, Plaintiffs brought an action for patent infringement against Defendants in this Court under 35 U.S.C. § 271(a), (b) and (c). The Complaint initiating this action includes only one count. This count alleges that Defendants have committed direct and indirect patent infringement. Specifically, the Complaint alleges that Defendants “make, use, sell, and/or offer for sale the Talent Abdominal Stent Graft and the Talent Thoracic Stent Graft.” Compl. ¶ 14. In performing such actions, Plaintiffs allege that Defendants are “infringing, inducing infringement, and/or contributing to the infringement of the '870 patent ... and/or inducing or contributing to the use by others of such devices covered by the '870 patent, all to the injury of Gore.” Compl. ¶ 16. Plaintiffs further allege that Defendants' “infringement has been willful and will continue to be willful, making this case exceptional and entitling Gore to increased damages and other relief pursuant to 35 U.S.C. §§ 284 and 285 of the patent statute, to any extent not prohibited by the Agreement.” Compl. ¶ 18.

The agreement to which the Complaint refers is a Settlement and License Agreement (“Agreement”) struck between the parties on August 28, 2009. Compl. ¶ 8. According to this Agreement, which was attached to Plaintiffs' memorandum in opposition to the motion to dismiss, “with respect to patent infringement and/or patent invalidity claims relating to or arising from any of Medtronic's cardio vascular businesses, the Parties agree to bring such actions in the United States District Court for the Eastern District of Virginia....” Mem. Opp'n. Mot. Dismiss Ex. A, at 11. If, however, the United States District Court for the Eastern District of Virginia lacks subject matter jurisdiction, the Agreement states that “the Parties shall confer in good faith on the selection of an alternative neutral forum for such action.” Id. As to damages available in future disputes, the Agreement provides that “the Parties agree ... to waive their right to jury trial and to waive their rights to seek an injunction, exemplary damages and attorneys' fees as to any patent infringement or patent invalidity disputes.” Id. By dint of this Agreement, and the facts alleged in the Complaint, Plaintiffs contend that this Court has personal jurisdiction over the Defendants. Compl. ¶ 9.

On November 19, 2010, Defendants filed a motion to dismiss the Plaintiffs' Complaint. In this motion, Defendants seek dismissal of the Complaint because it allegedly “inappropriately relies on and fails to comply with provisions” of the Agreement and because “the Complaint fails to meet the minimum pleading requirements set forth in the Federal Rules of Civil Procedure and by the Supreme Court decisions of Twombly and Iqbal.” Mot. to Dismiss, Docket No. 18. It is this motion that the Court addresses below.

II. Discussion

1. Personal Jurisdiction and Limitations in the Agreement

A. Personal Jurisdiction

The Defendants' first argument in their motion to dismiss is that the Complaint improperly relies on the Agreement to establish personal jurisdiction. The entire personal jurisdictional allegation in Plaintiffs' Complaint states that the agreement “stipulates that, during the term of the Agreement, any action for patent infringement brought by one of the parties against another of the parties shall be brought in the United States District Court for the Eastern District of Virginia.” Compl. ¶ 8. Plaintiffs' Complaint further asserts that, as a result of such provision, “this Court has personal jurisdiction over defendants....” Compl. ¶ 9. According to the Defendants, “Gore fails to plead the basis under which this Court would have personal jurisdiction over Defendants. Instead, Gore simply cites the Agreement and then alleges that the facts and causes alleged in the Complaint give rise to personal jurisdiction over Defendants.” Mem. Supp. Mot. Dismiss 3. In response, Plaintiffs argue, among other things, that Defendants consented to jurisdiction in this forum when they agreed to the forum selection clause in the Agreement between the parties. Mem. Opp'n. Mot. Dismiss 5.

In order to evaluate Defendants' assertions, the Court must first determine the applicable law on the subject of personal jurisdiction in patent cases. According to the Federal Circuit, “[i]n reviewing district court judgments in patent cases, this court applies its own law on patent law issues, but with respect to nonpatent issues it generally applies the law of the circuit in which the district court sits.” Phonometrics, Inc. v. Hospitality Franchise Sys., 203 F.3d 790, 793 (Fed.Cir.2000). While personal jurisdiction might appear to be a nonpatent issue at first glance, the Federal Circuit has held that with respect to personal jurisdiction, it applies “ ‘Federal Circuit law because the jurisdictional issue is ‘intimately involved with the substance of the patent laws.’ ” Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 1324, 1328 (Fed.Cir.2008) (quoting Akro Corp. v. Luker, 45 F.3d 1541, 1543 (Fed.Cir.1995)). Therefore, “[d]istrict courts should apply the precedents of the Federal Circuit when determining personal jurisdiction in patent cases.” Mike's Train House, Inc. v. Broadway Ltd. Imports, LLC, No. JKB–09–2657, 2011 WL 856306, at *3 n. 1, 2011 U.S. Dist. LEXIS 23576, at *9 n. 1 (D.Md. Mar. 8, 2011). See Patent Rights Prot. Grp., LLC v. Video Gaming Techs., Inc., 603 F.3d 1364, 1368 (Fed.Cir.2010) (“We apply Federal Circuit precedent when considering whether the district court properly declined to exercise personal jurisdiction.”); Nuance Communs., Inc. v. Abbyy Software House, 626 F.3d 1222, 1230 (Fed.Cir.2010) (“The law of the Federal Circuit, rather than that of the regional circuit in which the case arose, applies to determine whether the district court properly declined to exercise personal jurisdiction over an out-of-state accused infringer.”).

Where there is no discovery on the issue of personal jurisdiction, the Plaintiff is required “only to make a prima facie showing of jurisdiction to defeat the motion to dismiss.” Trintec Indus. v. Pedre Promotional Prods., 395 F.3d 1275, 1282 (Fed.Cir.2005) (internal citations omitted). “In evaluating this showing, the district court must construe all pleadings and affidavits in the light most favorable to the plaintiff.” Id. at 1282–83.

While, according to the Federal Circuit, questions of personal jurisdiction typically involve an analysis of a state's long arm statute and constitutional due process considerations, Patent Rights Prot. Grp., LLC, 603 F.3d at 1368–69, the calculus changes when a forum selection clause is involved. Monsanto Co. v. McFarling, 302 F.3d 1291, 1294 (Fed.Cir.2002). A valid forum selection clause allows for personal jurisdiction in the chosen forum under the principles of “contractual consent or waiver.” Id. See also Nat'l Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, 315–16, 84 S.Ct. 411, 11 L.Ed.2d 354 (1964) (“[I]t is settled ... that parties to a contract may agree in advance to submit to the jurisdiction of a given court....”); Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 282 n. 11 (4th Cir.2009) (“We note in passing that a valid forum selection clause, unlike a choice of law clause, may act as a waiver to objections to personal jurisdiction.”); TruServ Corp. v. Flegles, Inc., 419 F.3d 584, 589 (7th Cir.2005) (“[O]bviously, a valid forum-selection clause, even standing alone, can confer personal jurisdiction.”) (internal citations omitted); Menorah Ins. Co. v. INX Reinsurance Corp., 72 F.3d...