Polar Electro Oy v. Suunto Oy

Docket No. 2015-1930

July 20, 2016

Brief Summary: DC decision that Suunto lacked sufficient minimum contacts with DE to support specific jurisdication vacated and remanded for a determination of “whether exercising jurisdiction over Suunto would be reasonable and fair.”

Summary: Polar appealed DC finding that Suunto lacked sufficient minimum contacts with DE to support specific jurisdiction. Both Polar and Suunto are Finnish companies that sell equipment for measuring heart rates during physical exercise. The patents-in-suit are US 5,611,346 and 6,537,227. Polar sued Suunto, Amer Sports Winter & Outdoor (“ASWO”) and Firstbeat Technologies Oy (“Firstbeat”) for infringement the patents and sued in DE. ASWO is a DE corporation owned by same parent company as Suunto, and having a principal place of business being Utah, that distributed products for Suunto. Under their distribution agreement, Suunto supplies products from Finland, provides “outbound logistics services”, and ships products under that agreement to retail stores in DE. The DC determined DE’s long-arm statute (personal jurisdiction) to be satisfied under the “dual jurisdiction” theory since Suunto had an “intent to serve the [DE] market” through its relationship with ASWO. But the DC also concluded “Suunto did not have sufficient contacts with [DE] to support specific jurisdiction” (due process) (“general intent to serve the U.S. market at large, without any particular focus on [DE]”). The FC opinion reviewed the “three-prong test to determine whether specific jurisdiction [sufficient minimum contacts] exists: (1) whether the defendant purposefully directed activities at residents of the forum; (2) whether the claim arises out of or relates to those activities; and (3) whether assertion of personal jurisdiction is reasonable and fair” (Nuance, FC 1995). The FC opinion explained that an “evenly divided” SCOTUS could not agree whether “mere foreseeability or awareness” was enough in Asahi (US 1987) and McIntyre (US 2011; relied on by the DC here) also did not produce a majority holding (the cases presenting two different versions of the stream-of-commerce theory”), the FC “must follow our existing precedent” (e.g., Beverly Hills Fan, FC 1994) and “decline[d] to decide which version…should apply because…the result would be the same under all articulations of the…test.” The FC panel agreed “with Polar that Suunto had sufficient contacts with [DE] to sustain specific jurisdiction” (“purposefully shipped” products to DE, “fully expecting that its products would then be sold in [DE]…This is not a case where a small manufacturer sells its products to an independent distributor, who then distributes the products to consumers across the nation.”) It therefore vacated the decision and remanded it to the DC for a determination of “whether exercising jurisdiction over Suunto would be reasonable and fair.” It also concluded the DC “correctly applied the dual jurisdiction theory in this case” (“Suunto’s activities demonstrated its intent to serve the [DE] market.”)

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