DC finding of no personal jurisdiction reversed due to TX-based PerDiemCo’s communications with Trimble in California

Trimble Inc. et al. PerDiemCo LLC

Docket No. 2019-2164 (http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/19-2164.OPINION.5-12-2021_1776598.pdf)

NEWMAN, DYK, HUGHES

May 12, 2021

Brief Summary:  DC finding of no personal jurisdiction reversed and remanded (e.g., PerDiemCo “exchanged twenty-two communications with Trimble in California over a period of three months”). Summary:  Trimble appealed CA DC judgment dismissing its declaratory judgment (DC) noninfringement action against PerDiemCo for lack of personal jurisdiction (PJ).  PerDiemCo is a Texas limited liability company (LLC) and is the assignee of the eleven disputed patents (listed in FN1).  The FC panel reviewed the question of PJ de novo (Autogenomics, FC 2009; Xilinx, FC 2017), explaining that the question “involves two inquires: whether a forum state’s long-arm statute permits service of process and whether assertion of personal jurisdiction violates due process.”  The state of CA “permits service of process to the limits of the Due Process Clauses of the U.S. Constitution”, folding the two inquiries “into one: whether the exercise of jurisdiction over PerDiemCo would be consistent with due process” and focusing “on the nature and extent of ‘the defendant’s relationship to the forum State’” (Ford (US 2021) (there must be “‘purposeful availment… “[t]he defendant . . . must take ‘some act by which [it] purposefully avails itself of the privilege of conducting activities within the forum State’”), citing Bristol-Myers (US 2017) (“[t]he plaintiff’s claims . . . ‘must arise out of or relate to the defendant’s contacts’ with the forum”); Burger King, US 1985 (“the exercise of [PJ] must also comport with ‘fair play and substantial justice’”, “minimum contacts”); World-Wide, US 1980 (five factors considered:  ‘[1] ‘the burden on the defendant,’ [2] ‘the forum State’s interest in adjudicating the dispute,’ [3] ‘the plaintiff’s interest in obtaining convenient and effective relief,’ [4] ‘the interstate judicial system’s interest in obtaining the most efficient resolution of controversies,’ and [5] the ‘shared interest of the several States in furthering fundamental substantive social policies.’”)  The DC relied on the FC’s Red Wing decision (FC 1998) to find “that it would be unreasonable to assert [PJ] over PerDiemCo based on its communications to Trimble in California.”  The FC panel explained that “[t]hree subsequent developments have clarified the scope of Red Wing” which “remains correctly decided”:  PJ “cannot rest on special patent policies” (SCA, US 2017), “communications sent into a state may create specific [PJ], depending on the nature and scope of such communications” (South Dakota, US 2018; “communications threatening suit or proposing settlement or patent licenses can be sufficient to establish” (Jack Henry, FC 2018; Genetic Veterinary, FC 2019; Elecs. for Imaging, FC 2003 (“hiring an attorney or patent agent in the forum state to prosecute a patent application that leads to the asserted patent”)), and “a defendant’s contacts “must show that the defendant deliberately ‘reached out beyond’ its home” (Ford, US 2021).  The FC panel “conclude[d] that the minimum contacts or purposeful availment test is satisfied in this case” as PerDiemCo, e.g., “exchanged twenty-two communications with Trimble in California over a period of three months” including “an unfiled complaint…used by PerDiemCo to launch negotiations”, “Trimble is headquartered in California, connecting California to Trimble’s claims”, and exercise of PJ would not be unreasonable under the Burger King / World-Wide factors listed above.  The DC’s order was therefore reversed and remanded for further proceedings.

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