DC dismissal of Apple’s complaint for lack of personal jurisdiction over Zipit reversed and remanded

Apple, Inc. v. Zipit Wireless, Inc.

Docket No. 2021-1760 (https://cafc.uscourts.gov/opinions-orders/21-1760.OPINION.4-18-2022_1937645.pdf)

HUGHES, MAYER, STOLL

April 18, 2022

Brief Summary:   DC dismissal of Apple’s DJ action based on a lack of personal jurisdiction reversed and remanded.

Summary:  Apple appealed Northern District (ND) of CA DC dismissal of its request for a declaratory judgment (DJ) of noninfringement against Zipit wireless (a DE corporation with a principal place of business in Greenville, SC) for lack of personal jurisdiction (PJ) (unreasonable based on the nature of Zipit’s communications with Apple in the ND).  The FC panel found the DC erroneously “read our precedent as applying a bright-line rule that patent infringement notice letters and related communications can never form the basis for personal jurisdiction”.  The FC panel opinion explains that Zipit met with Apple at its ND headquarters to discuss licensing or selling the patents to Apple as well as the ongoing IPR proceedings involving the patents and technical details regarding infringement.  The parties exchanged multiple letters and emails regarding possible infringement of the patents by Apple, and Zipit sued Apple in Georgia which it voluntarily dismissed, followed by Apple’s complaint leading to this appeal.  The ND CA DC found that “Apple had established the requisite minimum contacts” with Zipit’s letters and evidence of meetings and that Zipit had not “established a ‘compelling case’ that the exercise of jurisdiction would be unreasonable” (Burger King, US 1985).  However, the DC also concluded that the FC “has held that “the exercise of personal jurisdiction . . . would be unconstitutional when ‘[a]ll of the contacts were for the purpose of warning against infringement or negotiating license agreements, and [the defendant] lacked a binding obligation in the forum” (Burger King; Breckenridge Pharm., FC 2006) and therefore found the exercise of jurisdiction would be unreasonable and dismissed Apple’s DJ action.  The FC panel reviewed the DC decision de novo and explained that it “need only consider ‘whether jurisdiction comports with due process’” (Xilinx, FC 2017).  The FC panel explained that “‘foreseeability . . . is critical to due process analysis,’ and the Supreme Court has made clear that the focus is on whether a given defendant’s “conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there” (Burger King, quoting World-Wide Volkswagon, US 1980).  And “the burden is placed on the defendant to present a ‘compelling case that the presence of some other considerations would render jurisdiction unreasonable’” (Burger King; Red Wing Shoe, FC 1998 (outlining 5 factors (defendant’s burden (“a primary concern”), state’s interest, plaintiff’s interest, interstate judicial system’s interest, shared interest of states)).  The FC panel agreed with the DC on minimum contacts but disagreed that the burden placed on Zipit to litigate in CA “merely [an] inconvenience…that can be addressed by challenging improper venue” (“Zipit has not met its burden to present a compelling case that these factors in the aggregate would render the exercise of jurisdiction unreasonable.”) the DC decision was therefore reversed and remanded.

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