Minimum contacts test for personal jurisdiction in a patent suit. MAXCHIEF v. WOK

Minimum contacts test for personal jurisdiction in a patent suit. MAXCHIEF v. WOK

A patent is a set of exclusive rights granted to the inventor of an invention.  To get a patent in the Untied States an inventor needs to file a patent application with the United States Patent and Trademark Office.  The United States Patent and Trademark Office reviews the patent application to determine if the invention meets the requirements to be granted a patent.  If the invention meets all the requirements to be granted a patent, the inventor will be granted a patent.  A patent grants the inventor the exclusive right to make, use, sell, and import the invention in the Untied States.  If someone other than the patent owner attempts to exercise one of these exclusive rights, that can be considered patent infringement.  A patent owner can file a lawsuit and request an injunction to stop patent infringement as well as monetary damages for patent infringement which has occurred.

When a patent owner files a patent infringement lawsuit, no matter how strong their patent infringement case is, there are various requirements that must be met.  If these requirements are not met, a patent infringement case can be dismissed in favor of the defendant before the facts of the case are reviewed.  A fundamental aspect of litigation in the United States is that a court can only hear a case if the court has jurisdiction.  Two factors in jurisdiction are subject matter jurisdiction and personal jurisdiction.  Regarding subject matter jurisdiction, United States Federal District Courts have exclusive jurisdiction over patent infringement cases, this means that if a patent lawsuit is filed in state court, the case will be dismissed.  Personal jurisdiction is more complex.

Personal jurisdiction in United States courts is based on the due process clause of the United States Constitution.  The question of whether a court has personal jurisdiction over a person involves the question as to whether it would be fair for the court to issue a judgment against that person.

A recent Court of Appeals for the Federal Circuit give some guidance on when a court my exercise personal jurisdiction over a case which involves a patent is MAXCHIEF INVESTMENTS LIMITED, v. WOK & PAN, IND., INC., 2018-1121 (C.A.F.C. 2018).  This case involves a dispute between two Chinese companies over a patent on folding tables. The defendant in this case owns several patents on a type of folding table.  The defendant sued a major retailer that was selling tables manufactured by the the plaintiff for patent infringement in California federal court.  The retailer asked the distributor, Meco, that sold the tables to defend the case.  The distributor then asked the plaintiff to defend the case in California.

The plaintiff then filed a separate lawsuit against the defendant in the home state of the distributor, Tennessee.  The plaintiff requested that the Tennessee federal district court declare the patent invalid.  The defendant moved that the case in Tennessee be dismissed because the Tennessee federal district court did not have personal jurisdiction over the defendant.  The Tennessee district court agreed with the defendant, the plaintiff appealed to the Court of Appeals for the Federal Circuit which has jurisdiction over appeals that involve patents.

The Federal Circuit applied its test for personal jurisdiction, rather than the Circuit Court which hears appeals from Tennessee, because the central issue in the case involved patent law.  The Federal Circuit agreed with the Tennessee district court that the Tennessee court did not have personal jurisdiction over the defendant Wok.

The Federal Circuit held that a defendant must have sufficient minimum contacts with the forum state to satisfy due process.  The minimum contacts inquiry involves two related requirements. First, the defendant must have purposefully directed its conduct at the forum state.  Second, the claim must arise out of or relate to the defendant’s contacts with the forum.  The Federal Circuit has in the past held that sending enforcement notices in a state is enough to satisfy the minimum contacts requirement.  In this case the defendant made no such contact in the state of Tennessee.  Filing a lawsuit in California related to goods sold by a distributor headquartered in Tennessee, does not give Tennessee courts personal jurisdiction over a patent owner.

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