Notice Letters and Communications May Form a Basis for Personal Jurisdiction
Before Hughes, Mayer and Stoll. Appeal from the United States District Court for the Northern District of California.
Summary: Notice letters and related communications may be sufficient to establish personal jurisdiction within a given forum.
California Plaintiff, Apple Inc. (“Apple”) sued Zipit Wireless, Inc. (Zipit) for patent infringement in the Northern District of California. Zipit is a Delaware corporation with a principal place of business and all of its 14 employees located in South Carolina.
Zipit contacted Apple in 2013 in the Northern District of California regarding the possibility of Apple buying or licensing the patents-in-suit from Zipit. Over the course of three years, the parties exchanged several rounds of correspondence, phone calls, and met in person twice at Apple’s headquarters, located in the Northern District.
In June 2020, Zipit sued Apple in the Northern District of Georgia, accusing Apple of infringing the patents-in-suit. Nine days later, Apple filed a complaint in the Northern District of California, seeking a declaratory judgment of noninfringement of the patents-in-suit. Zipit moved to dismiss Apple’s complaint for lack of personal jurisdiction. In February 2021, the district court granted Zipit’s motion and dismissed Apple’s complaint, holding that it lacked specific personal jurisdiction over Zipit. The district court held that, while Apple established that the contact between the parties was sufficient to establish personal jurisdiction, exercise of jurisdiction would be unreasonable because Zipit’s contacts with California were all related to the attempted resolution of the dispute regarding the patents-in-suit.
On appeal, the Federal Circuit disagreed that the exercise of personal jurisdiction would be unreasonable. The Federal Circuit explained that there is no bright-line rule prohibiting exercise of personal jurisdiction based only on cease-and-desist letters and related in-person discussions. Rather, the Federal Circuit explained that courts consider a “variety of interests” in determining whether exercise of jurisdiction would be reasonable. These interests include (1) the burden on the defendant, (2) the forum state’s interest in adjudicating the dispute, (3) the plaintiff’s interest in obtaining relief, (4) the interstate judicial system’s interest in efficient resolution of controversies, and (5) the shared interest in furthering fundamental substantive social policies.
The Federal Circuit found Zipit failed to meet its burden of presenting a compelling case that jurisdiction would be unreasonable, reversed the district court’s judgment, and remanded the case for further proceedings.
Editor: Paul Stewart