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Repeated and Specific Litigation Threats – Sufficient Minimum Contacts

| Silas K. AlexanderNicole R. Townes

TRIMBLE INC. v. PERDIEMCO LLC

Before Judges Newman, Dyk, and Hughes.  Appeal from the United States District Court for the Northern District of California.

Summary: Repeated email, phone, and letter communications threatening patent infringement litigation and negotiating a potential licensing arrangement with a company in forum state held sufficient for personal jurisdiction in forum state.

PerDiemCo is the owner of 11 patents at issue in this lawsuit, all of which relate to electronic logging devices and/or geofencing.  PerDiemCo accused Trimble of infringing these 11 patents.  PerDiemCo has only a single employee, owner Robert Babayi, who operates the business out of Washington, D.C.  PerDiemCo also rents office space in Marshall, Texas.  However, Babayi has never visited the Texas location.  PerDiemCo sent various letters and other communications to Trimble, a company headquartered in California, regarding claims of patent infringement and negotiating a potential licensing arrangement.

After three months of communications, Trimble sought a declaratory judgment of non-infringement in the Northern District of California.  The Northern District of California dismissed the action based on lack of personal jurisdiction over PerDiemCo.  In particular, the district court relied on the Federal Circuit’s decision in Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc.  In Red Wing, the Federal Circuit stated that “[a] patentee should not subject itself to personal jurisdiction in a forum solely by informing a party who happens to be located there of suspected infringement.”

Trimble appealed to the Federal Circuit and argued that the district court erred in its holding that there was no specific personal jurisdiction over PerDiemCo.

The Federal Circuit distinguished the Red Wing case.  Specifically, the Federal Circuit stated “PerDiemCo’s actions went far beyond ‘solely . . . informing a party who happens to be located [in California] of suspected infringement.’”  PerDiemCo “amplified its threats of infringement as the communications continued, asserting more patents and accusing more of Trimble and ISE’s products of infringement,” including going so far as to identify counsel retained for the infringement suit and informing Trimble of its intended litigation venue. Additionally, the Court walked through several decisions subsequent to Red Wing that have clarified its scope and brought consistency to personal jurisdiction determinations in the context of patent litigation.  The Federal Circuit stated that Red Wing does not stand for the proposition that patent enforcement letters can never provide the basis for jurisdiction in a declaratory judgment action.

The Federal Circuit held that the noninfringement action related to PerDiemCo’s three-month-long period of contacts with California “easily satisfied” the minimum contacts or purposeful availment requirement.  The Court reversed the district court’s order and remanded the case for further proceedings.

Editor: Paul Stewart