Avocent Huntsville Corp. v. Aten Intern. Co., Ltd.

552 F.3d 1324, 89 U.S.P.Q. 2d (BNA) 1481, 2008 U.S. App. LEXIS 25477, 2008 WL 5216005
CourtCourt of Appeals for the Federal Circuit
DecidedDecember 16, 2008
Docket2007-1553
StatusPublished
Cited by199 cases

This text of 552 F.3d 1324 (Avocent Huntsville Corp. v. Aten Intern. Co., Ltd.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Avocent Huntsville Corp. v. Aten Intern. Co., Ltd., 552 F.3d 1324, 89 U.S.P.Q. 2d (BNA) 1481, 2008 U.S. App. LEXIS 25477, 2008 WL 5216005 (Fed. Cir. 2008).

Opinions

Opinion for the court filed by Circuit Judge LINN.

Dissenting opinion filed by Circuit Judge NEWMAN.

LINN, Circuit Judge.

This appeal concerns the personal jurisdiction of a U.S. district court over a Taiwanese company in a suit for declaratory judgment of non-infringement and invalidity of two U.S. patents owned by that Taiwanese company. Because the plaintiffs failed to allege that the Taiwanese company purposefully directed any activities beyond merely sending notice letters at residents of the forum and that the declaratory judgment action arose out of or related to those activities, we affirm the district court’s dismissal of all claims for lack of personal jurisdiction.

I. BACKGROUND

Avocent Huntsville Corp. (“Avocent Huntsville”) and Avocent Redmond Corp. [1327]*1327(“Avocent Redmond”) (collectively “Avo-cent”) are subsidiaries of Avocent Corporation, a Delaware corporation located in Huntsville, Alabama. Avocent develops and markets computer hardware devices. Aten International Co., Ltd. (“Aten International”) is a corporation formed under the laws of Taiwan, with its principal place of business in Taipei, Taiwan. One of Aten International’s U.S. subsidiaries, Aten Technology, Inc. (“Aten Technology”), is located in Irvine, California. IO-GEAR, which is located at the same address as Aten Technology, is also affiliated with Aten International.

Avocent and Aten International compete in the manufacture and sale of keyboard-video-mouse switches (“KVM switches”), which allow a computer user or users to share a single keyboard, video device, and mouse, or multiple sets of keyboards, video devices, and mice. It is undisputed that various Aten International products are available for sale within Alabama. Avo-cent has alleged that Aten International purposefully directed these products to Alabama both by injecting them into the stream of commerce and through direct sales activities. Specifically, Avocent has alleged the sale and delivery to Alabama of a product purchased through the “Clearance Center” webpage of the ATEN-USA. com website published by Aten International, the existence of products manufactured by Aten International and offered for sale at Best Buy and CompUSA retail stores in Alabama, the availability of Aten International products through nationwide and Internet retailers, and the availability of these products through a government contractor located in Alabama.

Aten International is the assignee of U.S. Patent Nos. 6,957,287 (“the '287 patent”) and 7,035,112 (“the '112 patent”), both of which relate to KVM switches. This appeal relates to Aten International’s attempts to enforce these patents against Avocent.

Aten International’s enforcement efforts are reflected in three letters. The first is a letter dated May 28, 2004, from counsel for Aten Technology to John Cooper, the CEO and President of Avocent Corporation, stating:

Pursuant to Section 154(d) of the U.S. Patent Act, please be advised that the U.S. Patent Office has published a patent application owned by our client Aten Technology, Inc. A copy of the published patent application is attached. We suggest that you review the claims as we believe they are relevant to a product your company is making, using, selling, offering to sell and/or importing.

J.A. at 473.1 A copy of the published patent application leading to the '112 patent was attached to this letter. The second is a letter dated April 27, 2006, from IOGEAR to Amazon in Seattle, Washington, encouraging Amazon to discontinue selling various products allegedly infringing the '112 patent, including the “Avocent SVM200.” Id. at 470-71. This letter collectively referred to Aten International, Aten Technology, and IOGEAR as “ATEN/IOGEAR” and asserted that this entity owned the '112 patent. The third letter was sent on March 15, 2007, at a time when Aten International and Avocent Redmond were litigating infringement of KVM patents owned by Avocent Redmond in a separate suit in the Western District of Washington. The letter was sent by counsel for Aten International to counsel for Avocent Redmond in Arlington, Virginia, asserting that Aten International’s '112 and '287 patents were infringed by Avocent’s KVM switch products and stating that efforts to resolve all outstanding [1328]*1328disputes between the parties and avoid further litigation would require consideration of those patents as well as the others in suit. Id. at 448.

In reaction to these letters, on April 6, 2007, Avocent filed a complaint against Aten International in the United States District Court for the Northern District of Alabama for declaratory judgment of non-infringement and invalidity of the '287 and '112 patents. The complaint also presented claims of unfair competition under the Lanham Act, 15 U.S.C. § 1125, and intentional interference with business or contractual relations under Alabama law. Aten International subsequently moved, inter alia, to dismiss the entire action for lack of personal jurisdiction under Rule 12(b)(2) of the Federal Rules of Civil Procedure, or in the alternative, to transfer the case under 28 U.S.C. § 1404(a) to the Western District of Washington where Avocent Redmond had sued Aten International for patent infringement related to three KVM patents owned by Avocent Redmond.

The district court granted Aten International’s motion to dismiss the entire action without prejudice for lack of personal jurisdiction. Avocent Huntsville Corp. v. Aten Int’l Co., No. 07-CV-625, slip op. at 13 (N.DAla. Aug. 30, 2007). The district court held that it could not exercise specific jurisdiction over Aten International based on the letters asserting infringement, id. at 8, concluding that under Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1360-62 (Fed.Cir.1998), Aten International “did not purposefully submit itself to jurisdiction in Alabama by sending the three letters listed above.” Avocent, slip op. at 10. The district court also rejected Avocent’s assertion of general jurisdiction based on the availability of Aten International’s products for sale in Alabama under a “stream of commerce” theory. Id. at 10-13. After noting that “it is not clear whether these KVM switches are the ones with patents involved in the Washington action, the instant action, or neither,” id. at 11-12, the district court found the most instructive case to be Viam Corp. v. Iowa Export-Import Trading Co., 84 F.3d 424 (Fed.Cir.1996) (applying the stream of commerce holding of Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed.Cir.1994), in the context of a declaratory judgment action and holding that jurisdiction was proper where there were purposefully directed activities in the forum through an established regular distribution channel). The district court held that, as distinguished from Viam, “[n]o similar systematic and continuous contact by [Aten International] with Alabama has been shown by the plaintiffs.” Avocent, slip op. at 13. Avocent timely appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

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552 F.3d 1324, 89 U.S.P.Q. 2d (BNA) 1481, 2008 U.S. App. LEXIS 25477, 2008 WL 5216005, Counsel Stack Legal Research, https://law.counselstack.com/opinion/avocent-huntsville-corp-v-aten-intern-co-ltd-cafc-2008.