HealthSpot, Inc. v. Computerized Screening, Inc.

66 F. Supp. 3d 962, 2014 U.S. Dist. LEXIS 169596, 2014 WL 6896298
CourtDistrict Court, N.D. Ohio
DecidedDecember 8, 2014
DocketCase No. 1:14-CV-00804
StatusPublished
Cited by4 cases

This text of 66 F. Supp. 3d 962 (HealthSpot, Inc. v. Computerized Screening, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
HealthSpot, Inc. v. Computerized Screening, Inc., 66 F. Supp. 3d 962, 2014 U.S. Dist. LEXIS 169596, 2014 WL 6896298 (N.D. Ohio 2014).

Opinion

OPINION & ORDER [Resolving Doc. 14]

JAMES S. GWIN, District Judge.

In this patent case, Plaintiff HealthSpot, Inc. (“HealthSpot”) seeks a declaratory judgment that its products do not infringe patent rights held by Defendant Computerized Screening, Inc. (“CSI”). Alternatively, HealthSpot asks for a ruling that CSI’s patent claims are invalid.

[965]*965Defendant CSI has filed a motion to dismiss for lack of personal jurisdiction.1 In the alternative, CSI’s motion asks the Court to decline to exercise its discretionary jurisdiction over this declaratory judgment action and either dismiss it or transfer it to the District of Nevada.2 HealthSpot has filed 'a response,3 and CSI has filed a reply.4 For the reasons below, the Court DENIES Defendant CSI’s motion to dismiss for lack of personal jurisdiction. The Court also DENIES CSI’s alternative argument that . the Court should decline to exercise its discretionary jurisdiction over this declaratory judgment suit.

I. Background

Both parties sell to the market for health kiosks. Health kiosks come in many forms, but generally are machines that allow for medical services, such as blood pressure testing, to be performed at locations other than doctor’s offices. The dispute concerns Patent No. 6,692,436, (’436 Patent) which Defendant CSI received in 2004.5

Plaintiff HealthSpot is a Delaware corporation with its principal place of business in Ohio.6 Defendant CSI is a Nevada corporation with its principal place of business in Nevada.7 In seeking dismissal on personal jurisdiction grounds, CSI says that it does riot conduct business in Ohio, is not registered to conduct business in Ohio, maintains no place of business in ' Ohio, has no bank account or employees in Ohio, and neither owns nor leases real estate in Ohio.8 CSI further says that it has not shipped .products to Ohio in “several years” and does not conduct sales activities in Ohio.9

In total, CSI says that it has sold about 4,700 kiosks, of which 1,807 are “active.”10 CSI acknowledges that seven kiosks it previously sold remain present in Ohio, of ■ which three are “active.”11 CSI has ongoing service contracts for the three “active” kiosks, but outsources them to independent contractors.12 While it says it “does not have any ongoing relationship with the owners of’ the four “inactive” kiosks, CSI has received calls for assistance from these owners on four separate occasions.13 Although it leases kiosks in other states, CSI says that it has no outstanding kiosk leases in Ohio.14

In part, Plaintiff HealthSpot argues that CSI’s communications with HealthSpot regarding HealthSpot’s alleged infringement subject CSI to personal jurisdiction in Ohio. As described below, under controlling Federal Circuit case law, this argument requires that these communications constituted sufficient contacts with Ohio that related to CSI’s defense or enforcement of its patent rights and went beyond [966]*966sending cease and desist letters and offers to license.

The first contact between the parties appears to have come in April 2012, when Charles Bluth, the President and CEO of Defendant CSI, sent a letter’ to Steve Cashman, the CEO of Plaintiff Health-Spot. The letter warned that HealthSpot might be infringing CSI’s patent rights.15 Bluth requested that HealthSpot stop any potentially infringing activity and suggested that He,althSpot contact CSI regarding licensing.16

Then, in February 2013, Bluth sent Cashman another letter.17 This letter indicated that the parties had spoken in June 2012.18 It also said that “several recent press releases” suggested to CSI that HealthSpot’s kiosks “appeared] to be violating CSI’s Patent” and requested information to facilitate licensing discussions.19

Representatives of the two companies met in April 2013 in Reno, Nevada.20 After the meeting, Bluth emailed Cashman.21 In this email, Bluth described uncertainty regarding how HealthSpot’s kiosks worked, but said that CSI did not believe the HealthSpot kiosks “impact[ed]” CSI’s patent rights.22 Bluth also stated an intent to “protect CSI’s Patents! the market we have created, and the concept of Tele-health that we created.”23

Several months later, in September 2013, Defendant’s President and CEO Bluth again emailed Cashman. This time, although still indicating some uncertainty about how HealthSpot’s kiosks worked, Bluth said that HealthSpot’s website suggested that HealthSpot was violating CSI’s patent rights.24 CSI says that before this email, Bluth examined a HealthSpot kiosk at an August 2013 Las Vegas trade show.25

On December 10, 2013, and after Bluth saw and read an article about HealthSpot in Behavioral Healthcare Magazine,26 Bluth sent Cashman another email.27 This email again alleged that HealthSpot was infringing the '436 Patent. It said that if HealthSpot declined to enter a license agreement by December 31, 2013, CSI would file a patent infringement lawsuit.28 In an apparent reference to HealthSpot’s status as- a start-up company, the email also said that “[i]t will also be very interesting to see if you have raised funds and have not disclosed the Patent violations.”29

At this point, communications between the companies shifted to their respective attorneys. Over the next several months, CSI’s attorneys continued to claim that HealthSpot was violating CSI’s patents and should purchase a license.30 Health-Spot’s attorneys responded that Health-Spot was not infringing the patents and [967]*967that the infringement allegation rested on a misunderstanding of advertising material. HealthSpot also asked to demonstrate its product to CSI, which it believed would dispel the infringement claim.31

CSI repeatedly declined these invitations to examine the HealthSpot product, saying that it believed it had sufficient information to support the infringement charge. It told HealthSpot that it would bring an infringement suit on April 11, 2014, if the matter remained unresolved.32 As that date approached, the frequency of emails between counsel for the parties increased. Despite its threat, and despite HealthSpot not purchasing any license, CSI did not file suit on April 11, 2014, a Friday.

On the following Monday, April 14, 2014, the attorneys arranged a call for Tuesday the 15th to discuss the matter.33 Later on April 14, 2014, HealthSpot filed this declaratory judgment action.34 The next morning, CSI filed an infringement suit in United States District Court for the District of Nevada.35 That suit remains pending.

II. Personal Jurisdiction

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
66 F. Supp. 3d 962, 2014 U.S. Dist. LEXIS 169596, 2014 WL 6896298, Counsel Stack Legal Research, https://law.counselstack.com/opinion/healthspot-inc-v-computerized-screening-inc-ohnd-2014.