New World International, Inc. v. Ford Global Technologies, LLC

859 F.3d 1032, 97 Fed. R. Serv. 3d 1542, 123 U.S.P.Q. 2d (BNA) 1154, 2017 WL 2467271, 2017 U.S. App. LEXIS 10171
CourtCourt of Appeals for the Federal Circuit
DecidedJune 8, 2017
Docket2016-2097
StatusPublished
Cited by31 cases

This text of 859 F.3d 1032 (New World International, Inc. v. Ford Global Technologies, LLC) 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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New World International, Inc. v. Ford Global Technologies, LLC, 859 F.3d 1032, 97 Fed. R. Serv. 3d 1542, 123 U.S.P.Q. 2d (BNA) 1154, 2017 WL 2467271, 2017 U.S. App. LEXIS 10171 (Fed. Cir. 2017).

Opinion

BRYSON, Circuit Judge.

New World International, Inc., and National Auto Parts, Inc., (collectively, “New World”) appeal from a final decision by the United States District Court for the Northern District of Texas dismissing *1035 New World’s declaratory judgment complaint for lack of personal jurisdiction over defendant-appellee Ford Global Technologies, LLC (“FGTL”). We affirm.

I

A

FGTL is a wholly owned subsidiary of the automaker Ford Motor Company. Both FGTL and the Ford Motor Company are incorporated in Delaware and headquartered in Michigan. FGTL does no business in Texas and neither maintains an office nor has any employees in Texas.

FGTL does not make or sell automobiles or automotive products; it owns, manages, and licenses intellectual property for the Ford Motor Company. FGTL’S portfolio includes several design patents, including U.S. Design Patent No. D489,299 (“the ’299 patent”), which claims the design of a vehicle hood exterior, and Design Patent No. D501,685 (“the ’685 patent”), which claims the design of a vehicle head lamp.

FGTL licensed the ’299 and ’685 patents to LKQ Corp. (“LKQ”), an entity incorporated in Delaware and head-quartered in Illinois. The license agreement between FGTL and LKQ designates LKQ as the exclusive licensee for the importation and sale of non-original equipment aftermarket products in the United States. 1 LKQ does business in all 50 states, including Texas.

The license agreement states that “LKQ has no right, title or interest in or to the FGTL Design Patents” beyond selling the aftermarket products as provided in the agreement, and that LKQ does not have the right to grant sublicenses. The agreement further provides that FGTL and LKQ each operate as “an independent contractor in the performance of each and every part of the license,” and that neither “has the power or authority to act as agent, employee or in any other capacity to represent, act for, bind or otherwise create or assume any obligation on behalf of the other party for any purpose whatsoever.” In addition, the agreement provides that LKQ may not reference its relationship to Ford or FGTL in any of LKQ’s marketing materials regarding the royalty products, and that LKQ must attach to each of those products a label that reads “Non Original Equipment Aftermarket Part.” The agreement does not otherwise control LKQ’s marketing of the royalty products.

The license agreement details the relationship between FGTL and LKQ regarding infringement claims against third parties. If LKQ learns of potentially infringing conduct by a third party, LKQ must notify FGTL in writing. The agreement then provides:

FGTL will have the right to determine what action, if any, is to be taken in each such instance, but shall not unreasonably refuse a request by LKQ to enforce the Ford Design Patents against allegedly-infringing use in conflict with LKQ’s rights under th[e] [License] Agreement. If FGTL decides to take any action at LKQ’s request, LKQ agrees ... to become a party to such action if necessary, and to cooperate with FGTL, in the prosecution of any such action or proceeding involving any *1036 alleged infringement respecting FGTL’s rights in the Ford Design Patents.

The license agreement also addresses potential third-party claims of design patent infringement against LKQ based on LKQ’s sales of the aftermarket products. For such claims, the agreement provides that FGTL will indemnify LKQ for any design patent suits against LKQ initiated by third parties.

B

New World is a Texas company with headquarters in Texas. In September 2011, FGTL sent New World a cease and desist letter accusing New World of infringing the ’299 and ’685 patents by selling various parts meant for use on Ford vehicles. The letter informed New World that LKQ had been granted an exclusive license to import and sell those products, and that New World had not obtained the accused products from LKQ in an authorized manner.

On May 21, 2013, FGTL sent another letter to New World, providing New World with a “partial list” of Ford design patents and again requesting that New World cease and desist selling various parts for Ford vehicles. FGTL also informed New World that LKQ “may be able to assist” with New World’s “disposal” of the accused products, and stated that “LKQ will contact you directly.”

New World requested a license to sell the accused products. On June 11, 2013, FGTL responded that a license option was not available; that FGTL had contacted its litigation counsel, who would contact New World; and that FGTL had asked LKQ to contact New World about the disposal of the accused products in New World’s possession.

In June 2013, LKQ contacted New World “regarding the recent ‘cease and desist’ letter” from FGTL. LKQ asked that New World call LKQ “to review the details of [New World’s] inventory” in order to “determine the most prudent disposal method.”

Litigation counsel for FGTL sent New World another cease and desist letter on November 13, 2013.

On January 29, 2015, FGTL sued New World and its Internet retailer, Auto Lighthouse Plus, LLC, in the United States District Court for the Eastern District of Michigan, charging them with willful infringement of nine patents, including the ’299 and ’685 design patents. Ford Global Techs., LLC v. New World Int’l, Inc., No. 2:15-cv-10394 (E.D. Mich.). FGTL later filed an amended complaint that dropped the claims under the ’299 and ’685 design patents.

C

On April 14, 2015, New World filed the present suit in the Northern District of Texas seeking a declaratory judgment of noninfringement and invalidity with regard to the ’299 and ’685 design patents. FGTL moved to dismiss the complaint for lack of personal jurisdiction. Relevant to this appeal, New World asserted that the district court had specific personal jurisdiction over FGTL.

As to that theory, the district court noted that, under controlling Federal Circuit law, FGTL’s cease and desist letters sent to New World in Texas were not sufficient to establish jurisdiction over FGTL. The court then assessed FGTL’s license agreement with LKQ. The court determined that the license did “not impose continuing obligations on FGTL to enforce or defend the patents in Texas nor give LKQ an independent right to enforce those patents, and it does not give FGTL control over LKQ’s business operations.” Therefore, the court concluded, the license agreement *1037 did not provide the court with specific personal jurisdiction over FGTL in the declaratory judgment suit, and the court accordingly dismissed the complaint.

After the dismissal, New World filed a motion for reconsideration and a motion for leave to file an amended complaint to add further allegations in support of specific jurisdiction. Regarding the motion for reconsideration, the court acknowledged a factual error in its previous dismissal order but concluded that, even with the error corrected, the court still lacked specific personal jurisdiction over FGTL. The court denied New World’s motion for leave to file an amended complaint as untimely.

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859 F.3d 1032, 97 Fed. R. Serv. 3d 1542, 123 U.S.P.Q. 2d (BNA) 1154, 2017 WL 2467271, 2017 U.S. App. LEXIS 10171, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-world-international-inc-v-ford-global-technologies-llc-cafc-2017.