Visual Security Concepts, Inc. v. KTV, Inc.

102 F. Supp. 2d 601, 2000 U.S. Dist. LEXIS 9148, 2000 WL 876718
CourtDistrict Court, E.D. Pennsylvania
DecidedJune 29, 2000
DocketCIV. A. 98-4921
StatusPublished
Cited by6 cases

This text of 102 F. Supp. 2d 601 (Visual Security Concepts, Inc. v. KTV, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Visual Security Concepts, Inc. v. KTV, Inc., 102 F. Supp. 2d 601, 2000 U.S. Dist. LEXIS 9148, 2000 WL 876718 (E.D. Pa. 2000).

Opinion

MEMORANDUM & ORDER

KATZ, Senior District Judge.

The plaintiff, Visual Security Concepts, Inc. (VSC), has sued several defendants for patent infringement related to the manufacture of a clear-cabinet television set used in correctional institutions. The present motion to dismiss submitted by defendant Korea Electronics Company, Ltd. (KEC), contends, inter alia, that it is not subject to personal jurisdiction in this court. Because the plaintiff has not met its burden of showing that KEC has the necessary minimum contacts with this forum, the motion will be granted. The court does not reach the other grounds for. dismissal raised by the defendant.

I. Standards

A federal court may exercise personal jurisdiction over a non-resident defendant to the extent permitted under applicable state law, see Fed.R.Civ.P. 4(e), and Pennsylvania authorizes long-arm jurisdiction to the extent permitted by the due process clause. See 42 Pa.C.S. § 5322(b). 1 Once jurisdiction has been challenged, the plaintiff “bears the burden of establishing either that the cause of action arose from the defendant’s forum-related activities (specific jurisdiction) or that the defendant has continuous and systematic contacts with the forum state (general jurisdiction).” Mellon Bank (East) v. DiVeronica Bros., 983 F.2d 551, 554 (3d Cir.1993) (citations, punctuation omitted). In most cases, the plaintiffs jurisdictional allegations must be supported by appropriate affidavits or documents, as a motion brought pursuant to Federal Rule of Civil Procedure 12(b)(2) requires resolution of factual issues. See TJS Brokerage & Co., Inc. v. Mahoney, 940 F.Supp. 784, 787 (E.D.Pa.1996).

The plaintiff may meet its burden and present a prima facie case for exercising personal jurisdiction by “establishing with reasonable particularity sufficient contacts between the defendant and the forum state.” Mellon Bank (East) PSFS v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992) (citations omitted). Jurisdiction is proper only if the defendant has constitutionally sufficient “minimum contacts” that indicate that it has “purposefully directed” its activities toward the forum. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). In other words, fortuitous contacts *603 are inadequate, as the minimum contacts must be “such that [a defendant] should reasonably anticipate being haled into court” in the forum. World-Wide Volkswagen Carp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). As is particularly important in this case, “with regard to producers or sellers of goods, the mere foreseeability that a product one sells may end up in the forum state does not render the seller amenable to suit in the forum state.” Pennzoil Prods. Co. v. Colelli & Assoc., Inc., 149 F.3d 197, 203 (3d Cir.1998) (citations, punctuation omitted). Furthermore, even if minimum contacts are demonstrated, the court may exercise personal jurisdiction only if doing so would comport with “traditional notions of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945).

II. Jurisdictional Facts

KEC is a Korean corporation with its principal place of business in Korea. See Am.Compl. ¶ 3; Jae Hoon Lee Aff. (1) ¶ 4. 2 It manufactures electronics products and components, including television sets, that are exported to numerous countries, including the United States. See Lee Aff. (1) ¶ 4. KEC is not licensed to do business in Pennsylvania and has no office, property, telephone, mailing address, sales agent or representative, agent for service of process, or bank accounts in Pennsylvania. See id. ¶ 3. Nor does it advertise in Pennsylvania. See id.

While KEC admits that it manufactures clear televisions, it does so only for KTV, Inc., one of the other defendants, and only to meet KTV’s specifications. See id. ¶ 4; see also Jong Hyun Kim Dep. at 45, 51. KEC describes KTV as its “distributor.” Lee Aff. (1) ¶ 4. KTV, in turn, is a New Jersey corporation. See id. ¶ 5. KEC owns fifty percent of KTV’s outstanding stock while another unrelated Korean corporation, Kolon Company, owns the other fifty percent. See Lee Aff. (2) ¶4; see also Lee Aff. (1) ¶ 5 (stating that KEC’s ownership interest in KTV is not a “majority or controlling interest”); Kim Dep. at 14 (explaining that one other entity has ownership interest and that KEC does not “own” KTV); Sung Soo Park Dep. 3 at 6, 12-13 (stating that he believes that “KEC supplies some materials” to KTV and that KEC does not own KTV).

KEC itself has never sold or delivered any television sets of any type to Pennsylvania and has not itself shipped televisions to or through Pennsylvania. All KEC televisions sold in the United States are “shipped by Korea Electronics Co., Ltd. F.O.B. Korea, to KTV, Inc.” Lee Aff. (1) ¶ 6. KEC does not have input into KTV’s sales or marketing decisions but rather fills orders placed by that company. See Lee Aff. (2) ¶¶ 5, 7; Kim Aff. ¶ 2 (KTV is an “independent company and makes all financial, pricing, purchasing, sales, and marketing decisions internally and independently of Korea Electronics”). KTV has no authority to act on KEC’s behalf and has no power to bind KEC. See Kim Aff. ¶ 3. KEC is not paying any part of KTV’s attorneys’ fees in this matter because “this is KTV’s problem, so KTV pays all the expenses.” Kim Dep. at 51.

KTV has only seven employees, see Kim Aff. ¶ 7, and KTV and KEC share one employee, Mr. Kim. See Lee Aff. (2) ¶ 10; Park Dep. at 14; Kyung Shim Dep. 4 at 8-9. Mr. Kim is the president of KTV and a non-voting director of KEC. See Lee Aff. *604 (2) ¶ 2; Kim Aff. ¶ 1. He began working for KEC only upon his return to Korea from New Jersey in 1998, see Lee Aff. (2) ¶ 2, and he clearly treats his obligations to the two companies separately.

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Bluebook (online)
102 F. Supp. 2d 601, 2000 U.S. Dist. LEXIS 9148, 2000 WL 876718, Counsel Stack Legal Research, https://law.counselstack.com/opinion/visual-security-concepts-inc-v-ktv-inc-paed-2000.