CEASE AND DESIST LETTERS ARE NOT ENOUGH TO CONFER PERSONAL JURISDICTION

Avocent Huntsville Corp. v. Aten International Co., Ltd., [2007-1553] (December 16, 2008) [LINN, Newman, Schall] The Federal Circuit affirmed the district courts dismissal of a declaratory judgment action against a Taiwanese company for lack of personal jurisdiction, because 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.
DISCUSSION: Aten sent three letters concerning its patent applications and patents. The first was a letter dated May 28, 2004, from counsel for Aten Technology to CEO and President of Avocent giving notice of two pending patent applications. The second was 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.” As a result of these letters, Avocent brought this declaratory judgment action. Determining whether personal jurisdiction exists over an out-of-state defendant involves two inquiries: whether a forum state’s long-arm statute permits service of process, and whether the assertion of personal jurisdiction would violate due process.” Because Alabama’s long-arm statute permits service of process “as broad as the permissible limits of due process, the jurisdictional analysis collapsed into a single determination of whether the exercise of personal jurisdiction comports with due process.
Due process requires that to subject a defendant not present in the district to jurisdiction, the defendant have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. The Federal Circuit said 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, noting that grounding personal jurisdiction on such contacts alone would not comport with principles of fairness. A patent owner may, without more, send cease and desist letters to a suspected infringer, or its customers, without being subjected to personal jurisdiction in the suspected infringer’s home state.