Maxchief Investments Limited v. Wok & Pan, Ind., Inc.
Opinion
Maxchief Investments Limited ("Maxchief") appeals from the judgment of the District Court for the Eastern District of Tennessee. The district court dismissed Maxchief's declaratory judgment action against Wok & Pan, Ind., Inc. ("Wok") for lack of personal jurisdiction and dismissed Maxchief's tortious interference claim for lack of subject matter jurisdiction. Because Wok lacked sufficient contacts with the forum state of Tennessee for personal jurisdiction as to both the declaratory judgment claim and the tortious interference claim, we affirm.
BACKGROUND
Maxchief makes plastic folding tables. It has its principal place of business in China and distributes one of its tables-the UT-18 table-exclusively through Meco Corporation ("Meco"), which is located in Greenville, Tennessee. Meco sells the UT-18 tables to retailers such as Staples, Inc. ("Staples") and The Coleman Company ("Coleman"), which in turn sell the tables to consumers.
Wok competes with Maxchief in the market for plastic folding tables, and also has its principal place of business in China. Wok is the owner of U.S. Patent Nos. 5,957,061, 8,881,661, 8,931,421, and 9,089,204 (collectively, "the Wok patents"), which are directed to folding tables.
Two separate actions are relevant here. In February 2015, Wok filed suit against Maxchief's customer, Staples, in the Central District of California, alleging that Staples' sale of Maxchief's UT-18 table infringed the Wok patents. See Wok & Pan, Ind., Inc. v. Staples, Inc. , No. 2:15-cv-00809 (C.D. Cal.) ("the Staples action"). Staples requested that Meco, the distributor of the table, defend and indemnify Staples. Meco in turn requested that Maxchief defend and indemnify Meco and Staples. The Staples action is stayed pending the outcome of this case.
Separate from the Staples action, Maxchief filed this action against Wok in the Eastern District of Tennessee. In its amended complaint, filed on September 2, 2016, Maxchief sought declarations of non-infringement or invalidity of all claims of the Wok patents. The complaint also alleged tortious interference with business relations under Tennessee state law. Wok moved to dismiss all claims for lack of personal jurisdiction. 1 There is no contention *1137 here that Wok is subject to general jurisdiction in Tennessee. Maxchief claims only that Wok is subject to specific personal jurisdiction.
On September 29, 2017, the district court dismissed the declaratory judgment claim for lack of personal jurisdiction.
Maxchief Invs. Ltd. v. Wok & Pan, Ind., Inc.
, No. 2:15-CV-153,
With respect to the state law tortious interference claim, the district court noted that Maxchief had not "explicitly allege[d]" that the court had subject matter jurisdiction over this claim, and indicated that amendment of the complaint would be futile and unduly prejudicial to Wok because "there is no independent federal basis for subject matter jurisdiction on this claim." Id. at *9-10.
Maxchief timely appealed. We have jurisdiction under
DISCUSSION
The central issue in this case is whether there is specific personal jurisdiction over Wok for the declaratory judgment and state law tortious interference claims. Given the centrality of patent law to these claims, here personal jurisdiction is governed by the law of our circuit.
See
Xilinx, Inc. v. Papst Licensing GmbH & Co. KG
,
I. DECLARATORY JUDGMENT CLAIM
The parties dispute whether personal jurisdiction exists over Counts I, II, and III of the complaint, which seek declaratory judgments of non-infringement or invalidity of three of the Wok patents.
Personal jurisdiction must comport with the state's long-arm statute and with due process under the U.S. Constitution.
Due process requires that a defendant have sufficient "minimum contacts" with the forum state such that the suit not offend "traditional notions of fair play and substantial justice."
Bristol-Myers Squibb Co. v. Superior Court of Cal.
, --- U.S. ----,
The minimum contacts inquiry involves two related requirements. First, the defendant must have purposefully directed its conduct at the forum state.
See
Goodyear Dunlop Tires Operations, S.A. v. Brown
,
A declaratory judgment claim arises out of the patentee's contacts with the forum state only if those contacts "relate in some material way to the enforcement or the defense of the patent."
Avocent Huntsville Corp. v. Aten Int'l Co.
,
Maxchief contends that Wok's lawsuit against Staples in the Central District of California created sufficient contacts with Tennessee because the suit sought a broad injunction against "all those in active concert" with Staples, including its "distributors," and the distributor of Staples' table was Meco, a Tennessee resident. Appellant's Br. at 16. Maxchief maintains this lawsuit had "effects" in Tennessee because Wok's requested injunction would extend to Meco, and Maxchief would respond to any injunction by changing its Tennessee activities. According to Maxchief, the Staples lawsuit therefore created jurisdiction under
Calder v. Jones
,
Contrary to Maxchief's argument, it is not enough that Wok's lawsuit might have "effects" in Tennessee. Rather, jurisdiction "must be based on intentional conduct by the defendant" directed at the forum.
Walden v. Fiore
,
This case is analogous to
Walden
. There, Nevada plaintiffs sued an out-of-state defendant for conducting an allegedly unlawful search while the plaintiffs were in Georgia preparing to board a plane bound for Nevada.
Id. at 279-81,
In support of its position, Maxchief also relies on
Silent Drive, Inc. v. Strong Industries, Inc.
,
Finally, Maxchief argues that Wok created minimum contacts related to patent enforcement by sending an infringement notice letter to Maxchief's lawyer in Tennessee. As discussed more fully below, because this letter alleged infringement by Coleman, a Kansas company that is not alleged to operate in Tennessee, the letter constitutes a contact with Kansas, not Tennessee, regardless of the fact that it was mailed to a lawyer in Tennessee. For this reason alone there is no personal jurisdiction in Tennessee over the declaratory judgment claim. Alternatively, even if the letter qualified as a minimum contact with Tennessee, under
Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc.
,
Accordingly, the district court lacked personal jurisdiction over the declaratory judgment claim.
II. TORTIOUS INTERFERENCE CLAIM
Maxchief also asserted a claim for tortious interference under Tennessee state law, alleging that Wok damaged Maxchief's business relationships with its customers "by sending objectively and subjectively baseless assertions of patent infringement" to these customers. J.A. 95-96. The district court dismissed this claim for failure to sufficiently allege original subject matter jurisdiction and concluded that an amendment to include such an allegation should not be permitted. It concluded that "there is no independent federal basis for subject matter jurisdiction on this claim, [and] the Court need not reach the issue of whether the Court has personal jurisdiction." J.A. 15. We need not decide the issue of subject matter jurisdiction because here there is no personal jurisdiction over the tortious interference claim.
3
See
Ruhrgas AG v. Marathon Oil Co.
,
We conclude that there is no personal jurisdiction over the tortious interference claim. It may be that sending a single notice letter into the forum state, directed to a customer doing business in the state, could provide personal jurisdiction over a tortious interference claim.
See
Burger King Corp. v. Rudzewicz
,
*1141
in both contexts, the patentee purposefully directs activities at the forum state by sending notice letters to residents of the state. In the declaratory judgment context, notice letters do not suffice for personal jurisdiction because they do not satisfy the "fair play and substantial justice" prong due to policy considerations unique to patent law.
See
Red Wing
,
But here, there is no claim that the allegedly infringing entity receiving Wok's notice letter-Coleman-was a resident of the forum state or did business there. To the contrary, Maxchief's complaint refers to "The Coleman Company, Inc. of Wichita, Kansas." J.A. 89. Thus, Wok's letter alleging infringement by Coleman is properly considered a contact with Kansas, not Tennessee. Wok sent its letter to Maxchief's lawyer, who was responding on Coleman's behalf and was located in Tennessee. We have repeatedly held, however, that merely sending a notice letter to a lawyer in the forum state does not constitute activity directed at the forum state where the entity alleged to infringe does not operate in the state.
See
Inamed Corp. v. Kuzmak
,
In sum, the district court lacked personal jurisdiction over both the declaratory judgment and tortious interference claims.
CONCLUSION
We hold that Maxchief has not established that personal jurisdiction over Wok is proper in Tennessee. Accordingly, we affirm the district court's dismissal of Maxchief's complaint.
AFFIRMED
COSTS
No costs.
Maxchief's complaint also alleged unfair competition under the Lanham Act,
Maxchief points to Wok's shipments and sales of tables in Tennessee to establish minimum contacts, but concedes that "the personal jurisdiction inquiry for patent declaratory judgment claims ... focuses on patent enforcement activities directed at residents of a forum." Appellant's Br. at 15. Shipments and sales of patented products by the patent holder are not enforcement activities, and thus do not qualify as relevant minimum contacts.
See
Avocent
,
Contrary to the district court's conclusion that "there is no independent federal basis for subject matter jurisdiction on this claim," there may well be original subject matter jurisdiction over this claim under
These cases "may well have survived the Supreme Court's decision" in
Gunn v. Minton
,
Reference
- Full Case Name
- MAXCHIEF INVESTMENTS LIMITED, Plaintiff-Appellant v. WOK & PAN, IND., INC., Defendant-Appellee
- Cited By
- 27 cases
- Status
- Published