NXP Semiconductors USA, Inc. v. France Brevets, S.A.S., et al, No. 3:2014cv01225 - Document 71 (N.D. Cal. 2014)
Court Description: ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS 40 70 25 35 (Illston, Susan) (Filed on 9/15/2014)
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NXP Semiconductors USA, Inc. v. France Brevets, S.A.S., et al Doc. 71 1 2 3 4 5 6 7 IN THE UNITED STATES DISTRICT COURT 8 FOR THE NORTHERN DISTRICT OF CALIFORNIA 9 10 11 NXP SEMICONDUCTORS USA, INC., Plaintiff, 12 13 14 15 No. C 14-1225 SI ORDER GRANTING DEFENDANTS’ MOTIONS TO DISMISS v. FRANCE BREVETS, S.A.S., et al., Defendants. / 16 17 On August 22, 2014, the Court held a hearing on defendants’ motions to dismiss. For the 18 reasons set forth below, the Court GRANTS the motions and dismisses this case for lack of personal 19 jurisdiction over defendants. 20 21 BACKGROUND 22 On March 14, 2014, plaintiff NXP Semiconductors USA (“NXP USA”) filed this declaratory 23 judgment action against three defendants: (1) France Brevets, a French corporation with its principal 24 place of business in Paris, France (2) INSIDE Secure, a French corporation with its principal place of 25 business in Meyreuil, France, and (3) NFC Technology, LLC (“NFCT”), a Delaware limited liability 26 corporation with its principal place of business in Marshall, Texas. NFCT is a wholly-owned indirect 27 subsidiary of France Brevets. The complaint seeks declaratory judgment of non-infringement and 28 1 Dockets.Justia.com 1 invalidity of U.S. Patents Nos. 6,700,551 (“the ‘551 patent”), 7,665,664 (“the ‘664 patent”), and 2 7,905,419 (“the ‘419 patent”) (collectively, “the Patents in Suit”). The patents-in-suit relate to “near 3 field communication” (“NFC”) technology. NFC is a wireless technology that is used for contactless 4 communication between electronic devices, such as between a smart phone and a terminal, and allows 5 devices such as smart phones to perform many tasks, including unlocking doors, purchasing products, 6 and accessing services remotely. Compl. Ex. D. The complaint alleges that this action arises from 7 defendants’ licensing and enforcement efforts with respect to the patents-in-suit. Defendants have moved to dismiss this case for lack of personal and subject matter jurisdiction, 8 9 and improper venue.1 10 11 I. The parties 12 Plaintiff NXP USA is a Delaware corporation with its principal place of business in San Jose, 13 California. Id. ¶ 2. NXP USA sells and offers for sale in the United States semiconductor products with 14 NFC capability. Id. ¶ 33.2 One of NXP USA’s products is the NXP PN544 NFC Communication 15 Controller. Id. ¶ 23. 16 Defendant France Brevets is a French corporation with its principal place of business in Paris, 17 France. Id. ¶ 3. France Brevets was created in March 2011 within the framework of a French 18 governmental initiative, the “Programme d’Investissements d’Avenir” (Program of Future Investments). 19 Id. Ex. D; Richards Decl. Ex. 2-4 (Docket No. 49). France Brevets was established with 50% funding 20 from the French government and 50% funding from the Caisse de Dépôts et Consignations (the “CDC”). 21 Id. France Brevets is dedicated to patent promotion and monetization in Europe. Compl. Ex. D. France 22 Brevets does not maintain an office in California. Bégouin-Grenard Decl. ¶ 3. France Brevets does not 23 24 25 26 1 Only France Brevets and INSIDE Secure contend that there is no subject matter jurisdiction. Because the Court finds that there is no personal jurisdiction over these defendants, the Court does not reach the issue of subject matter jurisdiction. 2 27 At the hearing, counsel for France Brevets asserted that NXP USA does not actually sell semiconductor products, and that other NXP entities sell the products. This factual dispute is irrelevant to the resolution of the pending motions. 28 2 1 have a registered agent in California. Id. ¶ 4. France Brevets is not registered or licensed to do business 2 in California. Id. ¶ 2. France Brevets does not own or lease real property in California, or anywhere in 3 the United States. Id. ¶ 5. France Brevets does not own or lease tangible personal property in 4 California, or anywhere in the United States. Id. ¶ 6. France Brevets does not pay taxes in California, 5 or anywhere in the United States. Id. ¶ 7. France Brevets does not have employees in California, or 6 anywhere in the United States. Id. ¶ 8. France Brevets does not advertise to California residents, and 7 France Brevets does not pay for any print, radio, television, or any other advertising directed to 8 California residents. Id. at ¶ 9. France Brevets does not have any bank accounts in California, or 9 anywhere in the United States. Id. ¶ 10. 10 Defendant NFCT is a Delaware limited liability corporation with its principal place of business 11 in Marshall, Texas. NFCT was formed on November 19, 2013, as a wholly-owned indirect subsidiary 12 of France Brevets. Compl. ¶ 19 and Ex. F.3 The corporate formation documents for NFCT state that 13 the sole manager of NFCT is France Brevets. Id. ¶ 19 & Ex. F. NFCT is not licensed to do business 14 in this district or in California, and NFCT is not doing business this district or in California. Asselot 15 Decl. ¶ 2. NFCT does not maintain an office in California. Id. ¶ 3. NFCT does not have a registered 16 agent in California. Id. ¶ 4. NFCT is not registered or licensed to do business in California. Id. ¶ 5. 17 NFCT does not own or lease real property in California. Id. ¶ 6. NFCT does not own or lease personal 18 property in California. Id. ¶ 7. NFCT does not pay taxes in California. Id. ¶ 8. NFCT does not have 19 employees in California. Id. ¶ 9. NFCT does not advertise to California residents, and NFCT does not 20 pay for any print, radio, television, or any other advertising directed to California residents. Id. ¶ 10. 21 NFCT does not have any bank accounts in California. Id. ¶ 11. 22 Defendant INSIDE Secure is a French corporation with its principal place of business in 23 Meyreuil, France. Compl. ¶ 4. INSIDE Secure is a designer, developer and supplier of semiconductors, 24 embedded software, and platforms for secure transactions and digital security. Id., Ex. D. INSIDE 25 26 3 27 NFCT states that FB Licensing, LLC, a Texas limited liability company, is the whole owner of NFCT, and that France Brevets is the whole owner of FB Licensing, LLC. NFCT’s Motion to Dismiss at 10 n.3. 28 3 1 Secure owned the ‘551 and ‘664 patents prior to assigning them to NFCT after NFCT’s formation, and 2 INSIDE Secure owns the ‘419 patent. 3 4 II. Defendants’ patent licensing program 5 In June 2012, France Brevets and INSIDE Secure issued a joint press release announcing the 6 launch of an NFC (“Near Field Communication”) patent licensing program. Compl. ¶ 17 & Ex. D. The 7 press release stated that France Brevets will “manage and lead all the efforts under the NFC licensing 8 program,” including efforts to license and assert INSIDE Secure’s NFC patents. Id. In 2013, INSIDE 9 Secure granted to France Brevets “a worldwide exclusive license to grant non-exclusive licenses” of 10 INSIDE Secure’s patents included in the NFC Patent Licensing Program. Compl. Ex. E (“NFC 11 Licensing Program Statement”). The NFC Licensing Program Statement states that “France Brevets 12 has full authority to conclude and execute any license agreement with any third party” consistent with 13 the NFC patent licensing program. Id. 14 The complaint alleges “[u]pon information and belief, France Brevets has approached customers 15 of NXP products regarding the licensing and enforcement of patents either assigned to NFCT or 16 assigned to INSIDE Secure and licensed to France Brevets, including the Patents in Suit.” Compl. ¶ 22. 17 The complaint alleges, upon information and belief, that France Brevets’ licensing efforts have included 18 the presentation of claim charts for infringement of the ‘551 and ‘664 patents by products “utilizing a 19 NXP PN544 Communication Controller.” Id. ¶¶ 23-24. The complaint alleges that “the claim charts 20 contain images of NXP’s PN544 product, information derived from the reverse engineering of 21 components of the PN544 product, and excerpts from NXP’s documents regarding the PN544 product.” 22 Id. The complaint also alleges, upon information and belief, that France Brevets’ licensing efforts 23 “further included the presentation of information about European Patent No. 1,855,229 and its United 24 States counterpart, the ‘419 Patent.” Id. ¶ 25. These licensing efforts included written and verbal 25 communications with United States-based HTC and LG entities. Compl. Ex. H ¶ 22. The HTC entity 26 is a Washington resident, while the LG entities are Delaware and California residents. Compl. Ex. H 27 ¶¶ 2, 5, 6; Exs. 5, 6. 28 4 1 On November 19, 2013, defendant NFCT was formed as a wholly-owned indirect subsidiary of 2 France Brevets. Compl. ¶ 19 and Ex. F. The complaint alleges that France Brevets formed NFCT solely 3 to hold and litigate one or more of the patents-in-suit in the Eastern District of Texas. Id. ¶¶ 5, 20. On 4 November 28, 2013, INSIDE Secure assigned the ‘551 and ‘664 patents to NFCT. Compl. ¶ 4 & Ex. 5 G. The Assignment states that INSIDE Secure “does hereby sell, assign, transfer and confer unto 6 [NFCT] . . . all right, title, and interest that exist today and may exist in the future in and to” the ‘551 7 and ‘664 patents, including all “enforcement rights under, or on account of” the ‘551 and ‘664 patents. 8 Id. Ex. G. INSIDE Secure did not assign the ‘419 patent to NFCT. 9 On December 5, 2013, NFCT filed a complaint in the Eastern District of Texas asserting the ‘551 10 and ‘664 patents against United States-based HTC and LG entities. NFCT’s complaint alleges that the 11 LG and HTC defendants infringe the ‘551 and ‘644 patents because the defendants allegedly sell 12 products “having NXP semiconductor chips and other components with Near Field Communication 13 (NFC) capability.” Compl. ¶ 26 & Ex. H ¶¶ 3, 7. The Texas complaint does not allege infringement of 14 the ‘419 patent. The same day, France Brevets filed complaints in Germany against European HTC and 15 LG entities. Compl. ¶¶ 26, 29; Compl. Ex. H; Exs. 7. France Brevets’ German complaints allege 16 infringement of the European patent counterparts to the three patents-in-suit based on the use of 17 NXP-branded controller chips, including NXP’s PN544 chip. Compl. ¶ 29; Ex. 7 at 23-24, 68-85, 18 102-110; Ex. 8 at 23-24, 68-85, 102-110. 19 On December 9, 2013, France Brevets issued a press release announcing that it had filed “patent 20 infringement lawsuits against LG Electronics and HTC in Germany and in United States for the use of 21 NFC patents in their products.” Compl. ¶ 32 & Ex. I. The press release states that the Texas lawsuit was 22 filed by NFCT, an “affiliate” of France Brevets. Id. The press release specifically identifies the ‘551 23 and ‘664 patents asserted in the Eastern District of Texas, and quotes France Brevets’ managing director 24 as stating that France Brevets is “determined to take steps when [infringement and licensing-related] 25 discussions are not conclusive.” Id. Ex. I. 26 27 28 5 1 LEGAL STANDARD 2 The parties agree that Federal Circuit law applies to the question of whether personal jurisdiction 3 exists over defendants. See Elecs. for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1348 (Fed. Cir. 2002) 4 (“[W]here the personal jurisdictional inquiry is ‘intimately involved with the substance of the patent 5 laws,’ we apply Federal Circuit law.”). Under Federal Circuit law, “before a federal court can exercise 6 personal jurisdiction over a defendant in a federal question case, the court must determine whether an 7 applicable statute potentially confers jurisdiction by authorizing service of process on the defendant, and 8 whether the exercise of jurisdiction would satisfy the requirements of due process.” Deprenyl Animal 9 Health, Inc. v. Univ. of Toronto Innovations Found., 297 F.3d 1343, 1349 (Fed. Cir. 2002). 10 The “applicable statute” authorizing service of process is the California long arm statute. See 11 id. at 1350; Fed. R. Civ. P. 4(e). Because the California long arm statute is coextensive with the limits 12 of due process, “the two inquiries collapse into a single inquiry: whether jurisdiction comports with due 13 process.” Dainippon Screen Mfg. Co., Ltd. v. CFMT, Inc., 142 F.3d 1266, 1270 (Fed. Cir. 1998). 14 Before a court may exercise personal jurisdiction over a non-resident defendant, due process requires 15 that the defendant “have certain minimum contacts with [the forum state] such that the maintenance of 16 the suit does not offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. 17 Washington, 326 U.S. 310, 316 (1945). 18 Plaintiff does not allege that this Court has general personal jurisdiction over any defendant. 19 Instead, plaintiff contends that this Court has specific personal jurisdiction over defendants based on 20 events related to the instant dispute. “Where a defendant is not subject to general personal jurisdiction 21 in the forum state, a district court may nonetheless exercise specific personal jurisdiction over the 22 defendant subject to a three part test: (1) the defendant purposefully directed its activities at residents 23 of the forum, (2) the claim arises out of or relates to those activities, and (3) assertion of personal 24 jurisdiction is reasonable and fair. With respect to the last prong, the burden of proof is on the 25 defendant, which must ‘present a compelling case that the presence of some other considerations would 26 render jurisdiction unreasonable’ under the five-factor test articulated by the Supreme Court in Burger 27 King.” Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1018 (Fed. Cir. 2009). 28 6 1 “To survive a motion to dismiss in the absence of jurisdictional discovery, plaintiffs need only 2 make a prima facie showing of jurisdiction.” Nuance Commc’ns, Inc. v. Abbyy Software House, 626 3 F.3d 1222, 1231 (Fed. Cir. 2010); Electronics For Imaging, Inc. v. Coyle, 340 F.3d 1344, 1349 (Fed. 4 Cir. 2003). “In the procedural posture of a motion to dismiss, a district court must accept the 5 uncontroverted allegations in the plaintiff’s complaint as true and resolve any factual conflicts in the 6 affidavits in the plaintiff’s favor.” Electronics For Imaging, 340 F.3d at 1349. 7 8 9 DISCUSSION I. France Brevets’ motion to dismiss 10 Plaintiff contends that this Court has personal jurisdiction over France Brevets in three 11 independent ways: (1) under 28 U.S.C. § 1330, which provides original jurisdiction over actions against 12 the instrumentalities of foreign states; (2) specific personal jurisdiction based on the patent licensing and 13 enforcement efforts of France Brevets, from which NXP’s declaratory relief claims arise; and (3) 14 pursuant to Federal Rule of Civil Procedure 4(k)(2). 15 16 A. Foreign Sovereign Immunities Act of 1976; agency or instrumentality of a foreign state 17 NXP USA alleges that this Court has subject matter jurisdiction over its declaratory judgment 18 claims and personal jurisdiction over France Brevets under 28 U.S.C. § 1330(a) and (b)4 because France 19 Brevets is an agency or instrumentality of a foreign state under 28 U.S.C. § 1603(b), and because this 20 21 22 23 24 25 26 27 28 4 Those sections provide; (a) The district courts shall have original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state as defined in section 1603(a) of this title as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity either under sections 1605-1607 of this title or under any applicable international agreement. (b) Personal jurisdiction over a foreign state shall exist as to every claim for relief over which the district courts have jurisdiction under subsection (a) where service has been made under section 1608 of this title. 28 U.S.C. § 1330(a), (b). 7 1 action is based on France Brevets’ “commercial activity,” and thus falls within an exception to foreign 2 sovereign immunity. “Under the [Foreign Sovereign Immunities Act] . . . personal jurisdiction over 3 a foreign state exists where subject-matter jurisdiction exists and where proper service has been made. 4 28 U.S.C. § 1330(b).” Altmann v. Republic of Austria, 317 F.3d 954, 969 (9th Cir. 2002). 5 The Foreign Sovereign Immunities Act of 1976 (“FSIA”), 28 U.S.C. § 1602 et seq., “is the 6 exclusive source of subject matter jurisdiction over all suits involving foreign states or their 7 instrumentalities.” Gupta v. Thai Airways Intel, Ltd., 487 F.3d 759, 763 (9th Cir. 2007). Under the 8 FSIA, foreign sovereigns enjoy immunity from suit in a federal or state court unless one of several 9 statutory exceptions apply. Id. at 761 n.2, 763; 28 U.S.C. § 1604. Exceptions to the FSIA are set forth 10 in 28 U.S.C. §§ 1605-1607. 11 Section 1604 of FSIA creates a “statutory presumption that a foreign state is immune from suit.” 12 Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1124 (9th Cir. 2010). The presumption “applies 13 if it is apparent from the pleadings or uncontested that the defendant is a foreign state.” Id. at 1125. 14 Otherwise, to trigger the presumption, “the defendant must make a prima facie case that it is a foreign 15 state.” Id. at 1124. After the sovereign establishes a prima facie case, “the burden of production shifts 16 to the plaintiff to offer evidence that an exception applies.” Id. at 1125; Phaneuf v. Republic of 17 Indonesia, 106 F.3d 302, 307 (9th Cir. 1997). When the “plaintiff satisfies her burden of production, 18 jurisdiction exists unless the defendant demonstrates by a preponderance of the evidence that the 19 claimed exception does not apply.” Id. at 1125.5 20 21 Plaintiff contends that France Brevets is an agency or instrumentality of France. Under 28 U.S.C. § 1603(b), an “agency or instrumentality of a foreign state” is an entity: 22 (1) which is a separate legal person, corporate or otherwise, and 23 (2) which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof, and 24 25 5 27 The parties do not address how this framework applies when, as here, it is the plaintiff arguing that the defendant is a foreign state. In this case it is not apparent from the pleadings that the defendant is a foreign state, and defendant argues that it is not. Thus, the Court finds that in order to trigger the presumption, it is plaintiff who must make a prima facie case that France Brevets is a foreign state. 28 8 26 1 (3) which is neither a citizen of a State of the United States as defined in section 1332(c) and (e) of this title, nor created under the laws of any third country. 2 28 U.S.C. § 1603(b). 3 The first and third factors are not disputed. At issue is whether France Brevets meets the second 4 factor. NXP contends that France Brevets meets both prongs of subjection (2) because it is an “organ 5 of a foreign state or political subdivision,” and because a majority of France Brevets’ shares or other 6 ownership interest is owned by a foreign state or political subdivision. 7 8 1. Organ of a foreign state 9 Plaintiff contends that France Brevets is an organ of the French government. “In defining 10 whether an entity is an organ, courts consider whether the entity engages in a public activity on behalf 11 of the foreign government. In making this determination, courts examine the circumstances surrounding 12 the entity’s creation, the purpose of its activities, its independence from the government, the level of 13 government financial support, its employment policies, and its obligations and privileges under state 14 law.” Patrickson v. Dole Food Company, 251 F.3d 795, 807 (9th Cir. 2001), aff’d on other grounds, 15 538 U.S. 468 (2003). “The entity may be an organ even if it has some autonomy from the foreign 16 government.” Id.; see also Gates v. Victor Fine Foods, 54 F.3d 1457, 1461 (9th Cir. 1995). “[T]hat the 17 [state] is not directly involved in the day-to-day activities of [the entity] does not mean that it is not 18 exercising control over the entity. . . . ”). Consistent with Congress’s intent, the Ninth Circuit defines 19 “organ” “broadly,” noting that, 20 21 22 “‘agency or instrumentality of a foreign state’ could assume a variety of forms, including a state trading corporation, a mining enterprise, a transport organization such as a shipping line or airline, a steel company, a central bank, an export association, a government procurement agency or a department or ministry which acts and is suable in its own name.” 23 Gates, 54 F.3d at 1460 (9th Cir. 1995) (quoting H.R.Rep. No. 94-1487 (1976), as reprinted in 1976 24 U.S.C.C.A.N. 6604, 6614). 25 In Patrickson, companies that were formerly indirectly owned by the Israeli government argued 26 that they were organs of the Israeli government under the FSIA. The Ninth Circuit held that the 27 28 9 1 2 3 4 5 6 companies were not: The Dead Sea Companies argue that, like the oil company in Corporacion Mexicana, the Companies were government organs created by Israel for the purpose of exploiting the Dead Sea resources owned by the government. The Dead Sea Companies were classified as “government companies” under Israeli law, which gave the government certain privileges reflecting its ownership stake. The government had the right to approve the appointment of directors and officers, as well as any changes in the capital structure of the Companies, and the Companies were obliged to present an annual budget and financial statement to various government ministries. The government could constrain the use of the Companies’ profits as well as the salaries of the directors and officers. 7 8 9 10 11 12 13 14 15 16 Although Israeli law granted such authority directly to the Israeli government, it is not considerably different from the control a majority shareholder would enjoy under American corporate law. In contrast to the oil refinery in Corporacion Mexicana [de Servicios Maritimos, S.A. de C.V. v. M/T Respect, 89 F.3d 650, 655 (9th Cir. 1996)], the Dead Sea Companies were not run by government appointees; their employees were not treated as civil servants; nor were the Companies wholly owned by the government of Israel. The Companies could sue and be sued, and could in fact sue the government of Israel (although official Israeli documents describe such disputes as between “a government company and another government body”). Nor did the Companies exercise any regulatory authority, as did the entity in Gates [v. Victor Fine Foods, 54 F.3d 1457, 1461 (9th Cir. 1995)]. These factors support the district court’s view of the Companies as independent commercial enterprises, heavily regulated, but acting to maximize profits rather than pursue public objectives. Although the question is close, we hold that the Dead Sea Companies were not organs of the Israeli government, but indirectly owned commercial operations, which do not qualify as instrumentalities under the FSIA. Patrickson, 251 F.3d at 808 (internal footnote omitted). 17 In contrast, in California Department of Water Resources v. Powerex Corp. (“Powerex II”), 533 18 F.3d 1087 (9th Cir. 2008), the Ninth Circuit held that a government-owned and government-operated 19 electric power distribution company was an organ of British Columbia. The court found that “[t]he 20 ‘circumstances surrounding Powerex’s creation’ weigh in favor of finding Powerex an organ of British 21 Columbia. It owes its very existence to the Province, which instructed BC Hydro [itself a government 22 agency] to establish a subsidiary that would assist it with its sovereign functions.” Id. at 1099. The 23 court also found significant that “BC Hydro wholly owns Powerex and appoints Powerex’s board of 24 directors. That board is made up of inside directors who sit on both BC Hydro’s and Powerex’s boards, 25 and outside directors who are appointed by the inside directors. Any outside directors—i.e., non-BC 26 Hydro directors—on Powerex’s board are subject to the approval of the office of the British Columbia 27 Premier.” Id. The purpose of Powerex’s activities demonstrated its public nature because it was 28 10 1 marketing surplus power from the BC Hydro system, “the precise mission originally dictated by the 2 Province’s Ministry of Energy, Mines, and Petroleum Resources.” Id. at 1100. In addition, “[u]nder 3 the direction of the Provincial government, Powerex fulfills the goals of the Power for Jobs 4 Development Act, the purpose of which is ‘to help ensure that British Columbia’s electric power 5 resources contribute to the creation and retention of jobs in British Columbia and to regional economic 6 development.’” Id. Powerex was also involved in sovereign functions such as treaty formation and 7 implementation, and “Powerex was to serve as the vehicle for the Province’s now-abandoned attempt 8 to create an auction market for electricity trading.” Id. The court noted that Powerex was restrained 9 by provincial regulations and directives applicable to government corporations, that the Province could 10 limit Powerex’s ability to enter banking and other financial arrangements, and that Powerex’s financial 11 operations were reviewed by the Province’s comptroller general. Id. at 1101. The court found that 12 “[a]lthough Powerex may enjoy a limited degree of tactical independence, its purposes and 13 strategies—indeed, its continued existence—are determined by the Province.” Id. Finally, the Ninth 14 Circuit noted that Powerex did not pay federal or provincial income tax, which was a special privilege 15 under Canadian law, and that Powerex’s profits were entirely rebated directly or indirectly to British 16 Columbia. Id. at 1102. 17 Similarly, in Gates v. Victor Fine Foods, the Ninth Circuit held that a Canadian marketing board 18 established pursuant to Canadian law as exclusive marketing agent for the sale of hogs in the Province 19 of Alberta was an agency or instrumentality of Canada. The court found it significant that a 20 governmental body called the Alberta Agricultural Products Marketing Council played an active 21 supervisory role over the board, including the fact that “the Council may authorize the board to issue 22 regulations requiring [hog] producers, among other things, to produce according to quotas, to furnish 23 information relating to the production and marketing of specified products, and to pay service charges.” 24 Gates, 54 F.3d at 1461. The Ninth Circuit also noted that Canadian law “establishes a mechanism 25 whereby a producer who is dissatisfied with a board decision can appeal to an appellate body appointed 26 by the Minister. . . . In this way the board resembles an administrative agency.” Id. (internal citations 27 omitted). Further, board members were immune “from liability for acts performed in good faith in 28 11 1 carrying out their duties, a protection normally afforded to governmental actors.” Id. (internal citation 2 omitted); see also Corporacion Mexicana de Servicios Maritimos, S.A. de C.V. v. M/T Respect, 89 F.3d 3 650, 655 (9th Cir. 1996) (holding Mexican oil refinery was an organ of Mexico where it was entirely 4 owned by the government, controlled by government appointees, employed only public servants, and 5 had the exclusive responsibility for refining and distributing Mexican government property). 6 The Court concludes that France Brevets is more similar to the “heavily regulated” but 7 “independent commercial enterprises” in Patrickson than the entities in Powerex II, Gates, and 8 Corporaction Mexicana, and thus that France Brevets is not an “organ or instrumentality” of the French 9 state. Certain aspects of France Brevets’ creation and structure do weigh in favor of finding that it is 10 an organ or instrumentality of France, such as the facts that France Brevets was created pursuant to a 11 French public initiative with funding from the French government and the CDC (itself, as discussed 12 infra, an agency of the French government). In addition, France Brevets has an eight-member Board of 13 Directors, consisting of four representatives from the French Republic and four representatives from 14 CDC, see Bégouin-Grenard Decl. ¶ 13, and similar to the companies in Patrickson and Gates, the Board 15 exercises supervisory authority such as the authority to appoint and dismiss the Director General of 16 France Brevets, as well as the authority to approve the annual budgets and business plans proposed by 17 the Director General. Auchter Decl. Ex. F at § 4.1. At the same time, however, France Brevets was 18 established as a standard limited liability company under French law, and counsel stated at the hearing 19 that France Brevets does not enjoy any special tax status in France and that it pays taxes to France. 20 Further, France Brevets is a distinct juridical entity that is authorized to sue and be sued in its name, and 21 unlike the Powerex II utility or the Gates marketing board, France Brevets does not exercise regulatory 22 authority in France. Bégouin-Grenard Decl. ¶ 14. The stated operating methodology of France Brevets 23 is as follows: 26 France Brevets shall acquire licensing rights to patents through research establishments and entities and through private companies located in France or abroad. Its purpose is to build a broad portfolio of intellectual property rights, enhance their value by combining them in technological clusters and organize their marketing in the form of licenses to European and global businesses. 27 Id. ¶ 1.2. Thus, France Brevets is more similar to a private company acting to maximize profits, as 28 12 24 25 1 opposed to an arm of the state conducting sovereign functions such as treaty negotiation and 2 implementation or distributing government resources. In addition, although France Brevets pays 3 dividends to the French state, France Brevets also operates as a private corporation by paying royalties 4 to the patent owners “after compensation for the equity committed by France Brevets.” Id. ¶¶ 2.4, 4.3. 5 Finally, France Brevets does not employ civil servants, Bégouin-Grenard Decl. ¶ 16, which is an 6 additional factor in support of the finding that France Brevets is not an organ of the French government. 7 Accordingly, the Court concludes that France Brevets is not an organ of the French state. 8 9 2. Majority of shares owned by a foreign state or political subdivision 10 Alternatively, plaintiff contends that France Brevets is an agency or instrumentality of a foreign 11 state because a majority of France Brevets’ shares or other ownership interest is owned by France or 12 French political subdivision. France Brevets is 50% owned by France and 50% owned by the CDC. 13 NXP USA argues that the CDC is a political subdivision of France, and therefore that France Brevets 14 is wholly owned by the government of France. 15 The CDC was created by Chapter X of the Finance Act of April 28, 1816. Richards Decl., Ex 16 18. The CDC describes itself as “a long-term investor serving France’s public interest and economic 17 development. It operates businesses in four different sectors: banking services, savings funds, the 18 pensions and solidarity sector and regional development.” Auchter Decl. Ex. B at 7. The French 19 Parliament “exercises control over [the CDC’s] activities and guarantees its autonomy.” Richards Decl., 20 Ex. 18. The Parliament exercises this dual mission through a thirteen-member supervisory committee 21 comprised of four members of the French Parliament, a representative of the Highest Administrative 22 Court, two representatives from the Court of State Auditors, the Governor of the Bank of France, the 23 Director of the French Treasury, and three “qualified figures” appointed by the heads of the French 24 Chamber of Deputies and the French Senate. Richards Decl., Ex. 21. The supervisory board “monitors 25 the management of [the CDC], making comments to the Chairman and Chief Executive Officer to 26 inspire his management, without him being obliged to apply them.” Id. The Chief Executive Officer 27 also takes an oath to “defend the establishment’s autonomy and to guarantee the inviolability of funds 28 13 1 entrusted to it.” Docket No. 51, Ex. E. The 1816 law further provides that the Chief Executive Officer 2 is personally and financially responsible for the management of the funds conferred upon the CDC. 3 Richards Decl., Ex., 18. 4 “The term ‘political subdivisions’ includes all governmental units beneath the central 5 government, including local governments.” H.R. Rep. No. 94-1487 (1976), at 15, reprinted in 1976 6 U.S.C.C.A.N. 6604, at 6613. To determine whether the CDC is a foreign state (or political subdivision 7 thereof) as opposed to an agency and instrumentality of a foreign state, the Court applies the “core 8 functions” test, which examines whether the entity is “an integral part of a foreign state’s political 9 structure or, by contrast, an entity whose structure and function is predominantly commercial.’”6 10 Ministry of Def. & Support for the Armed Forces of the Islamic Republic of Iran v. Cubic Defense Sys., 11 Inc. (“Ministry of Defense”), 495 F.3d 1024, 1035 (9th Cir. 2007) (internal quotation marks omitted), 12 rev’d on other grounds, Ministry of Def. & Support for the Armed Forces of the Islamic Republic of Iran 13 v. Elahi, 556 U.S. 366 (2009). In Ministry of Defense, the Ninth Circuit held that the Iranian Ministry 14 of Defense was part of the Iranian state and not an instrumentality because “the powers to declare and 15 wage war are so intimately connected to a state’s sovereignty.” 495 F.3d at 1035. The Ninth Circuit 16 found that there was no evidence that the ministry was a “separately constituted legal entity” distinct 17 6 18 19 20 21 22 23 24 25 26 27 28 The FSIA treats foreign states (and political subdivisions) and instrumentalities of foreign states differently with respect to the scope of immunities provided and service of process. As the Ninth Circuit has noted, Congress seemed exceedingly conscious of the distinction between foreign states, political subdivisions, and agencies or instrumentalities of foreign states and political subdivisions. It could easily have stated that an entity must be owned by a foreign state, a political subdivision or an agency or instrumentality of a foreign state or political subdivision. It did not. Moreover, a contrary reading of the statute could expand immunity far beyond what Congress intended. As it is written, the Act provides potential immunity to entities that are either organs of a foreign state or political subdivision thereof or have a majority of shares owned by the foreign state or political subdivision. To add to that list entities that are owned by an agency or instrumentality would expand the potential immunity considerably because it would provide potential immunity for every subsidiary in a corporate chain, no matter how far down the line, so long as the first corporation is an organ of the foreign state or political subdivision or has a majority of its shares owned by the foreign state or political subdivision. Gates, 54 F.3d at 1461. 14 1 2 3 4 5 from the Iranian state: [The plaintiff] has not established that MOD is “primarily responsible for its own finances,” that it is run as a “distinct economic enterprise,” that it operates with “independence from close political control,” or that it exhibits any of the traits – other than the capacity to sue and be sued – that the Court has identified as characteristic of a “separately constituted legal entity.” [First Nat. City Bank v. Banco Para El Comercio Exterior de Cuba (Bancec ), 462 U.S. 611, 624 (1983).] As such, Elahi has failed to overcome the presumption that MOD constitutes an inherent part of the state of Iran. 6 Id. at 1035-36. 7 Other courts have similarly held that government departments and ministries are political 8 subdivisions under the FSIA. See e.g., Magness v. Russian Fed’n, 247 F.3d 609, 613 (5th Cir. 2001) 9 (Russian Ministry was a “political subdivision,” but the Russian State Diamond Fund was a government 10 agency that was not a political subdivision); S & Davis Int'l, Inc. v. Republic of Yemen, 218 F.3d 1292, 11 1298 (11th Cir. 2000) (describing Yemeni Ministry of Supply & Trade as political subdivision of 12 Yemen for purposes of determining legal status of entity controlled by Ministry); Transaero, Inc. v. La 13 Fuerza Aerea Boliviana, 30 F.3d 148, 150 (D.C. Cir. 1994) (Bolivian Air Force was a foreign state and 14 not instrumentality); Roeder v. Islamic Republic of Iran, 333 F.3d 228, 234 (D.C. Cir. 2003) (Iranian 15 Ministry of Foreign Affairs was a foreign state and not instrumentality ); Garb v. Republic of Poland, 16 440 F.3d 579, 594 (2d Cir. 2006) (Polish Ministry of the Treasury was a foreign state, rather than an 17 agency or instrumentality, because its core function was “to hold and administer the property of the 18 Polish state,” which was “indisputably governmental.”). 19 The Court concludes that the CDC is not an integral part of France’s political structure, but 20 rather that its structure and function is predominantly commercial, and that it operates with a significant 21 degree of independence from France. As an initial matter, the Court notes that the CDC has already 22 been held to be an instrumentality of France, see Freund v. The Republic of France, 592 F. Supp. 2d 23 540, 555 (S.D.N.Y. 2008), and plaintiff has not cited any cases holding that the CDC is a political 24 subdivision of France. While France exercises some degree of control and involvement in the CDC 25 through the supervisory board, French law guarantees the autonomy of the CDC, and the CEO of the 26 CDC is personally and legally responsible for the CDC’s finances. Thus, the record shows that the CDC 27 28 15 1 is “primarily responsible for its own finances,” that it is run as a “distinct economic enterprise,” that it 2 operates with “independence from close political control.” See Ministry of Defense, 495 F.3d at 1035- 3 36; Bancec, 462 U.S. at 624. 4 Plaintiff cites O’Connell Machinery Co. v. M.V. “Americana”, 734 F.2d 115 (2d Cir. 1984), for 5 the proposition that financial entities can be political subdivisions. However, the Court does not hold 6 that a financial entity cannot, as a matter of law, be a political subdivision under the FSIA, and instead 7 simply holds that under the facts of this case plaintiff has not shown that the CDC is a political 8 subdivision of France. In addition, O’Connell Machinery contains very little information about the 9 entity at issue except for the fact that it was “under the direct control of the Istituto per la Ricostruzione 10 Industriale, a public financial entity which coordinate[d] the management of the commercial enterprises 11 of the Italian Government,” id. at 116, and thus O’Connell Machinery is not helpful to this Court’s 12 analysis regarding the characterization of the CDC.7 13 14 B. Specific personal jurisdiction 15 Alternatively, NXP USA contends that the Court has jurisdiction over France Brevets under 16 ordinary principles of specific personal jurisdiction. In a declaratory judgment action, “[t]he relevant 17 inquiry for specific personal jurisdiction purposes then becomes to what extent has the defendant 18 patentee ‘purposefully directed [such enforcement activities] at residents of the forum,’ and the extent 19 to which the declaratory judgment claim ‘arises out of or relates to those activities.’” Avocent Huntsville 20 Corp. v. Aten Intern. Co., Ltd., 552 F.3d 1324, 1332 (quoting Breckenridge Pharm., Inc. v. Metabolite 21 Labs., Inc., 444 F.3d 1356,1363 (Fed. Cir. 2006). A declaratory judgment claim “neither directly arises 22 out of nor relates to the making, using, offering to sell, selling, or importing of arguably infringing 23 products in the forum, but instead arises out of or relates to the activities of the defendant patentee in 24 enforcing the patent or patents in suit.” Id. at 1332. In addition, “the mere sale of defendant’s products 25 26 7 27 As the Court has concluded that France Brevets is not an agency or instrumentality of France, the Court finds it unnecessary to reach the parties’ arguments regarding whether the commercial activity exception to foreign sovereign immunity applies here. 28 16 1 – whether covered by the patents in suit or not – is not sufficient to establish specific personal 2 jurisdiction in a declaratory judgment suit.” Id. at 1338. 3 The Federal Circuit has long held that a letter threatening litigation is an insufficient basis for 4 asserting personal jurisdiction over a patent holder. See, e.g., Inamed Corp. v. Kuzmak, 249 F.3d 1356, 5 1361 (Fed. Cir. 2001) (“We have, however, repeatedly held that the sending of an infringement letter, 6 without more, is insufficient to satisfy the requirements of due process when exercising jurisdiction over 7 an out-of-state patentee.”). Thus, “[f]or the exercise of personal jurisdiction to comport with fair play 8 and substantial justice, there must be ‘other activities’ directed at the forum and related to the cause of 9 action besides the letters threatening an infringement suit.” Silent Drive, Inc. v. Strong Indus., Inc., 326 10 F.3d 1194, 1202 (Fed. Cir. 2003). The Federal Circuit has found personal jurisdiction “where such 11 ‘other activities’ in some identifiable way ‘relate to’ enforcement of those patents in the forum.” 12 Avocent, 552 F.3d at 1334. 27 Examples of these “other activities” include initiating judicial or extra-judicial patent enforcement within the forum, or entering into an exclusive license agreement or other undertaking which imposes enforcement obligations with a party residing or regularly doing business in the forum. See Campbell Pet Co. v. Miale, 542 F.3d 879, 886 (Fed. Cir. 2008) (finding jurisdiction over a patentee whose “extra-judicial patent enforcement,” namely, enlisting a third party to remove defendant’s products from a trade show that was being held in the forum state, went beyond merely informing the defendant of its alleged infringement); Breckenridge [Pharmaceutical, Inc. v. Metabolite Laboratories, Inc., 444 F.3d 1356, 1366 (Fed. Cir. 2006)] (“Here, in addition to sending letters into the forum state, . . . Metabolite has entered into an exclusive license with PamLab, a company that . . . conducts business in Florida.” (emphasis added)); Silent Drive [Inc. v. Strong Industries, Inc., 326 F.3d 1194, 1202 (Fed. Cir. 2003)] (noting that “ [e]xclusive license agreements with respect to the patents at issue with residents of the forum . . . have, at least in some circumstances, been held sufficient to confer personal jurisdiction” (emphasis added)); Inamed [Corp. v. Kuzmak, 249 F.3d 1356, 1361 (Fed. Cir. 2001)] (finding jurisdiction over a patentee who had previously “granted [the plaintiff] an exclusive license to practice the inventions claimed in the [relevant] patents” (emphasis added)); Red Wing Shoe [Co., Inc. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1362 (Fed. Cir. 1998)] (noting that in Akro, “[i]n light of the patentee’s substantial contacts with its exclusive licensee, this court determined that the patent was a sufficient nexus between the contacts and the cause of action to establish ‘specific jurisdiction.’” (emphasis added)); Genetic Implant Sys. [Inc. v. Core-Vent Corp., 123 F.3d 1455, 1458 (Fed. Cir. 1997)] (finding jurisdiction over a patentee who “contracted with [an exclusive distributor] to sell [the] patented products in [the forum State]” where the agreement was “analogous to a grant of a patent license” (emphasis added)); Viam [Corp. v. Iowa Export-Import Trading Co., 84 F.3d 424, 430 (Fed. Cir. 1996)] (finding jurisdiction where “according to their own submission to this court, [the defendants] have initiated a suit seeking to enforce the same patent that is the subject 28 17 13 14 15 16 17 18 19 20 21 22 23 24 25 26 1 of this suit against other parties, unrelated to this action, in the same district court” (emphasis added)); Akro [Corp. v. Luker, 45 F.3d 1541, 1543, 1548-49 (Fed. Cir. 1995)] (finding jurisdiction over patentee who had exclusively licensed the plaintiff’s local competitor to practice the relevant patent, where the license agreement also “oblige[d] [the patentee] ‘to defend and pursue any infringement against’ the [relevant] patent” (emphasis added)). 2 3 4 Id. 5 Plaintiff contends that there is specific personal jurisdiction over France Brevets (and the other 6 defendants as France Brevets’ agents and/or alter egos) because France Brevets is “directing a public 7 patent enforcement campaign directed at products sold by NXP, a resident of California, and customers 8 that use NXP-branded products, including at least one already-sued California customer.” Opp’n to 9 France Brevets’ Mtn. at 14:18-20. Plaintiff argues that France Brevets’ enforcement efforts are directed, 10 at least in part, towards California because “France Brevets’ press release announcing NFCT’s lawsuit 11 publicly trumpets this litigation affecting California residents, thereby threatening potential sales for 12 NXP – a California resident.” Id. at 16:18-20. In addition, plaintiff notes that the same press release 13 also announced that France Brevets’ licensing efforts targeted the LG entities sued by NFCT, and that 14 those LG entities include a California resident with offices in San Diego and San Jose who were 15 “previously provided written and verbal notice of the NFC Technology Patents as well as LG’s 16 infringement of each such patent.” Id. at 16:23-25 (quoting press release). Plaintiff argues that these 17 “other contacts” are sufficient to establish personal jurisdiction. 18 The Court disagrees. “[E]nforcement activities taking place outside the forum state do not give 19 rise to personal jurisdiction in the forum . . . .” Radio Sys. Corp. v. Accession, Inc., 638 F.3d 785, 792 20 (Fed. Cir. 2011); Avocent, 552 F.3d at 1339 (“We are aware of no precedent that holds that the filing 21 of a suit in a particular state subjects that party to specific jurisdiction elsewhere.”). In Radio Systems, 22 a Delaware corporation with its principal place of business in Tennessee filed a declaratory relief action 23 in Tennessee against a New Jersey corporation. The plaintiff argued that the Tennessee court had 24 specific jurisdiction over the nonresident defendant because the defendant’s president had sent letters, 25 e-mails, and made phone calls to the Tennessee corporation in an effort to license the defendant’s patent; 26 the defendant’s president traveled to Tennessee to meet with the plaintiff to demonstrate the defendant’s 27 28 18 1 product; the defendant sent cease-and-desist e-mails and letters to Tennessee threatening litigation; and 2 the defendant contacted the PTO (in Virginia) to alert the examiner for the plaintiff’s pending 3 application of the existence of the defendant’s patent, resulting in the withdrawal of a notice of 4 allowance previously issued for the plaintiff’s application. Id. at 788, 790-92. 5 The Federal Circuit held that these contacts were insufficient. The court held that some of the 6 contacts, including the trip by the defendant’s president to Tennessee, related to attempts to 7 commercialize or license the patent, and such contacts do not give rise to a declaratory judgment action. 8 Id. at 790. The court also held that under long-standing Federal Circuit precedent, the cease and desist 9 letters and e-mails were not, on their own, sufficient to establish personal jurisdiction. Id. at 791. With 10 regard to the defendant’s contacts with the PTO, the court held that “Accession’s contacts with the PTO 11 d[o] not support Radio Systems’ jurisdictional argument because those contacts were directed at 12 Virginia (the site of the PTO) rather than Tennessee.” Id. at 792; cf. Electronics for Imaging, 340 F.3d 13 at 1351 (finding personal jurisdiction over nonresident defendant where, inter alia, defendant had hired 14 an attorney in the forum state to assist with enforcement of its patent rights and the attorney, as the agent 15 for the defendant, engaged in communications with the plaintiff relating to the enforcement of the 16 patent). 17 Here, all of the enforcement efforts occurred overseas, such as the issuance of the France Brevets 18 press release and the filing of the German lawsuit, or – assuming that NFCT is France Brevets’ alter 19 ego/agent, and thus imputing NFCT’s contacts to France Brevets – in Texas. The only alleged 20 connection to California is attenuated: plaintiff alleges that defendant’s enforcement activities will be 21 felt in California because NXP is a California resident, and that NXP may lose sales as a result of 22 NFCT’s lawsuit against NXP’s customers, one of whom is a California resident. Plaintiff does not cite 23 any authority holding that there is specific personal jurisdiction in such circumstances, and to the 24 contrary, Federal Circuit case law strongly suggests otherwise. Further, two judges from the Northern 25 District have held, under very similar facts, that there is no personal jurisdiction over a nonresident 26 defendant based upon the defendant filing infringement lawsuits outside of California. See Key Source 27 Intern. v. CeeColor Industries, LLC, C 12-1776 WHA, 2012 WL 6001059, at *3-4 (N.D. Cal. Nov. 30, 28 19 1 2012) (dismissing declaratory relief action against nonresident defendant for lack of personal 2 jurisdiction where defendant sent cease and desist letters to resident plaintiff and sued plaintiff for 3 infringement in Delaware); Juniper Networks, Inc. v. SSL Servs., LLC, No. C 08-5758 SBA, 2009 WL 4 3837266, at *4 (N.D. Cal. Nov. 16, 2009), aff’d without opinion, 404 Fed. App’x 499 (Fed. Cir. Dec. 5 13, 2010), reh’g denied (Jan. 31, 2011) (“Tellingly, Juniper cites no authority to support its novel 6 argument that the act of filing a lawsuit against an alleged California resident – in a Texas district court 7 – is sufficient to make a prima facie showing that it has purposefully availed ‘itself of the privilege of 8 conducting activities within the forum State, thus invoking the benefits and protections of its laws.’”). 9 Accordingly, the Court concludes that plaintiffs has not made out a prima facie case of specific 10 personal jurisdiction. 11 12 C. 13 Plaintiff also contends that this Court has personal jurisdiction over France Brevets pursuant to 14 15 16 17 Rule 4(k)(2) Federal Rule of Civil Procedure 4(k)(2). That rule provides, (2) Federal Claim Outside State-Court Jurisdiction. For a claim that arises under federal law, serving a summons or filing a waiver of service establishes personal jurisdiction over a defendant if: (A) the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction; and 18 19 (B) exercising jurisdiction is consistent with the United States Constitution and laws. 20 Fed. R. Civ. Proc. 4(k)(2). “Thus, for a court to exercise personal jurisdiction over a defendant under 21 that rule, the plaintiff’s claim must arise under federal law, the defendant must not be subject to 22 jurisdiction in any state’s courts of general jurisdiction, and exercise of jurisdiction must comport with 23 due process.” Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403, 1412 (Fed. Cir. 2009). “The third 24 requirement under Rule 4(k)(2) – the due process analysis – contemplates a defendant’s contacts with 25 the entire United States, as opposed to the state in which the district court sets.” Synthes (U.S.A.) v. G.M. 26 Dos Reis Jr. Ind. Com de Equip Medico, 563 F3d 1285, 1295 (Fed. Cir. 2009) (finding jurisdiction under 27 Rule 4(k)(2) over foreign defendant where contacts with the United States included “attendance at trade 28 20 1 shows, purchases of parts and a machine, the sale of a product for a veterinary application to one 2 customer, and a pair of consultations about product development” and jurisdiction was reasonable and 3 fair because, inter alia, defendant had traveled to United States repeatedly and plaintiff alleged that 4 defendant imported infringing product into United States). The Federal Circuit has held that “the 5 purposes of Rule 4(k)(2) are best achieved when the defendant is afforded the opportunity to avoid the 6 application of the rule only when it designates a suitable forum in which the plaintiff could have brought 7 suit. The advisory committee was concerned with defendants escaping jurisdiction in U.S. federal courts 8 while still having minimum contacts with the United States.” Touchcom, 574 F.3d at 1415. 9 Plaintiff argues that this case arises under federal law because this is a declaratory judgment 10 patent case and that France Brevets appears to contend it is not subject to jurisdiction anywhere in the 11 United States. Plaintiff argues that the third element is satisfied because “France Brevets’ and its alter 12 ego’s contacts with United States generally, when combined with its conduct directed at California, 13 establish personal jurisdiction under Rule 4 (k)(2)).” Opp’n to France Brevets’ Mtn. at 19:21-22. 14 Plaintiff’s arguments regarding the third element are essentially the same as its specific jurisdiction 15 arguments, namely that “France Brevets manages the patent licensing program, under which it has 16 threatened United States companies using NXP-branded products, obtained exclusive rights to United 17 States patents, is asserting United States patents, and is gathering information to bring infringement 18 claims against NXP.” Id. at 19:23-20:4. 19 France Brevets asserts that it does not have sufficient minimum contacts with the United States 20 to create personal jurisdiction anywhere, but that if the Court determines that France Brevets has 21 minimum contacts with this country, the Eastern District of Texas is the appropriate venue. The Court 22 agrees. As discussed above, France Brevets did not take any action in California, nor does plaintiff 23 allege that France Brevets itself – as opposed to its alleged alter ego/agent NFCT – has engaged in any 24 conduct in the United States giving rise to this declaratory judgment action. To the contrary, all of 25 France Brevets’ conduct occurred overseas. Even assuming that NFCT is France Brevets’ alter ego or 26 agent, at the very most that would support a finding of personal jurisdiction in the Eastern District of 27 Texas, not California. Plaintiff has not demonstrated that France Brevets has sufficient minimum 28 21 1 contacts with the United States such that it would be fair and reasonable for this Court to exercise 2 personal jurisdiction over France Brevets. 3 4 II. NFCT’s motion to dismiss 5 Plaintiff contends that this Court has specific personal jurisdiction over NFCT because NFCT 6 is an alter ego and/or agent of France Brevets.8 For the reasons set forth above, the Court lacks personal 7 jurisdiction over France Brevets, and thus even assuming that NFCT is an alter ego and/or agent of 8 France Brevets, the Court also lacks personal jurisdiction over NFCT. Plaintiff’s reliance on Google 9 Inc. v. Rockstar Consortium U.S. LP, C 13-5933 CW, 2014 WL 1571807 (N.D. Cal. Apr. 17, 2014), is 10 misplaced because in that patent declaratory judgment action, Judge Wilken held that there was specific 11 jurisdiction over nonresident defendants because “Google has shown that it is likely that Defendants 12 have created continuing obligations with a forum resident to marshal the asserted patents such that it 13 would not be unreasonable to require Defendants to submit to the burdens of litigation in this forum.” 14 Id. at *7. 15 Plaintiff also requests the opportunity to conduct jurisdictional discovery regarding NFCT’s 16 relationships with France Brevets and INSIDE Secure. Plaintiff also proposes to seek documents and 17 testimony regarding the governance, officers, and employees of NFCT, and plaintiff states that it 18 believes that such discovery will establish that NFCT’s employees are all associated with and 19 compensated by France Brevets. Plaintiff states that it would also seek documents and testimony 20 reflecting NFCT’s licensing and enforcement efforts. See Opp’n to NFCT’s Mtn. at 14:16-21. 21 Defendant opposes such discovery on the ground that it is unnecessary because plaintiff has failed to 22 make a prima facie showing of personal jurisdiction. 23 The Federal Circuit reviews “the district court’s denial of discovery, an issue not unique to patent 24 law, for abuse of discretion, applying the law of the regional circuit.” Autogenomics Inc., 566 F.3d at 25 1021-22 (citing Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006)). In the Ninth Circuit, 26 8 27 Plaintiff has apparently abandoned the allegation that NFCT is itself an agency or instrumentality of a foreign state. See Compl. ¶ 7. 28 22 1 “discovery should ordinarily be granted where pertinent facts bearing on the question of jurisdiction are 2 controverted or where a more satisfactory showing of the facts is necessary.” Laub v. U.S. Dep’t of the 3 Interior, 342 F.3d 1080, 1093 (9th Cir. 2003) (quoting Butcher’s Union Local No. 498 v. SDC Inv., Inc., 4 788 F.2d 535, 540 (9th Cir. 1986)). “A trial court may deny jurisdictional discovery when it is clear that 5 further discovery would not demonstrate facts sufficient to constitute a basis for jurisdiction, or where 6 the request for discovery is based on little more than a hunch that it might yield jurisdictionally relevant 7 facts.” Nuance Communications, Inc. v. Abbyy Software House, 626 F.3d 1222, 1235-36 (Fed. Cir. 8 2010) (citing and quoting Ninth Circuit case law, internal citations and quotation marks omitted). 9 Here, the proposed jurisdictional discovery regarding the relationship between the defendants, 10 as well as regarding the structure and governance of NFCT, would not be helpful because even assuming 11 an alter ego or agency relationship amongst the defendants, there are no contacts by any defendant with 12 this forum that give rise to plaintiff’s claims. With regard to the proposed discovery on NFCT’s 13 licensing and enforcement efforts, plaintiff has not asserted any basis for believing that NFCT has such 14 contacts in California that could provide a basis for specific personal jurisdiction. Accordingly, the 15 Court exercises its discretion and DENIES plaintiff’s request to conduct jurisdictional discovery. 16 17 III. Defendant Inside Secure’s motion to dismiss 18 A. Specific jurisdiction 19 Plaintiff contends that France Brevets and NFCT are INSIDE Secure’s agents, and thus that their 20 contacts can be imputed to INSIDE Secure for purposes of specific personal jurisdiction.9 As an initial 21 matter, the Court notes that the complaint does not allege that NFCT is an agent of INSIDE Secure, and 22 only alleges in a conclusory fashion that France Brevets is an agent of INSIDE Secure. More 23 importantly, even assuming an agency or alter ego relationship, neither France Brevets nor NFCT has 24 9 27 Plaintiff has apparently abandoned the argument that specific jurisdiction over INSIDE Secure can be based on INSIDE Secure’s California subsidiary’s contacts with California. Compare Compl. ¶ 10 (alleging as basis for personal jurisdiction that “Additionally, upon information and belief, INSIDE Secure has a United States subsidiary with its principal place of business at 555 Twin Dolphin Drive, Suite 620, Redwood City, California.”) with Opp’n to INSIDE Secure’s Mtn. at 7 n.5 (plaintiff states that it “is not alleging alter ego or agency with regard to INSIDE Secure’s California subsidiary.”). 28 23 25 26 1 contacts with California giving rise to this declaratory relief action, and therefore even if their contacts 2 are imputed to INSIDE Secure, there is no basis for specific personal jurisdiction over INSIDE Secure. 3 Further, for the reasons stated above, plaintiff’s request for jurisdictional discovery is DENIED. 4 5 B. Rule 4(k)(2) 6 Plaintiff also contends that there is personal jurisdiction over INSIDE Secure pursuant to Rule 7 4(k)(2). INSIDE Secure contends that Rule 4(k)(2) is inapplicable because 35 U.S.C. § 293, the patent 8 long-arm statute, provides for personal jurisdiction in the Eastern District of Virginia for claims 9 involving infringement or validity of the patents it owns. 35 U.S.C. § 293 provides, Every patentee not residing in the United States may file in the Patent and Trademark Office a written designation stating the name and address of a person residing within the United States on whom may be served process or notice of proceedings affecting the patent or rights thereunder. If the person designated cannot be found at the address given in the last designation, or if no person has been designated, the United States District Court for the Eastern District of Virginia shall have jurisdiction and summons shall be served by publication or otherwise as the court directs. The court shall have the same jurisdiction to take any action respecting the patent or rights thereunder that it would have if the patentee were personally within the jurisdiction of the court. 10 11 12 13 14 15 35 U.S.C. § 293. 16 Plaintiff does not dispute that it could have brought its declaratory relief claims regarding the 17 ’419 patent against INSIDE Secure in the Eastern District of Virginia. Rule 4(k)(2) is inapplicable 18 where there is “a suitable forum in which the plaintiff could have brought suit.” Touchcom, 574 F.3d 19 at 1403. Accordingly, plaintiff has not demonstrated that this Court has personal jurisdiction over 20 INSIDE Secure pursuant to Rule 4(k)(2). 21 22 23 24 /// 25 26 27 28 24 1 CONCLUSION 2 For the reasons stated in this order, the Court concludes that it lacks personal jurisdiction over 3 defendant’s, and accordingly GRANTS defendants’ motions to dismiss. This order resolves Docket Nos. 4 25, 35 & 40. 5 6 IT IS SO ORDERED. 7 8 Dated: September 15, 2014 SUSAN ILLSTON United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 25
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