Computerized Screening, Inc. v. Healthspot, Inc., No. 2:2014cv00573 - Document 24 (D. Nev. 2015)

Court Description: ORDER Denying 11 Motion to Dismiss for Lack of Jurisdiction. Signed by Judge Richard F. Boulware, II on 7/28/15. (Copies have been distributed pursuant to the NEF - PS)

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Computerized Screening, Inc. v. Healthspot, Inc. Doc. 24 1 2 3 4 UNITED STATES DISTRICT COURT 5 DISTRICT OF NEVADA 6 *** 7 COMPUTERIZED SCREENING, INC., 8 Plaintiff, 9 10 v. Case No. 2:14-cv-00573-RFB-NJK ORDER DENYING MOTION TO DIMISS OR FOR TRANSFER OF VENUE HEALTHSPOT INC., 11 Defendant. 12 13 I. INTRODUCTION 14 Plaintiff Computerized Screening, Inc. ( CSI ), a Nevada corporation, has filed suit 15 against Healthspot Inc. ( Healthspot ), a Delaware corporation, in the District of Nevada, alleging 16 that Healthspot infri making, having made, using, selling, offering 17 infringing product. Compl. ¶ 20, ECF No. 1. Claiming that it lacks 18 contacts with Nevada sufficient to subject it to personal jurisdiction and that a Nevada venue is 19 20 Civ. P. 12(b)(2) and (3). Alternatively, in the event it is subject to the personal jurisdiction in 21 Nevada, Healthspot has requested a transfer of venue to the Northern District of Ohio. This Court, 22 for the reasons discussed below, finds that Healthspot is subject to personal jurisdiction in Nevada 23 and that venue is proper. Additionally, this Court finds Healths 24 unpersuasive. 25 II. 26 of venue BACKGROUND For purposes of this motion to dismiss for lack of personal jurisdiction 27 considers the pleadings and affidavits in the light most favorable to CSI. Graphic Controls Corp. 28 v. Utah Med. Products, Inc., 149 F.3d 1382, 1383 n.1 (Fed. Cir. 1998). 1 A. Facts 2 The following facts are alleged by CSI. CSI is a Nevada corporation with its principal 3 place of business in Reno, Nevada. CSI alleges that it is the owner of United States Patent No. 4 6,691,436 (the 5 6 the data through a network to store the measurement data in remote d 7 14, ECF No. 1. ¶ 10, 8 Healthspot is a Delaware corporation with its principal place of business in Dublin, Ohio. 9 Compl. ¶ 4, ECF No. 1; Cashman Decl. ¶ 2, ECF No. 11-1. Healthspot is a manufacturer of 10 remotely-located healthcare providers to provide near real-time 11 12 medical care to p Cashman Decl. ¶ 3, ECF No. 11-1; accord Compl. Exs. 2, 3. On or before April 4, 2013, 13 understanding that H 14 No. 11-1. At that time, CSI told Healthspot that it believed 15 16 Cashman Decl. ¶ 26, ECF . Cashman Decl. ¶ 26, ECF No. 11-1. CSI then offered to license its technology to Healthspot for use in their kiosks. Id. 17 CSI alleges that after Healthspot was put on notice that their kiosks might infringe upon 18 NACDS ) 19 tradeshow in Las Vegas, Nevada in August 2013. Bluth Decl. ¶¶ 3 5, ECF No. 16. There, the 20 21 Healthspot demonstrating and advertising the accused product. Id. Healthspot denies ever 22 attending the NACDS tradeshow, but admits to visiting Nevada on at least three prior occasions 23 for trade shows. Cashman Supp. Decl., ¶ 4 6, ECF No. 19. However, Healthspot asserts that the 24 last time the accused product was in Nevada was for the National Council of Behavior conference 25 on April 8 9, 2013. Id. at ¶ 6. 26 Following the alleged demonstration at the NACDS tradeshow, CSI alleges it engaged in 27 correspondence with Healthspot in an attempt to resolve the dispute out of court. Hoekel Decl. 28 Ex. 1, ECF No. 15. CSI once more offered to license the technology to Healthspot and informed -2- 1 them that if they did not reach a licensing agreement CSI would be compelled to take legal action. 2 Id. at 6. In response Healthspot offered to demonstrate their kiosk for CSI in order to alleviate 3 Id. at 5. CSI replied that a 4 demonstration would not be necessary since they believed they had sufficient information to 5 support their allegation of infringement. Id. CSI further stated that if a licensing agreement was 6 not reached by April 11, 2014, they would be compelled to take legal action. Id. Healthspot 7 warned CSI that if they filed a patent infringement action against Healthspot without further 8 examination of the accused product, they would be in violation of Federal Rules of Civil Procedure 9 11. Id. at 4. 10 The parties then scheduled a conference call for 10:00 am on April 15, 2014 to attempt to 11 resolve the dispute. Id. at 1 2. On April 14, after scheduling the conference call, Healthspot filed 12 a suit in Ohio seeking declaratory judgement stating 13 14 Id.; Cashman Decl. ¶ 32, ECF No. 11-1. On April 15, 2014, after receiving notice of the Ohio suit, CSI filed this lawsuit, in Nevada. See Compl.., ECF No. 1. 15 B. Procedure 16 On April 15, 2014, CSI filed the Complaint in the present case in the District of Nevada. 17 ECF No. 1. In its Complaint, CSI alleges one cause of action. Id. CSI claims Healthspot infringed 18 19 infringing product. Id. at 3. 20 21 On June 30, 2014, Healthspot filed the instant Motion to Dismiss for lack of personal jurisdiction. ECF No. 11. 22 23 III. 24 PERSONAL JURISDICTION A. Legal Standard 25 Federal Circuit rather than regional circuit law applies when determining whether a 26 court has personal jurisdiction in patent infringement actions. Nuance Commc'ns, Inc. v. Abbyy 27 Software House, 626 F.3d 1222, 1230 (Fed. Cir. 2010). Absent discovery on the matter, a plaintiff 28 is only to make a prima facie showing of jurisdiction to defeat -3- 1 Med. Solutions, Inc. v. C Change Surgical LLC, 541 F.3d 1136, 1140 (Fed. Cir. 2008) 2 (internal quotation marks omitted). In order to determine whether a plaintiff has made a prima 3 facie showing of personal jurisdiction over the defendant, the trial court must construe all pleadings 4 and affidavits in the light most favorable to the plaintiff. Deprenyl Animal Health, Inc. v. 5 University of Toronto Innovations Foundation, 297 F.3d 1343, 1347 (Fed. Cir. 2002) (citing 6 Graphic Controls, 149 F.3d at 1383 n.1). 7 When determining whether a court has jurisdiction over a defendant, the court must 8 -arm statute permits service of process, and whether the 9 Inamed Corp. v. Kuzmak, 249 F.3d 10 1356, 1359 (Fed. Cir. 2001). Because Nevada 11 Nevada courts to exercise jurisdiction to the same extent as the Constitution, this Court need only 12 consider the constitutional principles of due process. Walden v. Fiore, 134 S. Ct. 1115, 1121 13 (2014). 14 -arm statute, Nev. Rev. Stat. § 14.065, permits B. Analysis 15 CSI argues that this Court has general jurisdiction over Healthspot. In the alternative, CSI 16 argues that this Court has specific jurisdiction over Healthspot. The nature and number of the 17 er this Court can exercise either general 18 or specific personal jurisdiction. Synthes (U.S.A.) v. G.M. Dos Reis Jr. Ind. Com de Equip. 19 Medico, 563 F.3d 1285, 1297 (Fed. Cir. 2009). The Court finds that, although it lacks general 20 jurisdiction over Healthspot, it can exercise specific jurisdiction in the instant case. 21 1. General Jurisdiction 22 contact sufficiently 23 with the forum state. Grober v. Mako Products, Inc., 686 F.3d 1335, 1346 (Fed. Cir. 24 2012) (citations omitted) (finding no general jurisdiction over a defendant who had made 25 numerous product shipments to the forum and had attended a tradeshow in the forum). The 26 27 28 must nstant and pervasive as to render [it] Daimler AG v. Bauman, 134 S. Ct. 746, 751 (2014) (alteration in original) (internal quotation marks omitted). -4- 1 CSI fails to meet the high threshold required to establish general jurisdiction over 2 Healthspot. Healthspot is a company incorporated in Delaware with its principle place of business 3 4 nor are there allegations that Healthspot owns any property in Nevada. Although Healthspot has 5 visited Nevada on several occasions with the accused product, demonstrated the accused product 6 in Nevada, and corresponded with and instituted a claim against a Nevada resident, these contacts 7 are insu 8 2. Specific Jurisdiction 9 minimum contacts with 10 [the forum] such that the maintenance of the suit does not offend traditional notions of fair play 11 and substantial justice 12 Washington, 326 U.S. 310, 316 13 whether the defendant purposefully directed its activities at residents of the forum, (2) whether the 14 claim arises out of or relates to those activities, and (3) whether assertion of personal jurisdiction 15 3D Sys., Inc. v. Aarotech Labs., Inc., 160 F.3d 1373, 1378 (Fed. Cir. 16 1998). The plaintiff has the burden of satisfying the first two prongs of the test. Viam Corp. v. 17 Iowa Export-Import Trading Co., 84 F.3d 424, 429 (Fed. Cir. 1996). The burden then shifts to the 18 defendant to make a compelling case that jurisdiction would be unreasonable. Id. 19 20 Inamed Corp., 249 F.3d at 1360 (quoting International Shoe Co. v. - a. Purposeful Availment The purposeful availment requirement (also known as the purposeful direction 21 22 random, fortuitous, or attenuated contacts, or of the unilateral activity of another party or a third 23 Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 1324, 1329 (Fed. Cir. 2008) (citing 24 Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). The Court may consider a number 25 of factors in evaluating purposeful availment. In Beverly Hills Fans Company v. Royal Sovereign 26 Corporation, the Federal Circuit held that the fact that the defendant shipped the accused product 27 into the forum state after being put on notice that the accused product might infringe upon the 28 68 (Fed. -5- 1 Cir. 1994). The Federal Circuit has also found that interstate communications addressing the 2 accused product and visits to the forum state by the defendant to discuss surrounding infringement 3 4 5 Electronics For Imaging, Inc. v. Coyle, 340 F.3d 1344, 1351 (Fed. Cir. 2003). 6 7 8 9 attended the NACDS tradeshow, but, because the Court must resolve such disputed facts in favor 10 of the plaintiff, this assertion is presently irrelevant. See Deprenyl, 297 F.3d at 1347 ( 11 disputes must be resolved in 12 jurisdiction. ). Healthspot visited CSI in Reno on April 4, 2013 to discuss the very issue of ll factual s favor in order to evaluate its prima facie showing of 13 14 corresponding with CSI for several months in an attempt to resolve the issue outside of court. 15 16 surprise to Healthspot. 17 18 , because the Ohio suit is also an action 19 purposefully directed at a resident of Nevada. The central purpose of a declaratory action is often 20 to clear the air of infringement charges. Inamed Corp., 249 F.3d at 1362 (internal quotation marks 21 omitted). Here, Healthspot demonstrates 22 Ohio declaratory action to resolve the dispute. Mot. to Dismiss 2, ECF No. 11. Certainly, a 23 judgment in favor of (or, for that matter, against) Healthspot in the Ohio proceeding would affect 24 CSI in Nevada. For example, if it is determined tha it filed the 25 26 on CSI in Nevada are further compounded by the fact that negotiations about the accused product 27 were still ongoing at the time the suit was filed. In sum, the filing of the Ohio suit is also an act 28 purposefully directed towards Nevada and therefore weighs in favor of finding that Healthspot -6- 1 purposefully availed themselves to Nevada. 2 In conclusion, Healthspot purposefully directed activities at Nevada. Its alleged use in 3 Nevada of the accused product after being put on notice of its potentially infringing characteristics, 4 visits to Las Vegas and Reno, and commencement of a related civil action against a Nevada 5 resident demonstrate that facing civil liability in the instant case 6 7 See Avocent Huntsville Corp., 552 F.3d at 1329 (quoting Burger King Corp., 471 U.S. at 474). 8 b. Relation to Specific Forum Activities 9 10 11 Burger King Corp., 471 U.S. at 472. This prong is not, as general rule, 12 that Healthspot suggests. Mot. to Dismiss 10:24 25, ECF No. 11; See Inamed Corp., 249 F.3d at 13 1362 (holding that it is a broad standard 14 give rise to or relate to the claim). In Synthes 15 claim was sufficiently related to the activities of the defendant in the forum state because the 16 defendant displayed a product accused of infringing on the plaintiff patent at a trade show. 563 17 F.3d at 1298. The court reasoned that the defendant was displaying the accused product at the even higher the defendants actions in the forum state must either 18 19 plaintiff. Id. 20 21 22 23 As in Synthes, actions at tradeshows would also generate interest in its kiosk to the detriment of CSI. Ultimately, CSI has made a prima facie showing that 24 25 26 c. Reasonableness/Fair Play and Substantial Justice A defendant can defeat personal jurisdiction on constitutional grounds if she can make a 27 28 ial justice. Burger -7- 1 King, 471 U.S. at 477 78. The factors used to determine whether exercising personal jurisdiction 2 3 the plaintiff's interest in obtaining relief, (4) the interstate judicial system's interest in obtaining the 4 most efficient resolution of controversies, and (5) the shared interest of the several states in 5 Electronics For Imaging, Inc., 340 F.3d at 6 1352. 7 would be unreasonable in which sufficient minimum contacts exist but where the exercise of jurisdiction Id. 8 Healthspot fails to make a sufficiently compelling argument that would render exercise of 9 personal jurisdiction constitutionally unreasonable. First, the burden of traveling to Nevada for 10 litigation placed on Healthspot (which has made at least five trips to Nevada in less than two years) 11 is not constitutionally unreasonable. See Inamed Corp., 249 F.3d at 1363 (concluding that even if 12 it were true that a defendant was so ill that he could not stand or sit for longer than one-half hour 13 at a time and was unable to travel long distances, a finding of personal jurisdiction in the forum 14 state was not so unreasonable as to make it unconstitutional); Synthes, 563 F.3d at 1299 (internal 15 citations omitted) ("The burden on [Defendant] is significant, in that [Defendant] will be required 16 to traverse the distance between its headquarters in Brazil and the district court in California . . . . 17 We note, however, that 'progress in communications and transportation has made the defense of a 18 lawsuit in a foreign tribunal less burdensome.' In addition, for at least the last five years, 19 [Defendant] representatives have traveled to the United States for, among other things, trade 20 shows, which suggests that, as far as [Defendant] is concerned, travel itself is not unduly 21 burdensome."). Second, Nevada has a substantial interest in protecting its residents from patent 22 infringement. See Electronic Imaging, Inc., 340 F.3d at 1352. Third, CSI has an interest in 23 preserving its patent rights and, as a plaintiff, has an interest in litigating in a convenient forum. 24 Fourth, although Healthspot has filed a complaint for declaratory relief in Ohio, it is still pending 25 and can be consolidated with the current action. See id. Finally, there is no conflict between the 26 interests of Nevada a 27 28 Id. ... -8- 1 In conclusion, because Healthspot has sufficient minimum contacts with Nevada, this 2 Court has specific personal jurisdiction ov 3 pursuant to Fed. R. Civ. Proc. 12(b)(2) is denied. 4 5 IV. VENUE PROPRIETY 6 In moving to dismiss pursuant to Fed. R. of Civ. Proc. 12(b)(3), Healthspot argues that 7 venue is improper in Nevada. However, this issue is foreclosed because this Court has personal 8 jurisdiction over Healthspot and, by extension, venue is proper. See VE Holding Corp. v. Johnson 9 Gas Appliance Co. 10 includes any district where there would be personal jurisdiction over the corporate defendant at 11 28 U.S.C. § 1391(c). 12 dismiss pursuant to Fed. R. Civ. Proc. 12(b)(3) is denied. 13 14 15 16 17 V. VENUE TRANSFER Healthspot argues that, even if it is subject to personal jurisdiction in Nevada, the suit should be transferred to the Northern District of Ohio. Mot. to Dismiss 13:1 2, ECF No. 11. A. Legal Standard 18 Whereas Federal Circuit law guides personal jurisdiction, local circuit law determines 19 venue transfer issues. Storage Tech. Corp. v. Cisco Sys., Inc., 329 F.3d 823, 836 (Fed. Cir. 2003). 20 Pursuant to 28 U.S.C. § 1404, a district court may transfer a case to another district if it serves the 21 Atl. 22 Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 134 S. Ct. 568, 581 (2013). When 23 determining whether to transfer a case, courts examine various public and private factors. Decker 24 Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). Generally, great 25 weight is generally accorded to a plaintiff's choice of forum. Lou v. Belzberg, 834 F.2d 730, 739 26 (9th Cir. 1987). The burden is on the party seeking transfer to show that when these factors are 27 applied, the balance of convenience clearly favors transfer. Commodity Futures Trading Comm'n 28 v. Savage, 611 F.2d 270, 279 (9th Cir. 1979). -9- 1 B. Analysis 2 1. Public Factors 3 The relevant public factors weigh in favor of keeping the claim in Nevada. These factors 4 5 Decker Coal Co., 805 F.2d at 843. As stated 6 previously, Nevada has an interest in resolving the claims of its residents. Additionally, since 7 Federal Circuit law is controlling in patent issues, there will be no conflict of laws. Transferring 8 the claim to the Northern District of Ohio would not alleviate any public burden 9 transfer it. 10 11 it would merely Anticipatory filing of a declaratory action in an infringement suit is also a factor. Electronics For Imaging, Inc., 340 F.3d at 1351. Although this Court recognizes 12 -to- Pacesetter Sys., Inc. v. Medtronic, Inc., 13 678 F.2d 93, 95 (9th Cir. 1982) ( 14 mechanically applied, but rather is to be applied with a view to the dictates of sound judicial 15 administration. 16 was an anticipatory suit, or was filed for the purposes of forum shopping. Alltrade, Inc. v. Uniweld 17 Products, Inc., 946 F.2d 622, 628 (9th Cir. 1991). first to file rule is not a rigid or inflexible rule to be -to- 18 19 transferring. Healthspot admittedly filed the Ohio action in anticipation that negotiations would 20 continue to fail leaving CSI compelled to file a claim for patent infringement. Mot. to Dismiss 21 16:23- 22 bad faith. The claim was allegedly filed fifteen minutes after CSI and Healthspot scheduled a 23 conference call in hopes of resolving the issue outside of court. Resp. to Mot. to Dismiss 3:10 24 11, ECF No. 13. Invoking the potential of Rule 11 sanction, Healthspot dissuaded CSI from filing 25 suit before examining the accused product. Healthspot then filed the complaint for declaratory 26 relief in Ohio during the time period when it had persuaded CSI to await the outcome of further 27 negotiations. The record supports a prima facie conclusion that 28 gamesmanship and arguably deceptive. This Court will not, in effect, reward such behavior with - 10 - 1 a choice in forum. 2 2. Private Factors 3 The relevant private factors also weigh in favor of keeping the claim in Nevada. These 4 factors include 5 for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses ess to sources of proof; availability of compulsory process 6 and all Decker Coal 7 Co., 805 F.2d at 843 (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)). 8 choice in forum is accorded great weight. Lou, 834 F.2d at 739. 9 This Court recognizes that the bulk of relevant evidence in patent infringement cases 10 usually comes from the alleged infringer and, therefore, weighs in favor of transferring to that 11 location. See In re Genetech, Inc., 566 F.3d 1338, 1345 (Fed. Cir. 2009). However, this does not 12 13 home forum. Importantly 14 15 has failed to provide any facts demonstrating that litigating a patent claim in Nevada would be so 16 Mot. to Dismiss 15:8-12, 17 ECF No. 11. 18 Therefore, this Court finds that the Healthspot has failed to make the required showing of 19 inconvenience in order to transfer the case to the Northern District of Ohio. 20 ... 21 ... 22 ... 23 24 25 26 27 28 - 11 - 1 2 VI. CONCLUSION As CSI has made a prima facie case for specific personal juri 3 to Dismiss must be denied. Healthspot may re-raise the issue of personal jurisdiction later should 4 evidence be available that supports such a motion at that time. Furthermore, Healthspot has failed 5 to make the requisite showing to transfer the case to the Northern District of Ohio, and its Motion 6 to Transfer is similarly denied. Accordingly, 7 8 Dismiss for Lack of Jurisdiction, Improper Venue or, In the Alternative, to Transfer, ECF No. 11, is DENIED. 9 10 Dated: July 28, 2015 11 12 13 14 ________________________________ RICHARD F. BOULWARE II UNITED STATES DISTRICT JUDGE 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 12 -

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