Delaware IP Law Blog

When faced with a credible claim of lack of personal jurisdiction, a court has two options: dismiss the action or order jurisdictional discovery. In a recent stream-of-commerce decision, Magistrate Judge Leonard P. Stark opted for the latter.

In the underyling litigation, the aggrieved manufacturer insisted that it had no knowledge that its accused products would enter Delaware. Rejecting this line of reasoning, the Court found that delivery to the United States could satisfy the stream-of-commerce test:

Any evidence that Defendants use [a distributor] to deliver the accused chips to the United States, from which they might enter Delaware, may constitute evidence supporting a finding of intent to serve the Delaware market. (Op. at 20 n.7)

According to the Court, the fact that the defendant "tout[ed] its established distribution channels in the U.S., as well as its close relationships with end users . . . throughout this country," justified further discovery.

Like the Internet-access personal jurisdiction cases, this decision expands on a common theme in the District of Delaware: if you serve the United States markets, you serve Delaware's as well.

Power Integrations Inc. v. BCD Semiconductor Corp., C.A. No. 07-633-JJF-LPS (D. Del. April 11, 2008) (Stark, M.J.).

A recent report and recommendation from Magistrate Judge Stark found that the existence of pre-existing nonexclusive licensees does not prohibit a company from granting an exclusive license subject to those pre-existing licenses. TV Guide Online, Inc. v. Tribune Media Services, C.A. No. 05-725-SLR/LPS, Report and Recommendation Concerning Defendant Tribune's Motion to Dismiss Plaintiff TV Guide Online, Inc. for Lack of Standing (D. Del. March 26, 2008 (Public Version)). Defendant in this case moved to dismiss one of the plaintiffs (TV Guide Online, LLC) who was likely to be the party on which plaintiffs' claim for lost profits was based. Id. at 2 n.2. Tribune argued that TV Guide Online lacked standing to pursue this patent infringement action because they are not in fact an exclusive licensee. Id. at 2. The License Agreement between the two plaintiffs granted TV Guide Online "an exclusive license to the '078 patent, including the right to sue and recover for past infringement." Id. at 3 (internal citations omitted). Tribune argued that because 19 other entities also had licenses for the same patent, and further, because an additional license was issued by the parent company of the plaintiffs after TV Guide Online obtained its license, TV Guide Online could not be an exclusive licensee. Id. at 3.

Magistrate Judge Stark found that the parties "intended" the license agreement to be an "exclusive license" as it provided TV Guide Online with the right to practice the invention, the right to exclude others (except for pre-existing licensees) and the right to grant sublicenses. Id. at 7. Furthermore, the existence of prior non-exclusive licenses "does not prevent a patentee from granting an 'exclusive license' going forward." Id. at 8. Finally, Magistrate Judge Stark found that the record evidence at this stage in the proceedings (by way of a declaration and deposition testimony by the senior vice president of intellectual property for the parent company and TV Guide Online) was enough to show that the subsequent license did not defeat defendant's exclusive licensee status. Id. at 10.

For a copy of the opinion see here.

A recent order from the district court's new magistrate, Magistrate Judge Stark, sheds some light on his case scheduling process. Power Integrations, Inc. v. BCD Semiconductor Corp., C.A. No. 07-633-JJF-LPS, Memo. Order (D. Del. Feb. 11, 2008). Of particular note, Magistrate Stark is following the same discovery dispute procedure as Judge Jordan previously used, and Magistrate Thynge continues to use. When the parties have a dispute, they should contact chambers to arrange for a teleconference. Forty-eight hours prior to the teleconference the party seeking relief files a 3 page letter setting forth the issues and its position and then 24 hours later, the opposing party files its 3 page opposition letter. (Note: a copy of any sealed letter or exhibit must be provided to the Court within 1 hour after e-filing.) After the teleconference the judge will decide whether to order further briefing.

The Memorandum Order also clarifies Magistrate Stark's position on the "3-day rule" regarding service. The Order states that "Fed. R. Civ. Proc. 6(e) provides for three extra days for responding to documents electronically filed, whether or not e-mailed and/or hand-delievered as well."

Finally, Magistrate Stark's tutorial process is different than the other sitting judges in this district. Pursuant to this Order, each party files under seal a thirty minute CD or video of their tutorial with no discussion or argument about claim construction. Each party within 10 days can then submit a five page written response commenting on the opposing party's tutorial.

We will continue to watch to see if the schedule in this case translates into a future form Rule 16 schedule for his patent docket.

For a copy of the opinion: Power Integrations Inc. v. BCD Semiconductor Corp.