Published on:

In Fifth Market, Inc. v. CME Group, Inc., et al., C.A. No. 08-520-GMS (D. Del. June 19, 2013), Chief Judge Gregory M. Sleet considered motions related to a stay the Court had issued in May 2011 following defendants’ filing of a request for ex parte reexamination of one patent (“the ‘419 Patent”) and the filing of a draft request for inter partes reexamination of a different patent (“the ‘387 Patent”). Id. at 1-2.

The PTO issued a reexamination certificate for the ‘419 Patent in February 2013 and granted inter partes reexamination of the ‘387 Patent in September 2012. The Court explained that “[t]hese developments principally affect the court’s assessment of the undue prejudice factor, as [plaintiff] complains of the defendants’ ‘excessive delay’ in seeking reexamination of the ‘387 Patent and the resulting delay of this litigation.” Id. at 3 n.1. The timing of defendants’ inter partes reexamination request and its intent to file a request for post-grant review of the ‘419 Patent as a covered business method patent “indicate that they have adopted a strategy of raising piecemeal PTO challenges to [plaintiff’s] patents,” which was “impermissibly tactical.” Id. (internal quotation marks omitted). The status of the reexamination and the fact that the defendants had not yet filed their request for post-grant review also “concern[ed] the court” in terms of potential delay. Id. Finally, “[w]hile the final ‘relationship between the parties’ sub-factor [of the undue prejudice analysis] remains both unchanged and untroubling given [plaintiff’s] status as a non-practicing entity, the defendants’ timing and the status of the ‘387 reexamination-as well as the planned ‘419 CBM review-suggest that the broader undue prejudice factor now favors lifting the stay. The defendants appear to have sought an inappropriate tactical advantage, and denial of this motion would expose [plaintiff’s] suit to the various evidentiary risks associated with prolonged stays.” Id. (internal citations omitted). As a result, the Court granted the plaintiff’s motion to lift the stay.

In the context of plaintiff’s motion to lift the stay, defendants had moved to strike plaintiff’s reply brief or, in the alternative, for leave to file a sur-reply, which they had filed along with this motion. The Court agreed with defendants that the plaintiff had violated Local Rule 7.1.3(c)(2) when it had “include[ed] [in its reply] a discussion of the stay factors entirely ignored in its opening brief.” Id. at 4 n.2. But the Court “exercise[d] its discretion and grant[ed] the defendants’ alternative motion to file a surreply rather than strike [plaintiff’s] reply brief. While [the] opening brief was deficient, the defendants have acknowledged that the three traditional ‘stay factors’ are well known, and they were able to address them in their own answering brief. Moreover, any prejudice that might have resulted from [plaintiff’s] improper reply is remedied by the court’s consideration of the defendants’ sur-reply.” Id. (internal citations omitted).

Continue reading

Published on:

In Shelbyzyme, LLC v. Genzyme Corporation, C.A. No. 09-768-GMS, Chief Judge Gregory M. Sleet had previously granted in part defendant’s request for the production of plaintiff’s privileged documents under the crime fraud exception, as detailed here. Here the Court considered plaintiff’s motion for reconsideration, and denied it. Slip op. at 1 (D. Del. June 25, 2013).

Plaintiff argued that “the court erred in drawing the inference that patent applicant knew of the abandonment [of a relevant application] by December 1999 and thus was mistaken in its subsequent finding on the ‘intent to deceive’ prong” of fraud. Id. at 3. Plaintiff argued that the Court’s finding was “predicated upon a misreading of” an email from a licensee to the related patent family to defendant, in which the licensee had explained that the application in question would become abandoned if the applicant did not pay a base issue fee. Id. at 5 n.3 (quoting the email in full). The plaintiff “now claims that [the prosecuting attorney and patent counsel] was the source of the information that the issue fee had not been paid.” Id. at 6. However, “the court continues to believe that the most reasonable interpretation of [this] email is that [the applicant] was the source of [the licensee’s] knowledge that the issue fee had not been paid and that [the licensee] conveyed that knowledge to [defendant]. A close examination of the message supports this view,” and, quoting passages from the email, the Court mapped out how the prosecuting attorney’s statement that the fee had not been paid was “conditional” and indicated that he was “unaware as to whether [the applicant] actually had paid the fee.” Id. The Court also noted that “the alternative interpretations presented in [plaintiff’s] Motion for Reconsideration suffer from serious flaws.” Id. at 7.

Plaintiff also “reference[d] a June 2, 2013 declaration [of the prosecuting attorney] in support of its position that [the attorney] was the source of [the licensee’s] knowledge that the issue fee had not been paid.” Id. at 9. The Court disregarded this declaration, explaining that “a motion for reconsideration should not be used ‘as a means to argue new facts or issues that inexcusably were not presented to the court in the matter previously decided.’ Here, [plaintiff] failed to present an equivalent to this . . . declaration in support of its initial [letter brief], making consideration of the above-quoted statement improper.” Id. at 10 (quoting Brambles USA v. Blocker, 735 F. Supp. 1239, 1240 (D. Del. 1990)). “The remaining evidence offered by [plaintiff] to challenge the court’s reading of the [email],” including testimony from various parties regarding this email and the source of information as to whether the issue fee had been paid, “[was] unpersuasive,” as it “[told] the court little about the actual source of [the] information.” Id.

Finally, plaintiff “[took] issue with the court’s characterization of a declaration attached to the Petition for Revival, which the court referenced in its discussion of the ‘reliance’ element” of fraud. Id. at 3. “While the court recognizes that its prior characterization of the [this declaration] may have oversimplified matters, conflating [the declarant’s] own knowledge with that of the applicants, it does not believe that any error resulted in its conclusion as to the reliance issue” because its prior characterization was “not required to reach [its] conclusion” that the PTO had reasonably relied on the alleged misrepresentations in the Petition for Revival. Id. at 13.

Continue reading

Published on:

Judge Stark has denied a motion to dismiss claims of willful infringement from an amended patent infringement complaint. The plaintiff had previously filed and the Court granted a motion to amend its complaint to include a claim of willful infringement based on longstanding knowledge of a patent-in-suit. The defendant then moved to dismiss this newly-added claim under Rule 12(b)(6). See Cloud Farm Associates, L. P. v. Volkswagen Group of Am., Inc., C.A. No. 10-502-LPS, Memorandum Op. at 1-2 (D. Del. July 2, 2013). Judge Stark explained that he had “already addressed the sufficiency of [the plaintiff’s] pleading.” Id. at 3. “The Court considered and rejected [the] argument” that amendment of the complaint was “futile because it would not survive a motion to dismiss.” Id. Because the plaintiff “provides no reason for the Court to reconsider this conclusion,” and its motion “merely repackages its opposition to the earlier motion to amend,” the motion presented “neither an appropriate nor necessary occasion to delve further into . . . potentially competing lines of authority.” Id. at 3-4. Accordingly, Judge Stark denied the motion to dismiss.

Continue reading

Published on:

Chief Judge Sleet recently granted a motion to transfer in a patent infringement case involving software for managing collision insurance claims. See Audatex N. Am., Inc. v. Mitchell Int’l, Inc., C.A. No. 12-139-GMS, Memorandum Op. at 1 (D. Del. June 28, 2013). Both the plaintiff and defendant are Delaware corporations with principal places of business in San Diego, California. Accordingly, it was clear that the case could have originally been brought in the Southern District of California. Id. at 2-3. Finding that the Third Circuit’s Jumara factors favored transfer on balance, Judge Sleet granted the defendant’s motion to transfer.

Judge Sleet explained that the plaintiff’s choice “to litigate in the forum where it is incorporated, rather than the forum where its principal place of business is located . . . is entitled to less deference than it would typically receive. Consequently, [the plaintiff’s choice of forum] factor weighs against transfer and is accorded heightened, but not maximum, deference as an individual Jumara factor.” Id. at 5-6. Furthermore, although the question of “whether the claim arose elsewhere” is often neutral in patent infringement actions, “because the patent infringement claims arise from infringing products that were designed and manufactured in a single, discrete location, this factor weighs slightly in favor of transfer.” Id. at 6-7. Several other factors, including the convenience of the parties and practical considerations that could make the trial expeditious or inexpensive, also favored transfer, and only the plaintiff’s choice of forum weighed against transfer. Judge Sleet, therefore, concluded that the defendants “met their burden of demonstrating that the interests of justice and convenience strongly favor transfer.” Id. at 17.

Continue reading

Published on:

In a recent memorandum opinion, Judge Leonard P. Stark denied defendant’s motion to dismiss plaintiff’s complaint for lack of personal jurisdictional and improper venue, and denied defendant’s alternative motion to transfer venue to the Northern District of California. Graphic Properties Holdings Inc. v. Asus Computer International, Inc., C.A. No. 12-210-LPS (D. Del. Jun. 28, 2013). Plaintiff, a Delaware corporation with its principal place of business in New York, is asserting three patents, U.S. Patent Nos. 5,896,119 (“the ‘119 patent”), 6,816,145 (“the ‘145 patent”), and 8,144,158 (“the ‘158 patent”). Id. at 1-2. Moreover, plaintiff is asserting one or more of those three patents in at least eleven other ongoing actions in the District of Delaware. Id. at 1. Defendant is a California corporation with its headquarters in the Northern District of California. Id. at 2. Defendant “does not have employees, documents or places of business in Delaware,” and “none of [its] accused products were designed or manufactured in Delaware.” Id.

Defendant contested personal jurisdiction and venue only with respect to plaintiff’s asserted claims related to the ’119 patent; with respect to claims under the ’145 and ’158 patents, defendant had submitted to the Court’s jurisdiction. Id. at 5. Denying defendant’s motion to dismiss for lack of personal jurisdiction, Judge Stark explained why “jurisdiction is proper at least” under 10 Del C. § 3104(c)(3) based on “use” of the accused product in Delaware. Id. at 6. Specifically, § 3104(c)(3) permits the exercise of personal jurisdiction when a defendant “causes tortious injury in [Delaware] by an act or omission in [Delaware].” Id. As Judge Stark noted, defendant admitted that “in two instances an individual in Delaware returned a broken VH-242 monitor to [defendant], and [defendant] provided that individual with a replacement monitor in satisfaction of a warranty agreement.” Id. Judge Stark thus found that “[a]t a minimum,” plaintiff’s “indirect infringement claim . . . ‘arises from’ use of the accused products in Delaware by individuals who received the product from [defendant].” Id. at 7. Moreover, as Judge Stark explained, “[t]he direct infringement claim is likewise directly related to the delivery of the accused products to Delaware.” Id. Finally, Judge Stark found that the assertion of personal jurisdiction would comport with Due Process. In support of that finding, he noted that defendant “knowingly and intentionally shipped the accused products to two separate customers in Delaware” to satisfy its warranty. Id. Judge Stark also found the exercise of personal jurisdiction “fair and reasonable” based predominantly on defendant’s litigation with respect to the ’145 and ’158 patents that is moving forward in Delaware and the fact that the ’119 patent is being asserted in several other concurrent Delaware lawsuits. Id. at 8. Moreover, because the parties agreed that the “outcome of the venue issue should be the same as the outcome of the personal jurisdiction question,” Judge Stark denied defendant’s motion to dismiss for improper venue. Id. at 9.

Denying defendant’s alternative motion to transfer venue to the Northern District of California, Judge Stark found that “plaintiff’s choice of forum, practical considerations, administrative difficulty, and public policy” weighed against transfer. Id. at 16. Regarding plaintiff’s choice of forum, Judge Stark noted that “[t]he Court agrees with those cases that include a corporate entity’s state of incorporation as part of its home turf.” Id. at 10. Judge Stark thus found that plaintiff’s choice of forum was “entitled to ‘paramount consideration,’ or, at a minimum, ‘significant deference.’” Id. With respect to practical considerations, Judge Stark explained that plaintiff has “at least 11 other cases pending in Delaware, each of which involves one or more of the asserted patents,” and this factor therefore weighed “heavily” against transfer. Id. at 14. Relatedly, addressing administrative difficulties, Judge Stark noted that “[t]ransferring this case to California would only add to the workload of that Court without meaningfully reducing the workload of this one.” Id. at 15.

On the other hand, Judge Stark found that “defendant’s preferred forum, location of operative events, convenience to witnesses, and location of relevant evidence” weighed in favor of transfer, and that the remainder of the factors were neutral. Id. at 16. “Evaluating the factors as a whole, and according each factor its appropriate weight under the circumstances presented,” Judge Stark determined that defendant failed to demonstrate that “the balance of the convenience factors and interests of justice weigh strongly in favor of transfer.” Id.

Continue reading

Published on:

Judge Stark recently granted defendants’ motion for summary judgment of laches in the long-standing suit filed by St. Clair for infringement of patents related to power savings and management. St. Clair Intellectual Property Managment Consultants, Inc. v. Acer, Inc., et al., C.A. No. 09-354-LPS (consol.) (D. Del. July 2, 2013). “A laches defense requires a showing by a preponderance of evidence that (a) the patentee’s delay in bringing suit was unreasonable and inexcusable, and (b) the alleged infringer suffered material prejudice attributable to the delay.” Id. at 4 (quotations omitted). And, a presumption of laches arises if the patentee had actual or constructive knowledge of alleged infringing activity for six or more years before filing suit. Id. Defendants’ argued, and Judge Stark agreed, that there was such a presumption here because St. Clair had constructive knowledge of “activities infringing the Fung patents” no later than October 2002, but did not file suit until May 15, 2009. Id. Specifically, Judge Stark found that:

The evidence presented by Defendants establishes that St. Clair, [its co-owner, and the patents’ inventor], were aware of the existence of products embodying “technology similar to that for which [the patentee] holds a patent and [which] uses that similar technology to accomplish a similar objective.” By its failure to act, despite this knowledge, St. Clair “shirk[ ed]” its “duty to examine the product or device more closely to ascertain whether it infringes … on peril of triggering the laches period and perhaps ultimately losing [its] right to
recover damages for the infringement.”

Id. at 6. (quoting Crown Packaging Tech. , Inc. v. Rexam Beverage Can Co., 679 F. Supp. 2d 512, 520 n.42 (D. Del. 2010).

To rebut the presumtion of laches, St. Clair argued that the trigger date for laches was the date of the first accused infringement, which was August 2004, and that the pre-2004 accused products were immaterial “because a new laches period began as a result of design changes implemented in the newer accused infringing products.” Id. at 7. Judge Stark rejected this argument because “St. Clair cannot avoid a laches defense by narrowing its infringement contentions, especially given that in 2002 St. Clair conducted an analysis of pre-2004 products.” Id. at 8.

Judge Stark also granted-in-part St. Clair’s motion for summary judgment dismissing certain bases for Defendants’ inequitable conduct defenses. Id. at 8. Defendants’ defenses were based on the named inventor misrepresenting that he was the sole inventor, the withholding of material prior art during prosecution, and the applicant’s misrepresenting its entitlement to small entity status. Id. Judge Stark granted St. Clair’s motion as to one prior art reference that was allegedly withheld during prosecution. Id. at 11. Specifically, Judge Stark found that Defendants’ failed to establish that the applicant or its attorneys knew of the specific reference or intentionally withheld it from the PTO. Id. Judge Stark also found that Defendants failed to raise a triable issue of fact as to the applicant’s intent to deceive the PTO regarding small entity status. Id. at 12-13.

Continue reading

Published on:

Magistrate Judge Mary Pat Thynge recently issued a report and recommendation addressing cross-motions for summary judgment, as well as the plaintiff’s motion to strike portions of the defendant’s reply brief in support of its summary judgment motion. Cornell Univ., et al. v. Illumina, Inc., C.A. No. 10-433-LPS-MPT (D. Del. June 25, 2013). Judge Thynge agreed with the plaintiff that the defendant’s “reply brief relie[d] on inadmissible evidence from the parties’ settlement negotiations[,]” and granted the motion to strike such evidence from the reply brief. Id. at 5. Although the defendant argued that the plaintiff’s own motion and opening brief opened the door to such evidence, Judge Thynge explained, “[e]ven if plaintiffs ‘opened the door,’ that door should remain closed where plaintiffs’ references to the settlement agreement were inappropriate, and neither parties’ evidence would be admissible.” Id. at 6. Judge Thynge agreed in part with the plaintiff’s additional argument that portions of the defendant’s reply brief should be stricken because they raised new arguments and facts not appearing in the defendant’s opening brief. Id. at 9-15.

Judge Thynge then considered the parties’ cross-motions for summary judgment. Construing a settlement agreement under California law, as well as issues of successor liability under Delaware corporate law, the Court agreed with the defendant that two of the plaintiffs, Life Technologies and Applied Biosystems, were bound by a covenant not to sue entered into by the defendant and Applera Corporation, because they were “affiliates” or “successors” of Applera under the agreement. Id. at 26. But the Court agreed with plaintiff Cornell University’s argument that it was not bound by the covenant not to sue because it was not an affiliate or successor of the settling party, which the defendant did not contest in briefing. Id. at 26.

Continue reading

Published on:

Judge Richard G. Andrews recently rejected a defendant’s motion to redact certain portions of an oral argument transcript relating to alleged inequitable conduct. St. Jude Medical Cardiology Division Inc., et al. v. Volcano Corp., C.A. No. 12-441-RGA (D. Del. June 17, 2013). Judge Andrews noted that the defendant had not provided any argument as to why the information should be redacted, other than a bare claim that it was highly confidential, and in denying the motion explained: “[n]o harm is alleged, and, indeed, it is apparent to me that there could not be any harm from the disclosure of specific allegations of inequitable conduct years and years ago that would justify sealing the transcript.”

Continue reading

Published on:

In a recent memorandum opinion, Judge Sue L. Robinson considered plaintiffs’ motion for partial summary judgment on infringement and defendants’ cross-motion for non-infringement, in addition to defendants’ motion for summary judgment of invaldity and plaintiffs’ cross-motion for partial summary judgment of validity. INVISTA North America S.a.r.l. et al. v. M&G USA Corporation, et al., C.A. No. 11-1007-SLR-CJB (D. Del. June 25, 2013). Plaintiffs are asserting three patents—U.S. Patent Nos. 7,919,159 (“the ’159 patent”); 7,943,216 (“the ’216 patent”); and 7,879,930 (“the ’930 patent”)—each related to “plastic materials with applications in packaging for oxygen-sensitive foods.” Id. at 1. The ’216 and ’159 patents share a common specification and relate specifically to compositions (and containers and articles derived therefrom), which are alleged to possess strong gas barrier properties while yielding comparatively small amounts of yellowness and haze that traditionally accompanied compositions with similar properties. See id. at 2-4. The ’930 patent relates to “the use of certain colorants that do not completely deactivate” the transition metal catalyst in compositions such as those claimed in the ’216 and ’159 patents. See id. at 5.

With respect to the ’216 and ’159 patents, Judge Robinson granted summary judgment of no direct infringement. Id. at 19. The Court had construed the term “composition” as used in those patents to mean “a blend that contains the specified ingredients at any time from the moment the ingredients are mixed together.” Id. at 17. It was undisputed that defendants’ accused products—the PoliProtect products (“PoliProtect”)—are “manufactured as pellets” and have components that are separated into different layers. Id. at 17. Because the components were not “mixed together in a blend,” Judge Robinson found that PoliProtect did not practice the “composition” limitation. Id. at 18-19.

However, turning to indirect infringement of the ’216 patent, Judge Robinson found that the “only reasonable inference from the evidence of record is that [defendants’] customers mix the components of the pellets into blends to make their desired articles,” and “thereby necessarily practice the ‘composition’ limitation.” Id. at 20-21. Judge Robinson also found that, with the exception of one claim, PoliProtect practiced the remaining limitations of the seven asserted claims from the ’216 patent. See id. at 21-26. Further, as Judge Robinson noted, defendants “had knowledge of the ’216 patent at least from the filing of [the] lawsuit.” Id. at 26. Addressing contributory infringement, Judge Robinson found that defendants offered “no evidence to rebut [plaintiffs’] arguments that the PoliProtect products are not a staple of commerce that are suitable for noninfringing uses.” Id. at 27. With respect to induced infringement, Judge Robinson first noted that plaintiffs “established on the summary judgment record that the PoliProtect products have no substantial noninfringing uses.” Id. at 28. Moreover, Judge Robinson explained that “it is entirely appropriate to presume that one who sells a product containing a component that has no substantial noninfringing use in that product does so with intent that the component will be used to infringe.” Id. at 29 (quoting Ricoh Co. v. Quanta Computer Inc., 550 F.3d 1325, 1340, 1338 (Fed. Cir. 2008)). Judge Robinson therefore granted summary judgment of contributory and induced infringement for six of the seven asserted claims of the ’216 patent.

Judge Robinson, however, denied plaintiffs’ motion for summary judgment with respect to indirect infringement of the ’159 patent. Id. at 31. Plaintiffs argued PoliProtect literally infringed the ’159 patent because PoliProtect’s LiSIPA-containing copolyester meets both the “polyester” and “ionic compatibilizer” limitations. Id. at 29. Judge Robinson did note that “the doctrine of equivalents may be applicable even when its application would vitiate the requirement that two components be separate elements.” Id. at 30. Judge Robinson concluded, however, that defendants raised genuine issues of material fact regarding the “polyester” limitation under the doctrine of equivalents, precluding the entry of summary judgment. Id. at 30-31.

With respect to the ’930 patent, the parties summary judgment motions addressed only indirect infringement. See id. at 31. Judge Robinson found that plaintiffs offered evidence of infringement of the limitations at issue and thus created genuine issues of material fact, precluding the entry of summary judgment of no indirect infringement. See id. at 31-35.

Turning to the validity motions, Judge Robinson noted that defendants argued that the asserted claims of the ’159 and ’216 patents are invalid as obvious and for failure to comply with 35 U.S.C. § 112’s written description and enablement requirements. Id. at 34. With respect to obviousness, defendants asserted that the ’159 and ’216 patents are obvious in light of two prior art references. Id. at 35. As Judge Robinson explained, however, defendants’ expert “never addressed the combination of the . . . references in his expert reports,” and the argument was made for the first time in defendants’ reply summary judgment brief for invalidity. Id. at 35-36. Although defendants attempted to support the new theory with an expert declaration attached to the reply brief, the new opinions in the declaration were struck in a separate order as untimely and prejudicial. Id. at 36. Without expert testimony addressing the combination of the two references, Judge Robinson granted plaintiffs’ motion for partial summary judgment of validity on this ground. Id. at 36.

With respect to a lack of enablement, defendants first argued that the ’159 and ’216 patents recite a “metal sulfonate salt,” but did not provide any “meaningful disclosures, teachings, or supportive data” related to those salts, with the exceptions of sodium and zinc. Id. at 37. Judge Robinson found, however, that plaintiffs’ expert presented evidence that the patent specification “enables one of ordinary skill in the art to make and use the claimed invention.” Id. at 39. Thus, there remained an issue of material fact, and Judge Robinson denied entering summary judgment of lack of enablement on this ground. Id. at 39. Defendants had also set forth several other similar invalidity arguments under § 112 related to the ’159 and ’216 patents, which were all premised on a similar theory that the scope of the asserted claims were “substantially broader than the small number of examples provided.” Id. at 42-43. Once again, Judge Robinson found that entry of summary judgment for invaldity on these grounds was precluded “[i]n light of the conflicting expert testimony” regarding whether the examples provided in the specification enable a person of ordinary skill in the art to make the claimed invention. Id. at 43.

Defendant also argued that plaintiffs’ specification failed to disclose the “importance of sodium acetate . . . in controlling yellowness in the compositions of the ’159 and ’216 patents,” and that the patents were therefore nonenabling and lacked a sufficient written description. Id. at 39. Judge Robinson explained, however, that “[t]he enablement and written description requirements are both based on the invention as claimed,” and “sodium acetate is not a limitation in any of the asserted claims and is not mentioned in the specification.” Id. at 40-41. Judge Robinson therefore granted plaintiffs’ partial motion for summary judgment of validity on this ground. Id. at 42.

With respect to the ’930 patent, defendants moved for summary judgment of invalidity based on an insufficient written description, non-enablement, and indefiniteness. Id. at 43. Judge Robinson denied the parties’ motions for summary judgment on these issues in light of conflicting expert testimony. See id. at 43-45.

Continue reading

Published on:

Judge Robinson recently considered defendant Daxtra Technologies Limited’s (“Daxtra UK”)’ motion to dismiss plaintiff’s complaint for lack of personal jurisdiction. Kenexa Brassring, Inc. v. Akken, Inc., et al., C.A. No. 12-660-SLR (D. Del. June 25, 2013). Daxtra UK is a Scottish company with places of business in the United Kingdom. Id. at 2. Defendant Daxtra Technologies Inc. (“Daxtra US”) is a Delaware corporation and a subsidiary of Daxtra UK formed “for the purpose of marketing and selling software and providing support in the United States.” Id.

To establish personal jurisdiction, the Court must determine whether there exists a basis for jurisdiction under Delaware’s long arm statute, 10 Del C. sec. 3104(c)(1)-(4), and if so, whether the the defendant “purposefully availed” itself of the forum state such that it should reasonably anticipate being sued there. Id. at 4.

First, Kenexa argued that personal jurisdiction was appropriate “through direct contacts between Daxtra UK and the United States, including Delaware. Id. at 5. Kenexa pointed to the sale of a potentially infringing product in the United States that had been licensed to a U.S. company. Id. Judge Robinson found that this ground was not sufficient because it was unclear whether Kenexa would accuse that product of infringing the patents-in-suit. Id. Next, Kenexa asserted that personal jurisdiction was appropriate because Daxtra UK used its website to solicit job applicants in the U.S. Id. at 5-6. Judge Robinson rejected this ground because “Kenexa ha[d] not indicated any particular instance in which a U.S. applicant interacted with the website[.] Id. at 6.

Second, Kenexa argued that personal jurisdiction existed over Daxtra UK through contacts of its subsidiary, Daxtra US, pursuant to agency theory. Id. “Under agency theory, the court may attribute the actions of a subsidiary company to its parent where the subsidiary acts on the parent’s behalf or at the parent’s direction.” Id. at 6-7 (quotations omitted). Four factors are relevant to the court’s determination:

(1) the extent of overlap of officers and directors; (2) methods of
financing; (3) the division of responsibility for day-to-day management; and (4) the
process by which each corporation obtains its business.

Id. at 7 (quotations omitted).

Daxtra UK conceded that the officers and directors of Daxtra UK and Daxtra US overlapped completely. Id. Daxtra UK argued, however, that there was no overlap regarding the financing of the entities, and Judge Robinson found that Kenexa had not alleged otherwise, with reasonable particularity. Id. at 7-8. Regarding the third factor, Kenexa argued that Daxtra UK’s CTO was assigned to Daxtra US, which was “indicative of his playing a larger role in the day-to-day management” of Daxtra US. Id. at 8. Daxtra UK responded that the CTO’s re-assignment was temporary so that he could help “make sales calls and grow the business in the United States[.]” Id. Regarding the last factor, the court found that at least some of Daxtra US’s business was obtained from Daxtra UK. Id. at 8-9.

In light of the foregoing, Judge Robinson concluded that “plaintiff ha[d] presented factual allegations that suggeste[d] with reasonable particularity the possible existence of the requisite contacts between Daxtra UK and Delaware.” Id. at 9. Therefore, the Court permitted Kenexa to take jurisdictional discovery and denied Daxtra UK’s motion, without prejudice to renew one month after the close of such discovery. Id. at 9-10.

Continue reading

Contact Information