Published on:

Judge Robinson grants renewed motion to dismiss for lack of personal jurisdiction

By

In DNA Genotek Inc. v. Spectrum DNA, et al., C.A. No. 15-661-SLR (D. Del. Dec. 14, 2016), Judge Sue L. Robinson granted Defendants’ renewed motion to dismiss due to lack of personal jurisdiction, having ordered jurisdictional discovery when denying the first motion.

Defendants manufactured a saliva collection device for a third-party DNA testing service (“Ancestry”) that had sold some kits to Delaware customers. Various agreements between Defendants and Ancestry provided that Ancestry owned the intellectual property rights of the accused product, Ancestry was obligated to indemnify Defendants for patent infringement, Defendants were required to manufacture their product in accordance with the third party’s specifications, and Defendants paid Ancestry a fixed price per kit that they could resell to third parties, but Defendants had not resold such kits into Delaware.

Under these facts, the Court concluded that there was no personal jurisdiction under Delaware’s long-arm statute under a theory of dual jurisdiction. The Court distinguished other Delaware case law where dual jurisdiction was found, where a “defendant sold a product directly to national resellers who added nothing significant to the product before selling it through well-established sales channels, often with physical locations in Delaware, to consumers or end-users.” Id. at 7. Here, instead, Defendants had “no control over what happens to the accused products once shipped to Ancestry” where Defendants’ device was made “per Ancestry’s specifications, using intellectual property and tooling owned by Ancestry, in a quantity sufficient to meet Ancestry’s estimated product forecast, and then [sold] . . . exclusively to Ancestry. . . . If [Defendants want] to sell the accused products to someone other than Ancestry, it must first purchase the accused products it manufactures for Ancestry from Ancestry.” Id. at 7-8. There were no other facts present that exhibited intent to serve the Delaware market “based on national distribution” as there had been in other Delaware cases finding jurisdiction. See id. at 8 n.7. Furthermore, “[t]he facts supporting intent are even more attenuated if the court takes into account that there is no evidence the accused product has reached Delaware except as a part of Ancestry’s testing service, making [Defendants’] role analogous to that of a component manufacturer. . . . in cases finding dual jurisdiction over a component manufacturer, something more than the mere presence of millions of the accused products in the United States is needed to demonstrate intent.” Id. at 9.

The Court also rejected Plaintiff’s agency theory of jurisdiction based on Defendants’ relationship with Ancestry, where the companies were entirely separate and there was no evidence that Defendants controlled Ancestry. Id. at 12-13.

Having concluded that the Delaware long-arm statute was not satisfied, the Court did not address the constitutional prong of the jurisdiction test, and granted the motion to dismiss.

DNA Genotek Inc. v. Spectrum DNA, et al., C.A. No. 15-661-SLR (D. Del. Dec. 14, 2016)

Contact Information