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Attendance at single trade show to display infringing product sufficient for personal jurisdiciton

October 20, 2009
Post by Blog Staff

In a case of first impression for the Federal Circuit, the court addressed the issue of how to apply Federal Rule 4(k)(2) (the Federal Court's long-arm statute) to a defendant. The court, in agreement with several other circuits, that a Rule 4(k)(2) analysis is appropriate when (1) the plaintiff's claim arises under federal law, (2) the defendant is not amenable to jurisdiction in any individual state, and (3) the exercise of jurisdiction comports with due process.

Applying this test to the facts of the case, the court reversed the district court's dismissal of the case for lack of personal jurisdiction. The court held the fact that representatives of the defendant showed the accused products at a trade show in California was sufficient for specific personal jurisdiction. The court held attendance at the trade show was sufficient for the defendant to purposefully avail itself of the privilege of conducting activities in the United States, and that the infringement claim arose out of these contacts, even though the defendant's representatives took steps to ensure it was clear the allegedly infringing devices were not for sale in the United States.

The court left the most interesting questions for future cases, including whether bringing the allegedly infringing devices to the trade show constitutes an infringing act of importation under § 271, whether the plaintiff or the defendant has the burden to show the defendant is not subject to the jurisdiction of any state under the second step of the Rule 4(k)(2) analysis (and what sufficies as such a showing), and whether a district court must undertake a Rule 4(k)(1) analysis before a 4(k)(2) analysis.

Synthes is a manufacturer of medical equipment and owner of U.S. Patent Number 7,128,744 ("the '744 patent"), directed to locking bone plates for immobilization of bones during fracture healing. G.M. Dos Reis Jr. Ind. Com. de Equip. Medico ("GMReis") is a Brazilian corporation having its headquarters in Brazil. GMReis manufactures medical equipment, including (as relevant here) locking bone plates, but does not have FDA approval for use of its locking bone plates in human patients in the United States.

In 2007, representatives of GMReis attended the American Association of Orthopaedic Surgeons Annual Meeting ("AAOS Meeting") in San Diego, California. They brought with them bone plates which were on display. Synthes believed the bone plates infringed the '744 patent, and served a summons and complaint on the representatives of GMReis while they were at the trade show alleging infringement under 35 U.S.C. § 271. GMReis moved to dismiss for lack of personal jurisdiction, as it did not have "continuous and systematic" contacts with California (general jurisdiction), nor did it engage in any acts constituting patent infringement (specific jurisdiction) in California. GMReis asserted that bringing a potentially infringing product into the United States for purposes of display at a trade show did not constitute infringement under § 271(a), and there had been no offer to sell the infringing goods. GMReis' motion was granted after jurisdictional discovery.

The Federal Circuit reversed. The relevant Rule is Federal Rule 4(k)(2), which acts as a long-arm statute for federal courts. The Rule was promulgated to avoid a situation where a defendant's contacts with any one state is insufficient to establish personal jurisdiction, but actions in the United States as a whole are sufficient. When Rule 4(k)(2) applies was an issue of first impression for the Federal Circuit. The court adopted the analysis from several other circuit courts, and held Rule 4(k)(2) applies to provide personal jurisdiction when (1) the plaintiff's claim arises under federal law, (2) the defendant is not amenable to jurisdiction in any individual state, and (3) the exercise of jurisdiction comports with due process.

Applying this analysis to the facts of the case, the court relied on GMReis' statement that it was not subject to personal jurisdiction in any one state, thereby eliminating the need to determine whether the plaintiff or defendant bears the burden of establishing this fact (an issue the various Circuit Courts have wrestled with). The court then examined GMReis' contacts with the United States and determined that its contacts were insufficient for general jurisdiction, but sufficient for specific jurisdiction. The court applied its test from Elecs. for Imaging, Inc. v. Coyle, where the Federal Circuit explained its three-factor test for specific jurisdiction. Specifically, specific personal jurisdiction exists when (1) the defendant purposefully directed its activities at reisdents of the forum, (2) the claim arises out of or relates to the defendant's activities with the forum, and (3) assertion of personal jurisdiction is reasonable and fair.

Here, the defendants choice to attend the trade show in the United States was sufficient for the defendant to purposefully avail itself of the United States. The fact the GMReis representatives brought the accused devices to the trade show was sufficient for the claim to arise out of these activities. Finally, this was not "one of those rare cases" where the concepts of fair play and substantial justice defeated personal jurisdiction. Accordingly, the court reversed the district court's decision and remanded the case to the United States District Court for the Southern District of California to proceed.

To read the full decision in Synthes (U.S.A.) v. G.M. Dos Reis Jr. Ind. Com. de Equip. Medico, click here.


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