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HEARTSTATION INC. v. J.L. INDUSTRIES INC.

April 3, 2003

HEARTSTATION, INC., AN ILLINOIS CORPORATION, PLAINTIFF,
v.
J.L. INDUSTRIES, INC., A MINNESOTA CORPORATION; POTTER-ROEMER A CALIFORNIA CORPORATION; AND DATA METALCRAFT, INC., A MINNESOTA CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Ronald A. Guzman, United States Judge

MEMORANDUM OPINION AND ORDER

Pending is Defendant Data Metalcraft, Inc.'s motion to dismiss this lawsuit for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(6), or, in the alternative, for improper venue pursuant to Fed.R.Civ.P. 12(b)(3). For the reasons set forth below, the motion to dismiss for lack of personal jurisdiction is granted. Because the Court grants Defendant's motion to dismiss for lack of personal jurisdiction, it need not address the issue of improper venue.

BACKGROUND FACTS

Plaintiff Heartstation, Inc., ("Heartstation") is an Illinois corporation with assigned rights to U.S. Patent No. 6,301,501 (501 patent), entitled "Protective Defibrillator Storage Device with Alarm Signal." (Compl. at 2). Heartstation has brought a patent infringement suit against J.L. Industries, Inc., a Minnesota corporation, Potter-Roemer, a California corporation, and Data Metalcraft, Inc., ("Data Metalcraft"), a Minnesota corporation, for allegedly infringing its `501 patent. Data Metalcraft is a contract precision sheet metal fabricator of housings and other components, and it primarily serves as an original equipment manufacturer ("OEM") that supplies products made to their customer's unique specifications. (O'Brien Aff. at 1). Data Metalcraft currently is an OEM supplier of external defibrillator housing devices for storing automatic external defibrillator devices. (O'Brien Aff. at 2).

In support of its motion to dismiss, Data Metalcraft submitted a sworn affidavit from its president, Gene G. O'Brien. In the affidavit, O'Brien asserts that Data Metalcraft has a single office in Chaska, Minnesota with forty-seven employees. He further attests to the following: Data Metalcraft has not directed, engaged in, or conducted business in the State of Illinois; Data Metalcraft does not market, advertise, or sell its own product line; Data Metalcraft does not own or lease property in Illinois, or maintain employees or agents, or solicit sales of any of its products in Illinois, including the allegedly infringing devices; Data Metalcraft does not direct commercial or advertising activities at Illinois; Data Metalcraft serves primarily as a supplier of parts to other manufacturers, who then incorporate and utilize the parts in manufacturing and selling their own products; Data Metalcraft directs roughly 88% of its sales of the allegedly infringing devices to a local Minnesota corporation, with the remaining 12% of sales made to companies in Florida, New York, Ohio, Massachusetts, California, Missouri, and Oregon; none of Data Metalcraft's sales or advertising are directed at Illinois; Data Metalcraft does not own or maintain an Internet website for any purpose, advertise at trade shows, advertise in industry trade publications, send out national mass-mailings, or negotiate into licensing agreements with any Illinois companies (O'Brien Aff. at 2-4).

Plaintiff Heartstation, in its Response to Data Metalcraft's Motion to Dismiss, contends that limited facts exist that suggest that Data Metalcraft may be subject to the jurisdiction of this Court. Heartstation asserts that Data Metalcraft sells the allegedly infringing storage devices to eight corporations, including Survivalink, a Minnesota corporation, and other "unnamed" corporations in other states. (Pltf's Resp. at 2). Heartstation states that Survivalink sells the devices over the Internet, and then alleges that SaraMed, a New York corporation, is likely another corporation who purchases the devices from Data Metalcraft and then sells the devices over the Internet. (Pltf. Resp. at 3). Heartstation concludes that it is unable to determine whether the other corporations Data Metalcraft does business with actually sell the devices over the Internet or in Illinois; it seeks the opportunity to conduct further discovery to determine whether these corporations do just that. (Pltf. Resp. at 3, 5).

DISCUSSION

Standard of Review

In patent infringement cases, Federal Circuit law is controlling, even in determining the question of whether to exercise personal jurisdiction over out-of-state defendants. Hildebrand v. Steck Mfg. Co., 279 F.3d 1351, 1354 (Fed. Cir. 2002). However, deference is given to the state's highest court in determining whether a defendant is amenable to process in the forum state. LSI Indus. Inc. v. Hubbell Lighting, 232 F.3d 1369, 1371 (Fed. Cir. 2000). In order to survive a motion to dismiss for lack of personal jurisdiction, plaintiffs carry the burden of establishing a prima facie case of personal jurisdiction over the defendants. Euromarket Designs, Inc. v. Crate & Barrel Ltd., 96 F. Supp.2d 824, 833 (N.D. Ill. 2000). When deciding whether the plaintiff has made the necessary showing, a court can look to the affidavits and exhibits submitted by each party. Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987).

A court may exercise personal jurisdiction over a defendant where the defendant has sufficient minimum contacts with the forum state. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980); Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945). The minimum contacts can establish two types of jurisdiction: general or specific. The defendant is subject to general jurisdiction when it is either domiciled in the forum state, see Euromarket Designs, 96 F. Supp.2d at 833, or "when the defendant maintains "continuous' and systematic' contacts with the forum state even when the cause of action has no relation to those contacts." LSI Indus., 232 F.3d at 1375, citing Helicopteros Nacionales de Columbia S.A. v. Hall, 466 U.S. 408, 414-15 (1984). Specific jurisdiction `arises out of' or "relates to" the cause of action even if the defendant's contacts with the forum state have been "isolated and sporadic." Id. "Random," "fortuitous," or "attenuated" contacts, however, will not substantiate a finding of minimum contacts between a forum state and an out-of-state defendant Red Wing Shoe Co., Inc. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1359 (Fed. Cir. 1998).

A. GENERAL PERSONAL JURISDICTION

A defendant domiciled in a forum state or who has activities that are "substantial" or "continuous and systematic" is subject to the general jurisdiction of that state, Helicopteros Nacionales de Columbia, S.A. v. Hall, 46 U.S. 408, 414-15 (1984). The Court sees no contacts between Data Metalcraft and Illinois that could potentially be considered substantial, continuous, or systematic. Heartstation asserts that Data Metalcraft sells its allegedly infringing devices to Survivalink, a Minnesota corporation, who then sells the devices in a continuous manner on an interactive website. Though Heartstation makes its case for general jurisdiction by asserting that marketing a product through a distributor who has agreed to serve as a distributor in a forum state subjects a defendant to personal jurisdiction in that state, (Pltf. Resp. at 3, citing Asahi Metal Indus. Co. v. Superior Court of California, 480 U.S. 102, 112 (1987)), Heartstation concedes that Data Metalcraft is only subject to the personal jurisdiction of this Court if there was a distribution agreement between Data Metalcraft and Survivalink specifically directed at distribution to Illinois consumers. This would not automatically create personal jurisdiction, as Heartstation suggests. Rather, such an agreement would qualify as "additional conduct indicating an intent or purpose to serve the market in the forum state." Asahi Metal, 480 U.S. at 112. However, "a defendant's awareness that the stream of commerce may or will sweep the product into the forum State does not convert the mere act of placing the product into the stream into an act purposefully directed toward the forum State." Id. Heartstation has not presented any factual basis evidencing a distribution agreement between Data Metalcraft and Survivalink that directs purposeful commercial activities at Illinois; thus, the possibility that one of the allegedly infringing devices has made its way to Illinois does not tie Data Metalcraft to the jurisdiction of this Court.

B. SPECIFIC PERSONAL JURISDICTION

To determine whether specific personal jurisdiction exists, the Court must determine whether the defendant has "purposefully established minimum contacts within the forum state" and whether those contacts would make an assertion of personal jurisdiction fair and reasonable under the circumstances. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985). The defendant must have "purposefully availed" itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws such that they should "reasonably anticipate being haled into court there." Asahi Metal, 480 U.S. at 109. In federal cases, the plaintiff must satisfy two elements for specific jurisdiction: (1) the plaintiff must show that the defendant is amenable to service of process; and (2) the plaintiff must establish that haling the defendant into court is consistent with the Fifth ...


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