Opinion
Civil No. 02-876-HA
March 21, 2003
Alexander C. Johnson, Jr., Marger, Johnson McCollom, Portland, OR, for Plaintiff.
Gary G. Norris, Law Office of Gary G. Norris, McMinnville, OR, David Fink, Fink Johnson, Houston, TX, for Defendant.
OPINION and ORDER
Defendant Peng Tan moves to dismiss this action for lack of personal jurisdiction. For the following reasons, the motion is granted.
BACKGROUND
Plaintiff — an Oregon company — filed this action for declaratory judgment, alleging that defendant's patent is invalid and unenforceable. Defendant moves to dismiss for lack of personal jurisdiction, pointing out that defendant resides in California, has no offices in Oregon, has no bank accounts in Oregon, owns no property in Oregon, and does not conduct any business in Oregon.
Plaintiff believes jurisdiction is proper, alleging the following facts: Defendant traveled to Oregon in 1983 when he was an employee of Hewlett-Packard to conduct a seminar on the technology underlying the patent. Defendant has sent cease and desist letters coupled with offers to negotiate licenses to plaintiff and to Lattice Semiconductor Corporation, another Oregon company. Defendant also has a licensing agreement with Intel, which has facilities in Oregon.
Finally, defendant has solicited two California companies with test facilities in Oregon to license the patent's technology.
Defendant has sent four letters to plaintiff from California to Oregon, each accusing plaintiff of infringement and offering to negotiate a license. In addition, defendant and his attorney initiated a phone call with plaintiff, stating that the infringement matter was not going to go away and that other companies that had tried to litigate the validity of defendant's patent had, in the end, settled for a license.
STANDARDS
In patent cases, the law of the Federal Circuit governs the issue of personal jurisdiction. Deprenyl Animal Health, Inc. v. Univ. of Toronto Innovations Found., 297 F.3d 1343, 1348 (Fed. Cir. 2002). First, the court determines whether a forum state's long-arm statute permits service of process, and second, whether the assertion of personal jurisdiction satisfies due process. Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1359 (Fed. Cir. 2001). Oregon's long-arm statute permits the exercise of personal jurisdiction to the extent the U.S. Constitution permits. Freeman v. Duffy, 983 P.2d 533, 534 (Or. 1999). Therefore, the court considers only whether the exercise of personal jurisdiction over defendant would satisfy federal due process.
The relevant inquiry is whether the defendant has certain minimum contacts with the forum state so that maintaining a suit against him "does not offend traditional notions of fair play and substantial justice." Quill Corp. v. North Dakota By and Through Heitkamp, 504 U.S. 298, 307 (1992) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945)). The Federal Circuit has a three part test to determine whether the exercise of personal jurisdiction over the defendant would satisfy due process:
(1) whether the defendant "purposefully directed" its activities at residents of the forum; (2) whether the claim "arises out of or relates to" the defendant's activities in the forum; and (3) whether assertion of personal jurisdiction is "reasonable and fair."
Inamed, 249 F.3d at 1360 (quoting Akro Corp. v. Luker, 45 F.3d 1541, 1545 (Fed. Cir. 1995)).
ANALYSIS
Addressing the first prong of the Federal Circuit's test, it is clear that defendant purposefully directed his activities toward at least two residents of Oregon. On the evidence before the court, he wrote cease and desist letters to both plaintiff and Lattice Semiconductor, and he initiated a phone call to plaintiff to persuade plaintiff to purchase a license. Indeed, plaintiff argues that defendant's business consists solely of contacting and writing letters to high-tech companies across the nation threatening infringement actions, negotiating licenses, and collecting licensing fees. Plaintiff asserts that the process of writing cease and desist letters constitutes defendant's "business", and he writes them with full awareness of the possibility of future litigation.
Assuming that this is true, however, it is well-established that the Federal Circuit Court does not consider cease and desist letters alone sufficient to satisfy the demands of due process. See Deprenyl Animal Health, Inc., 297 F.3d at 1351. The Federal Circuit explained, "Principles of fair play and substantial justice afford a patentee sufficient latitude to inform others of its patent rights without subjecting itself to jurisdiction in a foreign forum." Red Wing Shoe Co., Inc. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1360-61 (Fed. Cir. 1998). While the court articulated this rule when considering a defendant whose business consisted of more than the enforcement of his or her patent rights, there is no basis for distinguishing defendant's activities from prevailing Federal Circuit precedent. Accordingly, the court must examine defendant's other contacts with Oregon to determine whether they can be considered activities purposefully directed at Oregon residents.
Plaintiff's only other contacts with Oregon consist of a licensing agreement with Intel, a company that does business in Oregon, and a trip to Oregon as an employee of Hewlett-Packard in 1983, ostensively to speak on the subject matter of the patent. The court does not consider defendant's business with Intel to be activities purposefully directed at the residents of Oregon.
The Federal Circuit is clear that doing business with a company that does business in the forum state is not the same as actually doing business in that state. Red Wing, 148 F.3d. at 1361. In addition, one trip to Oregon twenty years ago at the behest of an employer fails to qualify as an activity "purposefully directed" at the residents of Oregon. Akro Corp., 45 F.3d at 1545. It is unnecessary to consider the second and the third prongs of the Federal Circuit's test. Defendant's only activities purposefully directed at the residents of Oregon are his cease and desist letters and a follow-up phone call to plaintiff. Without more, the exercise of jurisdiction fails to satisfy the demands of due process.
CONCLUSION
Defendants' motion to dismiss for lack of personal jurisdiction (Doc. #12) is GRANTED. Plaintiff's motion for leave to file a surreply (Doc. #20) is DENIED.
IT IS SO ORDERED.