Multi Tech v . Forchheim 05-CV-403-SM 02/07/07
UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Multi Technology
Industrial, LLC,
Plaintiff
v. Civil N o . 05-cv-403-SM
Opinion N o . 2007 DNH 015
Huhtamaki Forchheim
f/k/a 4P Folie Forchheim,
Defendant
O R D E R
Multi Technology Industrial, L L C (“MTI”) brought suit
seeking a declaration that it is not infringing a patent held by
the defendant, Huhtamaki Forchheim.1 See 28 U . S . C . § 2201.
Huhtamaki moves to dismiss, arguing that the court lacks personal
jurisdiction over it and that venue in this district is improper.
See F E D . R . C I V . P . 12(b)(2) and 12(b)(3). M T I objects.
STANDARD OF REVIEW
“The issue of personal jurisdiction in a declaratory action
for non-infringement is ‘intimately related to patent law’ and
1
The defendant’s correct name is unclear. Plaintiff claims
that correspondence it received from the defendant was from
Huhtamaki Forchheim, while defendant asserts that its legal name
is Huhtamaki Deutschland GmbH & C o . KG. Because neither party
believes the distinction is relevant to the present motion, the
court refers to the defendant in this case as “Forchheim.”
thus governed by Federal Circuit law regarding due process.”
Breckenridge Pharm., Inc. v . Metabolite Labs., Inc., 444 F.3d
1356, 1361 (Fed. Cir. 2006) (quoting Silent Drive, Inc. v . Strong
Indus., Inc.,
356 F.3d 1192, 1201 (Fed. Cir. 2003)). When “the
parties have not conducted discovery, the plaintiff need[] ‘only
[ ] make a prima facie showing’ that the defendants [are] subject
to personal jurisdiction.” Silent Drive, Inc. v . Strong Indus.,
326 F.3d 1194, 1201 (Fed. Cir. 2003) (quoting Deprenyl Animal
Health, Inc. v . Univ. of Toronto Innovations Found.,
297 F.3d
1343, 1347 (Fed. Cir. 2002)) (alterations in original).
BACKGROUND
The relevant facts, as alleged in the complaint (document
n o . 1 ) are as follows.
MTI, a Delaware limited liability company with its principal
place of business in Brentwood, New Hampshire, “designs,
develops, and manufactures release liners for use in the
construction, automotive and electronics industries.” Forchheim
is a German corporation that manufactures plastic films,
coatings, and silicones.
2
In April 2005, MTI received a letter from Forchheim, through
its counsel, alleging infringement of U.S. Patent N o . 5,143,676
(the “‘676 patent”). MTI’s counsel responded, which resulted in
another letter from Forchheim in October 2005 threatening patent
infringement litigation. This suit followed.
DISCUSSION
“There are two kinds of personal jurisdiction--specific and
general.” Trintec Indus. v . Pedre Promotional Prods., 395 F.3d
1275, 1279 (Fed. Cir. 2005). MTI asserts that it has met its
prima facie burden of showing that Forchheim is subject to
personal jurisdiction under either theory.
I. General Personal Jurisdiction
General personal jurisdiction “requires that the defendant
have ‘continuous and systematic’ contacts with the forum state
and confers personal jurisdiction even when the cause of action
has no relationship with those contacts.” Silent Drive, 326
F.3d. at 1200 (quoting Helicopteros Nacionales de Colombia, S.A.
v . Hall,
466 U.S. 4 0 8 , 414-16 (1984)).
MTI argues that Forchheim is subject to general personal
jurisdiction in New Hampshire because Huhtamaki Packaging, Inc.
3
(“HPI”), a company that shares common ownership with Forchheim,
is registered to do business in the state. The Federal Circuit,
however, has found such relationships, without more, an
insufficient basis upon which to subject a party to general
personal jurisdiction. In Phonometrics, Inc. v . N . Telecom,
Inc., 133 F.3d 1459, 1463 (Fed. Cir. 1998), the Federal Circuit
affirmed a district court ruling finding lack of jurisdiction
over a parent corporation where only its subsidiary operated in
the forum state. Specifically,
the [district] court held that [the parent] established
that it does not control [the subsidiary] and that it
had no offices, employees, or agents in [the forum
state], and neither manufactures nor sells equipment in
[the forum state], nor otherwise conducts business
there, and [the plaintiff] could provide no evidence to
refute these facts.
Here, MTI has failed to show that Forchheim has any offices,
employees, or agents in New Hampshire, or that it otherwise
conducts any business here. To the contrary, the record
indicates that aside from one transaction with M T I , Forchheim has
never sent its products to New Hampshire or solicited business
here, nor does it have any agreements or contracts with New
Hampshire-based entities. (Def.’s Mot. Dismiss, Ex. B (Wilde
Dec.) ¶¶ 2-4.)
4
MTI has proffered evidence that H P I , a corporate relative of
Forchheim, is registered with the New Hampshire Secretary of
State to conduct business here and that HPI has engaged in
business transactions in New Hampshire. There i s , however, a
“‘presumption of corporate separateness that [may] be overcome by
clear evidence.’” Donatelli v . Nat’l Hockey League, 893 F.2d
459, 465 (1st Cir. 1990) (quoting Escude Cruze v . Ortho Pharm.
Corp.,
619 F.2d 9 0 2 , 905 (1st Cir. 1980)) (alteration in
original). In cases where the activity of one separate yet
related corporate entity has conferred jurisdiction on another,
“there is invariably a ‘plus’ factor -- something beyond the
subsidiary’s mere presence within the bosom of the corporate
family,” id. at 465-66, such as an agency relationship or some
showing of control. Id. at 466.
MTI asserts that Forchheim is virtually indistinguishable
from HPI because of the company’s unified “Huhtamaki” brand
identity, and because certain administrative and managerial
functions are centralized and serve all of the company’s
divisions, including Forchheim and HPI.
But MTI has failed to show that aside from sharing a common
name and centralized administrative structure, there is any
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agency relationship between Forchheim and HPI or that Forchheim
is controlled by HPI in any way. In short, MTI has failed to
demonstrate that Forchheim is sufficiently intertwined with HPI
to warrant exercise of general jurisdiction because the evidence
does not show that the two entities share something “‘greater
than that normally associated with common ownership and
directorship.” Donatelli, 893 F.2d at 466 (quoting Hargrave v .
Fibreboard Corp.,
710 F.2d 1154, 1160 (5th Cir. 1983)).
Accordingly, MTI has failed to carry its prima facie burden of
showing that this court may exercise general personal
jurisdiction over Forchheim.
II. Specific Personal Jurisdiction
In contrast to general personal jurisdiction, specific
personal jurisdiction “must be based on activities that ‘arise[]
out of’ or ‘relate[] to’ the cause of action and can exist even
if the defendant’s contacts are ‘isolated and sporadic.’” Silent
Drive, 326 F.3d at 1200 (quoting Burger King Corp. v . Rudzewicz,
417 U.S. 4 7 2 , 472-73 (1985)) (alterations in original).
“Determining whether jurisdiction exists over an out-of-state
defendant involves two inquiries: whether a forum state’s long-
arm statute permits the assertion of jurisdiction and whether the
assertion of personal jurisdiction violates federal due process.”
6
Graphic Controls Corp. v . Utah Med. Prods., Inc., 149 F.3d 1382,
1385 (Fed. Cir. 1998) (footnote omitted). Where, as here, the
“long-arm statute is coextensive with the limits of due process,
the two inquiries collapse into a single inquiry: whether
jurisdiction comports with due process.” Inamed Corp. v . Kuzmak,
249 F.3d 1356, 1360 (Fed. Cir. 2001); see Computac, Inc. v . Dixie
News Co.,
124 N.H. 3 5 0 , 355 (1983) (explaining that New
Hampshire’s long-arm statute is “coextensive with constitutional
limitations”).
The federal due process inquiry requires the nonresident
defendant to have “certain ‘minimum contacts’ with the forum
‘such that the maintenance of the suit does not offend
traditional notions of fair play and substantial justice.’”
Elecs. for Imaging, Inc. v . Coyle, 340 F.3d 1344, 1350 (Fed. Cir.
2003) (quoting Int’l Shoe C o . v . Washington,
326 U.S. 3 1 0 , 316
(1945) (citations omitted). The Federal Circuit has articulated
a three-part test for evaluating minimum contacts: “‘whether (1)
the defendant purposefully directed its activities at residents
of the forum state, (2) the claim arises out of or relates to the
defendant’s activities with the forum state, and (3) assertion of
personal jurisdiction is reasonable and fair.’” Pennington Seed,
7
Inc. v . Produce Exch. N o . 299, 457 F.3d 1334, 1344 (Fed. Cir.
2006) (quoting Coyle,
340 F.3d at 1350).
MTI contends that the cease and desist letters it received
from Forchheim satisfy the first prong of the minimum contacts
inquiry. The Federal Circuit has held, however, that “without
more, such letters are not sufficient to satisfy the requirements
of Due Process in declaratory judgment actions,” Red Wing Shoe
C o . v . Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1360 (Fed.
Cir. 1998), and that “[a] patentee should not subject itself to
personal jurisdiction in a forum solely by informing a party who
happens to be located there of suspected infringement.”
Id. at
1361. Indeed, the court has observed that “the crux of the due
process inquiry should focus first on whether the defendant has
had contact with parties in the forum state beyond the sending of
cease and desist letters or mere attempts to license the patent
at issue.” Brekenridge Pharm. Inc. v . Metabolite Labs. Inc.,
444
F.3d 1356, 1366 (Fed. Cir. 2006).
MTI also argues that Forchheim has had contact with New
Hampshire beyond the sending of cease and desist letters —
contacts sufficient to meet the heightened standard discussed in
Brekenridge. But MTI asserts that those additional contacts
8
consist of Forchheim’s corporate relationship with H P I , an
assertion that fails for the same reasons it failed to justify
the exercise of general personal jurisdiction. Exercising
specific personal jurisdiction over Forchheim on the basis of the
cease and desist letters, without more, would be improper.
MTI points to Forchheim’s corporate web site, which, it
asserts, “is designed to broadcast and offer for sale into the
forum its products and services to customers and prospective
users in the forum with the intent of soliciting and establishing
business relationships in New Hampshire.” (Pl.’s O b j . Mot.
Dismiss 15.) The record discloses, however, that the site is
fairly general in nature and is not specifically directed at New
Hampshire residents. Instead, the site “is available to all
customers throughout the country who have access to the
Internet.” Trintec Indus., 395 F.3d at 1281. The mere fact that
New Hampshire residents have access to the site “‘does not by
itself show any persistent course of conduct by the defendants’”
in New Hampshire.
Id. (quoting GTE New Media Servs. Inc. v .
BellSouth Corp.,
199 F.3d 1343, 1349 (D.C. Cir. 2000)). Even if
the web site was a sufficient contact upon which to justify
exercise of personal jurisdiction, it is of no relevance here,
since the present action, involving patent rights, is unrelated
9
to the web site and would thus fail to satisfy the second prong
of the minimum contacts analysis. Accordingly, Forchheim’s web
presence does little to support MTI’s position that the exercise
of personal jurisdiction over Forchheim is proper in this court.
Finally, MTI asserts that Forchheim has sufficient contacts
with New Hampshire because it markets and sells products in New
Hampshire through its corporate affiliate, H P I , with the
expectation that such products will be sold, eventually, in New
Hampshire. This so-called “stream of commerce theory” is
frequently employed in cases where “the defendant’s contacts are
the result of establishing a distribution network in the forum
[s]tate for the sale of defendant’s products.” Viam Corp. v .
Iowa Export-Import Trading Co., 84 F.3d 4 2 4 , 427 (Fed. Cir.
1996). Under the stream of commerce theory, personal
jurisdiction is proper against a defendant if it “delivers its
products into the stream of commerce with the expectation that
they will be purchased by consumers in the forum [s]tate.”
World-Wide Volkswagen Corp. v . Woodson,
444 U.S. 286, 298 (1980).
MTI’s stream of commerce theory fails, however, for the same
reasons set forth above. Even if it is true that HPI is engaged
in the distribution of products that eventually reach New
10
Hampshire, MTI has failed to establish a sufficient connection
between Forchheim and HPI to justify exercise of personal
jurisdiction over the former based on the conduct of the latter.
See Donatelli, 893 F.2d 459, 465-66 (1st Cir. 1990).
MTI’s claim of personal jurisdiction over Forchheim in this
district is based upon the unsupported premise that Forchheim and
HPI are so intertwined that, for jurisdictional purposes, they
are essentially the same entity. MTI has failed to meet its
prima facie burden of demonstrating the existence of personal
jurisdiction over Forchheim in this forum. Having found no basis
upon which to exercise personal jurisdiction, a discussion of the
venue issue is unnecessary.
CONCLUSION
As the court lacks personal jurisdiction, Forchheim’s motion
to dismiss (document n o . 6 ) is hereby granted. The Clerk of
Court shall enter judgment in accordance with this order and
close the case.
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SO ORDERED.
Steven J. McAuliffe
'Chief Judge
February 7 , 2007
cc: Arnold Rosenblatt, Esq.
Daniel J. Bourque, Esq.
Jamie N . Hage, Esq.
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