November 29, 2018

Personal Jurisdiction in a DJ Action Must be based on Intentional Conduct Directed at the Forum

In Maxchief Investments Ltd. v. Wok & Pan, Ind., Inc., [2018-1121] (November 29, 2018), the Federal Circuit affirmed the district court’s dismissal of Maxchief’s declaratory judgment tortious interference claims because of lack of personal jurisdiction over Wok.

Wok had originally sued Staples in California for infringement of its U.S. Patent Nos. 5,957,061, 8,881,661, 8,931,421, and 9,089,204 for folding tables. Staples then demanded that the Tennessee-based distributor of the folding tables, Meco, defend the action pursuant to an indemnity. Meco demanded that the maker of the tables, Maxchief, defend the action pursuant to an indemnity. Maxchief brought a declaratory judgment action against Wok in the Eastern District of Tennessee, alleging specific personal jurisdiction.

The district court held that Maxchief failed to allege that Wok had sufficient minimum contacts with Tennessee, because although Wok sought to enforce the patents against other parties in other courts, Wok did not seek to enforce its patents in the forum state of Tennessee.

The minimum contacts inquiry involves two related requirements:

  1. The defendant must have purposefully directed its conduct at the forum state; and
  2. the claim must arise out of or relate to the defendant’s contacts with the forum.

A declaratory judgment claim arises out of the patentee’s contacts with the forum state only if those contacts relate in some material way to the enforcement or the defense of the patent, and thus the minimum contacts prong requires some enforcement activity in the forum state by the patentee.

It is not enough that Wok’s lawsuit might have “effects” in Tennessee. Rather, jurisdiction “must be based on intentional conduct by the defendant” directed at the forum.

The Federal Circuit concluded that Maxchief had not established that personal jurisdiction over Wok is proper in Tennessee, and affirmed the district court’s dismissal of Maxchief’s complaint.