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M-I Drilling Fluids UK Ltd. v. Dynamic Air Ltda.

Installation of Equipment on U.S. Flagged Ships Sufficient to Establish Specific Personal Jurisdiction for Patent Infringement

M-I Drilling Fluids UK Ltd. v. Dynamic Air Ltda., __ F.3d __, 2018 WL 2187726 (Fed. Cir. May 14, 2018) (Reyna (concurring), HUGHES, Stoll) (D. Minn.: Montgomery) (3 of 5 stars)

Fed Cir reverses dismissal for lack of specific personal jurisdiction. The district court erred in holding that DAL had not purposefully availed itself of the privilege of conducting activities within the United States. The opinion describes how DAL had installed accused pneumatic conveyance systems on two U.S.-flagged ships, at the direction of its (non-party) customer, the Brazilian state-owned oil company Petrobras. Because DAL “controlled the specifics of its own performance under the [Petrobras] contract,” including installation and ongoing maintenance of accused systems, “the totality of DAL’s contacts aboard the [U.S.-flagged] ships compels the conclusion that DAL purposefully directed its activities at the United States.” Op. at 8. Exercise of personal jurisdiction over DAL was both reasonable and fair under the due process factors in Burger King, 471 U.S. 462 (1985). The issue of whether U.S.-flagged ships are themselves U.S. territory for purposes of patent law was not raised by DAL before the district court, and is waived.

Concurrence: Judge Reyna writes separately to expand on territoriality issues, and the application of the Burger King factors to a defendant whose sole interaction with U.S. law is via interaction with U.S.-flagged ships. He expresses concern about the possibility that, were the issue raised timely, the court might encounter significant uncertainty about whether U.S. patent law applies to U.S.-flagged ships in international waters.

KEYWORDS: SPECIFIC PERSONAL JURISDICTION (YES); TERRITORIALITY; INTERNATIONAL WATERS; PURPOSEFUL AVAILMENT