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Maxchief Investments Ltd. v. Wok & Pan, Ind.

Out-of-Forum Lawsuit With In-Forum “Effects” Insufficient to Create Personal Jurisdiction

Maxchief Investments Ltd. v. Wok & Pan, Ind., __ F.3d __, 2008 WL 6205017 (Fed. Cir. Nov. 29, 2018) (DYK, Reyna, Hughes) (E.D. Tenn.: Greer) (2 of 5 stars)

Fed Cir affirms dismissal of Maxchief’s claims for lack of jurisdiction. The district court lacked personal jurisdiction over Maxchief’s claims for declaratory judgments of noninfringement/invalidity as to three Wok patents. That Wok filed a lawsuit against the retailer Staples in C.D. Cal. did not establish sufficient contacts in Tennessee, notwithstanding that the California complaint sought an injunction against “all those in active concert” with Staples, which included a Greenville, Tenn. company called Meco Corp. “[I]t is not enough that Wok’s [California] lawsuit might have ‘effects’ in Tennessee. Rather, jurisdiction ‘must be based on intentional conduct by the defendant’ directed at the forum.” Op. at 6 (quoting Walden, 571 U.S. 277 (2014)). Silent Drive, 326 F.3d 1194 (Fed. Cir. 2003), is not contradictory; in that case the defendants created minimum contacts by attempting to enforce an out-of-state judgment in-state. A letter from Wok to Maxchief’s lawyer in Tennessee also did not create minimum contacts because that letter alleged infringement by a separate company in Kansas, not a Tennessee company. And per Red Wing Shoe, 148 F.3d 1355 (Fed. Cir. 1998), merely sending notice letters of infringement does not generally create personal jurisdiction. In a footnote, the opinion also rejects Maxchief’s argument that Wok’s shipments and sales of goods in Tennessee could establish minimum contacts. Per Avocent, 552 F.3d 1324 (Fed. Cir. 2008), shipments/sales “are not enforcement activities, and thus do not qualify as relevant minimum contacts.” Op. at 6 n.2.

The district court also lacked personal jurisdiction over Maxchief’s claim for tortious interference under Tennessee state law. Maxchief’s claim was predicated on the letter alleging infringement by a non-Tennessee company. Per Inamed Corp., 249 F.3d 1356 (Fed. Cir. 2001), “merely sending a notice letter to a lawyer in the forum state does not constitute activity directed at the forum state where the entity alleged to infringe does not operate in the state.” Op. at 11.

The district court had held that there was also no subject matter jurisdiction over the tortious interference claim. The opinion does not reach this issue, but includes a lengthy footnote reasoning that there might be original subject matter jurisdiction over the claim per 28 U.S.C. § 1338, if Maxchief urged that Wok engaged in “unfounded litigation.” Past Fed Cir cases suggest that such a state law claim would raise a substantial question of patent law, but Gunn v. Minton, 568 U.S. 251 (2013), raises questions about those cases’ reliability. See Op. at 9 n.3.

KEYWORDS: PERSONAL JURISDICTION; DECLARATORY JUDGMENT