United States District Court, D. Kansas
MEMORANDUM AND ORDER
W. Lungstrum United States District Judge
patent infringement case comes before the Court on the motion
to dismiss filed by defendant Asia Tech Source Co., Ltd.
(“ATS”) (Doc. # 20). For the reasons set forth
below, the motion is denied in part and remains
pending in part. The motion is denied to the extent
based on the failure to state a claim. The motion remains
pending to the extent based on a lack of personal
jurisdiction or insufficiency of service, and plaintiff shall
be permitted to conduct jurisdictional discovery relating to
seeks dismissal for lack of personal jurisdiction pursuant to
Fed.R.Civ.P. 12(b)(2). The Court “applies the law of
the Federal Circuit, rather than that of the regional
circuits, to determine personal jurisdiction in a patent
infringement case.” See Red Wing Shoe Co. v.
Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1358 (Fed.
Federal Circuit law, the district court must first determine
whether the defendant may be subjected to jurisdiction under
the law of the forum state. See Id. The Kansas
Supreme Court has held that “[t]he Kansas long arm
statute is liberally construed to assert personal
jurisdiction over nonresident defendants to the full extent
permitted by the due process clause of the Fourteenth
Amendment to the U.S. Constitution.” See Volt Delta
Resources, Inc. v. Devine, 241 Kan. 775, 777 (1987). In
such case, the district court must then determine whether the
exercise of personal jurisdiction over the defendant would
offend due process. See Red Wing, 148 F.3d at 1358.
That due process analysis has two steps: first, the court
determines whether the defendant established “minimum
contacts” with the forum state, such that it should
reasonably anticipate being haled into court there; second,
any such minimum contacts are considered in light of other
factors to determine whether the exercise of jurisdiction
would comport with “fair play and substantial
justice.” See Id. (citations omitted). In this
case, ATS has not addressed those “other factors”
or argued that the exercise of jurisdiction would be unfair
in this case; thus the Court considers only ATS's
argument that the requisite “minimum contacts”
are lacking here.
response to ATS's motion, plaintiff does not argue that
this Court may exercise general jurisdiction over ATS;
rather, plaintiff argues that the Court may exercise specific
jurisdiction because plaintiff's patent infringement
claims arose out of or relates to ATS's contacts with
Kansas. See Id. at 1359. Specifically, plaintiff
argues that ATS's shipment of infringing products to a
company in Kansas provides the necessary contact with the
forum. ATS does not dispute that if it did have minimum
contacts with Kansas as alleged, plaintiff's claims will
have arisen from those contacts, such that this Court could
exercise specific jurisdiction.
Court then considers whether ATS did have minimum contacts
with Kansas. Such contacts must have been purposefully
directed at the forum or its residents. See Id.
Random, fortuitous, or attenuated contacts do not count in
this calculus; nor do contacts resulting from the unilateral
activity of others. See Id. A single act can support
specific jurisdiction so long as it creates a substantial
connection with the forum and not merely an attenuated
affiliation. See id.
making this determination concerning jurisdiction, the Court
resolves all factual disputes in the plaintiff's favor.
See Nuance Communications, Inc. v. Abbyy Software
House, 626 F.3d 1222, 1231 (Fed. Cir. 2010). If the
plaintiff's factual allegations are not directly
controverted, they are taken as true, and the plaintiff need
only make a prima facie showing to support jurisdiction.
See Id. Thus, any conflicts in facts contained in
declarations submitted by the parties must be resolved in
favor of the plaintiff. See Electronics For Imaging, Inc.
v. Coyle, 340 F.3d 1344, 1349 (Fed. Cir. 2003).
names as defendants ATS and Level 5 Tools, LLC (“Level
5”), a Kansas LLC located in Kansas City, Kansas, that
sells drywall finishing tools in competition with plaintiff
and plaintiff's licensees. Plaintiff alleges that certain
of Level 5's products, sold over the internet and in
brick-and-mortar stores, infringe plaintiff's design
patents. Plaintiff further alleges that ATS sold infringing
products in Kansas to Level 5.
moving to dismiss, ATS has submitted a declaration by Dan
Cooper, ATS's owner and president, stating the following:
ATS is a Taiwanese LLC with its headquarters in Taiwan. ATS
owns no property in the United States, has no place of
business in the United States, is not registered to do
business in any state, and has no registered agent for
receiving service of process in Kansas or any other state.
ATS has no distributors in the United States and has no
agreement with any company to distribute goods in the United
States. Customers purchase drywall tools from ATS by placing
orders through ATS's office in Taiwan. ATS then has the
tools manufactured by third parties in China according to the
customers' designs. ATS ships the finished goods to a
Chinese port and has them loaded on a vessel, but ATS does
not address or ship those packages; rather, customers take
title to the goods in China and arrange for the shipping of
the goods to their destinations. ATS does not have any
control over or “advance knowledge” of the final
destinations. Level 5 sometimes purchases goods from ATS
pursuant to those procedures, using a “forwarder”
in China to arrange for the shipment from that country.
response, plaintiff has submitted a declaration by its
officer, William White. Mr. White states that results of a
search of a trade database include 186 instances in which ATS
is listed as the “Shipper Declared”, including
six shipments to Level 5. Mr. White further states that he
accessed a bill of lading from another trade database that
gives ATS as the “Shipper Name” for a 2018
shipment to Level 5. The search results and bill of lading
are attached as exhibits to the declaration.
argues that it has thus controverted ATS's evidence by
submitting evidence that ATS has shipped goods to the United
States and specifically to Level 5. ATS objects to this
evidence as improper hearsay, but the Federal Circuit
“has held that there is no strict prohibition on a
court's consideration of hearsay in connection
with” a motion to dismiss for lack of personal
jurisdiction. See Campbell Pet Co. v. Miale, 542
F.3d 879, 889 n.1 (Fed. Cir. 2008) (citing cases). The Court
does agree with ATS, however, that these search results do
not necessarily controvert ATS's declaration.
“Shipper” is not defined with respect to the
documents provided by plaintiff, and those documents do not
really provide evidence concerning ATS's involvement in
the shipment of the goods to Level 5. Thus, plaintiff has not
controverted ATS's evidence that ATS merely places the
goods at a Chinese dock and that the customer then takes
title and arranges for the shipment.
was involved in shipping the accused tools to Kansas, such
conduct would appear to fit within the scope of contacts
deemed sufficient by the Federal Circuit. In Beverly
Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558
(Fed. Cir. 1994), which ATS describes as the seminal case
from the Federal Circuit on this issue, the court held that
the district court had erroneously declined to exercise
jurisdiction over a Chinese defendant and its importer who
had purposefully shipped the accused goods to the forum state
through an established distribution channel. See Id.
at 1565. The court held that the following conduct satisfied
due process: “defendants, acting in consort, place the
accused [item] in the stream of commerce, they knew the
likely destination of the products, and their conduct and
connections with the forum state were such that they should
reasonably have anticipated being brought into court
there.” See Id. at 1566. In noting that the
presence of an established distribution channel is a
significant factor, the court distinguished cases lacking
such a channel, in which alien sellers had sold to American
companies but had no reasonable bases for knowing that the
goods would necessarily end up in the forum state. See
Id. at 1565 n.15 (citing cases). In the present case, if
ATS was involved in knowingly shipping the accused goods to a
Kansas company, that conduct would similarly be deemed
sufficient by the Beverly Hills court. ATS argues
that there is no “established distribution
channel” in this case, but it provides no support for
that statement. In fact, if ATS repeatedly sold goods to a
company that would resell those goods in Kansas, that
mechanism could reasonably be considered an established
channel for the distribution of ATS's goods in Kansas.
ATS sold to a resident of the forum; thus, this is not a
situation, as in the cases distinguished in Beverly
Hills, in which the alien company merely sold to an
American company that was not a resident of the forum state.
Polar Electro Oy v. Suunto Oy, 829 F.3d 1343 (Fed.
Cir. 2016), the Federal Circuit again reversed a district
court's dismissal of an alien defendant for lack of
personal jurisdiction. In holding that the exercise of
jurisdiction satisfied due process, the court noted that the
defendant had purposefully shipped accused products to
retailers located in the forum state, fully expecting that
the products would then be sold there, which meant that the
defendant had purposefully directed its actions to the state
and indicated an intent to serve not the United States market
generally but the forum state market specifically.
Seeid. at 1350. The court noted that that
was not a case in which a manufacturer sold its products to
an independent distributor who then distributed the products
across the country, such that the products fortuitously ...