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Early Learning Resources, LLC, D/B/A Early Childhood Resources v. Sebel Furniture Limited

September 30, 2011

EARLY LEARNING RESOURCES, LLC, D/B/A EARLY CHILDHOOD RESOURCES, PLAINTIFF,
v.
SEBEL FURNITURE LIMITED, DEFENDANT.



The opinion of the court was delivered by: Hillman, District Judge

OPINION

Before the Court is a motion by defendant Sebel Furniture Limited ("Sebel") to dismiss Early Learning Resources, LLC, D/B/A Early Childhood Resources'("ECR") complaint pursuant to Fed.R.Civ.P. 12(b)(2) for lack of personal jurisdiction, or alternatively for a failure to state a claim for which relief may be granted, pursuant to Fed.R.Civ.P. 12(b)(6). ECR seeks a declaratory judgment that it is not infringing upon Sebel's patent. For the reasons expressed below, Sebel's motion to dismiss will be granted.

I. BACKGROUND

Plaintiff ECR is a limited liability company with its principal place of business in the State of New Jersey. ECR sells products, such as furniture and chairs, to schools and related institutions. Defendant Sebel is an Australian company, headquartered in Padstow, New South Wales, Australia. Sebel was formed in 1947 and manufactures chairs, desks, tables, and other furniture. At issue in this case is a patent for Sebel's POSURA model, which model is sold as a school chair. The patent is registered under U.S. Patent No. 5,860,697 ("the '697 Patent"). Sebel alleges that it has not sold any school chairs in the United States in at least the past three years. Moreover, Sebel contends that it has never sold its school chair in the District of New Jersey.

In or around November 2009, Sebel sent a letter to ECR in New Jersey, claiming that ECR sold a chair in the United States that was a copy of Sebel's POSURA chair, and thus, ECR was infringing upon Sebel's '697 patent. This letter was basically a "cease-and-desist letter" that stated that Sebel would pursue legal action against ECR if ECR continued to infringe the patent. In or around December 2009, Sebel's attorney responded to an email from a representative of ECR in California supplying patent details for Sebel's '697 patent. In December 2010, Sebel wrote another email to the ECR representative in California advising ECR that it planned to seek legal action for ECR's alleged infringement of Sebel's '697 patent. Sebel, however, has not taken any formal legal action against ECR for the alleged patent infringement.

In addition to the above contacts, plaintiff also alleges that: Sebel maintains a website that is in part directed to the United States; Sebel's website lists two U.S. distributors, one in Illinois and one in Michigan; Sebel has a "business relationship" with a dealer in Wisconsin; Sebel publishes two catalogs on its website that are directed toward the U.S., i.e., USA Educational Products and USA Institutional Products; Sebel has seven buyers in the U.S. and has made 91 shipments to the U.S. from July 1, 2007 to January 20, 2011; Sebel contracted for and was an exhibitor at two school equipment trade shows in Arizona in 2009 and 2010; Sebel demonstrated a school chair (the POSTURA chair which is the subject of this litigation) at the trade shows and offered them for sale in the U.S.; from 1989 to 2010, Sebel applied for and obtained 11 different U.S. design patents, three of which are still active; from 1988 to 2005, Sebel applied for and obtained at least six U.S. utility patents, one of which is the subject of the present litigation; Sebel maintained its U.S. patents by paying taxes; from 1989 to 2010, Sebel has applied to the U.S. Patent and Trademark Office to register 13 different trademarks; Sebel retained attorneys in California, Minnesota, Illinois and Pennsylvania in connection with the filing and prosecution of its design and utility patent applications; and Sebel retained attorneys in New York and Washington D.C. in connection with the filing and prosecution of its U.S. trademarks.

II. JURISDICTION

This Court has subject matter jurisdiction over this declaratory judgment action pursuant to 28 U.S.C. § 1331 as plaintiff's claims arise under the Federal Declaratory Judgment Act, 28 U.S.C. § 2201 and under the patent laws of the United States, 28 U.S.C. §1338(a). Although defendant has challenged this Court's personal jurisdiction, it is well established that the trial court has inherent power and jurisdiction to decide whether it has jurisdiction. See In re Automotive Refinishing Paint Antitrust Litigation, 358 F.3d 288, 303 (3d Cir. 2004).

III. DISCUSSION

A. Standard of Review

The defendant has moved to dismiss plaintiff's complaint pursuant to Rule 12(b)(2) and Rule 12(b)(6). Since a lack of personal jurisdiction over the defendant strips this Court of its authority to preside in the case, we address the personal jurisdiction challenge first. After a motion to dismiss is filed pursuant to Fed.R.Civ.P. 12(b)(2), the burden shifts to the plaintiff to provide sufficient facts to establish jurisdiction.

See Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119, 1121 (W.D.Pa. 1997). The plaintiff must "... sustain its burden of proof in establishing jurisdictional facts through sworn affidavits or other competent evidence..." and cannot rely "on the bare pleadings alone in order to withstand a defendant's Rule 12(b)(2) motion to dismiss for lack of in personam jurisdiction." See Weber v. Jolly Hotels, 977 F.Supp. 327, 331 (D.N.J. 1997) (citing Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 67 n. 9 (3d Cir. 1984)). A Court must look beyond the pleadings in deciding a Rule 12(b)(2) motion. Id.

Because the parties have not conducted discovery, ECR only needs to make a prima facie showing that Sebel is subject to personal jurisdiction. See Autogenomics, Inc. v. Oxford Gene Technology Ltd., 566 F.3d 1012, 1017 (C.A.Fed. 2009); Elecs. for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1349 (Fed.Cir. 2003) ("In the procedural posture of a motion to dismiss, a district court must accept the uncontroverted allegations in the plaintiff's complaint as true and resolve any factual conflicts in the affidavits in the plaintiff's favor."). The pleadings and affidavits are to be viewed in the light most favorable to ECR. See Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 1324, 1328-29.

B. Personal Jurisdiction

This case was filed in the District of New Jersey and, therefore, this Court must decide whether it has jurisdiction over the defendant in this forum. A defendant is subject to the jurisdiction of a United States district court if the defendant "is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located." Fed.R.Civ.P. 4(k)(1)(A). The district court's exercise of jurisdiction over an out-of-state defendant must comport with the forum state's long-arm statute and due process. See Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 1324, 1329 (Fed.Cir. 2008). "Federal courts situated in New Jersey may exercise personal jurisdiction to the extent permitted under New Jersey state law." Colvin v. Van Wormer Resorts, Inc., 417 Fed.Appx. 183, 186 (3d Cir. 2011)(citing Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 96 (3d Cir. 2004)). "New Jersey's analog to a long-arm statute, N.J. Court Rule 4:4--4, 'provides for jurisdiction coextensive with the due process requirements of the United States Constitution.'" Id. Therefore, "'parties who ...


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