United States District Court, D. New Jersey
MEMORANDUM OPINION AND REPORT AND
DUNN WETTRE. UNITED STATES MAGISTRATE JUDGE.
the Court are defendant's motion to dismiss the complaint
or, alternatively, to transfer venue to the Central District
of California (ECF No. 19) and plaintiffs motion for leave to
file an amended complaint (ECF No. 43). The Honorable Susan
D. Wigenton, U.S.D.J., referred the motion to dismiss to the
undersigned for a Report and Recommendation; as the motion to
amend also raises issues related to personal jurisdiction,
the Court will address the motions in tandem. The Court heard
oral argument on the motion to dismiss and the motion to
amend on May 13, 2019. The parties then asked the Court to
stay decision on the motions while they pursued mediation.
(ECF No. 55). As their mediation efforts were unsuccessful,
the motions are now ripe for disposition. Having considered
the parties' arguments and the written submissions at ECF
Nos. 19, 25, 26, 28, 29, 30, 34, 35, 43, 45, and 49, and for
good cause shown, the Court recommends that the motion to
dismiss for lack of personal jurisdiction be GRANTED. The
motion to transfer venue and motion to amend are therefore
DENIED AS MOOT.
complaint dated November 16, 2018, plaintiff Telebrands Corp.
seeks a declaratory judgment that its DermaSuction product
does not infringe defendant Altair Instruments, Inc.'s
U.S. Patent No. 6, 241, 739 (the '"739 Patent")
entitled "Microdermabrasion Device and Method of
Treating the Skin Surface." (Compl. ¶¶ 1, 10,
11, ECF No. 1). Plaintiff is a New Jersey corporation with
its principal place of business in Fairfield, New Jersey.
(Id. ¶ 2). Defendant is a California
corporation with its principal place of business in Ventura,
California. (Id. ¶ 3; Walker Decl. ¶ 2,
ECF No. 19-3). Defendant has no offices, real property, or
employees in New Jersey, is not licensed to do business in
New Jersey, and does not have an agent for service of process
in New Jersey. (Walker Decl. ¶¶ 4-5). Defendant has
not initiated any lawsuits in New Jersey and has not granted
any license authorizing any other entity to enforce the
'739 Patent. (Id. ¶¶ 7-8).
October 10, 2018, counsel for Altair sent Telebrands a cease
and desist letter alleging that the DermaSuction product
infringed several claims of the '739 Patent. (Compl.
¶ 14, Ex. 2). The parties then corresponded about the
possibility of re-designing the DermaSuction product to avoid
potential patent infringement liability. (Oines Decl., Exs.
5-10, ECF No. 19-2). Instead, approximately one month after
receiving the cease and desist letter, Telebrands filed the
instant declaratory judgment action. On December 17, 2018,
Altair filed an essentially identical patent infringement
suit against Telebrands in the Central District of
California, the court in which it has litigated a number of
other actions related to the '739 Patent. (Id.
¶¶ 3, 15, Ex. 11).
January 4, 2019, defendant filed the instant motion to
dismiss for lack of personal jurisdiction pursuant to Rule
12(b)(2) of the Federal Rules of Civil Procedure. (ECF No.
19). Defendant also urges the Court to decline to exercise
jurisdiction over the declaratory judgment action because
Telebrands allegedly filed it in anticipation of the
California patent infringement lawsuit to avoid litigating in
a forum where Altair has successfully pursued other accused
infringers of the '739 Patent. (Id.). In the
alternative, defendant asks the Court to transfer this action
to the Central District of California. (Id.).
However, on February 27, 2019, while the motion to dismiss
was sub judice, the Honorable Manuel L. Real, United
States District Judge for the Central District of California,
granted Telebrands' motion to transfer the second-filed
patent infringement action from California to the District of
New Jersey pursuant to the first-to-file rule. (ECF No.
34-1). The transferred patent infringement action, Altair
Instruments, Inc. v. Telebrands Corp., No. 19-cv-7452
(SDW), has been stayed pending the outcome of this motion to
an unsuccessful settlement conference on March 14, 2019,
while the fully briefed motion to dismiss for lack of
personal jurisdiction was still pending, plaintiff filed a
motion for leave to file an amended complaint. (ECF No. 43).
In addition to the declaratory judgment of non-infringement,
plaintiff seeks to add claims for Lanham Act false
advertising, false patent marking, and unfair competition in
violation of New Jersey statute and common law relating to
defendant's alleged marking of its DiamondTome Lymphatic
Massage Wand product ("Lymphatic Wand") with the
'739 patent. (Proposed Am. Compl. ¶¶ 19-24, ECF
Court has attempted to resolve the parties'
jurisdictional standoff by way of agreement, so that the
DermaSuction patent infringement and declaratory judgment of
non-infringement claims, as well as the Lymphatic Wand claims
in plaintiffs proposed amended complaint, could proceed in a
single action either in this district or in California. The
parties could not agree to litigate their disputes
efficiently in a negotiated forum, so the Court proceeds to
the pending motions.
Court applies the law of the Federal Circuit to determine
whether personal jurisdiction over defendant exists in New
Jersey. See Breckenridge Pharma., Inc. v. Metabolite
Labs., Inc., 444 F.3d 1356, 1361 (Fed Cir. 2006)
("The issue of personal jurisdiction in a declaratory
action for non-infringement is 'intimately related to
patent law' and thus governed by Federal Circuit law
regarding due process.")- Where, as here, the parties
have not yet begun discovery, plaintiff must make only a
prima facie showing that the court can exercise personal
jurisdiction over a defendant. Autogenomics, Inc. v.
Oxford Gene Tech. Ltd., 566 F.3d 1012, 1017 (Fed. Cir.
2009). Under a prima facie standard, "the pleadings and
affidavits are to be construed in the light most
favorable" to plaintiff and any factual disputes are
resolved in plaintiffs favor. Id.
whether personal jurisdiction exists over an out-of-state
defendant involves two inquiries: whether a forum state's
long-arm statute permits service of process, and whether the
assertion of personal jurisdiction would violate due
process." Inamed Corp. v. Kuzmak, 249 F.3d
1356, 1359 (Fed. Cir. 2001). New Jersey's long-arm
statute permits the exercise of jurisdiction over
non-residents "'to the uttermost limits permitted by
the United States Constitution.'" Charles
Gendler & Co.. Inc. v. Telecom Equip. Corp., 102
N.J. 460, 469 (1986) (quoting Avdel Corp. v. Mecure,
58 N.J. 264, 268 (1971)). Therefore, the Court's
"jurisdictional analysis collapses into a single
determination of whether the exercise of personal
jurisdiction comports with due process." Avocent
Huntsville Corp. v. Aten Int'l Co., Ltd., 552 F.3d
1324, 1329 (Fed. Cir. 2008). Due process, in turn, requires
that the defendant have "certain minimum contacts with
[the forum] such that the maintenance of the suit does not
offend traditional notions of fair play and substantial
justice." Int'l Shoe Co. v. Washington, 326
U.S. 310, 316 (1945) (internal quotation omitted).
Court can assert either general or specific jurisdiction over
a defendant that has minimum contacts with the forum.
Avocent, 552 F.3d at 1330. Plaintiff focuses its
argument solely on general jurisdiction. "A court may
assert general jurisdiction over foreign (sister-state or
foreign-country) corporations to hear any and all claims
against them when their affiliations with the State are so
'continuous and systematic' as to render them
essentially at home in the forum State." Goodyear
Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915,
919 (2011). In all but "exceptional case[s]," a
corporation is "essentially at home" and thus
subject to general jurisdiction in its state of incorporation
and its principal place of business. Daimler AG v.
Bauman, 571 U.S. 117, 139 n.19 (2014).
Altair is a California corporation with its principal place
of business in California, plaintiff faces an uphill battle
to show that this is the exceptional case where a foreign
corporation has such extensive affiliations with New Jersey
that this Court can hear any and all claims against it.
Defendant has no employees, offices, real property, business
license, or agent for service of process in New Jersey.
See Senju Pharma. Co., Ltd. v. Metrics, Inc., 96
F.Supp.3d 428, 441 (D.N.J. 2015) (applying Daimler
and Federal Circuit law in determining that there was no
personal jurisdiction in patent infringement action over
foreign defendant that "is not registered to do business
in the state and does not have an agent appointed to accept
service in the state. There is no allegation that Defendant
has any employees, agents, or bank accounts in New Jersey, or
that it solicits business or advertises in the state").
Instead, Plaintiff argues that the Court may exercise general
jurisdiction based on the fact that defendant sells its
products to customers in New Jersey via the internet and a
network of 23 New Jersey "distributors."
See Compl. ¶ 7; Maldonado ...