SAN FRANCISCO — A federal court of appeals has sent a
patent-dispute case back to the U.S. District Court of the Northern
District of California after reversing
a ruling that the court lacked personal jurisdiction.
The case involves Xilinx Inc., a Delaware corporation with its
headquarters in California that develops, designs and markets
programmable-logic devices for use in electronics systems, and Papst
Licensing GmbH & Co. KG, a Germany-based company that’s primary
business is to monetize intellectual-property rights.
Initially, Papst identified two patents, U.S. Patent 6,574,759 and
U.S. Patent 6,704,891,
as possibly being used by Xilinx and, as such, sent letters to the
California-based company alleging the use of the patents, and
offering Xilinx a licensing option. When Papst received no response,
according to court
documents, the company again sent letters to Xilinx offering to
reach an agreement on the use of the patents, or to “cease and
desist.” When that failed, Papst sent representatives from the
company along with legal counsel to meet with Xilinx to discuss the
infringement allegations and attempt to negotiate a licensing
agreement. When those negotiations failed, both parties went to
Xilinx filed in district court for a declaratory judgment in
November 2014, essentially asking that court to hold that any patent
claims brought by Papst were invalid. The same day, Papst filed a
patent-infringement suit for the two patents it claimed Xilinx was
infringing upon in a Delaware district court.
The district court in California, using previous tests of
jurisdiction set forth in case law, determined that Papst was not
subject to personal jurisdiction in the state.
Lee, a professor at the UC Davis School of Law who specializes in
patent litigation, summarized the rulings.
“The federal circuit ruled that Papst was subject to personal
jurisdiction,” Lee told the Northern California Record. “The
district court first ruled that it lacked jurisdiction because Papst
was neither incorporated in California nor had its principal place of
Xilinx appealed the decision, noting that Papst had previously
brought litigation in the state, and by sending not only letters, but
also representatives to the state to meet with Xilinx, the court did
indeed have jurisdiction.
Papst, whose patent-infringement suit has been moved to
California, argued that the issue was moot, and that Xilinx could
file for a declaratory judgment in the patent-infringement suit it
was defending itself in. But the court found the issue was still
relevant, regardless of whether or not Xilinx could move for a
declaratory judgment in the infringement case.
Papst also argued that sending letters and offering to license its
patents to Xilinx was not enough to satisfy the personal-jurisdiction
requirements of due process in a declaratory judgment action. That’s
not what the federal circuit found, however, when it reviewed the
fact that representatives from Papst had traveled to California.
What’s more, Papst was unable to prove to try a case there would
place an undue burden on the entity after it has brought
patent-infringement suits in California at
least seven times in the past.
“The federal circuit reversed,” Lee said, “ruling that Papst
had satisfied minimum contacts with the Northern District of
California and that it would be reasonable to recognize
This remanding of the case from the federal circuit makes clear
that in most cases, the sending of letters, or attempts at licensing,
is enough to satisfy jurisdictional requirements, and that only in
special circumstances are those contacts within a state insufficient
to do so. While this ruling isn’t expected to have sweeping
consequences for patent cases, it may affect the number of courts
where declaratory judgment actions are heard.
“More courts may have jurisdiction to hear declaratory judgment
actions given the federal circuit’s relatively broad interpretation
of jurisdiction,” Lee said.