Kraft Foods Group Brands LLC v. TC Heartland LLC et al

Filing 80

MEMORANDUM ORDER re 59 REPORT AND RECOMMENDATION is ADOPTED and 7 MOTION to Dismiss is DENIED. Signed by Judge Leonard P. Stark on 9/24/15. (ntl)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
KRAFT FOODS GROUP BRANDS LLC,
Plaintiff,
Civil Action No. 14-28-LPS

v.
TC HEARTLAND, LLC d/b/a HEARTLAND
FOOD PRODUCTS GROUP, and HEARTLAND
PACKAGING CORPORATION,
Defendants.

MEMORANDUM ORDER
WHEREAS, Magistrate Judge Burke issued a 30-page Report and Recommendations
("Report") (D.I. 59), dated August 13, 2015, recommending that Defendants TC Heartland, LLC
("TC Heartland") and Heartland Packaging Corporation's ("HPC") (copectively, "Defendants")
Motion to Dismiss Claims for Lack of Personal Jurisdiction and for Transfer of Venue to the
Southern District of Indiana ("Motion") (D .I. 7) be denied;
WHEREAS, on August 27, 2015, Defendants objected to the Report ("Objections") (D.I.
70), and specifically objected to (1) the Report's conclusion that this Court has personal
jurisdiction with respect to the entirety of this action and, thus, its recommendation that the
Motion to Dismiss Claims for Lack of Personal Jurisdiction be denied; and (2) the Report's
findings that 28 U.S.C. § 1391(c) permits venue in this district and, thus, its recommendation that
the Motion for Transfer of Venue to the Southern District of Indiana be denied;
WHEREAS, on September 14, 2015, Plaintiff Kraft Foods Group Brands LLC ("Kraft"
or "Plaintiff') responded to the Objections (D.I. 78), arguing that the Report

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correctly ... determined that (1) jurisdiction over Heartland is
appropriate as to all of Kraft's patent infringement claims
[because] Heartland purposefully placed infringing products into
the stream of commerce knowing full well that such products
would be sold in Delaware; and (2) venue in this case is proper in
the District of Delaware because it is a court in which jurisdiction
exists as to Heartland with respect to this action.

(Id. at 1);
WHEREAS, the Court has considered Defendant's Motion de nova, as it presents casedispositive issues, see 28 U.S.C. § 636(b)(l); Fed. R. Civ. P. 72(b)(3), and has further reviewed
all of the pertinent filings;
NOW THEREFORE, IT IS HEREBY ORDERED that:
1.

Defendants' Objections (D.I. 70) are OVERRULED, Judge Burke's Report (D.I.

59) is ADOPTED in all respects, and Defendants' Motion (D.I. 7) is DENIED.
2.

The Report correctly concluded that the Court's personal jurisdiction analysis is

not governed by Sears, Roebuck & Co. v. Sears pie, 752 F. Supp. 1223, 1228 (D. Del. 1990), but
rather by Beverly Hills Fan Co. v. Royal Sovereign Corp., 21F.3d1558, 1571 (Fed. Cir. 1994).
Sears was a district court trademark case finding that because "[e]ach of the alleged trade name
infringements by PLC' s subsidiaries is a separate and unrelated cause of action occurring in a
separate forum," personal jurisdiction only existed over the trade name infringements occurring
in the forum state. 752 F. Supp. at 1228-30. Sears predates the Federal Circuit's holding in
Beverly Hills Fan Co. that personal jurisdiction exists in patent cases where, as here, the
"defendants purposefully shipped the accused [product] into [the forum state] through an
established distribution channel." 21 F.3d at 1571. The Supreme Court's recent ruling in
Walden v. Fiore, 134 S. Ct. 1115 (2014), does not change the Court's conclusion that Beverly

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Hills Fan Co. continues to govern the Due Process analysis in a patent case. The quote from
Walden (which was also not a patent case) relied on by Defendants -that in order for the Court

to have specific personal jurisdiction over a claim, the claim must arise from "an 'activity or an
occurrence that takes place in the forum state,"' 134 S. Ct. at 1121 n.6 (quoting Goodyear
Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011)) - does not overrule
Beverly Hills Fan Co. and in no way suggests that personal jurisdiction in a patent case, once

found to exist, is limited to acts of infringement occurring within the forum state. 1
3.

The Report also correctly concluded that the 2011 Jurisdiction and Venue

Clarification Act's amendment of 28 U.S.C. § 1391 did not undo the Federal Circuit's decision
in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1575, 1579-84 (Fed. Cir.
1990), that "Section 1391(c) applies to all of chapter 87 of title 28, and thus to§ 1400(b)" and
venue is appropriate for a defendant in a patent infringement case where personal jurisdiction
exists. Plaintiff cites Federal Circuit and other district court decisions post-dating the 2011
amendment and reaffirming the vitality of the holding of VE Holding. (See, e.g., D.I. 78 at 6-10)
(citing cases as well as legislative history)
4.

Given the detailed reasoning provided in the Report, and that the parties have not

raised any arguments that are not adequately addressed in the Report, the Court finds it

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Defendants' further contention that "no court has ever held that alleged in-state
infringements can be remedied by multiplying the plaintiffs damages caused by such
infringements by a factor of ten or twenty or forty in order to account for alleged losses that the
patentee might have suffered elsewhere in the country" (D.I. 70 at 4) is unavailing. The
appropriateness of whatever damages analysis Plaintiff may ultimately choose to present is not
before the Court.
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unnecessary to discuss Defendant's Motion (D.I. 7) or Defendants' Objections (D.I. 70) any
further.

HONORABLELEONARDP.STARK
UNITED STATES DISTRICT JUDGE

September 24, 2015
Wilmington, Delaware

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