Krauser v. Evollution IP Holdings, Inc. et al
Filing
56
OPINION AND ORDER granting in part and denying in part 45 Motion to Dismiss; Motion to Change Venue. Signed by Judge Kenneth A. Marra on 9/19/2013. (ir)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 12-80977-CIV-MARRA
JACK T. KRAUSER, D.M.D.,
Plaintiff,
v.
EVOLLUTION IP HOLDINGS, INC. and
BIOHORIZONS IMPLANT SYSTEMS, INC.,
Defendants.
__________________________________/
OPINION AND ORDER
This cause is before the Court upon Defendants’ Joint Motion to Dismiss or Transfer
(DE 45). The Court has reviewed the briefs and the record, and is otherwise advised in the premises.
I. Background
This case involves competing claims of ownership and inventorship of a dental implant
system. Plaintiff Jack T. Krauser, D.M.D. (“Dr. Krauser”) is a noted periodontist and implant
surgeon, a lecturer, author, and educator, and a consultant to several major dental implant companies.
He alleges that he “first conceived” the dental implant system in question in 1987. (DE 35: Am.
Compl. ¶ 11).1
In 1988, Dr. Krauser retained a medical job and machine shop to produce drawings and
manufacture prototypes of the system, including implants, attachments, and related products. (Am.
Compl. ¶ 12). To assist the shop in performing its work, Dr. Krauser provided the shop with written
1
Dr. Krauser was ultimately granted patent number 5,316,476 for a “Dental Implant with a Longitudinally
Grooved Cylindrical Surface.” (Am. Compl. ¶ 11). W hile he claims that he is the sole inventor of the ‘476 patent, the
inventorship of that patent is not at issue in this case.
memoranda, initial drawings and sketches, work product, and intellectual property, including
copyrighted materials expressing his ideas in connection with the system. (Am. Compl. ¶ 13). The
shop was not manufacturing or selling any dental implant systems of its own at that time. (Am
Compl. ¶ 12).
Once the manufacturing process began, Dr. Krauser worked with the shop’s principals and
employees to develop the system. (Am. Compl. ¶ 14). According to the complaint, “[t]his
collaboration included face-to-face communications as part of a broader exchange of documents,
sketches, drawings and ongoing discussions pertinent to in vitro and in vivo animal studies and
human clinical evaluations.” Id. Dr. Krauser alleges that he contributed to the evolution and
improvement of the system with his experience in the implant field, his prior consulting with other
dental implant manufacturers, his knowledge and ideas gained through giving and attending lectures
in the field, “and his thoughts generating further ideas for such improvements.” (Am. Compl. ¶ 15).
While Dr. Krauser and the shop’s principals and employees developed the system over the
next several years, some of the principals and employees applied for and received five patents on
different aspects of it. (Am. Compl. ¶ 16).2 Dr. Krauser was not named as an inventor on the
applications, and he now seeks to correct the inventorship of four of the five patents.3 He alleges that
he has a reputational interest in correcting the omission of his name because of his stature in the
dental implant field, and he further claims that he has an economic interest in the patents and, by
2
The five patents are Patent No. 5,964,766 (“Buttress Thread Implant”), Patent No. 6,149,432 (“Buttress
Thread Dental Implant”), Patent No. 6,406,296 (“Implant with Enlarged Proximal Segment”), Patent No. 6,419,491
(“Dental Implant System with Repeating Microgeometric Surface Patterns”), and Patent No. 6,454,569 (“Dental Implant
Having a Dual Bio-Affinity Collar”).
3
Dr. Krauser brings one count for each patent he seeks to correct. He does not seek correction of inventorship
for the ‘766 patent. (Am. Compl. ¶ 19).
2
extension, Article III standing to bring this action. (Am. Compl. ¶¶ 20–21).
This is not the first time Dr. Krauser has initiated an action related to the system. In an earlier
case before this Court, Dr. Krauser brought a claim for declaratory relief seeking a declaration that
he was both the inventor and owner of the system.4 He also sought attorney’s fees. The inventorship
claim was voluntarily dismissed without prejudice, but the Court addressed the remaining ownership
claim at summary judgment. The Court concluded that “it is not enough for [Dr. Krauser] to claim
ownership of the at-issue intellectual property by stating that the dental implant system incorporates
certain features that reflect his ideas. The Court therefore finds, as a matter of law, that [Dr. Krauser]
has no ownership rights to the aforementioned intellectual property,” i.e., the dental implant system.
(Case No. 10-CV-80454-KAM: DE 169 at 20).
In this case, Dr. Krauser seeks an order directing the USPTO to correct the patents by naming
him an inventor pursuant to 35 U.S.C. § 256. That statute provides:
(a) Correction—Whenever through error a person is named in an issued patent as the
inventor, or through error an inventor is not named in an issued patent, the Director
may, on application of all the parties and assignees, with proof of the facts and such
other requirements as may be imposed, issue a certificate correcting such error.
(b) Patent valid if error corrected—The error of omitting inventors or naming persons
who are not inventors shall not invalidate the patent in which such error occurred if
it can be corrected as provided in this section. The court before which such matter is
called in question may order correction of the patent on notice and hearing of all
parties concerned and the Director shall issue a certificate accordingly.5
4
The defendants in that case were BioHorizons Implant Systems, Inc. (which is a defendant in this action),
BioLok International, Inc. (which was manufacturing the system), and their common parent organization BioHorizons,
Inc. Dr. Krauser sued the trio alleging that BioLok International had defaulted on obligations set forth in an earlier
settlement agreement between it and Dr. Krauser. Among other things, that agreement provided that, in the event of a
default, Dr. Krauser could sue for money damages, a declaration of his rights to the dental implant system, or both.
5
“The term ‘Director’ means the Under Secretary of Commerce for Intellectual Property and Director of the
United States Patent and Trademark Office.” Leahy-Smith America Invents Act, Pub. L. 112-29, § 2(1), 125 Stat. 284,
284 (2011).
3
Section 256 “provides a cause of action to interested parties to have the inventorship of a
patent changed to reflect the true inventors of the subject matter claimed in the patent.” Larson v.
Correct Craft, Inc., 569 F.3d 1319, 1324 (Fed. Cir. 2009) (citation and internal quotations omitted).
The Federal Circuit has interpreted § 256 broadly “as a ‘savings provision’ to prevent patent rights
from being extinguished simply because the inventors are not correctly listed.” Id. (quoting Chou
v. Univ. of Chi., 254 F.3d 1347, 1358 (Fed. Cir. 2001)).
Defendants Evollution IP Holdings, Inc. (“Evollution”) and BioHorizons Implant Systems,
Inc. (“BioHorizons”) move to dismiss Dr. Krauser’s inventorship claim on three grounds: first, it is
barred by the doctrine of res judicata; second, Dr. Krauser is collaterally estopped from asserting any
ownership interest in the patents, and his alleged reputational injury is insufficient to establish
standing under Article III; and third, Evollution is not subject to personal jurisdiction in Florida.6 As
to this last argument, Defendants request that the Court transfer this action to the District of
Delaware—which presumably has jurisdiction over both defendants—as opposed to dismissing
Evollution and subjecting Defendants to two lawsuits in two separate venues.
II. Legal Standards
Defendants move to dismiss Dr. Krauser’s claim as barred by res judicata under Federal Rule
of Civil Procedure 12(b)(6). A motion to dismiss based on res judicata is problematic in the sense
that res judicata is an affirmative defense that requires the Court to look outside of the pleadings,
and Federal Rule of Civil Procedure 12(d) instructs the Court to convert such a motion into one for
6
Evollution, which owns the patents at issue in this case, licenses intellectual property (including those patents)
to Defendant BioHorizons. BioHorizons sells various dental implant devices and equipment, presumably including the
dental implant system at issue here.
4
summary judgment.7 But “[a] district court may take judicial notice of certain facts without
converting a motion to dismiss into a motion for summary judgment,” Horne v. Potter, 392 F. App’x
800, 802 (11th Cir. 2010) (citing Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1278 (11th Cir.
1999)), and the Court accordingly takes judicial notice of the pleadings and documents in Dr.
Krauser’s first case before this Court (Case No. 10-CV-80454-KAM) as public records, see Horne,
392 F. App’x at 802; see also Lobo v. Celebrity Cruises, Inc., 704 F.3d 882, 892–93 (11th Cir. 2013)
(comparing complaints from two separate cases to determine whether the same facts were involved
for purposes of res judicata and ultimately affirming district court’s dismissal under Rule 12(b)(6));
Davila v. Delta Air Lines, Inc., 326 F.3d 1183, 1184–85 (affirming district court’s dismissal on
grounds of res judicata under Rule 12(b)(6)). Consequently, Defendants’ 12(b)(6) motion will not
be converted into a motion for summary judgment.
A. Motions to dismiss under Rule 12(b)(6)
Rule 8(a) of the Federal Rules of Civil Procedure “requires only ‘a short and plain statement
of the claim showing that the pleader is entitled to relief’ in order to give the defendant fair notice
of what the plaintiff’s claim is . . . and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2)). The Supreme Court has held that
“[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires
more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will
not do. Factual allegations must be enough to raise a right to relief above the speculative level.” Id.
7
Rule 12(d) provides that “[i]f, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are
presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All
parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.”
5
(citations omitted).
“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 129 S. Ct. 1937,
1949 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id.; see also Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1261
(11th Cir. 2009). Thus, “only a complaint that states a plausible claim for relief survives a motion
to dismiss.” Iqbal, 129 S. Ct. at 1950. When considering a motion to dismiss for failure to state a
claim, the court must “accept[] the allegations in the complaint as true and constru[e] them in the
light most favorable to the plaintiff.” Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1288 (11th
Cir. 2010) (internal quotation marks omitted).
B. Res judicata and the declaratory judgment exception
As to res judicata, the Eleventh Circuit has held that,
[a]s a general rule, res judicata bars the filing of claims which were raised or could
have been raised in an earlier proceeding. A party asserting res judicata bears the
burden of showing these elements: (1) the prior decision must have been rendered by
a court of competent jurisdiction; (2) there must have been a final judgment on the
merits; (3) both cases must involve the same parties or their privies; and (4) both
cases must involve the same causes of action. Only if all four of those requirements
are met do we consider whether the claim in the new suit was or could have been
raised in the prior action; if the answer is yes, res judicata applies.
Dormescar v. U.S. Atty. Gen., 690 F.3d 1258, 1268 (11th Cir. 2012) (citations, quotations, and notes
omitted); see also Lobo, 704 F.3d at 892–93; Davila, 326 F.3d at 1187. “In determining whether the
prior and present causes of action are the same, [the Court] must decide whether the actions arise
‘out of the same nucleus of operative fact, or are based upon the same factual predicate.’” Davila,
6
326 F.3d at 1187 (quoting In re Piper Aircraft Corp., 244 F.3d 1289, 1297 (11th Cir. 2001).
In the Eleventh Circuit, however, a declaratory judgment exception to res judicata has been
adopted; thus, ordinary principles of res judicata are not applied to declaratory judgments provided
that declaratory relief was the only relief sought in the prior action. See Empire Fire & Marine Ins.
Co. v. J. Transp., Inc., 880 F.2d 1291, 1296 (11th Cir. 1989); see also Duane Reade, Inc. v. St. Paul
Fire & Marble Ins. Co., 600 F.3d 190, 196 (2d Cir. 2010) (citing 18A Charles A. Wright, Arthur R.
Miller & Edward H. Cooper, Federal Practice and Procedure § 4446) (“So long as the request for
declaratory relief is combined or followed with coercive relief, the claim-preclusion rules that apply
to actions for coercive relief apply with full force.”). As held in Empire Fire, the supplemental nature
of declaratory relief “requires that preclusive effect can only be given to relitigation of any issue
actually litigated and necessary to the judgment rendered.” Empire Fire & Marine Ins. Co., 880 F.2d
at 1294–97 (emphasis in original) (adopting the rationale of the former Fifth Circuit in Kaspar Wire
Works, Inc. v Leco Eng’g & Mach., Inc., 575 F.2d 530 (5th Cir. 1978)).8 In other words, “the
preclusive effect of a prior declaratory proceeding should be viewed, within the usual framework of
res judicata, as presenting a special problem of issue preclusion.” Id. at 1296; see also Magaldi v.
Safeco Ins. Co. of Am., No. 10-80280-CIV, 2010 WL 2542011, at *3 (S.D. Fla. June 22, 2010)
(“Under the declaratory judgment exception to the [claim preclusion rule], the preclusive effect of
a declaratory judgment is limited to the subject matter of the declaratory relief, with the rule of
preclusion prohibiting only relitigation of any issue actually litigated and necessary to the judgment
rendered in the first filed suit.”) (citations omitted) (emphasis in original).
8
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the Eleventh Circuit adopted
as binding precedent all decisions of the former Fifth Circuit handed down before October 1, 1981.
7
Issue preclusion, otherwise known as collateral estoppel, applies when the issue at stake is
identical to the one involved in the prior proceeding and the issue was actually litigated and decided
in the prior proceeding. See Lozman v. City of Riviera Beach, 713 F.3d 1066, 1080 (11th Cir. 2013)
(citing Pleming v. Universal-Rundle Corp., 142 F.3d 1354, 1359 (11th Cir. 1998)). Moreover, “the
issue must have been ‘actually litigated and resolved in a valid court determination essential to the
prior judgment.’” Id. (quoting Taylor v. Sturgell, 553 U.S. 880, 892 (2008)).
III. Analysis
As previously indicated, in the prior action between the parties Plaintiff asserted, and then
voluntarily dismissed, his inventorship claim. As a result, Defendants argue that all four elements
of res judicata have been established in this case. Defendants further assert that because Dr. Krauser
sought both declaratory and coercive relief in the prior action, the declaratory judgment exception
to res judicata does not apply. (The latter relief being in the form of Dr. Krauser’s request for
attorney’s fees). Dr. Krauser responds by arguing that his request for attorney’s fees did not
constitute coercive relief, so the declaratory judgment exception applies and renders the preclusive
effect of the prior action limited to the subject matter of the declaratory relief, i.e., ownership (or lack
of ownership) of the patents at issue. Hence, the fact that Dr. Krauser is estopped from asserting
ownership does not prevent him from seeking correction of inventorship. He also asserts that his
reputational interest in correcting inventorship is sufficient to confer Article III standing.
A. Res judicata and the declaratory judgment exception
As a threshold matter, application of the declaratory judgment exception in this case requires
a determination as to whether Dr. Krauser’s request for attorney’s fees in the prior action constituted
“coercive relief.” As in the prior action, the Court applies Florida contract law to construe the
8
agreement that entitled Dr. Krauser to initiate the prior action, see supra note 4, because whether
Krauser’s request for fees constituted coercive relief is a substantive issue of contract interpretation,
i.e., an issue of how integral the fees are to the merits of the case and the scope of relief. See Preston
v. Marathon Oil Co., 684 F.3d 1276, 1285 (Fed. Cir. 2012) (recognizing that construction of pattern
assignment agreements is a matter of state contract law); see also In re Chira, 567 F.3d 1307, 1312
(11th Cir. 2009); Krauser v. BioHorizons, Inc., 903 F. Supp. 2d 1337, 1349 (S.D. Fla. 2012) (citing
Mars, Inc. v. Coin Acceptors, Inc., 527 F.3d 1359, 1370 (Fed. Cir. 2008)). In Florida, the recovery
of attorney’s fees is ancillary to the substantive claim within which the fees are sought. See Cheek
v. McGowan Elec. Supply Co., 511 So. 2d 977, 979 (Fla. 1987) (“the recovery of attorney’s fees is
ancillary to the claim for damages. A contractual provision authorizing the payment of attorney’s
fees is not part of the substantive claim because it is only intended to make the successful party
whole by reimbursing him for the expense of litigation.”); First Specialty Ins. Co. v. Caliber One
Indem. Co., 988 So. 2d 708, 714 (Fla. Dist. Ct. App. 2008) (“Florida courts have held that attorneys’
fees are not damages. Attorneys’ fees are ancillary to damages, and are not part of a substantive
claim.”) (citations and internal quotations omitted); Scottsdale Ins. Co. v. Haynes, 793 So. 2d 1006,
1009 (Fla. Dist. Ct. App. 2001) (“It is generally held that attorney’s fees are not damages, but are
ancillary to damages, and are not part of a substantive claim.”); see also Schafler v. Fairway Park
Condo. Ass’n, 324 F. Supp. 2d 1302, 1311 (S.D. Fla. 2004) (concluding that, in the context of an
Erie analysis, “the issue of attorney’s fees is ancillary to the underlying cause of action. Parties are
not likely to engage in forum shopping with respect to ancillary issues at the time the cause of action
is initially filed.”); Screnci v. State Farm Mut. Auto Ins. Co., No. 09-80510-CIV, 2009 WL 3667091,
at *4 (S.D. Fla. Oct. 26, 2009) (“Florida law is clear that the recovery of attorney’s fees is ancillary
9
to substantive claims for relief.”) (citations omitted). Thus, the Court has little trouble concluding
that Dr. Krauser’s request in the prior action for attorney’s fees, i.e., “ancillary relief” as defined by
Florida law, does not constitute a request for “coercive relief.” As a result, the declaratory judgment
exception is applicable in this case. And because the exception applies, the preclusive effect of the
Court’s declaration in the prior action is limited to the subject matter of the declaratory relief. The
subject matter of that relief addressed Dr. Krauser’s lack of ownership in the patents at issue. No
party can dispute that the issue of ownership was actually litigated and necessary to the judgment
rendered in the prior action, barring Dr. Krauser from relitigating that issue here.
But Dr. Krauser now brings a claim for correction of inventorship under 35 U.S.C. § 256,
and it is well established that ownership and inventorship are separate issues because “inventorship
is a question of who actually invented the subject matter claimed in a patent. Ownership, however,
is a question of who owns legal title to the subject matter claimed in a patent, patents having the
attributes of personal property.” Beech Aircraft Corp. v. EDO Corp., 990 F.2d 1237, 1248 (Fed. Cir.
1993) (citing 35 U.S.C. § 261); see also Israel Bio-Eng’g Project v. Amgen, Inc., 475 F.3d 1256,
1264 (Fed. Cir. 2007) (citing Beech Aircraft Corp. approvingly). Notwithstanding the distinction
between the two, Defendants argue that Dr. Krauser lacks Article III standing to bring his
inventorship claim because he is collaterally estopped from asserting any ownership interest in the
patents. This lack of ownership interest, according to Defendants, deprives Dr. Krauser of any
financial interest in the patents and, by extension, any economic interest that might confer standing
under Article III. Dr. Krauser responds by asserting that the “reputational” injury he would suffer by
not being named an inventor on the patents at issue meets Article III’s requirements.
10
B. The “reputational interest” theory of Article III standing
Whether a purely reputational interest confers standing for a § 256 claim is an open question
in the Federal Circuit. On at least two occasions that court had an opportunity to resolve the issue,
and on both occasions the court left the question unanswered. See Chou, 254 F.3d at 1359 (reserving
decision on whether a reputational interest alone is enough to satisfy Article III’s standing
requirements); see also Larson, 569 F.3d at 1328 (“we need not answer the question we left open
in Chou—whether a purely reputational interest is sufficient to confer standing for a § 256
claim—because the issue is simply not presented by these facts.”). For the reasons that follow, this
Court answers the open question and holds that a purely reputational interest is sufficient to confer
standing for a § 256 claim.
Of course, whether a plaintiff seeking correction of inventorship under § 256 has Article III
standing is a threshold question, “determining the power of the court to entertain the suit.” Larson,
1319 F.3d at 1325–26 (quoting Warth v. Seldin, 422 U.S. 490, 498 (1975)). The plaintiff can pursue
the inventorship claim in federal court “only if the requirements for constitutional standing—namely
injury, causation, and redressability—are satisfied.” Id. at 1326.
In Chou, the first of the two cases to address the unique standing issue before the Court, the
Federal Circuit made the following observation:
[the plaintiff] argues that a reputational interest alone is enough to satisfy the
requirements of Article III standing. That assertion is not implausible. After all, being
considered an inventor of important subject matter is a mark of success in one’s field,
comparable to being an author of an important scientific paper. Pecuniary
consequences may well flow from being designated as an inventor. However, we
need not decide that issue because [the plaintiff] has alleged a concrete financial
interest in the patent, albeit an interest less than ownership.
Chou, 254 F.3d at 1359; see also Jardin v. Datallegro, Inc., No. 10-CV-2552-IEG (WVG), 2011 WL
11
3300152, at *8 (S.D. Cal. July 29, 2011) (citing Chou for the proposition that “[t]he attribution of
inventorship confers value other than purely economic benefits.”). In Larson, the second of the two
cases, the Federal Circuit again left the question open because the court concluded that the plaintiff
had failed to claim a reputational injury, so a reputational injury could not be a basis on which to find
standing. See Larson, 569 F.3d at 1327–28; see also Vita-Herb Nutriceuticals, Inc. v. Probiohealth,
LLC, No. SACV 11-1463, 2013 WL 1182992, at *4 (C.D. Cal. Mar. 20, 2013) (reserving resolution
of the question of standing based on reputational injury because, similar to Larson, the plaintiff
conceded that it did not seek reputational damages).
Here, Dr. Krauser alleges that, given his stature in the dental implant field, “he has a
reputational interest in correcting the omission of his name and, therefore, evidence of his
contributions to each of the patents which are the subject of this action.” (Am. Compl. ¶ 20). He
separately alleges that he has “an economic interest in each of those patents and standing to bring
this action.” (Am. Compl. ¶ 21). Unlike Chou, Dr. Krauser has not alleged any concrete financial
interest in the patents at issue. And unlike Larson, he has alleged a reputational injury.
Since Larson and Chou, district courts addressing this issue have come to opposite
conclusions. Some courts have rejected the “reputational interest” theory of standing because “bald
assertions” of reputational interest are insufficient to carry the plaintiff’s burden of proof, see Cole
v. Gummow, No. 3–02–CV–0705–BD(P), 2003 WL 22455387, at *3 (N.D. Tex. Oct. 22, 2003), and
because being designated an inventor does not necessarily constitute “a mark of success in one’s
field,” see Barnette v. Dicello, 616 F. Supp. 2d 709, 714 (N.D. Ohio 2007) (citing Cole approvingly).
Moreover, one court effectively rejected the theory by concluding that even if the plaintiff could
establish standing based solely on injury to reputation, her claim failed as a matter of law because
12
she provided no evidence (such as lost employment opportunities) to support injury to reputation.
See Hoang v. Abbott Labs., No. 08 C 189, 2009 WL 1657437, at *3 (N.D. Ill. June 12, 2009).
On the other hand, one court concluded that, at the motion to dismiss stage, a plaintiff had
standing to challenge inventorship under § 256 “due to potential harm to his reputational interests.”
Shukh v. Seagate Tech., LLC, Civil No. 10-404 (JRT/JJK), 2011 WL 1258510, at *8 (D. Minn. Mar.
30, 2011). But that court also considered the plaintiff’s allegations that he was having trouble finding
new employment and noted that “it is . . . logical that omission from important patents could affect
his ability to get a new job,” Id. at *7, and in any event the court ultimately granted the defendant’s
motion for summary judgment because, while a general allegation of reputational injury was
sufficient to survive a motion to dismiss, the plaintiff failed to come forward with evidence of
damage to his reputation to survive summary judgment. See Shukh v. Seagate Tech., LLC, Civil No.
10-404 (JRT/JJK), 2013 WL 1197403, at *3–*13 (D. Minn. Mar. 25, 2013).9 Another court similarly
concluded that, at the motion to dismiss stage, a plaintiff had standing because he alleged that he
suffered harm to his reputation and standing in the scientific community and that, as a result, he was
unable to secure an employment opportunity and earn a particular salary. See Czarnik v. Illumina,
Inc., 437 F. Supp. 2d 252, 256 (D. Del. 2006). Consistent with Shukh, however, the court in Czarnik
noted that to survive summary judgment the plaintiff would be required to “set forth by affidavit or
other evidence specific facts establishing standing.” Id. at 256 n.2 (citation omitted).
While courts have come to different conclusions as to the soundness of the reputational
interest theory of standing, no court has provided a rationale for its conclusion other than a value
9
This conclusion was due in large part to the plaintiff’s deposition testimony, where he essentially conceded
that he “did not lose standing or prestige in his field and did not suffer a loss of reputational benefits associated with
inventorship” when the defendant omitted his name as an inventor on the six disputed patents. Id. at *10.
13
judgment as to the significance (or lack of significance) of a man’s interest in his reputation. Yet
there is a body of law devoted to this very issue.
i. A brief overview of the history of defamation law
“Since the latter half of the 16th century, the common law has afforded a cause of action for
damage
to
a
person’s
reputation
by the
publication
of
false
and
defamatory
statements. . . . Defamation law developed not only as a means of allowing an individual to vindicate
his good name, but also for the purpose of obtaining redress for harm caused by such statements.”
Milkovich v. Lorain Journal Co., 497 U.S. 1, 11–13 (1990) (quoting L. Eldredge, Law of Defamation
5 (1978)). As the Supreme Court has explained,
[t]he common law of defamation is an oddity of tort law, for it allows recovery of
purportedly compensatory damages without evidence of actual loss. Under the
traditional rules pertaining to actions for libel, the existence of injury is presumed
from the fact of publication. Juries may award substantial sums as compensation for
supposed damage to reputation without any proof that such harm actually occurred.
Gertz v. Robert Welch, Inc., 418 U.S. 323, 349 (1974). At common law, defamatory publications
enabled a plaintiff “to require the defamer to prove the truth of the imputation or to concede its
falsity and establish the privileged character of the publication.” Restatement (First) of Torts § 569
cmt. b (1938). This rule provided a path to vindication by letting a defamed plaintiff publicly brand
the defamatory publication as false. Id.; see also Gertz, 418 U.S. at 370–404 (White, J., dissenting);
Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749, 765–774 (1985) (White, J.,
concurring). “The salutary social value of this [was] preventive in character since it often permit[ted]
a defamed person to expose the groundless character of a defamatory rumor before harm to the
reputation has resulted therefrom.” Restatement (First) of Torts § 569 cmt. b. Consistent with this
vindicatory goal, actual harm to the plaintiff’s reputation was unnecessary because the publication
14
itself was seen as an injury—“and therefore a sufficient ground for recovery of at least nominal
damages.” Id. cmt. c.10
The Restatement (Second) of Torts reinforces a defamed plaintiff’s entitlement to nominal
damages “when the insignificant character of the defamatory matter . . . leads the jury to believe that
no substantial harm has been done to his reputation, and there is no proof that serious harm has
resulted from the defendant’s attack upon the plaintiff’s character and reputation. Restatement
(Second) of Torts § 620 cmt. a (1977). Nominal damages are awarded “when they are the only
damages claimed, and the action is brought for the purpose of vindicating the plaintiff’s character
by a verdict of a jury that establishes the falsity of the defamatory matter.” Id. (emphasis added).
To be sure, the law of defamation has evolved and been interpreted to have First Amendment
implications in a long line of cases involving public official and public figure plaintiffs, media and
non-media defendants, and matters of public concern. See, e.g., Phila. Newspapers, Inc. v. Hepps,
475 U.S. 767 (1986); Gertz, 418 U.S. 349; Rosenbloom v. Metromedia, Inc., 403 U.S. 29 (1971);
Curtis Publ’g Co. v. Butts, 388 U.S. 130 (1967); New York Times Co. v. Sullivan, 376 U.S. 254
10
In Gertz, the Supreme Court held that “[w]e need not define ‘actual injury,’ as trial courts have wide
experience in framing appropriate jury instructions in tort actions. Suffice it to say that actual injury is not limited to outof-pocket loss. Indeed, the more customary types of actual harm inflicted by defamatory falsehood include impairment
of reputation and standing in the community, personal humiliation, and mental anguish and suffering.” 418 U.S. at 350.
Florida law has adopted a similar understanding of the “injury” in a defamation claim. See, e.g., Miami Herald Pub. Co.
v. Brown, 66 So. 2d 679, 681 (1953) (reversing a judgment with directions to enter one for nominal damages where
plaintiff failed to provide proof that his reputation suffered); see also Florida Standard Jury Instructions in Civil Cases,
Substantive Instructions § 405.10 (“Defamation Damages”) (“If you find for (defendant), you will not consider the matter
of damages. But, if you find for (claimant), you should award (claimant) an amount of money that will fairly and
adequately compensate (claimant) for such [loss] [injury] [or] [damage] as the greater weight of the evidence shows was
caused by the [statement] [publication] in question. You shall consider the following elements of damage: a. Injury to
reputation or health; shame, humiliation, mental anguish, hurt feelings: Any injury to reputation or health and any
shame, humiliation, mental anguish, and hurt feelings experienced in the past [or to be experienced in the future]. There
is no exact standard for fixing the compensation to be awarded on account of such elements of damage. Any award
should be fair and just in the light of the evidence. . . . f. Nominal damages: If you find for (claimant) but find that no
[loss] [injury] [or] [damage] has been proved, you [should] [may] award nominal damages. Nominal damages are
damages of an inconsequential amount which are awarded to vindicate a right where a wrong is established but no
damage is proved.”).
15
(1964). But the effect of these decisions on cases involving private plaintiffs and private
matters—cases that are ostensibly the most analogous to § 256 claims11—remains unclear. See
Bierman v. Weier, 826 N.W.2d 436, 443 (Iowa 2013) (“In its constitutional decisions, [the Supreme
Court] has seemingly cleared a path for traditional common law defamations claims to proceed when
the plaintiff is a private figure and the defamation concerns private matters.”).12
Amidst the confusion, at least two state supreme courts have recently held that common law
libel presumptions still apply in defamation cases with private plaintiffs that do not involve matters
of public concern. See id. at 448–53; W.J.A. v. D.A., 43 A.2d 1148, 1160 (N.J. 2012).13 In Bierman,
the Iowa Supreme Court concluded that the United States Supreme Court “has never invalidated the
11
See Bierman v. Weier, 826 N.W .2d 436, 462 (Iowa 2013) “[P]urely private disputes such as a lawsuit in which
the impact is limited primarily to the parties involved, even though perhaps of interest to the public, are insufficient to
create a matter of public concern.”
12
As one state supreme court justice recently noted:
Defamation law has long been viewed as complex, and that perception has only grown since the New
York Times decision. As one commentator described: “The law of defamation is in disarray. It is
confusing. It is unclear. Most critically, it fails to serve its most important objectives: providing an
adequate remedy for reputational harm while allowing sufficient protection for speech. The chaotic
nature of defamation law is primarily due to the fact that, at present, defamation involves a
juxtaposition of two bodies of law: (1) the archaic state common law of libel and slander, a system
arising from medieval roots, and (2) First Amendment jurisprudence, as developed by the courts
following the United States Supreme Court’s landmark New York Times Co. v. Sullivan decision in
1964. The latter body of law, of necessity, imposes only federal constitutional limitations on what
remains essentially a state cause of action. As a result, the law of defamation resembles a creature
fashioned by committee, or worse yet, one fashioned by several independent committees working in
separate rooms in different eras with different blueprints—some building up and others chiseling
down.”
Bierman, 826 N.W .2d at 473 (Hecht, J., concurring in part and dissenting in part) (quoting Robert M. Ackerman,
Bringing Coherence to Defamation Law Through Uniform Legislation: The Search for an Elegant Solution, 72 N.C.
L. Rev. 291, 293 (1994)).
13
Per the Iowa Supreme Court: “Iowa is not the only state to continue to apply common law per se presumptions
in private plaintiff/private concern cases involving (at least) nonmedia defendants.” Bierman, 826 N.W .2d at 455–56
(listing states); see also W.J.A., 43 A.2d at 1158 (listing states and noting that the doctrine of presumed damages in a
private citizen/private concern case has been abolished in several jurisdictions in favor of actual injury to reputation in
all cases, but that the majority of states have retained the doctrine)
16
common law libel presumptions . . . to private plaintiff/private concern cases against nonmedia
defendants.” Bierman, 826 N.W.2d at 448. The opinion echoes rationale of the United States
Supreme Court as to why the common law libel presumptions are useful:
We believe that libel per se remains a useful rule in an area where it is often difficult
for a plaintiff to prove actual damages[.] “The rationale of the common-law rules has
been the experience and judgment of history that proof of actual damages will be
impossible in a great many cases where, from the character of the defamatory words
and the circumstances of publication, is it all but certain that serious harm has
resulted in fact. As a result, courts for centuries have allowed juries to presume that
some damage occurred from many defamatory utterances and publications.”
Id. at 454 (quoting Dun & Bradstreet, Inc., 472 U.S. at 760–61). In W.J.A. v. D.A., and similarly
consistent with the common law rationale, the New Jersey Supreme Court held that “[w]here a
plaintiff does not proffer evidence of actual damage to reputation, the doctrine of presumed damages
permits him to survive a motion for summary judgment and to obtain nominal damages, thus
vindicating his good name.” W.J.A., 43 A.2d at 1150 (emphasis added). The court later reasoned that,
“in a defamation case, vindication is a significant part of the analysis. A trial, even one with only
nominal damages awarded, will establish that a defendant’s allegations against a plaintiff were
false.” Id. at 1159. A specially concurring Justice in Bierman made the point succinctly:
I believe the only way a defamed person can definitely vindicate his or her reputation
is to bring an action against the defamer. When a defamatory act gives rise to a per
se claim, we should not require the defamed person to prove damages in order to
vindicate his or her name. This is true for two reasons. First, in many cases, damages
may be impossible to prove, and thus many per se cases would never be resolved.
Second, a jury award of one dollar vindicates the defamed person’s reputation, a
remedy far superior to any dollar amount a jury might award.
Bierman, 826 N.W.2d at 467 (Wiggins, J., concurring specially).
ii. Why the rationale of defamation law applies here
Requiring Dr. Krauser to prove some kind of concrete financial or economic harm to
17
establish standing for a reputational injury is tantamount to requiring a defamed plaintiff to prove
actual damages to state his claim. Notwithstanding the First Amendment implications that are now
a part of the law of defamation, it is clear that at common law actual damages were not necessary
for a successful defamation claim. The common law recognized that a man’s reputation was possibly
his most valuable asset, that vindicating that reputation in the face of one who sought to defame it
was of paramount importance, and that such vindication need not unnecessarily punish the defamer
because a judgment in favor of the plaintiff that simply established the falsity of the
defamation—and nothing more—was vindication enough.14
While the First Amendment protections established by the Supreme Court serve the
constitutional guarantee of free and uninhibited discussion of public issues, in defamation cases that
guarantee has always been balanced against society’s “pervasive and strong interest in preventing
and redressing attacks upon reputation.” Milkovich, 497 U.S. at 22; see also Gertz, 418 U.S. at 342
(“Some tension necessarily exists between the need for a vigorous and uninhibited press and the
legitimate interest in redressing wrongful injury.”). In the case of an inventor seeking to protect his
14
As Justice Stevens once wrote in dissent, “[t]he individual’s right to the protection of his own good name
reflects no more than our basic concept of the essential dignity and worth of every human being— a concept at the root
of any decent system of ordered liberty. . . . Indeed, vindicating one’s reputation is the main interest at stake in a
defamation case, and that interest has always been held to constitute a sufficient personal stake.” Spencer v. Kemna, 523
U.S. 1, 24 n.5 (1998) (Stevens, J., dissenting) (citations and quotations omitted). In Spencer, Justice Stevens cited to his
own majority opinion in Meese v. Keene for the proposition that the Supreme Court had already held that “an interest
in one’s reputation is sufficient to confer standing . . . .” Spencer, 523 U.S. at 24 n.6 and accompanying text. Meese
involved a plaintiff attorney and member of the California State Senate who wanted to exhibit three Canadian films that
had been identified as “political propaganda” under a federal statute. The plaintiff brought suit to enjoin application of
the statute to the films, and the district court held that the risk of damage to the plaintiff’s reputation “established his
standing to challenge the constitutionality of the statute’s use of the term ‘propaganda’ . . . .” Meese v. Keene, 481 U.S.
465, 468 (1987). The Supreme Court agreed, recognizing that the plaintiff had standing on the basis of the damage to
his professional and personal reputation that would result from showing films categorized as “political propaganda.” Id.
at 472–77. W hile the Court may have considered evidence of reputational injury in reaching its conclusion as to standing
based on reputation, see id. at 473–74 & nn.7–8, this Court concludes that, for reasons set forth below, such evidence
is unnecessary to establish standing under Article III for purposes of § 256.
18
professional name through correction of inventorship, that balance shifts in favor of society’s interest
in redressing damage upon reputation. And this shift is due to the importance of protecting inventors’
reputations as much as it is due to the minimal service to the First Amendment that would be
engendered by a rule prohibiting inventors—who seek nothing more than reputational
vindication—from bringing actions for correction of inventorship.15
iii. Conclusion
Dr. Krauser has a vindicatory interest in correcting inventorship because, consistent with
common law rationale, an erroneous patent application is itself an injury to his reputation sufficient
to confer Article III standing. He need not prove any concrete financial or economic injury to
vindicate his reputation because, as in most defamation cases, such injuries will generally be
impossible to prove, and success on the § 256 inventorship claim serves a vindicatory purpose even
if there is no concrete injury to be redressed. To hold otherwise would mean that the true inventor
of a product who lacked any economic or ownership interest in his product would have no means
of redress. Notwithstanding the contrary case law set forth above, this Court finds such a result
untenable.
Because the Court concludes that (1) the declaratory judgment exception applies in this case,
(2) being estopped from asserting ownership in the patents does not preclude Dr. Krauser from
seeking correction of inventorship, and (3) Dr. Krauser’s reputational interest confers Article III
15
In the language of defamation: a patent application listing a party as inventor boldly states that “anyone else
who claims to be the inventor of this patent is a liar.” By extension, implicit in any correction-of-inventorship claim are
competing statements that “the other party is a liar.” One of the parties is right, of course, because the law of inventorship
tells us that the identity of an inventor can be objectively ascertained. Of course, one of the parties is also wrong— and
there is “no constitutional value in false statements of fact” such as “so-and-so is a liar” because “[n]either the intentional
lie nor the careless error materially advances society’s interest in ‘uninhibited, robust, and wide-open’ debate on public
issues.” See Gertz, 418 U.S. at 340 (citing New York Times Co., 376 U.S. at 270).
19
standing, only Defendant Evollution’s challenge to personal jurisdiction remains. This challenge is
comprised of two prongs: first, that Evollution is not subject to personal jurisdiction in Florida; and
second, that rather than dismissing Evollution, the Court should exercise its discretion and transfer
this action to the District of Delaware where both defendants are subject to personal jurisdiction.16
For the reasons that follow, the Court concludes that Evollution is not subject to personal jurisdiction
in Florida, but the Court declines to exercise its discretion and transfer this action to the District of
Delaware.
IV. Personal Jurisdiction
The exercise of personal jurisdiction by a federal district court in Florida over a nonresident
defendant consists of a two-part inquiry: (1) whether Florida’s long-arm statute permits service of
process; and (2) whether the assertion of personal jurisdiction violates due process. See Fraser v.
Smith, 594 F.3d 842, 846 (11th Cir. 2010).
The plaintiff’s burden in alleging personal jurisdiction requires that the plaintiff
establish a prima facie case of personal jurisdiction over a nonresident defendant. A
prima facie case is established if the plaintiff presents enough evidence to withstand
a motion for directed verdict. The district court must accept the facts alleged in the
complaint as true, to the extent they are uncontroverted by the defendant’s affidavits.
If by defendant’s affidavits or other competent evidence, defendant sustains the
burden of challenging plaintiff’s allegations, the plaintiff must substantiate the
jurisdictional allegations in the complaint by affidavits, testimony or documents.
However, where the evidence conflicts, the district court must construe all reasonable
inferences in favor of the plaintiff.
Vision Media TV Grp., LLC v. Forte, 724 F. Supp. 2d 1260, 1263–64 (S.D. Fla. 2010) (citations
omitted). The Court first turns to Florida’s long-arm statute to determine whether a Florida court
could exercise jurisdiction over Defendant Evollution in this case. See Fraser, 594 at 846 (citing
16
Evollution seeks a transfer of this action notwithstanding the undisputed fact that BioHorizons is subject to
personal jurisdiction in Florida.
20
Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 626–27 (11th Cir. 1996)).
Dr. Krauser alleges that Evollution is subject to both specific and general personal
jurisdiction in Florida. (Am. Compl. ¶ 3). The relevant provisions of Florida’s long-arm statute
provide:
(1)(a) A person, whether or not a citizen or resident of this state, who personally or
through an agent does any of the acts enumerated in this subsection thereby submits
himself or herself and, if he or she is a natural person, his or her personal
representative to the jurisdiction of the courts of this state for any cause of action
arising from any of the following acts:
1. Operating, conducting, engaging in, or carrying on a business or business
venture in this state or having an office or agency in this state.
2. Committing a tortious act within this state.
3. Owning, using, possessing, or holding a mortgage or other lien on any real
property within this state.
4. Contracting to insure a person, property, or risk located within this state at
the time of contracting.
5. With respect to a proceeding for alimony, child support, or division of
property in connection with an action to dissolve a marriage or with respect
to an independent action for support of dependents, maintaining a
matrimonial domicile in this state at the time of the commencement of this
action or, if the defendant resided in this state preceding the commencement
of the action, whether cohabiting during that time or not. This paragraph does
not change the residency requirement for filing an action for dissolution of
marriage.
6. Causing injury to persons or property within this state arising out of an act
or omission by the defendant outside this state, if, at or about the time of the
injury, either:
a. The defendant was engaged in solicitation or service activities
within this state; or
b. Products, materials, or things processed, serviced, or manufactured
by the defendant anywhere were used or consumed within this state
21
in the ordinary course of commerce, trade, or use.
7. Breaching a contract in this state by failing to perform acts required by the
contract to be performed in this state.
8. With respect to a proceeding for paternity, engaging in the act of sexual
intercourse within this state with respect to which a child may have been
conceived.
9. Entering into a contract that complies with s. 685.102.
...
(2) A defendant who is engaged in substantial and not isolated activity within this
state, whether such activity is wholly interstate, intrastate, or otherwise, is subject to
the jurisdiction of the courts of this state, whether or not the claim arises from that
activity.
Fla. Stat. §§ 48.193(1)(a), (2) (2013).
Dr. Krauser suggests that the Court can exercise (presumably specific) personal jurisdiction
over Evollution because Evollution has purposefully availed itself of the privilege of conducting
activities in Florida through its relationship with BioHorizons.17 According to Dr. Krauser, this
17
The relevant allegations of Dr. Krauser’s Amended Complaint are as follows:
3. This court has personal jurisdiction over the Defendants pursuant to Fla. Stat. Ch. 48.193(1)(a) and
(2), in that they are, upon belief, personally or through an agent, operating, conducting, engaging in
or carrying on a business or business venture this State [sic]; and/or engaged in substantial and not
isolated activity within this State.
4. Evollution licenses intellectual property on an exclusive basis to [BioHorizons], including, upon
belief, the patents which are the subject of this action. [BioHorizons] is currently registered to do
business in, and does business in Florida through the sale of products embodying, in whole or part,
the inventions contained in the patents which are the subject of this action.
5. Upon belief, Evollution has no other purpose than holding and licensing such intellectual property,
including for the benefit of [BioHorizons]. Evollution is a wholly owned subsidiary of BioHorizons,
Inc.[, an entity not a party to this action.] [BioHorizons, a defendant in this action,] is also a wholly
owned subsidiary of BioHorizons, Inc. Evollution previously stipulated to submission to the
jurisdiction of this Court [in Case No. 10-CV-80454-KAM].
6. [An entity named Orthogen Corporation, which is the previous owner of the one of patents at issue
in this case,] is a wholly owned subsidiary of BioLok International, Inc., which was a [defendant in
22
“purposeful availment” arises out of out Evollution’s licensing agreement with BioHorizons because
the agreement “apparently extends beyond royalty or cross-licensing payment, including granting
both parties the right to litigate infringement cases relating to the patents-in-suit and Evollution’s
authorizing [BioHorizons] to use its trademark in the marketing and distribution of the
products . . . .” (DE 47 at 19). The Court rejects Dr. Krauser’s position.
Through a declaration of one of its officers, Evollution established, among other things, the
following:
•
•
•
•
•
•
•
•
•
Evollution is a corporation organized under the laws of the State of Delaware.
Evollution is a wholly-owned subsidiary of a corporation also organized under
the laws of the State of Delaware.
The only business Evollution has ever engaged in is the ownership of certain
patent and trademark rights and related intellectual property, and licensing those
rights on an exclusive basis to Defendant Biohorizons.
Evollution has never been qualified or authorized to do business in the State of
Florida.
Evollution does not maintain, nor has it ever maintained, any office or place of
business in the State of Florida.
Evollution does not own or lease, nor has it ever owned or leased, any real or
personal property in the State of Florida.
Evollution has never designated an agent authorized to accept service of process
on its behalf in the State of Florida.
Evollution does not maintain, nor has it ever maintained, any telephone listing or
post office box in the State of Florida.
Evollution does not maintain, nor has it ever maintained, any bank account in the
Case No. 10-CV-80454-KAM, see supra note 4]. BioLok [International, Inc.] is a wholly owned
subsidiary of BioLok Acquisition Corp., which is a wholly owned subsidiary of BioHorizons, Inc. In
view of the number of corporate entities owned by Biohorizons, Inc., such as those referenced herein,
as well as BioHorizons IPH, Inc., presently referenced on its website, and their apparent
interrelationship, both to this action and [Case No. 10-CV-80454-KAM], [Dr. Krauser] believes that
it may require further discovery as pertains to any challenge to personal jurisdiction in this action.
The Court notes that Evollution’s previous stipulation to submission to the jurisdiction of this Court in Case No. 10-CV80454-KAM , as alleged in paragraph 3, has no bearing on whether an exercise of jurisdiction over Evollution would be
appropriate in this case, where no stipulation has been made. Evollution was not a defendant in the previous case, it never
affirmatively sought the aid of this Court in the previous case, and it never defended the merits of the previous case. The
Court accordingly concludes that this conduct does not constitute consent to jurisdiction and a waiver of any objection
to personal jurisdiction by Evollution.
23
•
•
•
•
State of Florida.
Evollution has never attended or participated in any trade show or other business
events in the State of Florida.
Evollution does not have, nor has it ever had, any employees, agents, or
representatives in the State of Florida to conduct business on its behalf. Nor has
any employee or agent of Evollution ever visited the State of Florida for purposes
of soliciting or conducting any business on behalf of Evollution.
Evollution has never manufactured, distributed, marketed, or advertised any
product or service in the State of Florida (or anywhere else).
Evollution has never entered into any agreement with Dr. Krauser or any other
resident of the State of Florida, other than with its attorneys at the Florida law
firm who represent Evollution in this litigation.
(DE 23: Dutil Decl. ¶¶ 3–19). This declaration sustained Evollution’s burden of challenging Dr.
Krauser’s jurisdictional allegations, shifting the burden back to Dr. Krauser to “substantiate the
jurisdictional allegations in the complaint by affidavits, testimony or documents.” Dr. Krauser has
failed to meet this burden because he has failed to produce any evidence in support of his
jurisdictional claims.
The jurisdictional discovery conducted in this case supports the Court’s conclusion. Dr.
Krauser’s initial request for this discovery was opposed by Evollution, but the parties ultimately
agreed to limited discovery based on Dr. Krauser’s opposition to Evollution’s motion to dismiss.
That discovery was to include the license agreement entered into between Defendants Evollution and
BioHorizons, a related services agreement between those two companies, and copies of Evollution’s
certificate of incorporation and bylaws. (DE 49). A deposition of Evollution’s officer, Mr. Dutil, was
also to be conducted as part of the parties’ agreement.
Upon completion of the jurisdictional discovery, Dr. Krauser advised the Court that “nothing
further will be submitted by him, as regards the issue of personal jurisdiction over [Evollution].”
(DE 51). Dr. Krauser elected not to depose Mr. Dutil, and the only discovery produced to the Court
24
was the license agreement between Evollution and BioHorizons, which Dr. Krauser has failed to
establish supports the exercise of personal jurisdiction over Evollution.
As to specific jurisdiction, Dr. Krauser has not shown that Evollution purposefully availed
itself of the privilege of conducting activities in Florida through its relationship with BioHorizons
because he has not shown that the licensing agreement—the only evidence produced—supports that
contention. Of course, as to General jurisdiction, a connection between Evollution’s activities and
Dr. Krauser’s cause of action is not required. Consol. Dev. Corp. v. Sherritt, Inc., 216 F.3d 1286,
1292 (11th Cir. 2000). The “substantial and not isolated activity” requirement of the long-arm statute
has been recognized by Florida courts as the functional equivalent of the continuous and systematic
contact requirement for general jurisdiction under the Fourteenth Amendment Due Process Clause
as discussed in Helicopteros Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, 413–16 (1984);
see Woods v. Nova Cos. Belize, Ltd., 739 So. 2d 617, 620 (Fla. Dist. Ct. App. 1999); Achievers
Unlimited, Inc. v. Nutri Herb, Inc., 710 So. 2d 716, 720 (Fla. Dist. Ct. App. 1998). A finding that
a defendant’s activities satisfy section 48.193(2)’s requirements also necessitates a finding that
minimum contacts exist. See Universal Carribean Establishment v. Bard, 543 So. 2d 447, 448 (Fla.
Dist. Ct. App. 1989). Therefore, the analysis of jurisdiction under section 48.193(2) and the Due
Process clause merge.
As there is no requirement of a connection between the defendant’s activities and the cause
of action, the Due Process requirements are more stringent for general personal jurisdiction than for
specific personal jurisdiction. For the former, Due Process requires a showing of substantial,
persistent, continuous, and systematic business contacts between the defendant and the forum state.
Helicopteros, 446 U.S. at 414 nn.8, 9; Ruiz de Molina v. Merritt & Furman Ins. Agency, Inc., 207
25
F.3d 1351, 1357 n.4 (11th Cir. 2000); Meier v. Sun Int’l Hotels, Ltd., 288 F.3d 1264, 1274 (11th Cir.
2002). “The substantial connection between a defendant and the forum state must come about by an
action of the defendant purposefully directed toward the forum state.” Nida Corp. v. Nida, 118 F.
Supp. 2d 1223, 1229 (M.D. Fla. 2000) (citing Asahi Metal Indus. Co. v. Superior Ct. of Cal., Solano
Cty., 480 U.S. 102, 108–09 (1987)). The defendant’s contacts “must be so extensive to be
tantamount to [a defendant] being constructively present in the state to such a degree that it would
be fundamentally fair to require it to answer in [the forum state’s courts] in any litigation arising out
of any transaction or occurrence taking place anywhere in the world.” Baker v. Carnival Corp., No.
06-21527-CIV-HUCK, 2006 WL 3360418, at *2 (S.D. Fla. Nov. 20, 2006) (citing Purdue Research
Found. v. Sanofi Synthelabo, S.A., 338 F.3d 773, 787 (7th Cir. 2003)). Dr. Krauser has not provided
any evidence that would support an exercise of general personal jurisdiction over Evollution.
The cases cited by Dr. Krauser do not support an opposite conclusion. In Dainippon Screen
Mfg. Co., Ltd. v. CFMT, Inc., 142 F.3d 1266 (Fed. Cir. 1998), for example, the federal circuit
construed California’s long-arm statute, which is “coextensive with the limits of due process”—so
the court never had to analyze a more restrictive state long-arm statute. See id. at 1270. Of course,
“Florida state courts have repeatedly held that the Florida statute requires more activities or contacts
to sustain personal jurisdiction than demanded by the Constitution. ” Mallard v. Aluminum Co. of
Canada, Ltd., 634 F.2d 236, 241 (5th Cir. 1981).18 And in Breckenridge Pharmaceutical, Inc. v.
Metabolife Laboratories, Inc., 444 F.3d 1356 (Fed. Cir. 2006), the requirements of subsection (1)(f)
of Florida’s long-arm statute were met because the out-of-state defendant licensor sent letters that
could be construed as solicitations to Florida companies. See id. at 1361. Dr. Krauser cites
18
See supra note 8.
26
Breckenridge for the proposition that a defendant licensor is subject to personal jurisdiction in the
forum state “if the exclusive licensee (or licensee equivalent) with which it has established a
relationship is not headquartered in the forum state, but nonetheless conducts business there.” Id. at
1366; see also (DE 47 at 18). As Evollution correctly points out, however, that holding was directed
to the due process analysis that followed the federal circuit’s analysis of Florida’s long-arm statute.
Even if the Court accepted Dr. Krauser’s argument, that acceptance would only compel a conclusion
that the exercise of personal jurisdiction over Evollution comports with due process. Dr. Krauser has
still failed to provide any support for the antecedent inquiry: whether the exercise of personal
jurisdiction over Evollution comports with Florida’s long-arm statute. In any event, the Court rejects
Dr. Krauser’s implicit suggestion that the Breckenridge holding even supports a conclusion that the
exercise of personal jurisdiction over Evollution comports with due process.
In Breckenridge, the defendant licensor sent letters into the forum state (that the court
presumed qualified as “cease and desist” letters); entered into an exclusive license with a company
that, while not headquartered or incorporated in the forum state, conducted business there; granted
the licensee the right to sue for patent infringement with written consent; agreed to “discuss in good
faith the appropriate action, if any, with respect to third party infringers of [the licensed patents], and
to cooperate reasonably in any enforcement actions”; granted the licensee “full control of the
prosecution or maintenance” of any patent or application that the licensor abandoned or permitted
to lapse and agreed to provide the licensee with an executed power of attorney for that purpose; and
agreed to provide consultation to the licensee in the science, medicine, and marketing of related
products from time to time. See id. at 1366–67. As the court described it, “[t]hat this exclusive
license agreement not only contemplated an ongoing relationship between [the parties] beyond
27
royalty payments but has actually resulted in such a relationship is obvious from the facts of this
case.” Id. at 1367 (emphasis in original). The facts of Dr. Krauser and Evollution’s case do not
compel the same result because Dr. Krauser has failed to establish that Evollution derives revenue
from Florida through the license agreement or otherwise directs BioHorizons’ activities.
Dr. Krauser’s failure to establish that the statutory requirements for either specific or general
personal jurisdiction have been met precludes the assertion of personal jurisdiction over Evollution
under Florida’s long-arm statute. Thus, the Court need not address whether Evollution’s contacts
with Florida satisfy the requirements of Due Process. See Fraser, 594 F.3d at 848.
V. Conclusion
Accordingly, it is hereby ORDERED AND ADJUDGED that Defendants’ Joint Motion
to Dismiss or Transfer (DE 45) is GRANTED in part and DENIED in part. The motion is granted
to the extent that Defendant Evollution is dismissed for lack of personal jurisdiction under Federal
Rule of Civil Procedure 12(b)(2). The Court also concludes that the “interest of justice” does not
require transferring this action to Delaware under 28 U.S.C. § 1406. See Goldlawr, Inc. v. Heiman,
369 U.S. 463 (1962). The Court’s lack of personal jurisdiction over Evollution is not a sufficient
reason to require Dr. Krauser to proceed against Biohorizons—over which the Court does have
jurisdiction—in another venue which Dr. Krauser may find inconvenient. The remainder of the
motion is denied for the reasons set forth above.
DONE AND ORDERED in Chambers at West Palm Beach, Palm Beach County, Florida,
this 19th day of September, 2013.
______________________________________
KENNETH A. MARRA
United States District Judge
28
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