New England Gen-Connect, LLC v. Keller et al

Filing 33

Judge Indira Talwani: ORDER entered. MEMORANDUM AND ORDER. Defendants' Motion to Dismiss Amended Complaint 21 is ALLOWED IN PART. Plaintiffs Motion for Leave to File a Surreply 27 is ALLOWED. See attached Memorandum and Order. (MacDonald, Gail)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
NEW ENGLAND GEN-CONNECT, LLC, *
*
Plaintiff,
*
*
v.
*
*
US CARBURETION, INC., and JOHN M. *
KELLER,
*
*
Defendants.
*

Civil Action No. 14-cv-13530-IT

MEMORANDUM & ORDER
August 10, 2015
TALWANI, D.J.
I.

Introduction
Plaintiff New England Gen-Connect, LLC (“Plaintiff”) filed this action seeking a

declaratory judgment of non-infringement and invalidity of United States Patent No. 8,448,924
entitled “Alternative-Fuel Inductor for Engines” (the “Patent”). Presently before the court are
Defendants US Carburetion, Inc. (“US Carb”) and John Keller’s (“Keller”) Motion to Dismiss
Amended Complaint [#21] and Plaintiff’s Motion for Leave to File a Surreply [#27]. Keller
moves for dismissal for lack of personal jurisdiction under Federal Rule of Civil Procedure
12(b)(2). Additionally, Keller and US Carb move for dismissal for lack of subject matter
jurisdiction under Rule 12(b)(1). The court exercises its discretion to address the question of
personal jurisdiction first. For the reasons set forth below, Defendants’ motion to dismiss is
ALLOWED as to Keller. Plaintiff’s Motion for Leave to File a Surreply [#27] is ALLOWED.
Defendants’ motion as to US Carb remains under advisement.

II.

Factual Background
Plaintiff is a Massachusetts company with its principal place of business in

Massachusetts. Am. Compl. ¶ 4 [#10]. Keller is a resident of West Virginia. Id. ¶ 5; see also
Mot. Dismiss Ex. B ¶ 2 [#21-2]. Plaintiff alleges that Keller is the owner of the Patent. Am.
Compl. ¶ 2. US Carb is a West Virginia corporation with its principal place of business in West
Virginia. Id. ¶ 6; Mot. Dismiss Ex. B, ¶¶ 3-4. US Carb has sold and shipped products to
Plaintiff in Massachusetts on fifteen different occasions over the last two years. Am. Compl. ¶ 8.
On August 8, 2014, US Carb sent a letter to Plaintiff asserting, inter alia, that US Carb
owned the Patent and that Plaintiff’s making and selling of its Honda EU2000i Propone Kit
constitutes infringement of the Patent. Am Compl. ¶ 13; id. Ex. 1 (letter).
In an affidavit, Keller affirms, inter alia, that he has not personally entered into any
licensing agreements or other contracts with Massachusetts individuals or entities, he does not
own or rent any real property in Massachusetts, and he has not personally been involved in any
prior litigation in Massachusetts. Mot. Dismiss Ex. B.

III.

Discussion
Keller moves for dismissal on the ground that he has no contacts with Massachusetts. In

its opposition, Plaintiff asserts that US Carb acted as Keller’s agent in sending the cease-anddesist to Plaintiff in Massachusetts, and thus US Carb’s contact with Massachusetts in sending
the letter should be imputed to Keller. See Pl.’s Opp’n Mot. Dismiss 8-15 [#22]. Plaintiff
further asserts that the act of sending the cease-and-desist letter to Massachusetts is sufficient to
give rise to personal jurisdiction. See id.
“The issue of personal jurisdiction in a declaratory action for non-infringement is

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‘intimately related to patent law’ and thus governed by Federal Circuit law regarding due
process.” Breckenridge Pharm., Inc. v. Metabolite Labs., Inc., 444 F.3d 1356, 1361 (Fed. Cir.
2006) (quoting Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1201 (Fed. Cir. 2003)).
“[W]here the district court’s disposition as to the personal jurisdiction question is based on
affidavits and other written materials in the absence of an evidentiary hearing, a plaintiff need
only to make a prima facie showing that defendants are subject to personal jurisdiction.” 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.” Id.
The Federal Circuit has repeatedly held that “cease-and-desist letters alone do not suffice
to justify personal jurisdiction.” Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d
1355, 1361 (Fed. Cir. 1998); see also Radio Sys. Corp. v. Accession, Inc., 638 F.3d 785, 789
(Fed. Cir. 2011) (“[O]rdinary cease-and-desist notices sent by a patentee to an alleged infringing
party in a different state are not sufficient to subject the patentee to specific jurisdiction in that
state.”); Breckenridge Pharm., 444 F.3d at 1363 (“[P]ersonal jurisdiction may not be exercised
constitutionally when the defendant’s contact with the forum state is limited to cease and desist
letters, ‘without more.’” (quoting Red Wing Shoe, 148 F.3d at 1360)). Accordingly, Plaintiff’s
assertion of personal jurisdiction over Keller based on the cease-and-desist letter fails.
At the hearing on Defendants’ motion, Plaintiff argued for the first time that the facts of
this case parallel those in Breckenridge. In Breckenridge, the court held that personal
jurisdiction over a patent holder was proper where the patent holder had sent letters into the
forum state and entered into an exclusive licensing agreement with a company that conducted
business in the forum state, where the exclusive licensing agreement contemplated a relationship

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between the patent holder and the company beyond the payment of royalties. 444 F.3d at 1366.
The exclusive licensing agreement in Breckenridge granted the company-licensee the right to sue
for infringement with the patent holder’s consent and required the company-licensee and patent
holder to consult and cooperate in enforcement actions. Id. at 1366-67. Here, Plaintiff did not
present evidence or allege in its amended complaint that Keller and US Carb have entered into an
exclusive licensing agreement, much less that any such agreement contemplated a relationship
similar to that in Breckenridge. Although the issue of jurisdictional discovery was briefly raised
at the hearing, Plaintiff has neither formally requested jurisdictional discovery, nor provided
support for such a request to the court. On this record, the court cannot find jurisdictional
discovery warranted. Accordingly, Plaintiff has not met its burden to establish personal
jurisdiction over Keller under the prima facie standard.

IV.

Conclusion
For the above-stated reasons, Defendants’ Motion to Dismiss Amended Complaint [#21]

is ALLOWED IN PART. Keller’s motion to dismiss for lack of personal jurisdiction is
ALLOWED, and the claims against Keller are hereby dismissed without prejudice. US Carb’s
motion to dismiss for lack of subject matter jurisdiction remains under advisement.
At the hearing, the parties suggested that Keller may be a necessary party to a declaratory
judgment action on the Patent and that Plaintiff may not wish to continue in this forum without
Keller as a defendant. Pursuant to Rule 41(a)(1), Plaintiff may dismiss its action against US
Carb without prejudice (i) before US Carb serves an answer or motion for summary judgment or
(ii) by stipulation of dismissal signed by all parties who have appeared. If Plaintiff does not
dismiss the action against US Carb before September 9, 2015, the court will address US Carb’s

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motion to dismiss for lack of subject matter jurisdiction.
IT IS SO ORDERED.
/s/ Indira Talwani
United States District Judge

Date: August 10, 2015

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