Ford Global Technologies, LLC v. New World International Inc. et al

Filing 67

OPINION and ORDER Denying 65 MOTION for Reconsideration re 62 Memorandum Opinion & Order, - Signed by District Judge Laurie J. Michelson. (JJoh)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
FORD GLOBAL TECHNOLOGIES, LLC,
Plaintiff,

Case No. 2:15-cv-10394
Honorable Laurie J. Michelson

v.
NEW WORLD INTERNATIONAL INC.,
AUTO LIGHTHOUSE PLUS LLC, and
UNITED COMMERCE CENTERS, INC.,
Defendants.
OPINION AND ORDER
DENYING DEFENDANTS’ MOTION FOR RECONSIDERATION [65]
In a prior opinion and order, this Court concluded that it could, consistent with due
process, exercise personal jurisdiction over all claims against all Defendants in this action. See
generally Ford Global Techs., LLC v. New World Int’l Inc., No. 2:15-CV-10394, 2016 WL
3349041 (E.D. Mich. June 16, 2016).
Defendants now ask the Court to reconsider that conclusion. (R. 65.) In its prior opinion,
this Court found that Ford’s claims of patent infringement “arise out of or relate to” Auto
Lighthouse’s 15,000 or so sales of auto parts to Michigan residents even though these parts (save
about 20) were not accused of infringing Ford’s patents. See Ford Global, 2016 WL 3349041, at
*5–7. Defendants say that this was “a clear error of law.” (R. 65, PID 3549); see also E.D. Mich.
LR 7.1(h)(3) (stating that, generally, a party seeking reconsideration must “demonstrate a
palpable defect by which the Court and the parties and other persons entitled to be heard on the
motion have been misled”).

None of Defendants’ arguments demonstrate clear error. Defendants first imply that this
Court erred in relying on Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324 (Fed. Cir.
2008). (See R. 65, PID 3549.) In Avocent, the Federal Circuit acknowledged the rule that a
patentee’s efforts to enforce a patent in the forum—including the patentee’s efforts to enforce the
patent against entities unrelated to the lawsuit—were contacts that supported requiring the
patentee to defend a declaratory-judgment action in the forum. 552 F.3d at 1337. This Court
found this statement of law relevant because it showed that the Federal Circuit thought that a
declaratory-judgment plaintiff’s claims arose out of or related to the patentee’s enforcement
efforts—even if those efforts were not against the declaratory-judgment plaintiff and thus did not
give rise to the plaintiff’s claims. Ford Global, 2016 WL 3349041, at *6. Defendants argue that
it was improper for the Court to analogize Auto Lighthouse’s sale of non-infringing products to
non-parties. (See R. 65, PID 3549–50.) The proper analogy, say Defendants, would be if Avocent
found that a patentee’s attempt to enforce a patent unrelated to the declaratory-judgment action
supported personal jurisdiction. (See id.) In other words, Defendants say that its sales of products
not accused of infringement is comparable to the assertion of a patent not in suit. (See id.) But,
say Defendants, that was not the rule Avocent recognized. (See id.)
Even assuming Defendants’ analogy is closer than the one Court drew, the Court’s was
far from clear error. As explained in the prior opinion, Avocent shows that the Federal Circuit
understands the phrase “arise out of or relate to” as including contacts that do not give rise to the
claims in the lawsuit (obviously, the patentee’s efforts to enforce the patent against entities not
party to the lawsuit could not have given the declaratory-judgment plaintiff a cause of action).
See Ford Global, 2016 WL 3349041, at *6. In this way, the Court’s analogy of unrelated parties
to Auto Lighthouse’s sale of products not accused of infringement was sound.

2

Moreover, this was not even the primary manner in which this Court relied on Avocent.
Instead, that case was primarily cited for this proposition: that the Federal Circuit’s “‘own
interpretation of the ‘arise out of or related to’ language is far more permissive than either the
‘proximate cause’ or the ‘but for’ analyses’” used by other Courts of Appeal. Ford Global, 2016
WL 3349041, at *6 (quoting Avocent, 552 F.3d at 1337). Defendants’ attempt to distinguish
Avocent on its facts does not show that the Court erred in relying on this clear statement of law.
Defendants make a similar argument in asserting that this Court erred in relying on
Inamed Corp. v. Kuzmak, 249 F.3d 1356 (Fed. Cir. 2001). But the only manner in which this
Court cited Inamed was this: “in accord with [its] broad understanding of the ‘arises out of or
relates to’ requirement, the Federal Circuit has also stated, ‘it is significant that the constitutional
catch-phrase is disjunctive in nature, indicating an added flexibility and signaling a relaxation of
the applicable standard from a pure “arise out of” standard.’” Ford Global, 2016 WL 3349041, at
*6 (quoting Inamed, 249 F.3d at 1362); see also id. at *7. As the Court relied on Inamed’s
statement of Federal Circuit law, Defendants’ attempt to factually distinguish that case does not
demonstrate that this Court clearly erred.
Finally, Defendants take issue with this Court concluding that Chloé v. Queen Bee of
Beverly Hills, LLC, 616 F.3d 158 (2d Cir. 2010), was more instructive on the arises-out-of-orrelates-to question than the two cases Defendants cited, Canplas Indus., Ltd. v. InterVac Design
Corp., No. 1:13 CV 1565, 2013 WL 6211989 (N.D. Ohio Nov. 22, 2013), and Round Rock
Research LLC v. ASUSTeK Computer Inc., 967 F. Supp. 2d 969 (D. Del. 2013). In particular,
Defendants point out that Chloé was a trademark case while the two cases it cited were patent
cases. (R. 65, PID 3549, 3550.) Defendants also point out that the Second Circuit in Chloé never
explained why it found that Chloé’s claims of infringement arose out of or related to the

3

defendants’ sales of products that did not infringe Chloé’s marks. (R. 65, PID 3552.) And, if
there were a reason, Defendants surmise it to be unique to trademark law. (R. 65, PID 3555.) “In
short,” say Defendants, “there is no rationale or legal analysis in Chloé that is applicable to
specific personal jurisdiction in a patent case governed by Federal Circuit law and reliance by
this Court on Chloé was clear error.” (R. 65, PID 3555.)
Defendants’ arguments about Chloé, Canplas, and Round Rock do not demonstrate that
this Court clearly erred. For one, in rendering its initial opinion, the Court was well aware of the
obvious fact that Chloé was a trademark case and Canplas and Round Rock were patent cases.
The Court did not find the distinction particularly relevant, however, because the issue was
whether a defendant’s sales of non-infringing goods in a forum could give rise to or relate to a
plaintiff’s claims of infringement. Second, for all of Chloé’s alleged shortcomings, Defendants
say nothing about this Court’s explanation that Canplas and Round Rock were off-point or
lacked a solid rationale. Ford Global, 2016 WL 3349041, at *7 (“Canplas involved an analysis
under Ohio’s long-arm statute, not the Due Process Clause; further the court simply pointed out
that the plaintiff had failed to cite any authority to back its claim (if only the plaintiff had known
about Chloé). As for Round Rock, the court there cited no authority to back its statement about
the relevant contacts.”). Finally, Defendants are unable to say why, as this Court previously
reasoned, Chloé is not more consistent with Federal Circuit precedent than Canplas and Round
Rock. Ford Global, 2016 WL 3349041, at *7 (“[M]ore importantly, Chloé is more consistent
with the Federal Circuit’s interpretation of the phrase ‘arises out of or relates to.’ As explained,
the Federal Circuit has suggested that ‘relates to’ is to be accorded meaning apart from ‘arises
out of,’ Inamed, 249 F.3d at 1362, and has stated that its interpretation of the required tie

4

between contact and claim is ‘far more permissive than either the “proximate cause” or the “but
for” analyses,’ Avocent, 552 F.3d at 1337.”).
For the forgoing reasons, the Court does not find that it clearly erred in concluding that
Auto Lighthouse’s sale of 15,000 or so auto parts to Michigan residents gave rise to or relate to
Ford’s claims of patent infringement. As such, Defendants’ motion for reconsideration is
DENIED.
SO ORDERED.
s/Laurie J. Michelson
LAURIE J. MICHELSON
UNITED STATES DISTRICT JUDGE
Dated: July 19, 2016

CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing document was served on the attorneys
and/or parties of record by electronic means or U.S. Mail on July 19, 2016.
s/Jane Johnson
Case Manager to
Honorable Laurie J. Michelson

5