Datatreasury Corporation v. Wells Fargo & Company et al

Filing 210

RESPONSE to Motion re #85 MOTION to Dismiss for Lack of Jurisdiction (HSBC NA) filed by Datatreasury Corporation. (Attachments: #1 Exhibit #2 Exhibit #3 Exhibit #4 Exhibit #5 Exhibit #6 Exhibit #7 Exhibit #8 Exhibit #9 Text of Proposed Order)(Bruster, Anthony)

Datatreasury Corporation v. Wells Fargo & Company et al

Doc. 210 Att. 7

Case 2:06-cv-00072-DF-CMC

Document 210

Filed 06/23/2006

Page 1 of 14

IN THE UNITED STATESDISTRICT COURT FOR THE EASTERNDISTRICT OF IEXAS MARSHAIL DII'ISION DATATREASURYCORP., PIairtifi,

i : 1 . ' 'l-i g',','' r ....'..,i1ti.:

i l ! il3yI 7 Ai,t 38 8:
'i l:.:,-'j ir: iiii

SMALL VALUE PAYMENTSCO., Defendant

$ $ $ $

s $ s s

2:04-CV-85-DF

s

ORDER
Before the court is defendant Small Valu Paymert Company's Motion to Dsmiss for knproperVnue(Dk No. 2), Iiled June1, 2004. AAer rcviow ofthe bdofitrg by the partiesandthe facts ard law ofthis matter,the court finds defeodarf's motiotr shouldbo DENmD. BACKGROUND This is apatentinfiingement casehought by plaintiffDatatreasuryCorp. Oereafterrefened to as "Datatreasury"),on March 2,2004, agal\st defendantSmall Value Pa)4ner1ts (hereafier Co. refered to as "S\?Co') for inftiruemetrt of U,S. PatentNos. 6,032,137(the "'137 patent') a[d (the 5 , 9 1 0 , 9 8 8 "'988 parent'). Datatreasury aDelawarecorporationwith its pdncipalpla.e ofbusinessin Mellville, New is York. SVPCois a Delawarelimited liability company that maidains its p.incipal placeofbusiness in New York, New York. Compl. at fJfl 1-2. Datatreasuryclaims that SVPCo has beenand currently is "infringing the '988 and '137 patentsby making, using, selling, offering for salq and./or importing in or into the United States, directly, contributorily, andoi by inducement,without authority, products and servicesthat fall P a g eI of 14

Dockets.Justia.com

Case 2:06-cv-00072-DF-CMC

Document 210

Filed 06/23/2006

Page 2 of 14

within the scopeofthe claims ofthe '988 aBd'137 patents,idcluding but not limited to elctronic clearingandpoint-olsale check-to-debitssryices." E. at lJ 8. As this action adsesunderthe patent laws ofthe United Statesalld Title 35 ofth United StatesCode, the cout hasjurisdiction over this action pursuantto 28 U.S.C. $ 1338(a)0999). SVPCo,however,movesthe coult underFederalRule of Civil Procedue 12OX3) to dismissthis action for imDroDer venuo.

GENERAL RULf,S OF LAIff I.

VEIruE
Because is a suit for patentinftingement the law ofthe United StatesCourt ofAppeals lhis

for the Fedeml Circuit and not the Fifth Circuit binds this cout, even as to mattersconceming judsdiction and the closely related issueof venue. SggEglglltlElllEgq..tqg,-y-Bplel personal Sovereiel Corp..21 F.3d 1558,1564-65(Fed.Cir. 1994)(statingthat, althoughissuesofpersonal jurisdiction aregercrally prooedunl in nature,theyaresuffioieotly relatedto substantive patentlaw, andthusthe law ofthe FederalCircuit contlols). TheFederalCicuit, however,defersto the law of the regiotral circuits to resolve non-substantive patent issues- See Amana Reilieemhorr. lnc. v. Ouadlux.h% 172F.3d 852, 856 (Fed.Cir. 1999)(this court is "genenlly guidedby the law ofthe regional 'circuit to which district court appeals nomally lie, ur[essthe issuepertainsto or is unique to patentlaw") (citatiot omitted). Venuerclatesto tl locality in which a lawsuit may be brought. Mion. Min. & Mfe. Co. v. Eco Chennnnnnnnnnnnnnnn 1264(Fed. C'J. 1985)(oiting Neirbo v. BethlehernShipbuildide Inc., 757 F.2d 1256, eglp- 308 U.S. 165, 167-68(1939)). The purposeofa venuercquirernentis to pmtect defendants from being forced to defendlawsuitsi[ a court remoteI]om their rcsidenceor from wherethe acts

P a g e 2 14 of

Case 2:06-cv-00072-DF-CMC

Document 210

Filed 06/23/2006

Page 3 of 14

underlyingthe conhoversyocculred. Hoover Croup.Inc. v. CustomMetalcra.ft.Inc.. 84 F.3d 1408, 1 4 1 0(Fed.Cir. 1996). Thvenuestatute relatingto patentinfiingemeBtclaimsprovides:"Aay civil actionfor patent infingement may be brought in the judicial district wh6e the deferdant sides, or where the " defendant committedactsofinfringement andhasa regulat and established has placeofbusiness. 'rresides" venuepurposes, 28 U.S.C.$ 14000) O 999). In determiningwherc a defendant for courts must look to the generalveduestatute,28 U.S.C. $ 1391(c)(2002). VE Holdinq Coro. v. Johnson G a sAooliance Co..917F.2d1574,[e-mail]. 1990). Section pro\ridos: 1391(c) For purposesofvenu underthis chapter,a defendant that is a co4)orationshall be deemed residein alyjudicial district in which it is subjectto personaljurisdiotion to at the time the action is commenoed.ln I Statewhich has morc than one judicia.l dishict and in which a defendant thal is a cotporation is subject to personal jurisdiction at the time the action is commence4suchcorporationshall be deemed to residein any dishict in that Statewithin which its cottaots would be suJficie ro subjectit to penonaljuisdiction ifthat distdct werea sepa@te State,and,ifthere is no suchdistrict, the cotporationshallbe deemed residein the district vrithin whioh to it hasthe most significant contacts. 28 U.S.C. $ 1391(c). Readingthe statutestogether,Datatreasury must demonstrat that personal judsdiction over SVPCo exists in the Eastem District ofTexas, and cannot aggregate S\ryCo's contactswithin the entire Staieof Texasto establishthat venueis proper in this distiict. A ao[-reside[t defendant subjeatio personal jurisdiction in a federal district court if; is (1) the defendantis within the rearh ofthe forum staters long arn statute;a(rd(2) du prosassrs satisfied.SggBeverlvHills FarL21 F.3d at 1569(statiogthat courtsmust look to therelevantstate's long-arm statuteevet when the causeof action is purely fedenl). Becausethe Texas long-ann statuteis co-extensive with the limits of dueprocess, E93q1J.EgSb]!iI!IC&gg4818 F.2d 370,

3'72(5th Cir. 1987), the court's sole inquiry is whethet tho exerciseofpersonal jurigdiction over Page3 of 14

Case 2:06-cv-00072-DF-CMC

Document 210

Filed 06/23/2006

Page 4 of 14

SVPCocomports .ith dueprocess. \ @

84F.3d424,

(stating 4 2 7 (Fed.Cir.1996);seealsoAtro Com.v. Luker.45 F.3d 1541,15,f4(Fed.Cir. 1995) jurisdiction over a nonresidetrt federalcourtshavepersonal to defendantitr federal questioncases th extentthat federalconstitutionaldue prooess limits allow). Although Dataheasurybearsthe burden of estabtishingcorfacts by SVPCo sufficient to invoke thejurisdiction ofthis cout, I4h9ry-89!b, 20F.3d 644,648 (5rh Cir 1994),flte Foderal

andFifth Circuits agree wherea district court'sdispositionofthe pe$onaljurisdictional question that is basedon alfrdavitsand otherwritten materia.ls the absence anevidentiaryhearin& a plaintiff in of need only to make a pdma facie showing that defendantsare subject to peNonal jurisdiction. Electonics for L'nasine Inc. v. Covle.340F.3d 1344,1349(Fed.Cir. 2003);!dsg& 20 F.3dat 648; Asarco. postue ofa Inc. v. Glenam. Ltd.. 912F.2d784,185 (sth Cir. 1990). In the procedural motion to dismiss, "a district court must acceptthe uncontrovertedallegationsin the plaintiffs complaint astnre and resolveany faotualconflicts in the affidavits in the plaintiffs favor." Qqylg 340 F.3d at 1349;D.J. Invs.. Inc. v. MetzelerMotorcvcleTire Asent Grcee.Inc.. 754 F.2d 542,545 ( 5 t h Cir. 1985). The exercise of persoaaljtrisdiction over a nonresidentdefendant comports with the constitutional guaranteeof due processif: (1) the defendanthas purposely availed itself of the "minimum contactsl with the statesuch benefitsandprotectionsofthe forum stateby establishing that (2) exrcisingjudsdiction does not offend "traditional notions of fat play and substantial j u s t i c e . "BeverlvHillsFan.2l F.3dat l565 (quotinghelsbpgJ.yesh- 326U.S.310,316 (1945) Kirq Corp. v. Rudzeli'icz. 471U.5. 462,4'74(1985)). & citing Buuuuuuuuuuuuuuuueer

4 P a g e of 14

Case 2:06-cv-00072-DF-CMC

Document 210

Filed 06/23/2006

Page 5 of 14

A.

MINIMUM CoNTACTS

suffices to establish The critical issue in deteimining whether any set of circumstances "purposfully avaitled]itselfofthe privilege is defendarlt minimum contacts whethertheoomesident of conducting aotivities within the forum state, thus invokiag the benefits and protectionsofits laws." BllggKigg 471 U.S. at 475. When analyzingwhethersufficient minimum contactsexist

fte defendaot, with a forum state,the court is to focuson the rclationshipsamongthe non_resident forum state,and the litigation at issue. Shafferv. Hiber.433 U.5.186,204 (1917). Jurisdiction contarts with the forum is not proper when a defendantonly hasrandom,fottuitous, or attenuated state,or due to the udlateral aotivity of alother party or a third peNon, Eqgql!4g, 471 U.S at

havefair waming that a particular activity may 475. This standard helps ensue that non-residents subjectthem to litigation within the forun. Egyglllllilb-Ecq B. FAIR PLAYANDSUBSTANTIAL JUSTICX 21 F.3d at 1565.

may defeatthe defendant with dueprocess, norEesident a Notwithstandingits comporhnent exercise ofpersonaljudsdiction ifit canshowthat "faii play andsubstarfialjustice" militate against (1987); BurqerKine. Court,480U.S.102,121-22 s u c hanexerctse. AsahiMetallndus.v. Suoerior jurisdiction 'are limited to the 471\l .5. at 47'7 "[S]uch defeats . ofotlerwise constitutionalpersonal interestin adjudicatingthe disputein the raresituationin which theplaintiffs i{terest andthe state's forum ale so attenuated they a1E that clearly outweighedby the burde[ of subjectingtlte defndant Fan.21F.3dat 1568) (quotingBeverlvHills t o litigation within theforum."' Abg,45 F.3dat 1549 The following factorsare to be considered the court when conductiltg an inquiry of fair by justice: (1) the burdenupon the non-resideot defendant;(2) tlrc irtetests ofthe play andsubstantial relief; (4) the interstatejudioial8,6tem'sinterests fomm state;(3) the plaintiffs interestsin securing P a g e of 14 5

Case 2:06-cv-00072-DF-CMC

Document 210

Filed 06/23/2006

Page 6 of 14

intercstsofthe several in obtainingthe most efflcient tesolutionofcontove$ies; and(5) the shared statesin furthering firndamenta.l substantive socialpolicies. EqggK4& 47lU.S.at476-11

The faimess faotoB cannot of themselvesinvest the court with jurisdiction over a non-rcsident defendant when the minimum contaotsanalysis weighs against the exercise of j u r i s d i c t i o n .Wodd-Wide VolkswaeenCoro. v. Woodson.444 U.S, 286,294 (1980). The anticipatebeirg haledinto defendant's actionsmustjustify the conclusionthat it shouldreasonably court in the forum state. Il, at297. Herce, unilatelal activity ofthe plaintiff is insufricient to jurisdiction over the defendant. !. establishpersonal jurisdiction pu4oses is analyzedfor both specificand A dfendant's contactsfor personal generajurisdiction. l II. SPECItr'ICJURISDICTION A nonresident defendant's contacts with thefotum statethat ariseftom, or aredircctly related Nacionales de to, th causeofaction aresufficient to give rise to specificjudsdictio[ Helioooteros where C o l o m b i aS.A.v, Hall.466 U.S.408,414n.8 (1984).Specifojurisdictionmay ariseeven . the nonresident defendar hasnevq setfoot in the lorum state. Bullion v. Gillesoie. 895F.2d 213, 2 1 6 (5thCir. 1990). the specificjurisdiction over a nouesident defendant, qua[tity of When the court exercises act defendant's contactsneednot be geat, Even a single substantia.l may permit tle exerciseof p e r s o n a l j u r i s d i c t i o n . v. Ia CieneeaMusic 4 F,3d413,415(5thCir. 1993).TheSuFeme Ham Co.. Coud has stated:"If the sale of a product of a manufactureror distributor . . . is not simply an isolatcdoccurence,but arisesfiom the efforts ofthe ldefendarf] to serve,directly or indirectly, the market for its product . . . it is not uFeasonableto subjectit to suit," World-Wide Volkswaeen.444 P a g e of 14 6

Case 2:06-cv-00072-DF-CMC

Document 210

Filed 06/23/2006

Page 7 of 14

U.S. zt 297. This is padicularly true when the purposefulact involves the placing of an accused distribution chamel, !9. into the "streamofcommerce"with Foduct in anidtentionally established the expectation reasonable or foreseeability that itri,ill reachthe forum state. U at297-98;B84gu H i l l s Fan.21 F.3dat 1565-66', W 4 F .3d, 416. at

What is importa.ntis whther the defendantdeliberatelyengagedin significant activities within the forum or has croatedcontinuing obligationsbetvreenitself and residentsofthe forum, manifestingan availmentofthe privilege of conductingbusinessthere. BIEgqllig& 471 U.S. at

471-76. Whentheaonresident's activities areshielded thebenefitsandFotections ofthe foruln's by laws, it is presumptivelyreasonabl requirethe defendant submit to th burdensof litigation to to in the forum. l!. Thoroforo,jurisdiotion is proper 'Vhere tie contactsproximately result from

actionsby the defendant that createa substantialconnectionwith the forum State." ld L GEI\ERAIJURISDICTION If the defendant's contacts with the forum statearctrot directly relaledto the plaiotiffs oause ofaction, theywill still suIfice to establishgeneraljwisdiotion ilthey are sufficiently "continuous andsystematic"to supporta reasorEble exeroise ofjurisdiction. EglllpElglqg 466U.S. at 415-16; Keetonv. Hustler Maqazine.Inc., 465 U.5.7'70,779-80 (198a);SCe_alSS ES[_gl&G!!9rp.r (5th Cir. 1986) (explainiEg couns are requiredto examrrca E n r y q a , 801 F.2d,7'13,777-79 "in nofiesident ilefendanCs contacts toto to determine whethertheyconstitutthekind ofcontinuous afld s]Btematiccontactsrcquired to satisrydue process"). jurisdiction. Wilson. 20 Suchunrelatedconta.ts must be "substantial"to supportgetreral F.3d at 649 (citing Keeton.465 U.S. at 779 tr.11). Substantial Court contactsnotedby the Supreme in KggIQginclude "a oontinuousand systerroticsupervision"ofcorporate a.tivities in the fomm P a g e T 14 of

Case 2:06-cv-00072-DF-CMC

Document 210

Filed 06/23/2006

Page 8 of 14

state;th location ofcorpomte files there;the holding ofdirectors' meetingsthere;the maintnance decisionsthere Keeton.465 of substantialaccountsin the forum; and the making ofkey business U.S. at 779 n.11. The 5g9l@ Court additionally noted tle forum id questionwas the pdncipal, albeit temporary,pla.e ofbusinessfor the delendantseekingto avoid personaljudsdiction U jurisdiction includethe nomesident's ownership Otherfacto$ rclied upon to uphold genral businessdealingsthereitrto ofreal e,stato the forum state;havel to the forum state;andextensive in such an extent the FiIlh Circuit has found "constant and extersive personal and bushess life. Eqt 801 F.2d at 779. Other connections"with the forum statethroughoutthe tronresident's ofemploloes or oflicers in the forum; factoN include raintenance ofoffices in the forurn;residence ownerchipofpersonal propertyin the forurr; maintenance a telephonelisting or mailing address of in the fomm; and negotiation in the forum by agentsor officeN of the noffesident defendant. D o m i n i o dGasVentures. v. N.L.S..Inc.,889F. supp.265,268 (N.D. Tex. 1995). Inc. ANALYSIS Applying the foregoiog geoeralrule6 of law to this case,the court i6 to determinewhether venueproperlyexistedat the time Datatreasuty's complaintwasfiled. Hoffman v. Blaski.363 U.S. 335,342-44 (1960). Venuein patentcases determined is basedon a peNonaljurisdiction atal)Eis. V E Holdins.917F.2dat 1584. As stated,this court appliesthe law ofthe FederalCirouit to determinewhetherprsonal jurisdiction canbe exercisedover an out-of-statedefendant a patentinfringment cas. As pad in ofthe personaljurisdictionanalysis, oout oonsideB whetherit hasspecificor generaljurisdiction the over S\aPCo.

P a g e8 of 14

Case 2:06-cv-00072-DF-CMC

Document 210

Filed 06/23/2006

Page 9 of 14

SPECIFIC JIJRISDICTION In the FederalCircuit, specificjudsdiction existswhen the plaintiffsatisfies a three-prong test by showing: (1) the defendatrtpuposefirlly directedits activities at the forum state; (2) the plaintiffs claims aris6 out of those activities; and (3) assedionof pdsonal jurisdiction over the d e f e n d a n t "reasonable fair." l&q45 is and F.3dat 154546.

While a singleactcarlbe enoughto trigger specificjwisdictiorL the coud looks at thetotality ofthe circumstances detemine whetherthe act was substantia.l, ofsuch a purposetulnatwe to !Ethat exercisingperconaljurisdiction comports with dueprocess. S!te!!J!S!ad9!q39,772F.2d.1185, (5thCir. 1 1 9 2(5thCir. 1985); Hvdrokinetics. v. Alaska Inc. Mechanical. 700F.2d 1026,1028 Inc.. 1983). 35 U.S.C. $ 271 defitrespatentinfiingenent as follows: (a) Exceptasotherwise Fovided in this title, whoeverwithout authoritymakes,uses, offels to sell, or sellsanypatetrted or iavootion,withitr theUnited States imports into the United Statesany patentedinvention dudng the trm of the patent therfor,
infrinocc fhc nerpht

ofa O) Whoeveractively inducesibfringe1rrent patentshall be liable asan inftinger. (c) Whooveroffersto sell or sellsv.ithii the United Stats imports into the United or States a component of a patented maching madufa4tule, oombirEtror or compositio4 or a material or appantus for use in practicing a patentedprocess, constitutingarnaterialpart ofthe invention,knowing the sameto be especially made or especiallyadaptedfor use in an infringemert of such patent, and not a staple axticleor conmodity of oommercesuitablefor substantialnoninfringilg use,shall b e liableasa connibutory infringer. . . . 3 5 U.S.C.$ 271 (3003). Datatreasury of claims that personaljurisdiction exists "speaifically ovr SVPCo because S\?Co's conduct making,using,selling,offeringto sell, and./or in importing directly, contributodly,

P a g e9 of 14

Case 2:06-cv-00072-DF-CMC

Document 210

Filed 06/23/2006

Page 10 of 14

and./or induoement, by intinging prcducts aod srviceswithin the Stateof Texas and within this district, in particular for J.P. Morgan Chase,an infringing Defendantin the United StatesDistrict C o u l t for theEastem DistriotofTexas." Compl.at I4. SVPCoasserts E. thJoughthe alfidavit of Susatr Irng, seniorvice presidentof SVPCo,that it hasno offices or employees the StateofTexas, is not liceNed to do businessin, aod doesnot in that since do business the StateofTexas. D. Mot. at I-olg affidavit !J2. Ms. I-ong fiirther states in 1998,SVPCo has provided through a subsidiaryan elertrotic service for oxpeditingbanL check ("ECP). E atfl3. The ECP servicecuxrendy used is clearingcalled electroniccheckpresentrnent by twenty-six banks and the FederalReserve. 4. It permits banks to exchalge checkpayment inforuution elechonicallybut doesnot involve the exchange ofimages - the subjclofthe patents in suit in this action. E. Eachbark usingthe ECP seruicedoesso ftom ono or more ECP facilities. &. at T 4. None ofthe banksthat use or haveusedthe ECP sewice have done so ftom ady such facility in this district. !. In addition,SVPComaintainsa publicly accessible intemet websitthat providesinformation aboutits sen ices,but suchservices not availablethmugh the wesbsite.E. arc at{6. Datatreasuryrebuts the Long affidavit with an a{fidavit ftom a Lin&ey wltitehead and PowerPoint slidas attachedto the afndavit submittedwith their responseto SVPCo's moton. Through Ms. Whitehead's affidavit aod the slides, Datatueasury assertsthat Ms. Long made a presentationon March 2,2004, at a BAI Check 21 knplementationPlandng Clinic in Orlando, Florida. In theFesentatiotr,Ms. Inng allegedlyrpresented S\?Co is culIently eqaged in the thal businessof image exchaige on a natiolwide level, and that she did not replesed that SVPCo excludedthe EastemDistict ofTexas from its businessstrategy. P. Resp.at Whileheadalfidavit

P a g e of 14 10

Case 2:06-cv-00072-DF-CMC

Document 210

Filed 06/23/2006

Page 11 of 14

.t 2.
S\?Co assefisthrough a secondafEdavit of Susanlrng that in th speechshe gave on imaging network that, as of March 2004, March 2, 2004,in Odando, shedescribeda peer-to-per S\?Co wasplanning to inhoduce. D. Reply at Long alndavit lJ4. Sucha network wasfirst tested on June 8, 2004, but no testing occurtedin the EastemDistlict of Texas. E. Moreover, sucha networkhasnot becomeoperationalanywhere theUnited States.E. This network would beused irl by a numberof largebalks' datacenters,but SVPCohasno plansto inolude any datacenterin the that EastemDistrict ofTexas and hastaken no stepsto do so. B. Ms- Long further asserLs sheis not atare ofany conductby SVPCothat could be descdbedas "making, using, selling offerirg to within any by sell, and/orimporting,direotly,contributodly,andTor inducement" productsor services the EastemDistrict ofTexas. U. at lJ5. An article submitted by Datatreasuryas ao exhibit to their supplemetrtalresponsethat 3, appeared the "lnformationweek ' websiteon September 2004, states: on Key Bank and J.P. Morgan Cha6e& Co. have inaugurateda check-image-sharilg systemowned and program using knagg ExohangeNotrgork, an irnage exohange operated Small Value PaJ4nents a consortiumoflarge banks. Key andChase by Co., haveconcludeda two-monthpilot andexpert to increase volume ofimages they the exchange year and next. this and ImageBxchang Network eMblesbanksofall sizesto clea.r settlecheckimages directly or thrcugh third paties suchasthe Fdenl Resewe. By allowing banksto create digitized ihages of paper checks, it elimioatas the expenseof physically transportingthem betweenba[ks. P. Suppl. Resp.at Bx. A. The article showsthat SvPCo potentially pedorms intrhging activities with J.P. Mogan ChaseBank, who is a defendantculrefily subjectto personaljurisdiction and venuein this district for altogedpatent infringementofthe same'988and '137 patents. D4Ege35!ry

11 P a g e of 14

Case 2:06-cv-00072-DF-CMC

Document 210

Filed 06/23/2006

Page 12 of 14

(E.D.Tex.filed Jrme Com.v. J.P.MoreanChase. al.,Civil Actior No. 5:02-CV-124-DF-CMC et 5, 2002). The article also showsthat SVPComay havea commercialrelationshipwith the Federal Reserve Banl that includespotentially infringing activitieswith regardto tho olaimsofthe '988 and ' 1 3 7 patents. Accepting the allegationsin Datatreasury'scomplaht as true and rcsolving the factual conflicts in the a{ndavitsandthe dooumentation favor, to attaohed thoseaffidavits in Dataheasury's the court finds Datateasury's allegationsto be rmcontroverted.The cout also finds that sufficient evidencehasbeenpresented find that: (1) SVPCopurposefullydirectedits iDfringfug activities to at the EastemDistrict ofTexas through its affiliation with J.P. Morgan Chaseand t}le Federal Resene; (2) Datatreasury's patentinfritrgemert claims ariseout ofS\?Co's activities; and(3) due to SVPCo's potentially infringing activities in tlis distdct, asse{ion ofpersonal jurisdiction ovei SVPCowould be "rcasonablo fair." and For thesereasons, coult finds it hasspecificjurisdiction over SVPCo. the II. GENERAL JURISDICTION Even if SWCo's contactswith the BasternDiskict of Texa6 are not directly related to Dataheasury'scauseof action for patent infringenent, they will still sufioe to establishgercral jurisdiction ifthey arc sufficiently "continuousands)6tematic"to supporta reasonable exerciseof jurisdiction. Helicopteros.466 U.S. at 415-16. Suchurelated contactsmust be "substantial"to suppod generaljurisdiotion. ]l.bqL 20 F.3d at 649.

Dataheasury claims that "[p]eNomljurisdiction existsgenelallyover S\?Co pu$uant to 28 U.S.C. $ 1391because has sufficied minimum contact[s]with the forum as a result of busircss it conductedrMithinthe State of Texas and within this distlict." Compl. at lJ 4. However, even

P a g e of 14 12

Case 2:06-cv-00072-DF-CMC

Document 210

Filed 06/23/2006

Page 13 of 14

accepting fue the allegationsin Datatreasuy'scomplaint,the court carmotrcsolvthe foregoing as factual conflicts in the affidavits and attached favor. Insufficient documentation Datatrasury's in evidencehasbenpresented 6nd that SVPCo's oontaots with the EastemDistrict of Texasare to adequately continuousand systematic supporta reasonalleexerciseof genraljurisdictionover to it. Therefore,eventhoughthe coun finds it hasspecificjurisdiotion over SVPCo,it cannot6nd thai it hasgeneraljurisdiction over SVPCo. III. FAIR PLAY AIID SUBSTAI\TIAL JUSTICE judsdiction over SVPCoiI1this disaict comportswith the The exerciseof specificpersonal justice because: the burdenon SVPCo is small given requircmentsof fair play and substantial (1) its dircctedactivities at theEastemDistdct ofTexas, SVPCo'savailrnentofthe protectionofTexas laws, and the reasonable foreseeablityof SVPCobeing haled into court in the EastemDishict of Texasbasedon its national aod alfiliated activities in the distriot; (2) the district has an hterest in pursuing potntial patent infringe$ in its jurisdiction; (3) Datatreasuryhas chosenthis forum to securerclief ftom S\?Co's alleged infringing activities; (4) pursuing the instant aotion itr this district alleviatesanotherfederaldishict court from havingto rcsolvethe dispute;and(5) exeroising judsdiction in this district will help preserve integrity oftle patentsystern ensuring personal the by the dghts ofinventors to be free ftom infringing activitiesby allegedinfringers. BurserKine,4Tl U .5. at 4'7 6-77 . CONCLUSION Basedon the forcgoing anal)is,the cowt 6nds venueifl this caseis proper in the Eastem District ofTexas beca.rse coud hasspecificjurisdiction over SWCo, which comportswith the rhe requirernents offair play and substantialjustice. However,the court finds it doesnot havegeneral P a g e13of 14

Case 2:06-cv-00072-DF-CMC

Document 210

Filed 06/23/2006

Page 14 of 14

jurisdiction over defendant contacts SVPCodueto a lack of evidence ofcontinuous ands)Btematic by S\?Co in the distdct. Therefore,the court OR.DERSthat defendant Small Value PalatrentCompany'sMotion to Dismiss lor lnproper Velue @kt No. 2), filed Juae I , 2004,is DENIED. *\^SIGNED this \b day ofNovmber 2004.

DAVID FOLSOM I,NITED STATES DISTRICT JIJDGE

b*,Se&^.r-'---

P a g e14of 14