ETS-Lindgren, Inc. v. MVG, Inc.
ORDER GRANTING IN PART AND DENYING IN PART 22 Motion to Dismiss for Lack of Jurisdiction and Brief in Support, DENIED as to its request for dismissal and GRANTED as to its alternative request for transfer; IT IS FINALLY ORDERED that this case is TRANSFERRED to the United States District Court for the Northern District of Georgia, Atlanta Division. Signed by Judge Sam Sparks. (dm)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause,
and specifically Defendant MVG, Inc.'s Motion Under Fed. R. Civ. P. 12(b)(2) to Dismiss for
Lack of Personal Jurisdiction and Brief in Support [#22], Plaintiff ETS-Lindgren Inc.'s Response
[#24] thereto, Defendant's Amended Reply [#26] thereto, Plaintiff's Sur-Reply [#27] thereto,
and Defendant's Objection to ETS's Unauthorized Sur-Reply [#28].'
Having reviewed the
documents, the governing law, and the file as a whole, the Court now enters the following
opinion and orders.
This is a personal jurisdiction dispute in a patent infringement action. Plaintiff ETSLindgren, Inc. (ETS) is a manufacturer of electromagnetic, magnetic, and acoustic energy
measurement systems used in industrial and commercial markets, including a type of radar and
antenna measurement system generically known as a "MIMO" system. ETS holds U.S. Patent
No. 8,331,869 (the '869 Patent), entitled "Systems and Methods for Over the Air Performance
Under the local rules of the Western District of Texas, a litigant may not file a sur-reply without leave of
court. See Local Rule CV-7(f)(1). ETS failed to seek leave of court before filing its sur-reply. As consideration of
the sur-reply does not affect the Court's ultimate disposition of this motion, MVG's objection to the sur-reply is
Testing of Wireless Devices with Multiple Antennas."
ETS claims Defendant MVG, Inc.
(MVG)'s competing "STAR-MIMO" system infringes the '869 Patent, and asserts MVG is
liable for direct, contributory, and induced infringement.
ETS is an Illinois corporation "with a principal place of business" in Cedar Park, Texas.
Resp. [#24] at 1; see Compl. [#1] ¶
(alleging ETS "ha[s] a place of business" in Cedar Park).
MVG is incorporated in Delaware and has its principal place of business in Kennesaw, Georgia.
Mot. Dismiss [#22] ¶ 8; see Resp. [#24] at 2. According to ETS's complaint, MVG is subject to
personal jurisdiction in the Western District of Texas "because it conducts business in this state
and this judicial district, including at least selling or offering for sale the devices accused of
infringement." Compl. [#1] ¶ 5.
ETS initiated this action by filing its complaint on May 28, 2015. See id. at 1. After the
Court granted the parties' agreed motion for extension of time for MVG to respond to the
complaint, see Order of Aug. 18, 2015 [#18], on September 17, 2015, MVG filed the instant
motion to dismiss. See Mot. Dismiss [#22]. The motion is now ripe for decision.
The Federal Rules of Civil Procedure allow a defendant to assert lack of personal
jurisdiction as a defense to suit.
R. Civ. P. 12(b)(2).
In a patent infringement action,
Federal Circuit law applies to the jurisdictional analysis, as "the jurisdictional issue is intimately
involved with the substance of the patent laws." Autogenomics, Inc.
Oxford Gene Tech. Ltd.,
566 F.3d 1012, 1016 (Fed. Cir. 2009) (quoting Avocent Huntsville Corp. v. Aten
F.3d 1324, 1328 (Fed. Cir. 2008)).
Int'l Co., 552
To determine whether a federal district court has personal jurisdiction over a
nonresident defendant, the district court considers first whether exercising jurisdiction over the
defendant comports with due process. See Id.; Religious Tech. Ctr. v Liebreich, 339 F.3d 369,
373 (5th Cir. 2003).
If the requirements of due process are satisfied, the court then determines
whether the exercise of jurisdiction is authorized by the jurisdictional "long-arm" statute of the
state in which the court sits. See Autogenomics, 566 F.3d at 1016. Because the Texas long-arm
statute has been interpreted as extending to the limit of due process, the two inquiries are the
same for district courts in Texas. Liebreich, 339 F.3d at 373; see
TEX. CIV. PRAC.
"The Due Process Clause of the Fourteenth Amendment limits the power of a state court
to render a valid personal judgment against a nonresident defendant." World-Wide Volkswagen
Woodson, 444 U.S. 286, 291 (1980). One requirement of due process is that the
nonresident defendant be properly subject to the personal jurisdiction of the court in which the
defendant is sued. Id. The United States Supreme Court has articulated a two-pronged test to
determine whether a federal court may properly exercise jurisdiction over a nonresident
defendant: (1) the nonresident must have minimum contacts with the forum state, and (2)
subjecting the nonresident to jurisdiction must be consistent with "traditional notions of fair play
and substantial justice." Int'l Shoe Co.
Washington, 326 U.S. 310, 316 (1945).
A defendant's "minimum contacts" may give rise to either specific personal jurisdiction
or general personal jurisdiction, depending on the nature of the suit and the defendant's
relationship to the forum state. See Autogenomics, 566 F.3d at 1017. A court may exercise
specific jurisdiction when (1) the defendant purposely directed its activities toward the forum
state or purposely availed itself of the privileges of conducting activities there; (2) the
controversy arises out of or is related to the defendant's contacts with the forum state; and (3) the
assertion of personal jurisdiction is reasonable and fair. Id. at 1018 (citation omitted). When the
controversy is not related to the defendant's contacts with the forum state, a court may exercise
general jurisdiction over the defendant
if the defendant has engaged in "continuous and
systematic contacts" in the forum. Id. Of course, if a defendant satisfies neither of these tests,
the exercise of personal jurisdiction is not proper. Int'l Shoe, 326 U.S. at 316.
The plaintiff has the burden of making a prima facie case by showing a defendant has
sufficient "minimum contacts" with the forum state to justify the state's exercise of either
specific or general jurisdiction. See Autogenomics, 566 F.3d at 1018. If the plaintiff does so, the
burden shifts to the defendant to show such an exercise offends due process because it is not
consistent with traditional notions of fair play and substantial justice. Id. Finally, when a court
rules on a
2(b)(2) motion to dismiss for lack of personal jurisdiction without holding an
evidentiary hearing, it must accept the non-moving party's jurisdictional allegations as true and
resolve all factual disputes in its favor. Nuance Commc 'ns, Inc.
Abbyy Software House, 626
F.3d 1222, 1231 (Fed. Cir. 2010).
MVG's motion requests dismissal of this suit for lack of personal jurisdiction.
Alternatively, MVG asks the action be transferred to the District Court for the Northern District
of Georgia, where MVG and ETS are currently litigating Microwave Vision,
S.A. et al. v. ESCO
Technologies et al., Civil Action No. 1:14-cv-01153 (N.D. Ga. filed Apr. 18, 2014) (the Pending
Action), another patent infringement suit. In its response, ETS requests jurisdictional discovery,
and alternatively, asks the Court to deny the motion to dismiss and transfer the case to the
Northern District of Georgia. Resp. [#24] at
As set forth below, the Court finds it appropriate
to transfer this action to the Northern District of Georgia, Atlanta Division, as alternatively
requested by both parties.
According to MVG, which has attached the sworn declaration of John Estrada, its Chief
Executive Officer, in support of its jurisdictional allegations, MVG has no place of business,
office, employees, owners, officers, or directors located in Texas.
Dismiss [#22-1] Ex.
A (Estrada Decl.) ¶J 3-4. While MVG acknowledges it does conduct some sales in Texas, MVG
alleges those sales are not "so substantial as to render this district a home for MVG," as over the
past decade, its sales in Texas have averaged approximately 3.5% of MVG's total sales
nationwide. Id. ¶ 5. Further, MVG alleges it has never sold or offered to sell the accused
product, the STAR-MIMO system, to any customer within Texas. Id. ¶J 7-8. While MVG does
have a website accessible to the public anywhere in the United States, MVG states its website is
informational only and does not offer its products for sale.
Mot. Dismiss [#22] ¶ 11.
Given all of the above, MVG argues the exercise of either general or specific personal
jurisdiction over MVG in this district would be improper.
ETS responds that the Estrada declaration and MVG's jurisdictional allegations conflict
with publicly available information, and thus, jurisdictional discovery is necessary to ascertain
whether the exercise of specific jurisdiction over MVG in this district is warranted. Specifically,
ETS argues MVG's corporate parentMicrowave Vision Group SA (MVGSA), a French
holding companyowns several subsidiaries with many Texas customers, and suggests those
subsidiaries may have infringed while acting as MVG's agents.
Resp. [#24] at 2-3,
("[J]urisdictional discovery may very well reveal that the other Microwave Vision Group
companies, acting as authorized agents for MVG, have been involved in the sales and marketing
of the STAR-MIMO system in Texas."). In support of these allegations, ETS points to a public
due diligence and valuation document filed after MVGSA acquired both MVG2 and another
company called Orbit/FR.
Resp. [#24-2] Ex.
(Valuation Doc.). The document states that
following the acquisition of MVG and Orbit/FR, "[MVGSA] implemented a new structure which
revolved around pooling of transversal functions, the realization of industrial synergies, the
centralization of sales and marketing activities, and a global R&D management." Id. at 4. ETS
emphasizes the "centralization of sales and marketing activities" language.
ETS further notes MVG admits it offered to sell its accused STAR-MIMO system to a
customer in Irving, Texas just six days before the '869 Patent issued, and contends that offer may
be relevant to jurisdiction, as if ETS conducted pre-issuance sales and marketing in Texas, those
activities might "result in or enhance future sales." Resp. [#24] at 4, 8. Finally, ETS claims
MVG's website is more than a mere advertisement, as Texas customers may request price quotes
and additional information about the STAR-MIMO system through the website,
at 9, and
states a research paper published in a March 2015 journal indicates that "MVG-Orbit/FR"
employs at least one engineer who lives in Sunnyvale, Texas,
In its reply, MVG argues ETS 's jurisdictional allegations are purely speculative and lack
Additionally, MVG submits a supplemental
both particularity and a basis in the record.
declaration from John Estrada which responds to ETS's claims in support of its request for
jurisdictional discovery. In response to the agency argument, Estrada testifies "[o]nly MVG"
would be "able to offer to sell or sell STAR-MIMO systems in the state of Texas" and states
MVG was formerly imown as "Satimo USA, Inc.," and changed its corporate name after being acquired
by MVGSA. See Resp. [#24] at 2.
MVG, its agents, distributors, and sales representatives have never, within the term of the '869
Patent, sold or offered to sell a STAR-MIMO system either to a Texas customer or for
installation in Texas. Reply [#25] Ex.
(Suppi. Estrada Deel.) ¶
33 As for ETS's allegations
regarding the MVG website, Estrada states the site does not invite potential customers to request
price quotes, and in any event, no prospective customer located in Texas has ever sent an
informational request regarding the STAR-MIMO system via the website. Id. ¶J 4-6. Estrada
also explains the Sunnyvale, Texas engineer is employed by Orbit/FR, not MVG. Id. ¶ 2.
Finally, MVG argues the offer to sell made prior to issuance of the '869 Patent has no relevance
to the jurisdictional question because pre-issuance conduct cannot support the assertion of
jurisdiction. Mot. Dismiss [#22-1] ¶ 27; Am. Reply [#26] at 4-5.
ETS has failed to establish a prima facie case of jurisdiction
First, the Court finds ETS has failed to establish a prima facie case that either general or
specific jurisdiction is proper. ETS all but concedes that failure, as its pleadings focus near-
exclusively on the propriety of jurisdictional discovery, do not respond to MVG's arguments
related to general jurisdiction, and contend the
firstbut not the secondprong of the specific
jurisdiction test is satisfied on the present record. Concerning general jurisdiction, it is clear ETS
has failed to show MVG has "affiliations with [Texas]
so continuous and systematic as to
render [it] essentially at home" in this forum, and as such, general jurisdiction will not lie.
Bauman, 134 S. Ct. 746, 761 (2014) (quoting Goodyear Dunlop Tires
Brown, 131 S. Ct. 2846, 2851 (2011)).
MVG filed both a reply and an amended reply. See Reply [#251; Am. Reply [#26]. It appears that while
Estrada's supplemental declaration was attached to the reply, see Suppl. Estrada Decl., Estrada's original
declaration, not the supplemental declaration, was mistakenly attached to the amended reply, see Am. Reply. [#261] Ex. 1. Citations to the supplemental declaration are to the exhibit attached to the reply.
Nor has ETS established the propriety of specific jurisdiction, as ETS has failed to
adduce any evidence MVG purposely directed any activities toward Texas, purposely availed
itself of this forum's privileges, or that any such contacts between MVG and Texas gave rise to
ETS's infringement claim.4 See Autogenomics, 566 F.3d at 1018 (specific jurisdiction lies where
(1) the defendant has minimum contacts with the forum, (2) the plaintiffs cause
of action arise
from the defendant's contacts with the forum, and (3) the exercise of jurisdiction is fair and
reasonable). To the extent ETS argues MVG's website alone supports the assertion of specific
jurisdiction, that argument is rejected. Even if the website alone constituted purposeful direction
of activity toward Texasa dubious proposition, given no sales of the STAR-MIMO system are
conducted through the site and in light of Estrada's declaration no prospective Texas customers
used the site's information-request
formETS has made no
attempt to show its claims arise out
of or relate to those alleged contacts. See Applied Food Scis., Inc.
New Star 2], Inc., Civil
Action No. W-07-CA-359, 2009 WL 9120113, at *4 (N.D. Tex. Jan. 23, 2009) (finding even
where website fell "at the more interactive end" of the Zippo internet-contacts
"due to the
possibility of actual sales occurring through the use of PayPa]," the website did not support
specific jurisdiction because the plaintiffs failed to show that "any of the interactivity was
directed toward or accessed by anyone in Texas")
In a portion of its brief arguing for jurisdictional discovery, ETS states "it is unclear" whether the preissuance offer to sell MVG admits it made to the Irving, Texas customer "was still open for [the customer's]
acceptance" on the date the '869 Patent issued. See Resp. [#24] at 10-11. ETS has not argued that an offer,
extended prior to issuance of a patent, constitutes infringement in and of itself under 35 U.s.c. § 371(a). See id. at
11 ("Accordingly, a relevant inquiry to jurisdiction is whether this offer to sell would have resulted in a binding
agreement upon acceptance by [the customer] on or after [the date the "869 Patent issued]."); Sur-Reply [#27] at 78 (addressing only "post-issuance offers to sell"). consequently, the Court declines to address the question, raised
by MVG's citation to Beloit Corp. v. Valmet Corp., No. 96-C-0087, 1997 WL 745040 (W.D. Wis. July 15, 1997), of
whether a pre-issuance offer which remains open on the date a patent is issued can constitute infringement as a
matter of law.
See Zippo Mfg. Co. v. Zippo Dot Corn, Inc., 952 F. Supp. 1119, 1124 (W.D. Penn. 1997) (articulating the
tripartite sliding scale of website interactivity used to ascertain "the nature and quality of commercial activity that an
entity conducts over the Internet" for purposes of determining personal jurisdiction).
Jurisdictional discovery will not be permitted
Accordingly, the Court turns to the jurisdictional discovery issue. Issues concerning
jurisdictional discovery, which are not unique to patent law, are governed by the law of the
regional circuit. Autogenomics, 566 F.3d at 1021-22.
As with all discovery matters, the
question whether to permit jurisdictional discovery is committed to the district court's discretion.
Kaplan, 686 F.2d 276, 283 (5th Cir. 1982). "As the party opposing dismissal and
requesting discovery, the plaintiffs bear the burden of demonstrating the necessity of discovery."
Monkton Ins. Servs., Ltd.
Ritter, 768 F.3d 429, 434 (5th Cir. 2014) (quoting Davila
States, 713 F.3d 248, 264 (5th Cir. 2013)).
A plaintiff seeking jurisdictional discovery is
expected to identify with particularity the discovery sought, explain what information it expects
to obtain, and explain how that information would support the assertion of personal jurisdiction;
failure to do so warrants denial of leave to conduct the discovery. See Fielding v. Hubert Burda
Media, Inc., 415 F.3d 419, 429 (5th Cir. 2005) (citing Toys "R" Us, Inc.
F.3d 446, 456 (3d Cir. 2003)); Evergreen Media Holdings, LLC
Step Two, S.A., 318
Safran Co., 68 F. Supp. 3d
664, 672 (S.D. Tex. 2014) (citations omitted).
The Court declines to permit jurisdictional discovery in this case. ETS "seeks discovery
of MVG' s activities in Texas and this District, including those of any agents, the Microwave
Vision Group or its customers, that are related to the sale, offers to sell, use, manufacture or
importation of the STAR-MIMO system." Resp. [#24] at 13. This casts too wide and vague a
net. See New World Int'l, Inc.
Ford Global Techs., LLC, No. 3:15-CV-01121-M, 2015 WL
6549137, at *7 (N.D. Tex. Oct. 28, 2015) (slip op.) (declining to permit jurisdictional discovery
where the plaintiffs claimed discovery would reveal "[the defendant's] contacts with the State of
Texas including the technology that [the defendant] has licensed and/or sold"). Additionally, all
but one of ETS's arguments regarding the alleged gaps in jurisdictionally relevant information
are directly controverted by Estrada's two sworn declarations.
V, 213 F.3d 841, 856-57 (5th Cir. 2000) (holding district court did not abuse
its discretion to deny jurisdictional discovery on alter ego theory in light of three declarations
submitted by defendants controverting same); Autogenomics, 566 F.3d at 1023 (stating a
showing that further discovery would elucidate the facts necessary to prove personal jurisdiction
"is especially important where, as here, the defendant enters declarations into evidence
specifically denying certain jurisdictional allegations"); Sur-Tec, Inc.
CovertTrack Grp., Inc.,
No. 13-2218-CM, 2014 WL 1304909, at *3 (D. Kan. Apr. 1, 2014) ("Because the declarations
cure the alleged deficiencies, and because plaintiff brings forth no additional supported
allegations, jurisdictional discovery is not appropriate[.]"); see also Alphonse
F. App'x, 2015 WL 4187585, at *3(5th Cir. 2015) (finding, in diversity
case, district court did not err in relying on defendant's declarations to disallow additional
In its only argument not resolved by Estrada's declarations, ETS contends MVG's pre-
issuance offer to sell in Texas is relevant to jurisdiction because it "may [have] result[ed] in or
enhance[d] future sales." Resp. [#24] at 7-8 (quoting Genetic Implant Sys.
123 F.3d 1455, 1458 (Fed. Cir. 1997)). Core-Vent is readily distinguishable from this case. The
Core- Vent plaintiff, a forum resident, sued Core-Vent, the out-of-state patentee, seeking a
declaratory judgment of non-infringement, and Core-Vent moved to dismiss for lack of personal
jurisdiction. Core-Vent, 123 F.3d at 1457. Core-Vent sold its products directly in the forum
state prior to issuance of its patent. Id. After the patent issued, however, Core-Vent granted
exclusive marketing and distribution rights to Dentsply, which continued to sell Core-Vent's
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products in the forum state. Id. A few years later, the plaintiff filed suit after Core-Vent sent it
several cease-and-desist letters threatening infringement litigation. Id. In finding the assertion
of personal jurisdiction over Core-Vent was proper, the Federal Circuit explained while CoreVent's lengthy history of marketing in the forum did have some relevance, the "most significant"
factor was Dentsply's continued intra-forum sale of Core-Vent's products. Id. at 1458. The
court analogized the exclusive marketing and distribution agreement between Core-Vent and
Dentsply to a license; like a license, the agreement surrendered Core-Vent's right to exclude
under its patent. Id. Because "infringement letters sent into a forum state accompanied by the
grant of a license to an in-state competitor
[ajre sufficient to justify assertion of personal
jurisdiction against an out-of-state patentee," so too, the court concluded, was Core-Vent's
agreement with Dentsply accompanied by the infringement letters. Id.
Here, as no such
circumstances obtain, Core- Vent provides minimal, if any, support for ETS ' s request for
ETS's request for jurisdictional discovery is denied.
Transfer is appropriate
Pursuant to 28 U.S.C.
1406(a), a district court lacking personal jurisdiction may, in lieu
of dismissing the case without prejudice, transfer the action to "any district or division where it
could have been brought" if the court finds transfer "is in the interest of justice." Herman
Cataphora, Inc., 730 F.3d 460, 466 (5th Cir. 2013). Here, both parties agree that transferring
this case to the Northern District of Georgia, Atlanta Division, where the Pending Action is
being litigated between these and other parties and where MVG has its principal place of
business, would be proper.
See Mot. Dismiss [#22] at 11; Resp. [#24] at 15.
circumstances, transfer rather than dismissal would save the parties the time and expense of
beginning again from scratch, avoiding delay and wasteful duplication of effort. As such, the
Court finds transfer to the Northern District of Georgia, Atlanta Division, is in the interest of
IT IS ORDERED that Defendant MVG, Inc.'s Motion Under Fed. R. Civ. P.
12(b)(2) to Dismiss for Lack of Personal Jurisdiction and Brief in Support [#22] is
DENIED as to its request for dismissal and GRANTED as to its alternative request for
IT IS FiNALLY ORDERED that this case is TRANSFERRED to the United
States District Court for the Northern District of Georgia, Atlanta Division.
SIGNED this the
day of November 2015.
UNITED STATES DISTRICT JUDGE
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