Sonic Foundry, Inc. v. Astute Technology, LLC

Filing 22

DECISION AND ORDER signed by District Judge Lynn Adelman on 7/1/13 that the parties have until 8/15/2013 to conduct jurisdictional discovery. Further ordering that plaintiff's supplement brief due 9/3/2013 and defendant's reply due 9/17/13. (cc: all counsel) (dmm)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WISCONSIN
SONIC FOUNDRY, INC.,
Plaintiff,
v.

Case No. 13-CV-00087

ASTUTE TECHNOLOGY, LLC,
Defendant.

DECISION AND ORDER
Plaintiff Sonic Foundry, Inc. sues defendant Astute Technology, LLC for a
declaratory judgment of non-infringement and invalidity of three United States patents
under the Declaratory Judgment Act, 28 U.S.C. §§ 2201–02. Defendant moves to dismiss
the case for lack of personal and subject matter jurisdiction, or, in the alternative, to
transfer it to the Eastern District of Texas so it can be consolidated with Astute Technology,
LLC v. Learners Digest International, LLC, Case No. 12-CV-689 (E.D. Tex.). Before I can
consider any other issues, I must decide whether I have personal jurisdiction over
defendant.
Defendant is a limited liability company organized under the laws of and based in
Virginia. It is in the business of recording live presentations and making them available for
later viewing online. The three patents at issue in this case are for methods of capturing
and distributing copies of live presentations. Plaintiff alleges that defendant has several
contacts with Wisconsin. First, it alleges that in June 2012 defendant contacted plaintiff at
its headquarters in Wisconsin and offered to sell plaintiff all three of its patents because
plaintiff’s services are similar to defendant’s. Second, plaintiff alleges that defendant has

sold copies of its recorded presentations to Wisconsin customers. Defendant admits this
allegation, but claims that only 0.18% of its sales over the past two years were to
customers with Wisconsin addresses. Finally, plaintiff alleges that defendant has
purposefully targeted Wisconsin residents for other purposes. As an example, plaintiff
points to the “Keep America Fishing” website, which appears to be hosted by defendant.
The site says that Keep America Fishing is an organization dedicated to preserving
Americans’ right to sustainably fish our nation’s waterways. It asks people living in
Wisconsin and other Midwestern states to take action to protect their right to fish and to
donate to the organization. See Keep America Fishing, “Great Lakes & Upper Midwest
Region,” http://keepamericafishing.astutetech.com/action_midwest.html. Defendant makes
no effort to respond to this allegation, so the relationship between this organization and
defendant is unclear.
To determine whether I have personal jurisdiction over defendant, I must first decide
whether jurisdiction exists under Wisconsin’s long-arm statute, and then decide whether
the assertion of personal jurisdiction would be consistent with the constitutional
requirement of due process. See Trintec Indus., Inc. v. Pedre Promotional Prods., Inc., 395
F.3d 1275, 1279 (Fed. Cir. 2005); see also Patent Rights Prot. Grp., LLC v. Video Gaming
Techs., Inc., 603 F.3d 1364, 1368 (Fed. Cir. 2010) (holding that Federal Circuit law
governs disputes over personal jurisdiction in patent cases). Plaintiff argues that the
Wisconsin long-arm statute allows me to exercise jurisdiction over defendant because
defendant conducts a substantial amount of business in this state. It points to Wis. Stat.

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§ 801.05(1)(d), which permits a Wisconsin court to exercise jurisdiction over a defendant
who is “engaged in substantial and not isolated activities within this state.”
Based on the record before me, I am unable to determine whether personal
jurisdiction over defendant exists under § 801.05(1)(d). In the event that I find that the
evidence is inconclusive, plaintiff asks for the opportunity to conduct jurisdictional
discovery. I can grant such discovery if a plaintiff establishes a colorable or prima facie
showing of personal jurisdiction. See Central States, Southeast & Southwest Areas
Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 946 (7th Cir. 2000); see also
Purdue Research Found. v. Sanofi-Sythelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003) (“In
evaluating whether the prima facie standard has been satisfied, the plaintiff ‘is entitled to
the resolution in its favor of all disputes concerning relevant facts presented in the record.’”)
(quoting Nelson v. Park Indus., Inc., 717 F.2d 1120, 1123 (7th Cir. 1983)). I conclude that
plaintiff has satisfied this requirement. Therefore, I will grant its request. Plaintiff can use
discovery to clarify how many recordings of presentations defendant has sold to Wisconsin
residents, how those sales were made, and whether defendant has provided any other
services or conducted any other activities in Wisconsin.
THEREFORE, IT IS ORDERED that the parties have until August 15, 2013 to
conduct jurisdictional discovery.
IT IS FURTHER ORDERED that plaintiff has until September 3, 2013 to submit a
supplemental brief addressing the issue of personal jurisdiction, and defendant has until
September 17, 2013 to submit a reply brief.
Dated at Milwaukee, Wisconsin, this 1st day of July 2013.
s/ Lynn Adelman
_______________________
LYNN ADELMAN
District Judge
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