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Melnor, Inc. v. Orbit Irrigation Products, Inc.

United States District Court, W.D. Virginia, Harrisonburg Division

April 7, 2017

MELNOR, INC., Plaintiff,


          Elizabeth K. Dillon Elizabeth K. Dillon United States District Judge

         In this patent case, plaintiff Melnor, Inc. seeks a declaratory judgment that irrigation timers it sells do not infringe patents held by Orbit Irrigation Products, Inc. The case is before the court on Orbit's motion to dismiss for lack of personal jurisdiction (Mot. Dismiss, Dkt. No. 8) and Melnor's motion for jurisdictional discovery (Mot. Disc., Dkt. No. 16), which Melnor filed in response to Orbit's motion. Both motions have been fully briefed and are ripe for disposition. For the reasons stated herein, the court will grant Orbit's motion to dismiss and deny Melnor's motion for jurisdictional discovery.

         I. BACKGROUND

         Melnor, a Delaware corporation with its principal place of business in Virginia, filed this declaratory judgment action against Orbit, which is incorporated and headquartered in Utah. (Compl. ¶¶ 1-2, Dkt. No. 1.) Both Melnor and Orbit sell irrigation timers in Virginia and throughout the United States. (Id. ¶¶ 5, 9.) Melnor alleges that a “vast majority” of Orbit's sales are concentrated on the East Coast with a “significant volume” made in Virginia through big-box stores like Lowe's and The Home Depot, and online through and other sites. (Id. ¶ 5.) It further alleges that “[p]ersonal jurisdiction exists generally over Defendant Orbit because it regularly conducts business in the Commonwealth of Virginia and in this District.” (Id. ¶ 6.)

         Two patents protect Orbit's irrigation timers: U.S. Design Pat. No. D750, 506 (506 Patent) and U.S. Design Pat. No. D750, 977 (977 Patent) (collectively, the design patents).[1] (Id. ¶ 4, Exs. A-B.) At some point, Orbit sent Melnor a letter accusing it of violating Orbit's design patents by selling infringing irrigation timers and then filed a patent infringement suit against Melnor in the United States District Court for the District of Utah on April 18, 2016. (Id. ¶¶ 11- 12.) Orbit and Melnor representatives met on June 6, 2016, and July 19, 2016, to discuss the infringement suit, but no agreement was reached at either meeting.[2] (Id. ¶¶ 13-14.) Orbit subsequently dismissed that case on August 16, 2016 (id. ¶ 15), and Melnor filed this declaratory judgment action two weeks later.

         Orbit moved to dismiss Melnor's complaint for lack of personal jurisdiction. In support of its motion, Orbit submitted a declaration from Mitch Lord, Orbit's Executive Vice President. (Lord Decl. ¶ 2, Dkt. No. 9-1.) Lord asserts that Orbit's Virginia sales account for less than two percent of its total volume of sales in the United States. (Id. ¶ 6.) Lord also notes that Orbit has no warehouses, manufacturing plants, or other facilities in Virginia; is not incorporated or registered to do business in Virginia; has no agents, sales representatives, or employees in Virginia; has no accounts in Virginia banks; has no assets in Virginia; has not filed any actions to enforce the design patents in Virginia; and has not entered into any license agreements regarding the patents, in Virginia or elsewhere. (Id. ¶¶ 7-14.) Finally, Lord claims that Orbit has not visited Melnor's Virginia facilities, and that the June 6 and July 17 meetings between Melnor and Orbit representatives did not occur in Virginia; instead, they occurred via Skype, with Orbit's representatives in Utah and Melnor's representatives at the office of their then-counsel in Washington, D.C. (Id. ¶¶ 15-16.)

         In response to Orbit's motion to dismiss, Melnor filed a motion for jurisdictional discovery, seeking to resolve purported factual disputes about the amount of Orbit's Virginia sales and the communications between the parties. (See Pl.'s Br. Supp. Mot. Disc. (Pl.'s Br.) ¶¶ 7-8, Dkt. No. 17.) With its reply (Dkt. Nos. 26, 28), Melnor submitted a declaration from Juergen Nies, Melnor's President, and copies of Melnor's supplier agreements with Lowe's and Home Depot.[3] (Dkt. Nos. 28-, 28-2.) Melnor asserts that Orbit likely has similar agreements with those stores, and that the declaration and agreements contradict Lord's claims that Orbit has no Virginia assets or licenses of its design patents.


         A. Personal Jurisdiction

         This court applies Federal Circuit law to determine whether personal jurisdiction exists in a patent declaratory judgment action. Xilinx, Inc. v. Pabst Licensing GmbH & Co., KG, 848 F.3d 1346, 1352 (Fed. Cir. 2017); Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1016 (Fed. Cir. 2009); Robinson v. Bartlow, No. 3:12-cv-24, 2012 U.S. Dist. LEXIS 143323, at *5 (W.D. Va. Oct. 3, 2012). Where, as here, the court resolves the jurisdictional question “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.” Autogenomics, 566 F.3d at 1017 (quoting Elecs. For Imaging, Inc. v. Coyle, 340 F.3d 1344, 1349 (Fed. Cir. 2003)). The 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. (emphasis in original); accord Xilinx, 848 F.3d at 1352.

         “Determining whether jurisdiction exists over an out-of-state defendant involves two inquiries: whether a forum state's long-arm statute permits service of process and whether assertion of personal jurisdiction violates due process.” Autogenomics, 566 F.3d at 1017 (quoting Genetic Implant Sys., Inc. v. Core-Vent Corp., 123 F.3d 1455, 1458 (Fed. Cir. 1997)). Because Virginia Code § 8.01-328.1-Virginia's long arm statute-“extends personal jurisdiction to the limits allowed by due process, ” Mitrano v. Hawes, 377 F.3d 402, 406 (4th Cir. 2004), the court's statutory analysis merges with the constitutional question. Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396-97 (4th Cir. 2003); Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1360 (Fed. Cir. 2001) (“[B]ecause California's long-arm statute is coextensive with the limits of due process, the two inquires collapse into a single inquiry: whether jurisdiction comports with due process.”).

         In International Shoe Co. v. Washington, 326 U.S. 310 (1945), the Supreme Court recognized that due process authorizes a state to “exercise personal jurisdiction over an out-of-state defendant if the defendant has ‘certain minimum contacts with [the State] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.'” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 923 (2011) (quoting Int'l Shoe, 326 U.S. at 316) (internal quotations omitted) (alteration in original); accord Daimler AG v. Bauman, 134 S.Ct. 746, 754 (2014). Two categories of personal jurisdiction have developed from this principle: general jurisdiction and specific jurisdiction. Daimler, 134 S.Ct. at 754; Autogenomics, 566 F.3d at 1017. General personal jurisdiction exists when the defendant's “affiliations with the state are so ‘continuous and systematic' as to render it essentially at home in the forum state.” Goodyear, 564 U.S. at 919 (quoting Int'l Shoe, 326 U.S. at 317); Helicopteros Nacionales De Colombia v. Hall, 466 U.S. 408, 416 (1984). “Specific jurisdiction, on the other hand, must be based on activities that arise out of or relate to the cause of action, and can exist even if the defendant's contacts are not continuous and systematic.” Autogenomics, 566 F.3d at 1017. Melnor argues that the jurisdictional facts alleged establish both specific and general personal jurisdiction. The court will address both theories in turn.

         1. General jurisdiction

         General personal jurisdiction, or all-purpose jurisdiction, allows courts to adjudicate claims against a defendant regardless of whether those claims arose from the defendant's contacts with the forum state. See Daimler, 134 S.Ct. at 751, 754; Silent Drive, Inc. v. Strong Indus., 326 F.3d 1194, 1200 (Fed. Cir. 2003) (“[G]eneral jurisdiction . . . confers personal jurisdiction even when the cause of action has no relationship with those contacts.”). In order for this court to have general jurisdiction, Orbit's contacts with Virginia must be “‘so continuous and systematic' as to render [it] essentially at home” in Virginia. Goodyear, 564 U.S. at 919. The “paradigm bases for general jurisdiction” over a corporation are its place of incorporation and principal place of business, Daimler, 134 S.Ct. at 760 (citation omitted), although in exceptional cases general jurisdiction may be proper in other jurisdictions where a corporation's business is sufficiently continuous and systematic. Id. at 761 n.19; Collier v. Land & Sea Rest. Co., No. 7:13-cv-104, ...

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