STARK, U.S. District Judge:
Pending before the Court is Defendants ASUS Technology Pte Ltd. ("ASUS Singapore") and ASUSTek Computer Inc.'s ("ASUS Taiwan," collectively the "Foreign Defendants") motion to dismiss for lack of personal jurisdiction and improper venue. (D.I. 25) For the reasons discussed below, the Court will deny the Foreign Defendants' motion.
Plaintiff Graphics Properties Holdings, Inc. ("GPH") filed an action against ASUS Computer International ("ASUS California"), ASUS Singapore, and ASUS Taiwan on February 1, 2012. (C.A. No. 12-210 D.I. 1) GPH filed an Amended Complaint on March 27, 2012. (Id. at D.I. 8) In its Amended Complaint, GPH asserted U.S. Patent Nos. 5,896,119 (the "'119 patent"), 6,816,145 (the "'145 patent"), and 8,144,158 (the "'158 patent") against all three defendants. The defendants collectively moved to dismiss the action for lack of jurisdiction or, in the alternative, to transfer. (Id. at D.I. 11)
On October 11, 2012, the Court heard oral argument on the motion and denied
On May 17, 2013, GPH filed a second action against ASUS California, ASUS Taiwan and ASUS Singapore. (D.I. 1) GPH amended this complaint on July 19, 2013. (D.I. 7) In this Amended Complaint, GPH asserted that ASUS tablets, including the Nexus 7, infringe U.S. Patent Nos. 6,650,327 (the "'327 patent") and 5,717,881 (the "'881 patent"). The Foreign Defendants filed their motion to dismiss for lack of personal jurisdiction on December 31, 2013. (D.I. 25)
ASUS Taiwan is a Taiwanese corporation with its principal place of business in Taiwan. (C.A. 12-210 D.I. 14 at ¶ 2) The accused products are designed and manufactured in Taiwan or China. (Id. at ¶ 8) ASUS Taiwan does not directly sell the accused products in Delaware. (Id. at ¶ 9) Instead, it sells title to the products to ASUS Singapore in Taiwan or China. (Id. at ¶ 10)
ASUS Singapore is a Singaporean corporation that is 100% owned by ASUS Taiwan and has its principal place of business in Singapore. (See D.I. 29 Ex. 4 at 101; C.A. No. 12-210 D.I. 15 at ¶ 2) ASUS Singapore does not directly sell the accused products in Delaware either. (C.A. No. 12-210 D.I. 15 at ¶ 9) Instead, the accused products sold in the United States are first sold by ASUS Singapore to ASUS California. (Id. at D.I. 16 at ¶ 9)
ASUS California is 100% owned by ASUS Taiwan. (See D.I. 29 Ex. 4 at 100) ASUS California generally receives products from ASUS Singapore at ports or airports in California. (C.A. No. 12-210 at ¶ 10) ASUS California then sells the products to resellers throughout the United States, including Delaware. (See, e.g., D.I. 29 ¶ 6) ASUS California does not contest jurisdiction in Delaware.
Pursuant to Federal Rule of Civil Procedure 12(b)(2), a party may move to dismiss a case based on the court's lack of personal jurisdiction over that party. Determining the existence of personal jurisdiction requires a two-part analysis — one statutory and one constitutional.
When a defendant moves to dismiss a lawsuit for lack of personal jurisdiction, the plaintiff bears the burden of showing the basis for jurisdiction. See Power Integrations, Inc. v. BCD Semiconductor, 547 F.Supp.2d 365, 369 (D.Del. 2008). If no evidentiary hearing has been held, a plaintiff "need only establish a prima facie case of personal jurisdiction." O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d Cir.2007). A plaintiff "presents a prima facie case for the exercise of personal jurisdiction by establishing with reasonable particularity sufficient contacts between the defendant and the forum state." Mellon Bank (E) PSFS, Nat'l Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir.1992). On a motion to dismiss for lack of personal jurisdiction, "the plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in its favor." Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir.2004). A court is always free to revisit the issue of personal jurisdiction if it later is revealed that the facts alleged in support of jurisdiction are in dispute. See Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 331 (3d Cir. 2009).
The Delaware long-arm statute, in relevant part, states that:
10 Del. C. § 3104. GPH does not allege that jurisdiction exists under any one prong of Delaware's long-arm statute. Instead, GPH asserts that personal jurisdiction exists under a "dual jurisdiction" or "stream of commerce" theory that implicates two portions of the long-arm statute: subsection (c)(1) and (c)(4).
The Delaware long-arm statute "has been broadly construed to confer jurisdiction to the maximum extent possible under the due process clause." LaNuova D & B, S.p.A. v. Bowe Co., 513 A.2d 764, 768 (Del.1986). In LaNuova, the Delaware Supreme Court noted, in a footnote, that:
Id. at 768 n. 3. Subsequently, Delaware Superior Court cases have held that this footnote stands for the proposition that "when a [defendant] has sufficient general contacts with Delaware and the plaintiffs' claims arise out of those contacts," even if no subsection of the long-arm statute is fully satisfied, "jurisdiction is appropriate under [partial satisfaction of] § 3104(c)(1) and (c)(4)." Boone v. Oy Partek Ab, 724 A.2d 1150, 1157 (Del.Super.1997), aff'd, 707 A.2d 765 (Del.1998); see also Wright v. Am. Home Products Corp., 768 A.2d 518, 530-31 (Del.Super.2000). In applying this theory, "one must take great care not to overemphasize §§ 3104(c)(1) or (c)(4)." Boone, 724 A.2d at 1158. The "indicia of activity under § 3104(c)(4)" need not "rise to the level of `general presence' as usually required." Id. Similarly, "when analyzing § 3104(c)(1) it is not important that the manufacturer itself act in Delaware." Id. Instead, if a defendant exhibits "an intent or purpose ... to serve the Delaware market with its product," and "if the intent or purpose ... results in the introduction of the product to this State and plaintiff's cause of action arises from injuries caused by that product," then the long-arm statute is satisfied. Id. This approach, according to Boone, "best encompasses all of the intricacies of the stream of commerce theory." Id. at 1157-58; see also Wright, 768 A.2d at 530-31.
In applying LaNuova, Boone, and Wright, this Court has held that "[t]he dual jurisdiction concept arises from at least partial satisfaction of subsections (1) and (4) of the Delaware long-arm statute.... Dual jurisdiction may be established when a manufacturer has sufficient general contacts with Delaware and the plaintiffs' claims arise out of those contacts." Belden Techs., Inc. v. LS Corp., 829 F.Supp.2d 260, 267 (D.Del.2010) (internal quotations omitted). Under this approach, jurisdiction exists when a defendant displays "an intent to serve the Delaware market" and "this intent results in the introduction of [a] product into the market and ... plaintiff's cause of action arises from injuries caused by that product." Id. at 267-68; see also W.L. Gore & Assocs., Inc. v. Label Technologies, Inc., 2009 WL 1372106, at *3 (D. Del. May 15, 2009) ("Delaware courts have held that personal jurisdiction is proper under the Delaware long-arm statute under a stream of commerce theory resulting from only `partial satisfaction' of §§ 3104(c)(1) and (c)(4)."); Power Integrations, 547 F.Supp.2d at 371.
In at least one recent decision, another Judge in this District reached a contrary conclusion, predicting that the Delaware Supreme Court would not embrace the "dual jurisdiction" theory. See Round Rock Research LLC v. ASUSTeK Computer Inc., 967 F.Supp.2d 969 (D.Del.2013). In Round Rock, the Court suggested that the LaNuova footnote stands for the unremarkable proposition that:
Id. at 976. Round Rock further explained that although the Delaware Superior Court has adopted the dual jurisdiction theory, in doing so
Id. Accordingly, Round Rock held that it could not "agree, or predict, that the Delaware Supreme Court would recognize `dual jurisdiction.'" Id. at 977; see also Liqui-Box Corp. v. Scholle Corp., 2013 WL 3070872 (D.Del. June 17, 2013) (internal quotation marks omitted) ("[T]he constitutionally-accepted stream of commerce theory [of personal jurisdiction] does not fit neatly into any section of § 3104.").
In light of the differing views on this issue, the Court must first address whether it will continue to apply the dual jurisdiction theory of personal jurisdiction under the Delaware long-arm statute. Because the Delaware Supreme Court has not expressly decided the issue, the Court's role here is limited to "predict[ing] how that tribunal would rule" on this issue of state law. In re Makowka, 754 F.3d 143, 148 (3d Cir.2014). "In doing so, we give due deference to the decisions of" the Delaware Superior Court, although they are not controlling. Id.; see also Round Rock, 967 F.Supp.2d at 977 (agreeing that "the conclusion to be drawn from the Superior Court cases" is that dual jurisdiction is consistent with Delaware long-arm statute, but adding that this Court is "not bound to follow those cases" and merely gives them "some weight").
The Delaware Supreme Court has had several opportunities to reject the dual jurisdiction theory but has refrained from doing so. See Boone, 724 A.2d at 1156, aff'd, 707 A.2d 765 (Del.1998); Wright, 768 A.2d at 531 ("In sum, the Court finds that §§ 3401(c)(1) and (c)(4) provide a basis for jurisdiction over the French defendants."), appeal denied, 755 A.2d 389 (Del.2000). Indeed, no Delaware state court has rejected the dual jurisdiction theory. See LaNuova, 513 A.2d at 768 n. 3; Boone, 724 A.2d at 1156-58; Wright, 768 A.2d at 518-31; Crane v. Home Depot, Inc., 2008 WL 2231472, at *4 (Del.Super. May 30, 2008) ("[T]his Court may exercise personal jurisdiction through the stream of commerce theory.").
Moreover, it is uncontested that "Delaware's long arm statute ... is to be broadly construed to confer jurisdiction to the maximum extent possible under the Due Process Clause." Hercules Inc. v. Leu Trust & Banking (Bah.) Ltd., 611 A.2d 476, 480-81 (1992). Consistent with the Due Process Clause, a party may be subject to personal jurisdiction when that party does "something more than simply
Given this record, and particularly the fact that no Delaware state court has rejected the assertion of personal jurisdiction under the dual jurisdiction theory, the Court concludes that the Delaware Supreme Court, if faced with the issue, would hold that the "stream-of-commerce" theory does provide a basis for personal jurisdiction under Delaware law, even though the theory is not expressly authorized by Delaware's long-arm statute. The Court reaches this conclusion notwithstanding the contrary, and not unreasonable, prediction of a fellow Judge of this Court.
The Court must next determine whether the Foreign Defendants are subject to jurisdiction under the theory of "dual jurisdiction." "[T]he dual jurisdiction analysis requires a showing of both: (1) an intent to serve the Delaware market; and (2) that this intent results in the introduction of the product into the market and that plaintiff's cause of action arises from injuries caused by that product." Belden Techs., Inc., 829 F.Supp.2d at 267-68. The Court finds that both of these requirements are satisfied by the Foreign Defendants' conduct.
"A non-resident firm's intent to serve the United States market is sufficient to establish an intent to serve the Delaware market, unless there is evidence that the firm intended to exclude from its marketing and distribution efforts some portion of the country that includes Delaware." Power Integrations, 547 F.Supp.2d at 373; see also Belden Techs., Inc., 829 F.Supp.2d at 268 (finding that intent existed where (1) Delaware was not specifically targeted, (2) foreign party made at least four sales to Delaware customers, and (3) there was no indication that non-resident parties directed sales to Delaware customers to cease; "[t]hat [the non-resident defendant] did not specifically target Delaware is of no moment under these circumstances") (citing Boone, 724 A.2d at 1161).
Here, the record shows that the Foreign Defendants target the United States market by selling to ASUS California, which then sells the accused products to resellers for distribution across the United States. Of key significance is the fact that there are at least three physical resale outlets (Best Buy stores) inside Delaware that stock and sell the accused devices (D.I. 29 at ¶ 6), and the record reflects that the Foreign Defendants are aware of and actively utilize these reseller outlets to sell the accused devices (D.I. 29 Ex. 1). Hence, there is evidence not only of the Foreign Defendants targeting the United States generally but also of them targeting Delaware specifically. The evidence of sales in Delaware also satisfies the second prong of the statutory analysis, as it demonstrates that the Foreign Defendants' intent resulted in the introduction of the accused devices in Delaware. (See D.I. 29 at ¶ 6)
Having determined that this Court has jurisdiction under Delaware's long-arm statute, the Court must next determine if "subjecting the nonresident defendant to jurisdiction in Delaware violates the Due
In Asahi, 480 U.S. at 105, 107 S.Ct. 1026, the Supreme Court split into two camps regarding the question of whether "mere awareness on the part of a foreign defendant that the components it manufactured, sold, and delivered outside the United States would reach the forum State in the stream of commerce constitutes `minimum contacts' between the defendant and the forum State" such that the requirements of constitutional due process were satisfied. Justice Brennan, writing for four justices, took the view that "jurisdiction premised on the placement of a product into the stream of commerce is consistent with the Due Process Clause;" for, "[a]s long as a participant in this process is aware that the final product is being marketed in the forum State, the possibility of a lawsuit there cannot come as a surprise." Id. at 117, 107 S.Ct. 1026 (plurality opinion). Justice O'Connor, also writing for four justices, rejected Justice Brennan's approach and concluded instead:
Id. at 112, 107 S.Ct. 1026 (plurality opinion) (internal citation omitted).
In Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1566-67 (Fed. Cir.1994), the Federal Circuit found it was unnecessary to decide whether Justice O'Connor's or Justice Brennan's approach to the stream-of-commerce theory was the correct one. There, the Court found sufficient contacts with the forum state to support the exercise of personal jurisdiction under either articulation of the stream-of-commerce theory, as the defendants were alleged to have "made ongoing and continuous shipments of the accused infringing product into [the state] and maintained an established distribution network that encompassed [the state]." AFTG-TG, LLC v. Nuvoton Tech. Corp., 689 F.3d 1358, 1363-64 (Fed.Cir.2012) (citing Beverly Hills Fan, 21 F.3d at 1561, 1563, 1565).
More recently, in J. McIntyre Machinery, Ltd. v. Nicastro, ___ U.S. ___, 131 S.Ct. 2780, 180 L.Ed.2d 765 (2011), the Supreme Court revisited the split of opinion but did not resolve it. Accordingly, the Federal Circuit's decision in Beverly Hills Fan, 21 F.3d at 1558 which was handed down after Asahi and before McIntyre controls. See also AFTG-TG, 689 F.3d at 1363-64 ("Because we must proceed on the premise that McIntyre did not change the Supreme Court's jurisdictional framework, we must apply our precedent that interprets the Supreme Court's existing stream-of-commerce precedents. That precedent is Beverly Hills Fan....").
In its decisions, the Federal Circuit has emphasized the general proposition "that a court should not decide a legal issue when doing so is unnecessary to resolve the case
The O'Connor test is satisfied when a party engages in "[a]dditional conduct... [to] indicate an intent or purpose to serve the market in the forum State, [such as] ... advertising in the forum State, establishing channels for providing regular advice to customers in the forum State, or marketing the product through a distributor who has agreed to serve as the sales agent in the forum State." Asahi, 480 U.S. at 112, 107 S.Ct. 1026. Here, as in Beverly Hills Fan, 21 F.3d at 1565, "[t]he allegations are that defendants purposefully shipped the accused [product] into [Delaware] through an established distribution channel [and] [t]he cause of action for patent infringement is alleged to arise out of these activities." It is undisputed that the Foreign Defendants, by way of ASUS California, purposefully ship the accused devices into Delaware through established distribution channels such as Best Buy. (D.I. 29 at ¶ 6) The Foreign Defendants "purposefully avail [themselves] of the privilege of conducting activities within [Delaware], thus invoking the benefits and protections of its laws." See McIntyre, 131 S.Ct. at 2785. For this reason, the Foreign Defendants "could foresee being haled into court" in Delaware, see Asahi, 480 U.S. at 109, 107 S.Ct. 1026, and exercising personal jurisdiction over them in this Court is not inconsistent with the Due Process Clause.
The Foreign Defendants raise a further challenge to this Court's exercise of jurisdiction. According to the Foreign Defendants, GPH's complaint fails to satisfy the "arising from" language of the Delaware long-arm statute. Section 3104(c) provides that "[a]s to a cause of action brought by any person arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nonresident." 10 Del. C. § 3104(c) (emphasis added). It follows from this "arising from" language that "[t]he court cannot base jurisdiction on events that occurred after the filing of [the] complaint." Intel Corp. v. Silicon Storage Tech., Inc., 20 F.Supp.2d 690, 697 (D.Del.1998); see also Round Rock, 967 F.Supp.2d at 974 ("Further, the existence of personal jurisdiction is evaluated at the time the complaint was filed.").
GPH concedes that no Foreign Defendant performs any relevant acts in Delaware; instead, GPH relies upon acts by third parties, such as Best Buy, in Delaware. (D.I. 28 at 3-5) Hence, GPH is left to allege not direct infringement but only indirect infringement by the Foreign Defendants. Indirect infringement, whether contributory or induced, "requires knowledge of the existence of the patent that is infringed," Global-Tech Apps., Inc. v. SEB SA, ___ U.S. ___, 131 S.Ct. 2060, 2068, 179 L.Ed.2d 1167 (2011). In its complaint, GPH alleges knowledge of the patents-in-suit exclusively through "the filing and service of this Complaint." (D.I. 7 ¶¶ 18, 26) Because any indirect infringement occurred only after the complaint, and personal jurisdiction can only be based on events before the complaint, the Foreign
However, "[t]he `arising from' language in 10 Del. C. § 3104(c) [only] requires [that] the defendant's act set in motion a series of events which form the basis for the cause of action before the court." Sprint Nextel Corp. v. IPCS, Inc., 2008 WL 2737409, at *9 (Del.Ch. July 14, 2008). "Moreover, it is the nature of the acts giving rise to a claim, rather than the nature of the claims, that determines whether a cause of action
The Foreign Defendants do correctly note that, to this point, GPH has only provided facts showing sales of accused devices in Delaware five months
For the reasons stated above, the Court will deny the Foreign Defendants' motion to dismiss. An appropriate Order follows.
At Wilmington this
For the reasons set forth in the Memorandum Opinion issued this date, IT IS HEREBY ORDERED that Defendants' Motion to Dismiss for Lack of Jurisdiction Over the Person (D.I. 25) is