United States: Personal Jurisdiction over Out of State Corporation Based in Part on Hiring of Local Attorney

The U.S. Court of Appeals for the Federal Circuit reversed a district court dismissal of an action filed in California, holding that the district court incorrectly found that it did not have personal jurisdiction over a Nevada patent owner in a declaratory judgment suit filed by a California company. Electronics for Imaging, Inc. v. Coyle, 2003 U.S. App. LEXIS 16884 (Fed. Cir. Aug. 18, 2003).

In the case, Electronics for Imaging (EFI), a California company, sued Kolbet Labs, a Nevada company, and its alleged alter ego, Coyle, for declaratory and injunctive relief of non-infringement, as well as for state law claims of non-breach of contract and non-misappropriation of trade secrets. The district court (ND CA) granted the defendants’ motion to dismiss for lack of personal jurisdiction. EFI appealed.

Applying Federal Circuit law to the issue of personal jurisdiction for purposes of claims arising out of the patent laws (such as a claim for declaratory judgment of patent invalidity) and regional (Ninth Circuit) law for personal jurisdiction for claims arising under state law (such as tradesearch and contract) the Federal Circuit reversed. Thus, applying Federal Circuit law to the declaratory judgment claim, the Court analyzed whether Coyle had "purposefully directed" contacts at California and noted that defendants made telephone calls to EFI regarding the technology covered by the defendants’ patent application; sent two representatives to visit EFI’s facility to demonstrate defendants’ technology; and hired two California attorneys who contacted EFI to report on the progress of the defendants’ pending patent application and another to prosecute the application that matured into the patent now in dispute. The Court found those contacts were not "random, fortuitous or attenuated" but rather "the totality of these contacts sufficiently" made out EFI’s prima facie case that Coyle "by ‘emerging in significant activities’ in California… purposefully directed" its activities to California.

PRACTICE NOTE: This case appears to be the first instance in which a court has considered the act of retaining counsel in a jurisdiction as a factor in establishing the "minimum contacts" necessary for the exercise of specific jurisdiction.