39 F. Supp. 3d 1135
W.D. Wash.2014Background
- Authentify Patent Co. (WA LLC) owns U.S. Patent No. 6,934,858 covering out‑of‑band (OOB) customer authentication; StrikeForce Technologies (WY corp., NJ HQ) sells ProtectID and owns related patents.
- Authentify sued StrikeForce for patent infringement in the Western District of Washington (filed April 26, 2013).
- StrikeForce filed a declaratory judgment action in New Jersey asserting noninfringement and alleging alter‑ego jurisdiction over Authentify Patent Co.; New Jersey court stayed factual resolution to discovery.
- StrikeForce moved in Washington to dismiss for lack of personal jurisdiction and improper venue (or transfer to NJ). Court granted limited jurisdictional discovery focused on StrikeForce’s contacts with Washington.
- Discovery showed StrikeForce communications with three Washington contacts: Jordan Lee (prospective reseller), Pierce County employee Mark Grindstaff (remote demo, pricing), and letters to Microsoft (infringement notice).
- After evidentiary consideration, the Court denied the motion to dismiss and denied transfer to New Jersey, finding specific jurisdiction and that venue transfer was not warranted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Washington has specific personal jurisdiction over StrikeForce | StrikeForce purposefully directed commercial activity at WA residents (promo, demos, pricing) and the infringement claim arises from those contacts | Contacts are insufficient/minimal and not tied to the patented OOB components; infringement letters to Microsoft are insufficient | Court: Specific jurisdiction exists based on purposeful direction to WA residents (Lee and Grindstaff) and arising‑out established by Lee communications |
| Whether communications to WA residents constituted "offers to sell" under 35 U.S.C. §271(a) | Emails to Lee and Grindstaff included pricing/product details and an offer to test, amounting to offers to sell | Pricing/communications concern non‑OOB components; therefore they are not offers to sell the patented technology | Court: Communications to Lee (with specific pricing and OOB details) were offers to sell; Grindstaff communications alone were insufficient |
| Whether exercising jurisdiction would offend fair play and substantial justice | N/A (Plaintiff prefers WA forum) | Contacts are attenuated; exercising jurisdiction would be unreasonable and burdensome | Court: Defendant failed to show overriding hardship; fair play and substantial justice factors favor exercising jurisdiction in WA |
| Whether case should be transferred to District of New Jersey under §1404(a) (and first‑to‑file considerations) | Plaintiff prefers WA; infringement suit here was filed first | Transfer to NJ is more convenient; NJ case already pending | Court: Denied transfer — strong presumption for plaintiff's forum, first‑to‑file rule favors retaining this first‑filed infringement action in WA; no compelling efficiency or convenience justification to transfer |
Key Cases Cited
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945) (minimum contacts due‑process standard)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (purposeful availment and reasonableness analysis)
- Deprenyl Animal Health, Inc. v. Univ. of Toronto Innovations Found., 297 F.3d 1343 (Fed. Cir. 2002) (personal jurisdiction law in patent cases governed by Federal Circuit)
- 3D Sys., Inc. v. Aarotech Labs., Inc., 160 F.3d 1373 (Fed. Cir. 1998) (price quotations and specific product descriptions can constitute §271 offers to sell)
- Rotec Indus., Inc. v. Mitsubishi Corp., 215 F.3d 1246 (Fed. Cir. 2000) (offer to sell analyzed under traditional contract offer principles)
- Inamed Corp. v. Kuzmak, 249 F.3d 1356 (Fed. Cir. 2001) (infringement notice letters alone insufficient for personal jurisdiction)
- Radio Sys. Corp. v. Accession, Inc., 638 F.3d 785 (Fed. Cir. 2011) (patentee latitude to notify others of patent rights without submitting to foreign jurisdiction)
- Merial Ltd. v. Cipla Ltd., 681 F.3d 1283 (Fed. Cir. 2012) (first‑to‑file rule in patent cases and deference to earlier‑filed infringement suits)