Nuance Communications, Inc. v. Abbyy Software House
626 F.3d 1222
| Fed. Cir. | 2010Background
- Nuance sued Abbyy USA for patent infringement and later added Abbyy Production and Abbyy Software as defendants.
- District court dismissed Abbyy Production and Abbyy Software for lack of personal jurisdiction and improper service, without evidentiary hearing or jurisdictional discovery.
- On appeal, Nuance argues Abbyy Production purposefully directed activities in California and that jurisdiction is proper; Nuance also seeks jurisdictional discovery for Abbyy Software.
- Abbyy Production imports and distributes Abyyy software into the U.S. under an agreement with Abbyy USA; over 95% of California profits flow to Abbyy Production; the company aims to win the U.S. market.
- The record shows Abbyy Production and Abbyy USA share a consolidated management team; Abbyy Production computed royalties and provided master copies and updates to Abbyy USA.
- The court finds issues with service under Hague Convention for Abbyy Production, and permits alternative service under Rule 4(f)(3); it also finds potential for jurisdictional discovery and reverses certain dismissals, remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Abbyy Production is subject to California jurisdiction | Nuance asserts purposeful direction at California and relation to infringement | Abbyy contends no purposeful contact with California and no infringement relation | Abbyy Production subject to jurisdiction; reversed on this point |
| Whether Abbyy Software is subject to California jurisdiction | Nuance contends Abbyy Software controls or directs activities in California | Abbyy contends Abbyy Software is merely holding; discovery needed | District court erred by dismissing Abbyy Software; remanded for jurisdictional discovery |
| Whether service of Abbyy Production under Hague Convention was required and proper | Hague Convention is not feasible; alternative service permissible | Service must comply with Hague or proper alternative; Russian non-cooperation blocks Hague | Hague service not required; Rule 4(f)(3) substituted service appropriate; service via other means allowed |
| Whether Abbyy Software's service was properly handled | Nuance maintains proper service; district court erred in sua sponte dismissal | Abbyy disputes service sufficiency; not fully argued below | District court erred in sua sponte dismissal; remand for proper service assessment |
| Whether Nuance is entitled to jurisdictional discovery | Discovery needed to resolve control and direction over Abbyy USA and Production | Discovery inadequate or unnecessary for jurisdiction | District court abused by denying jurisdictional discovery; discovery should be allowed on remand |
Key Cases Cited
- Akro Corp. v. Luker, 45 F.3d 1541 (Fed. Cir. 1995) (three-prong test for specific jurisdiction)
- 3D Sys., Inc. v. Aarotech Labs., Inc., 160 F.3d 1373 (Fed. Cir. 1998) (due process and long-arm analysis for jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (minimum contacts and fair play standard)
- Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1564 (Fed. Cir. 1994) (stream of commerce and purposeful direction considerations)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) (stream of commerce not alone; purposeful availment matters)
- Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102 (1987) (limits of jurisdictional due process in stream of commerce cases)
- Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007 (9th Cir. 2002) (Rule 4(f)(3) substitute service and due process considerations)
- Patent Rights Prot. Grp., LLC v. Video Gaming Techs., Inc., 603 F.3d 1364 (Fed. Cir. 2010) (jurisdictional discovery and related issues)
- Brockmeyer v. May, 383 F.3d 798 (9th Cir. 2004) (application of Rule 4(f)(2)(A) personal service abroad)
- Omni Capital Int'l Ltd. v. Rudolf Wolff & Co., 484 U.S. 97 (1987) (service of summons and due process basics)