Oticon, Inc. v. Sebotek Hearing Systems, LLC.
865 F. Supp. 2d 501
D.N.J.2011Background
- Oticon, a California corporation with NJ as forum, owns US Patent 5,365,233 for an analog-digital processing unit for hearing aids.
- Plaintiff sued SDT, Gennum, and Sebotek for patent infringement; SDT is a Canadian company formed in 2007 after acquiring Gennum assets.
- Plaintiff believed SDT assumed Gennum’s liabilities under the Asset Purchase Agreement, potentially triggering successor liability.
- Jurisdictional discovery revealed SDT did not exist before 2007; SDT manufactures DSPs formerly made by Gennum.
- Plaintiff asserted jurisdiction under successor liability, stream of commerce, and Calder-style effects theories.
- Court granted SDT’s 12(b)(2) motion, finding no minimum contacts and dismissing SDT from the case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SDT is a successor to Gennum for jurisdiction | SDT assumed Gennum’s liabilities under APA/related documents. | APA language does not expressively or impliedly transfer pre-closing infringements as liabilities; product line exception inapplicable. | No successor liability; no jurisdiction over SDT. |
| Whether SDT has specific jurisdiction via stream of commerce | SDT targeted NJ via sales, alliances, and customers; knowledge of NJ sales suffices under certain tests. | Post-Nicastro, mere foreseeability or national market targeting is insufficient without explicit forum-specific aiming. | No specific jurisdiction under stream of commerce; insufficient NJ-directed activity. |
| Whether Calder 'effects' theory supports jurisdiction | SDT’s willful/infringing actions caused harm in NJ; NJ is focal point as Oticon is resident here. | Plaintiff failed to show explicit aiming at NJ; Calder requires targeted conduct toward NJ. | Calder-based jurisdiction not established; insufficiency of aiming to NJ. |
Key Cases Cited
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (Supreme Court 1945) (minimum contacts required for jurisdiction)
- Nuance Communications, Inc. v. Abbyy Software House, 626 F.3d 1222 (Fed. Cir. 2010) (long-arm statute confluence with due process)
- Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102 (Supreme Court 1987) (stream-of-commerce framework; multiple tests)
- McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780 (U.S. 2011) (split on stream-of-commerce; targeting national market not enough)
- Pebble Beach Co. v. Caddy, 453 F.3d 1151 (9th Cir. 2006) (Calder 'express aiming' requires more than foreseeability)
- Bancroft & Masters, Inc. v. Augusta Nat’l, Inc., 223 F.3d 1082 (9th Cir. 2000) (Calder-type analysis in some circuits)
- Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384 (8th Cir. 1991) (mere foreseeability insufficient for Calder)
- Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194 (Fed. Cir. 2003) (precedent on jurisdictional discovery and Calder context)
- Trintec Indus., Inc. v. Pedre Promotional Products, Inc., 395 F.3d 1275 (Fed. Cir. 2005) (jurisdictional record must be complete for ruling)