MEMORANDUM AND ORDER ON THE MOTIONS TO DISMISS FILED BY SKYE AND VALEO
On December 13, 2002, David Seitz and Microtherm, Inc. (together, “Seitz”) sued Envirotech Systems Worldwide, Inc. and Envirotech of Texas (together, “Enviro-tech”) for infringing Seitz’s patents and for unfair competition. (Docket Entry No. 1). Seitz claims that Envirotech’s E SI-2000 water heater and another heater in development, Fortis, infringe the patents. On March 1, 2007, Seitz filed an amended complaint. (Docket Entry No. 136). In that complaint, Seitz added two new defendants, Valeo, Inc. and Skye International, Inc. Envirotech and Valeo are wholly owned subsidiaries of Skye. Valeo and Skye are alleged to be Nevada corporations. (Id. at ¶¶ 4, 5). Because Valeo and Skye have no designated agents in Texas, they were served through the Texas Secretary of State. (Id.). The amended complaint alleges that this Texas court has jurisdiction over Valeo and Skye because “[e]ach party has sold infringing products and committed acts of unfair competition in this district, and /or has induced or contributed to the infringement and unfair competition of other parties in this district.” (Id. at ¶ 6).
Valeo and Skye have filed motions to dismiss under Rule 12(b)(2) for lack of personal jurisdiction and Rule 12(b)(6) for failure to state a claim. (Docket Entry Nos. 138, 141). Seitz has responded, (Docket Entry No. 144), and Skye and
I. The Applicable Legal Standard
In patent infringement actions, personal jurisdiction is governed by Federal Circuit law.
Silent Drive, Inc. v. Strong Indus.,
The due process requirements for exercising personal jurisdiction over a nonresident focus on whether the nonresident defendant has “certain minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ”
Int’l Shoe Co. v. Washington,
The plaintiff bears the burden of demonstrating facts sufficient to support pеrsonal jurisdiction over a nonresident defendant. That burden is met by a
prima facie
showing; proof by a preponderance of the evidence is not necessary.
Re-vell v. Lidov,
Minimum contacts can give rise to “specific” personal jurisdiction or “general” personal jurisdiction.
Wilson v. Belin,
When the cause of action does not arise from or relate to the nonresident defendant’s purposeful conduct within the forum state, due process requires that the nonresident defendant have engaged in continuous and systematic contacts with the forum state before a court may exercise general personal jurisdiction.
Helicopteros,
II. Analysis
A. Minimum Contacts
In the response brief to the motion to dismiss, Seitz relied on the allegations in the amended complaint and a two-paragraph affidavit by David Seitz to establish personal jurisdiction over Skye and Valeo. (Docket Entry No. 144, Ex. 1). That affidavit states the following:
Skye, International, Inc. has advertised its Fortis unit for sale in trade journals circulated within the State of Texas. Skye International, Inc. has appointed at least one manufacturer’s representation [sic] in the State of Texas to solicit Fortis business.Valeo, Inc. sold one or more of the ESI 2000 units to Texas residents. This evidence has been previously offered to the Court.
(Id. at 1). The previously offered evidence referred to in the affidavit appears to include an unsigned, undated, three-page “Brief History of Skye International and Envirotech” submitted to this court in Seitz’s motion for leave to amend. (Docket Entry No. 11, Ex. A). That unsigned statement does not mention specific Texas contacts by Skye or Valeo. The amended complaint does not allege specific saies of infringing products or specific acts of unfair competition in Texas committed by or attributable to Skye or Valeo. (Docket Entry No. 136).
Skye and Valeo responded, arguing that the evidence is conclusory and inadequate to make a prima facie showing of minimum contacts. Valeo argued that there was “no indication in [Seitz’s] statement of when that sale was made, whether it was made directly by Valeo, Inc. into Texas or indirectly through a distributor of supplied, what the terms of the sale were (e.g.F.O.B.shipping, F.O.B.destination, C.O.D., etc.), whether delivery was ever made of the product, whether payment was made for such sales, who purchased that product, or other facts.” (Docket Entry No. 146 at 4-5). Skye argued that no details were provided as to the alleged advertisement in Texas, such as “when it was sent, by whom it was published, or how the publication came to be circulated in the State of Texas,” and no details as to the Texas sales representative allegedly appointed by Skye, such as “identification of the manufacturer’s alleged representative, who that representative was appointed by, where that representative is located, how that representative allegedly solicits business in the forum, when that representative has allegedly solicited business within the forum, where in the forum that representative has allegedly solicited business, and to whom that representative had allegedly- sоlicited business.” (Docket Entry No. 145 at 3-4).
In
Panda Brandywine,
the Fifth Circuit upheld a district court’s decision to exclude uncontroverted assertions offered to 'show personal jurisdiction over a nonresident defendant because those assertions were conclusory.
In
Silverman v. Bookzone, Inc.,
■The evidence specifically discussed in Seitz’s response to the motion to dismiss as supporting the exercise of personal ju
1. Sales by Valeo
In his affidavit, David Seitz asserted that Valeo sold one or more of the ESI-2000 products to Texas residents. No details or support are provided. At a hearing before this court, Envirotech’s counsel acknowledged that Valeo “took on some backorders regarding the ESI 2000.” (Docket Entry No. 135 at 71). The record does not show whether or how Valeo filled these orders or whether any were from Texas.
In a patent infringement case, specific jurisdiction over a nonresident defendant may be proper if it sells the allegedly infringing product to customers in the forum state.
Trintec Indust., Inc. v. Pedre Promotional Products, Inc.,
In this case, the record does not show whether Valeo made any direct sales of the ESI-2000 to customers in Texas. Seitz’s conclusory allegation of one or more sales of the ESI-2000 by Valeo in Texas, with no further information, is insufficient.
In the Federal Circuit, personal jurisdiction under the stream-of-eommerce theory may be proper when “defendants, acting in consort, placed the accused [product] in the stream of commerce, they knew the likely destination of the products, and their conduct and connections with the forum state were such that they should reasonably have anticipated being brought into court there.”
Beverly Hills Fan Co. v. Royal Sovereign Corp.,
Seitz has made a conclusory assertion that Valeo sold one or more of the E SI-2000 products in Texas. Seitz does not present or identify evidence of facts that, if credited, could show that Valeo made direct sales to Texas customers or made sales to distributors that Valeo knew were likely to sell to Texas customers. Seitz has failed to make a prima facie showing of specific or general рersonal jurisdiction over Valeo in Texas based on sales of the ESI-2000 product.
2. Skye’s Sales Representative
David Seitz asserted in his affidavit that Skye “appointed at least one manufacturer’s representation [sic]” in Texas to solicit business for the Fortis product. No additional facts are provided. Enviro-tech asserts that this conclusory allegation is insufficient.
In
Electronics For Imaging, Inc. v. Coyle,
In
Central Freight Lines Inc. v. APA
Transport,
Corp.,
In this case, Seitz presents no evidence similar to that presented in Electronics For Imaging, Inc. or in Central Freight Lines. The conclusory assertion that Skye has appointed a Texas sales representative, with no additional facts, is insufficient to make a prima facie showing of personal jurisdiction.
3. Advertising by Syke
In his affidavit, David Seitz stated that Skye advertised the Fortis product in trade journals circulated within Texas. Sеitz did not provide details about or evidence of this advertising. The allegation of advertising, with no details, is insufficient to show personal jurisdiction.
In
Breckenridge Pharm., Inc. v. Metabolite Laboratories, Inc.,
In the Fifth Circuit, “advertising in national publications is not in itself sufficient to subject a defendant to personal jurisdiction.”
Singletary v. B.R.X., Inc.,
In this case, the record contains only a conclusory allegation that Skye advertised the. Fortis product in trade journals circulated within Texas. The record does not show how the advertising came to be circulated in Texas, what kind of publication it was published in, whether Skye intended the advertising to be circulated in Texas, whether any Texas residents saw the advertising, or the contents of the advertising. Seitz has not made a prima facie showing of personal jurisdiction over Skye based on advertising.
Seitz has failed to show minimum contacts sufficient to impose personal jurisdiction by a Texas court over Skye or Valeo.
B. Waiver of Jurisdiction
Seitz responded to the motions to dismiss with the argument that Valeo and Skye waived objections to personal juris
C. Skye’s Alter Ego Status
Seitz argues that this Texas court has jurisdiction over Skye because Skye is En-virotech’s alter ego. (Docket Entry No. 144 at 3). Seitz argues that “Envirotech is nothing more than a conduit through which Skye does business.” (Id.).
“[I]t is compatible with due process for a court to exercise personal jurisdiction over an individual or a corporation that would not ordinarily be subject to personal jurisdiction in that court when the individual or corporation is an alter ego or successor of a corporation that would be subject to personal jurisdiction in that court. The.theory underlying these cases is that, because the two corporations (or the corporation and its individual alter ego) are the same entity, the jurisdictional contacts of one are the jurisdictional contacts of the other for the purposes of the
International Shoe
due process analysis.”
Patin v. Thoroughbred Potver Boats Inc.,
The Fifth Circuit has identified a “laundry list” of factors that courts should apply in making an alter ego determination.
See United States v. Jon-T Chems., Inc.,
In the amended complaint, Seitz alleges that “Skye is the alter ego of Envi-rotech in that it has disregarded the corporate fiction of Envirotech for its own financial interest and has utilized the corporate fiction of Envirotech to perpetrate a fraud.” (Docket Entry No. 136 at ¶ 17). Seitz’s response to Skye’s motion to dismiss points out that the amended complaint “alleges that Sky is the alter ego of Envirotech.' Hence, if true, there is no
In
Freudensprung v. Offshore Tech. Servs.,
In this case, the record contains no evidence of the factors that bear on whether Skye is Envirotech’s alter еgo. The record is even more scant than the insufficient evidence in the
Freudensprung v. Offshore Tech. Sens,
and
Thomas v. Trico
cases. Seitz has failed to show evidence sufficient to overcome the presumption of corporate separateness and has not made a
prima facie
showing of personal jurisdiction over Skye as an alter ego of Enviro-tech.
See Thomas v. Trico,
III. Conclusion
Seitz has not argued, and the record does not show, that further discovery on jurisdiction is necessary. Seitz did ask for an opportunity to amend the complaint to plead morе detailed jurisdictional facts. The jurisdiction determination is not limited to the facts alleged in the complaint. Seitz submitted evidence beyond the complaint in response to the motion to dismiss. That evidence, with the allegations in the amended complaint, was insufficient to show personal jurisdiction as to Skye and Valeo. On the present record, amendment would be both late and futile.
The court grants the motions filed by Skye and Valeo under Rule 12(b)(2) for lack of personal jurisdiction. (Docket Entry Nos. 138,141).
