Synthes v. G.M. Dos Reis Jr. Ind. Com. De Equip. MedicoSynthes v. G.M. Dos Reis Jr. Ind. Com. De Equip. Medico
Synthes (U.S.A.) (“Synthes”) appeals the final judgment of the United States District Court for the Southern District of California dismissing without prejudice its suit for patent infringement against G.M. dos Reis Jr. Ind. Com de Equip. Medico (“GMReis”).
Synthes (U.S.A.) v. G.M. dos Reis Jr. Ind. Com. de Equip. Medico,
No. 07-CV-309-L(AJB),
BACKGROUND
I.
Synthes is a global medical-device company, with its principal place of business in Pennsylvania. It develops, produces, and markets instruments and implants, including bone plates, for the surgical fixation, correction, and regeneration of the human skeleton. Synthes is the assignee of United States Patent No. 7,128,744 (“the '744 patent”), which is directed to “a bone plating system and method for fracture fixation of bone.” '744 patent, Abstract (filed Sept. 22, 2003). GMReis is a Brazilian corporation, with its headquarters in that country. It designs, manufactures, and markets orthopedic and neurological medical devices, including bone plates.
From February 14-16, 2007, the Chief Executive Officer of GMReis, Geraldo Marins dos Reis, Jr., and a GMReis employee, Jose Luis Landa Lecumberri, represented GMReis at the 2007 American Association of Orthopaedic Surgeons Annual Meeting (“AAOS Meeting” or “AAOS trade show”) in San Diego, California. At GMReis’s booth, Mr. dos Reis and Mr. Lecumberri displayed, among other things, samples of five locking bone plates. 1
At the AAOS trade show, Synthes served Mr. dos Reis and Mr. Lecumberri with a summons and complaint. The complaint consisted of a single count: “GMReis has been and still is making, using, offering for sale, and/or importing into the United States products, systems, and/or apparatuses that infringe the '744 Patent, all in violation of
Synthes pleaded that GMReis was subject to personal jurisdiction in the Southern District of California because it had “imported into the United States and/or offered to sell locking plates that infringe Synthes’ patent rights [and had] displayed said locking plates at the 2007 [AAOS] Annual Meeting in San Diego, California for the purpose of generating interest in infringing products to the commercial detriment of [Synthes].” (Compl.l, ¶ 1.) Synthes alleged that, as a result of GMReis’s activities, it suffered and continued to suffer damages, including “impairment of the value of the '744 Patent.” (Compl.3, ¶ 13.) Synthes requested that the district court enter judgment that GMReis infringed the '744 patent and that it enjoin GMReis from infringing activity. (Compl.3, ¶ 1-2.)
On April 6, 2007, GMReis moved to dismiss Synthes’s complaint for lack of personal jurisdiction under
In support of its motion to dismiss, GMReis submitted declarations by Mr. dos Reis and Mr. Lecumberri. According to Mr. dos Reis’s declaration, GMReis is a Brazilian company without offices, employees, or assets in California or in the United States. The company sells its products in Brazil, South America, Europe, and Asia. GMReis has never sold any of its products in California, but has completed one sale of its products in the United States. That sale was to a veterinary medical supply company located in Massachusetts. Id. GMReis products are not approved by the Food and Drug Administration (“FDA”) for use by, or sale to, humans in the United States. Id.
In their declarations, Mr. dos Reis and Mr. Lecumberri admitted attending the 2007 AAOS Meeting to display GMReis’s products, five of which were sample locking bone plates. They both asserted that GMReis sends representatives to the AAOS Meeting because many non-U.S. surgeons attend the annual trade show, and GMReis wants to show its products to those non-U.S. surgeons. On February 12, 2007, Mr. Lecumberri traveled with the five samples in his luggage on a flight from Brazil, which landed in the United States in Dallas, Texas, where he went through U.S. Customs. Subsequently, he boarded a flight from Dallas to San Diego.
Mr. dos Reis and Mr. Lecumberri further declared that, at the 2007 AAOS Meeting, they did not sell any of the five sample locking bone plates or use them for the purposes for which they were designed (i.e., in surgery for securing a fractured bone). Because GMReis did not have, and had not applied for, FDA approval of its locking bone plates, Mr. dos Reis displayed prominent signs and product literature stating that GMReis products were not approved by the FDA and were not for sale in the United States. The GMReis product literature did not list any price for the locking bone plates, and neither Mr. dos Reis nor Mr. Lecumberri discussed prices at the trade show. Attached to Mr. dos Reis’s declaration were photographs from the 2007 AAOS Meeting, showing GMReis’s display table, signs, and product literature. Both declarations indicated that Mr. dos Reis returned to Brazil with the sample locking bone plates in his luggage on February 19, 2007.
In response to GMReis’s motion to dismiss, Synthes requested depositions of Mr. dos Reis and Mr. Lecumberri, a Rule 30(b)(6) deposition of GMReis,
2
and the production of documents relating to GMReis’s contacts, not just with California, but with the entire United States. GMReis opposed the discovery, and specif
On May 17, 2007, Synthes filed a motion to compel jurisdictional discovery. In its memorandum accompanying the motion, Synthes argued that in federal question cases involving a foreign defendant, contacts with the United States as a whole may be analyzed under the Due Process Clause of the Fifth Amendment pursuant to
(2) Federal Claim Outside State-Court Jurisdiction.
For a claim that arises under federal law, serving a summons or filing a waiver of service establishes personal jurisdiction over a defendant if:
(A) the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction; and
(B) exercising jurisdiction is consistent with the United States Constitution and laws.
On August 2, 2007, a magistrate judge granted Synthes’s motion to compel jurisdictional discovery relating to GMReis’s contacts with the United States for purposes of
From jurisdictional discovery, Synthes learned that GMReis had exhibited its products at a minimum of seven trade shows in the United States since 2003, including the 2006 North Aneriean Spine Society trade show, the 2003 World Spine II trade show, and the 2003-2007 AAOS annual meetings. In addition, Mr. dos Reis admitted that he attended at least two other trade shows in the United States. Synthes also learned about GMReis’s product acquisition and development in the United States. In the past, GMReis has purchased in the United States parts and a manufacturing machine for use in Brazil. In addition, it regularly purchases a product in the United States for resale in Brazil, and its representatives have met and consulted with two American companies regarding potential purchase and development of components for non-accused products.
Synthes also learned through discovery that, following the 2007 AAOS Meeting, GMReis’s website received two inquiries from U.S. entities, asking whether certain GMReis products would be available for sale or would be the subject of clinical trials for FDA approval in the United States in the future. GMReis responded by email that its products were neither approved by the FDA nor available to the U.S. market, and that it did not intend to launch its products in the United States in the future.
II.
A noted above, the district court granted Synthes’s motion to dismiss GMReis’s complaint for lack of personal jurisdiction.
Synthes,
The district court found that the first requirement for application of
The court first considered whether GMReis’s contacts with the United States subjected it to general jurisdiction.
Id.
at *4. Although it was unclear to the court whether Synthes intended to assert a general jurisdiction argument, it found that “GMReis’ contacts with the United States [were] no more continuous and systematic than the contacts found to be insufficient in
Helicópteros Nacionales de Colombia, S.A. v. Hall,
The court next considered whether GMReis’s contacts with the United States subjected it to specific jurisdiction.
Id.
In that regard, the court applied our three-pronged test for specific jurisdiction, which asks whether (1) the defendant purposefully directed its activities at residents of the forum; (2) the claim arises out of or relates to the defendant’s activities with the forum; and (3) assertion of personal jurisdiction is reasonable and fair.
Id.
(quoting
Elecs, for Imaging, Inc. v. Coyle,
The court determined that GMReis’s contacts with the United States satisfied the first prong of the minimum contacts analysis.
Id.
at *5. The court reasoned that GMReis purposefully directed its activities toward residents of the United States based upon (i) its single sale of products to the veterinary medical supply company, (ii) its several past and current purchases in the United States, and (iii) the pah’ of consultations exploring supplier
The court concluded, however, that GMReis’s contacts with the United States did not satisfy the second prong of the minimum contacts analysis. Id. at *5. The court identified GMReis’s activities at the 2007 AAOS Meeting as the only contacts that arose out of or were related to Synthes’s cause of action — the patent infringement claim. Id. The court found that those activities were not purposefully directed at U.S. residents because GMReis’s products lacked FDA approval, and GMReis “expressly discouraged the forum residents from purchasing its products.” Id. at *4.
Thus, the district court held that Synthes failed “to make a prima facie showing that GMReis’s minimum contacts with the United States were sufficient to establish specific personal jurisdiction.”
Id.
at *5. The court did not reach the reasonableness prong of the specific jurisdiction test because the quality and quantity of GMReis’s contacts with the United States failed to establish general or specific personal jurisdiction over GMReis.
Id.
The court also did not consider whether GMReis’s activities in the United States were sufficient for patent infringement because jurisdiction, and “not liability for patent infringement,” was at issue.
Id.
(quoting
Genetic Im/plant Sys., Inc. v. Core-Vent Corp.,
DISCUSSION
I.
We have jurisdiction over Synthes’s appeal pursuant to
Because the district court resolved the personal jurisdictional question based on the submission of papers, Synthes bore the burden of making a prima facie showing that the court had personal jurisdiction over GMReis.
See Elees, for Imaging,
Synthes contends that the district court erred in holding that it failed to establish a prima facie basis for personal jurisdiction
For its part, GMReis maintains that we should affirm the district court’s dismissal because the district court correctly concluded that GMReis was not subject to general or specific personal jurisdiction. GMReis argues that it never imported, used, or offered for sale allegedly infringing bone plates within the meaning of
II.
As noted by the district court,
see Synthes,
Determining whether a plaintiffs claim arises under federal law generally presents a relatively straightforward analysis, and in this case it is undisputed that Synthes’s claim arises under federal law. However, determining the second
To address these concerns, the First Circuit has tailored a burden shifting mechanism, where a
plaintiff ... must certify that, based on the information that is readily available to the plaintiff and his counsel, the defendant is not subject to suit in the courts of general jurisdiction of any state. If the plaintiff makes out his prima facie ease, the burden shifts to the defendant to produce evidence which, if credited, would show either that one or more specific states exist in which it would be subject to suit or that its contacts with the United States are constitutionally insufficient.
Id. Under the First Circuit approach, the plaintiff must certify that the defendant is not subject to suit in the courts of general jurisdiction of any state' — a requirement that presents practical difficulties for a plaintiff who prefers to plead in the alternative that the defendant is subject to suit under a state’s long-arm statute.
The Fourth Circuit has seemingly adopted the First Circuit’s approach.
See Base Metal Trading, Ltd. v. OJSC “Novokuznetsky Aluminum Factory”,
The Fifth, Ninth, and D.C. Circuits have adopted a variation of the First Circuit’s approach, which was first articulated by the Seventh Circuit:
A defendant who wants to preclude the use ofRule 4(k)(2) has only to name some other state in which the suit could proceed. Naming a more appropriate state would amount to a consent to personal jurisdiction there.... If, however, the defendant contends that he cannot be sued in the forum state and refuses to identify any other state where suit is possible, then the federal court is entitled to useRule 4(k)(2) . This procedure makes it unnecessary to traipse through the 50 states, asking whether each could entertain the suit.
ISI Int’l, Inc. v. Borden Ladner Gervais LLP,
Finally, another approach is to conduct a due process analysis prior to a negation requirement analysis. Under this approach, if it is concluded that the defendant’s contacts do not satisfy due process, it is not necessary to determine whether the requirements for application of
The third requirement under
Under the former rule, a problem was presented when the defendant was anon-resident of the United States having contacts with the United States sufficient to justify the application of United States law and to satisfy federal standards of forum selection, but having insufficient contact with any single state to support jurisdiction under state longarm legislation or meet the requirements of the Fourteenth Amendment limitation on state court territorial jurisdiction. In such cases, the defendant was shielded from the enforcement of federal law by the fortuity of a favorable limitation on the power of state courts, which was incorporated into the federal practice by the former rule. In this respect, the revision responds to the suggestion of the Supreme Court made in Omni Capital Int’l v. Rudolf Wolff & Co., Ltd., 484 U.S. 97 , 111,108 S.Ct. 404 ,98 L.Ed.2d 415 (1987). 6
Id.
III.
We turn now to this case. As seen, the district court concluded that
“[D]ue process requires only that in order to subject a defendant to a judgment in personam, [the defendant must] have 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,
Depending on their nature and number, a defendant’s contacts with a forum can provide a court with general jurisdiction or specific jurisdiction. To be subject to general jurisdiction, a defendant business entity must maintain “continuous and systematic general business contacts” with the forum, even when the cause of action has no relation to those contacts.
Helicópteros Nacionales,
We have, however, outlined a three-factor test for specific jurisdiction, which considers whether (1) the defendant purposefully directed its activities at residents of the forum, (2) the claim arises out of or relates to the defendant’s activities with the forum, and (3) assertion of personal jurisdiction is reasonable and fair.
Elecs, for Imaging,
Turning to the facts of this case, we think the district court was correct in ruling that it did not have general jurisdiction over GMReis.
Synthes,
We think the district court erred, however, in its ruling that it lacked specific jurisdiction over GMReis. Applying the first factor of our three-factor test for specific jurisdiction, we conclude that GMReis purposefully directed its activities at parties in the United States. The following undisputed facts support this conclusion. On behalf of GMReis, Mr. Lecumberri brought locking bone plates into the United States from Brazil. As representatives of GMReis, Mr. dos Reis and
As for the second factor, Synthes’s claim of patent infringement arises out of GMReis’s activities in the United States. Synthes’s complaint alleges that GMReis has been, and still is, making, using, offering for sale, selling, and/or importing into the United States products, systems, and/or apparatuses that infringe the '744 patent, all in violation of
We respectfully disagree with the district court’s conclusion that GMReis did not purposefully direct its activities at U.S. residents because “GMReis expressly discouraged the forum residents from purchasing its products.”
Synthes,
We see no reason to address, as both parties urge, whether Synthes made a prima facie showing that GMReis’s activities in the United States constituted patent infringement under
Because we find that GMReis’s activities within the United States were sufficient to establish minimum contacts, we turn to a consideration of whether assertion of jurisdiction over GMReis is reasonable and fair. To determine whether exercising personal jurisdiction would comport with “fair play and substantial justice,” we consider five factors: (1) the burden on the defendant, (2) the forum’s interest in adjudicating the dispute, (3) the plaintiffs interest in obtaining convenient and effective relief, (4) the interstate judicial system’s interest in obtaining the most efficient resolution of controversies, and (5) the shared interest of the states in furthering fundamental substantive social policies.
Burger King,
We conclude that application of the five factors establishes that exercising personal jurisdiction in this case is both reasonable and fair. The burden on GMReis is significant, in that GMReis will be required to traverse the distance between its headquarters in Brazil and the district court in California, and will be required to submit itself to a foreign nation’s judicial system.
See Asahi Metal Indus. Co. v. Cal. Super. Ct,
Moreover, we think that any burden on GMReis is sufficiently outweighed by the interest of the United States in adjudicating the dispute and the interest of Synthes in obtaining effective and convenient relief, the second and third due process factors. The United States has a “substantial interest” in enforcing the federal patent laws.
See Deprenyl Animal Health, Inc. v. Univ. of Toronto Innovations Found.,
To the extent that the fourth and fifth due process factors apply when the United States is the forum, we think they favor jurisdiction in this case. Both factors are concerned with the potential clash of substantive social policies between competing fora and the efficiency of a resolution to the controversy.
Burger King,
As to the fifth due process factor, GMReis argues that the forum, the United States, has an interest in furthering the social policy favoring the exchange of technological ideas and business. We agree that the United States has an interest in not chilling trade show attendance by foreign inventors, entrepreneurs, and customers. However, we do not view our decision as barring convention center doors to foreign entities. Interested parties, foreign and domestic, are welcome to attend trade shows in the United States, set up booths, and discuss their products. If, however, as in this case, a party brings allegedly infringing products to a trade show, we do not see the Due Process Clause of the Fifth Amendment standing in the way of a district court’s exercise of jurisdiction over the party.
In sum, this is not “one of those rare cases in which ‘minimum requirements inherent in the concept of “fair play and substantial justice” ... defeat the reasonableness of jurisdiction even [though] the defendant has purposefully engaged in forum activities.’ ”
Asahi Metal Indus.,
CONCLUSION
For the foregoing reasons, we reverse the judgment of the district court dismissing Synthes’s complaint for lack of personal jurisdiction. The case is remanded to the district court for further proceedings.
COSTS
Each party shall bear its own costs.
REVERSED and REMANDED.
Notes
. Locking bone plates are implantable devices with "locking holes” that accommodate "locking screws,” which secure bone to plate at a fixed angular relationship. See, e.g., '744 patent, Abstract. They are used to immobilize bones or bone fragments to promote healing of fractures. Id.
. Rule 30(b)(6) provides for a deposition of an organization named as a deponent.
.
See e.g., Porina v. Marward Shipping Co.,
.
See Oldfield v. Pueblo De Bahia Lora,
S.A.,
.
See, e.g., Porina,
. In
Omni Capital International,
the Supreme Court held that the district court could not “exercise personal jurisdiction over [the defendants] because they [were] not amenable to service of summons in the absence of a statute or rule authorizing such service.”
. In
Medical Solutions, Inc. v. C Change Surgical LLC,