3D Systems v. Aarotech Labs - Case Brief
3D Systems, Inc. v. Aarotech Labs., Inc., No. 97-1514, 1998 U.S. App. Lexis 28583, 160 F.3d 1373, 48 U.S.P.Q.2d (BNA) 1773 (Fed. Cir. Nov. 12, 1998).
Facts:
3D Systems filed a patent infringement suit against Aarotech, Aaroflex, and Young in the Central District of California. The defendants moved to dismiss for lack of personal jurisdiction. The district court granted the motion and dismissed the claims against all of the defendants, finding that the plaintiff had not established the elements for personal jurisdiction under the Ninth Circuit’s due process test.
Aarotech, the parent corporation of Aaroflex, was incorporated in Oklahoma and had its principle place of business in Virginia but had taken no actions in the state of California.
Aaroflex, a subsidiary of Aarotech, was incorporated in West Virginia and had its principle place of business in Virginia. As of the date of the district court’s decision, Aaroflex had sold a total of five machines, none of which had been shipped, and none of which had been sold in California. Promotional materials had been distributed in California, however.
Young was the President and Chairman of the Board of Aaroflex and the CEO of both Aaarotech and Aaaroflex and resided in Washington, DC.
Issue:
1) What personal jurisdiction law does the Federal Circuit apply – its own or that of the lower court?
2) Were Aaroflex’s promotional materials and price quotations offers for sale under 35 U.S.C. § 271(a), despite stating that they were not an offer for sale until executed by recipient?
Holding:
1) The Federal Circuit applies its own personal jurisdiction law, deferring to the state’s highest court’s interpretation of the state’s long arm statute.
2) Yes. Using the conceptualization of “offer to sell” under federal law and not the law of the state, the promotional materials were an offer for sale.
Discussion:
The Federal Circuit applied the Akro test for minimum contacts (see Akro Corp. v. Luker, 45 F.3d 1541, 1545-46, 33 U.S.P.Q.2d 1505, 1508-09 (Fed. Cir. 1995)). The three prongs of the Akro test are:
1) whether the defendant purposefully directed its activities at the forum,
2) whether the claim arises out of or relates to those activities, and
3) whether an assertion of personal jurisdiction is reasonable and fair.
Whether the second prong had been satisfied depended on whether the promotional materials constituted an offer for sale. The Federal Circuit held that “offer to sell” under 35 USC § 271 was intended to prevent potential infringers from generating interest in an infringing product to the detriment of the patentee. The Federal Circuit held that the promotional materials constituted offers for sale and that minimum contacts had been established, and that therefore the district court had had personal jurisdiction over Aaroflex. See International Shoe Co. v. Washington.
Disposition:
Affirmed-in-part as to the district court’s finding that it lacked personal jurisdiction over Aarotech and Young, reversed-in-part as to the district court’s finding that it lacked personal jurisdiction over Aaroflex, and remanded.
Tags: 35 usc 271, Cases, Cases, law, Patent, patents, personal jurisdiction