This aritcle was first published in the May 18, 2009 edition of IP Law360

---

 

In patent litigation, as in all civil litigation, the choice of forum is often controlled by whether a court in the selected forum can exercise personal jurisdiction over the alleged infringer/defendant.  Where the defendant lacks sufficient contacts with the selected forum to justify a court’s general jurisdiction over it, personal jurisdiction over the defendant will turn on whether the defendant’s acts come within the ambit of the selected forum’s long-arm statute granting specific jurisdiction.

 

Once in a while, facts that would seem to support personal jurisdiction do not.  This is because the substantive law prism through which the jurisdictional facts are analyzed direct the result in another direction.  For example, it would seem that the display and partial demonstration of an alleged infringing device at a trade show in a particular forum could be sufficient, alone, to show that the tort of patent infringement occurred in that jurisdiction.  As a recent Federal Circuit case demonstrated, however, a court does not necessarily have personal jurisdiction over an alleged infringer in those circumstances.

 

In the case, Medical Solutions, Inc. v. C Change Surgical LLC, 541 F.3d 1136 (Fed. Cir. 2008), the District Court for the District of Columbia and the U.S. Court of Appeals for the Federal Circuit dealt with whether the District Court had long-arm jurisdiction over a defendant because of its trade show activities performed within the District.  As in other fora, the District of Columbia’s long-arm statute gives its courts personal jurisdiction over a party who causes tortious injury there.  Under the Patent Statute, 35 U.S.C. § 271(a), activities constituting the tort of patent infringement are the making, using offering to sell, selling or importing of a patented invention in the forum jurisdiction.  Conversely (and controlling in this case), if the alleged infringer’s actions in the forum jurisdiction do not constitute any of those activities, there is no tort of infringement in the forum jurisdiction upon which personal jurisdiction may be based. 

 

Here, the overarching issue was whether the defendant C Change Surgical (“CCS”) committed the tort of patent infringement (“use,” “offer for sale”) within the District of Columbia when it displayed the accused product at a trade show held in the District and engaged in other activities at the show related to the display.

Plaintiff MSI makes and distributes medical technology for controlled heating and temperature maintenance of medical fluids and related equipment.  Its patents related to that technology were at issue in the case. Defendant CCS is a North Carolina Company, where its only place of business is located.  CCS develops and commercializes technologies that improve operating room efficiency and patient safety.  The only technology CCS has developed is a mobile workspace that controls the temperature of surgical fluids. 

 

CCS attended a trade show in the District of Columbia where it was one of about 600 exhibitors.  At the trade show, CCS had its own booth with a large and visible sign advertising the accused product.  CCS representatives working at the booth discussed the product with potential customers and showed how parts of the device functioned.  CCS also had brochures describing how parts of the device functioned. While at the trade show, CCS did not make any sales, negotiate any sales, take any orders, or provide any price information to attendees.  After the trade show, CCS sold the accused product to two hospitals - one in Maryland and the other in Georgia -as a direct result of its marketing at the trade show.  

 

The Maryland hospital learned about the product second-hand, from a trade show attendee.  The Georgia hospital contacted CCS through CCS’ website two months after the trade show.  The units placed in the Georgia hospital were for clinical evaluation and CCS did not charge the hospital for the use of those units.  CCS asserted that the Maryland and Georgia negotiations took place in Maryland, Georgia and North Carolina, not in the District of Columbia.  

 

MSI sued CCS contending that CCS’ technology infringed two of MSI’s patents in the District of Columbia.

 

CCS filed a motion to dismiss alleging that it had no contacts (no legally cognizable contacts) with the District.  For example, CCS alleged that it was not registered to do business in the District; did not have sales agents, employees, offices, manufacturing facilities, bank accounts, or telephone listings there; did not own or control anything of value in the District; did not manufacture, use, or sell any products in the District;. did not direct marketing efforts at the District or generate any revenue from there; nor was its website specifically targeted to residents of the District.  In response, MSI argued that the District Court had personal jurisdiction over CCS under the District’s long-arm statute because CCS “used” and “offered to sell” the accused product at the trade show and that each activity constituted the tort of patent infringement.  The District Court disagreed and granted CCS’ motion to dismiss for lack of personal jurisdiction. 

 

The District Court rejected MSI’s contention that CCS offered to sell the allegedly infringing product at the trade show.  Applying traditional contract principles, the District Court reasoned that to constitute an “offer to sell,” the offer must have included price terms.  Here, although CCS’ marketing efforts at the trade show resulted in the Maryland sale, the District Court ruled that because the price for CSS’ product was not made available to attendees of the trade show, there was no prohibited offer to sell.  On appeal, MSI abandoned its “offer to sell” argument and, instead, focused only on its “use” argument, which the Federal Circuit also rejected. 

 

In reviewing the District Court’s determination about whether “use” of the patented invention occurred at the trade show, the Federal Circuit acknowledged cases holding that merely demonstrating or displaying an accused product even for commercial purposes was not an act of infringement.  The court made clear, however, that it was not deciding the general proposition of whether the demonstration of a product at a trade show could ever be sufficient to establish an infringing use.  Recognizing that the inquiry regarding use of a patented item is highly case-specific, the court analyzed the demonstration at issue to determine whether MSI made out a prima facie case of “use.”  Did CCS’ demonstration place the “patented invention” (all of the elements of any one claim) into service? 

 

The Federal Circuit concluded it did not.  As indicated above, MSI’s patented technology pertains to systems for warming and controlling the temperature of medical and surgical items.  At the trade show, CCS displayed a prototype of the device; made brochures available about the product and showed an attendee how to take the basic off the device when the basin still had fluid in it.  The Federal Circuit concluded that those activities did not put the device into service and that much more would be needed to qualify as an infringing use, including using the device at the trade show to heat medical items. 

 

The Federal Circuit focused on the claims of the patent, holding that to constitute a “use” under the patent statute, CCS’ activities at the trade show would at least have to involve practicing all of the elements of at least one patent claim.  MSI’s declaration in opposition to the motion to dismiss did not suggest that had occurred.   

 

Thus, the Federal Circuit agreed with the District Court’s conclusion that CCS’ activities at the trade show did not constitute an infringing “use” of the allegedly infringing product in the selected forum.

 

Obtaining personal jurisdiction may require a more in-depth analysis and consideration of jurisdictional facts in view of relevant substantive law.  This case demonstrates that a particular forum may not have personal jurisdiction over the accused infringer under its long-arm statute merely because the accused infringer brought an alleged infringing product to a trade show there and even though the product was displayed and partially demonstrated there.  The lesson from this case is that in choosing where to sue, the plaintiff in a patent case must analyze the facts to ensure not only that the accused product infringes at least one of the patent’s claims, but also that infringing activity did, in fact, occur in the selected forum.