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Hid Global Corporation v. Isonas, Inc.

United States District Court, C.D. California

April 21, 2014



DAVID O. CARTER, District Judge.


Before the Court is Defendant Isonas's motion to dismiss for lack of personal jurisdiction and lack of subject matter jurisdiction (Dkt. 16). The Court finds this matter appropriate for decision without oral argument. See Fed.R.Civ.P. 78; L.R. 7-15. After considering the moving and opposing papers, the Court concludes that it lacks personal jurisdiction over Isonas and so GRANTS the motion to dismiss.

I. Factual Background

Plaintiff HID filed this declaratory judgment action seeking a declaration that its products do not infringe on Defendant Isonas's patent, U.S. Patent No. 7, 775, 429 ("Method and System for Controlling Access to an Enclosed Area"). FAC ¶ 17. Isonas produces products in the physical access security industry and competes with HID in certain areas, including access card readers. FAC ¶ 16. HID is a Delaware corporation with its principal place of business in Irvine, California. FAC ¶ 3. Isonas is a Colorado corporation with its principal place of business in Boulder, Colorado. FAC ¶ 4. Isonas was once located in the Central District of California, and HID estimates that it had an office in this district until 2005. FAC ¶ 7.

HID and Isonas have a business relationship. Isonas incorporates HID's products into some of its own products, purchased $75, 000 in products from HID in 2013, and has paid hundreds of thousands of dollars in licensing royalties over the past several years. FAC ¶ 9. HID further alleges that Isonas sells its products in California, has distributors that ship to California, and has advertised at least two California installations of its products on its website. See FAC ¶¶ 7-12. Isonas attended a key trade show in the Central District in 2009, and has sold or installed at least hundreds of thousands of dollars of its own products in this District. FAC ¶¶ 13-14. At least two contracts between Isonas and HID include forum selection clauses indicating this District, and provide that California law governs the terms.

HID filed this declaratory judgment action after Isonas made two communications referencing infringement of the 429 Patent. First, HID alleges that in September, 2013, Isonas's CEO met with senior executives of HID at a trade show in Chicago, Illinois. FAC ¶ 18. Isonas's CEO told HID's representatives that Isonas believed HID was infringing Isonas's 429 Patent. HID further alleges that Isonas's CEO told HID that Isonas's attorney had evaluated the 429 Patent for infringement and validity and felt strongly about Isonas's infringement claim against HID's Edge Series readers. Isonas also told HID that another entity might purchase Isonas and try to assert the 429 Patent against HID. FAC ¶ 19.

Then, on October 9, 2013, an investment banker exclusively representing Isonas sent an email to Assa Abloy, HID's parent company, stating that "[w]e believe it is imperative for either HID or Assa Abloy to acquire Isonas because HID's Edge Series directly infringes on Isonas' patent." HID alleges that Isonas told this investment banker of its belief that HID's Edge Series infringes the 429 Patent. FAC ¶ 20.

On January 13, 2014, HID filed the instant declaratory judgment lawsuit. FAC at 1. Isonas filed the instant motion to dismiss, arguing that this Court lacks personal jurisdiction and subject matter jurisdiction under the Declaratory Judgment Act.

II. Legal Standard

A defendant may bring a motion under Federal Rule of Civil Procedure 12(b)(2) to challenge the district court's exercise of personal jurisdiction over the defendant. The plaintiff bears the burden to establish personal jurisdiction. Menken v. Emm, 503 F.3d 1050, 1056 (9th Cir. 2007). In patent cases, the Court applies Federal Circuit precedent to determine whether it has personal jurisdiction over a defendant. HollyAnne Corp. v. TFT, Inc., 199 F.3d 1304, 1306 (Fed. Cir. 1999).

Where a district court's disposition of the personal jurisdiction question is based on affidavits and other written materials, a plaintiff need only make a prima facie showing that the defendant is subject to personal jurisdiction. Trintec Indus., Inc. v. Pedre Promotional Prods., Inc., 395 F.3d 1275, 1282 (Fed. Cir. 2005). The district court must construe all pleadings and affidavits in the light most favorable to the plaintiff and resolve any factual conflicts in the affidavits in the plaintiff's favor. Id. at 1282-83.

"Determining whether personal jurisdiction exists over an out-of-state defendant involves two inquiries: whether a forum state's long-arm statute permits service of process, and whether the assertion of personal jurisdiction would violate due process." Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1359 (Fed. Cir. 2001). "[B]ecause California's long-arm statute is coextensive with the limits of due process, the two inquiries collapse into a single inquiry: whether jurisdiction comports with due process." Id. (citing Cal. Code Civ. P. § 410.10).

The Supreme Court set forth the due process standard in International Shoe v. Washington, in which it held that "due process requires only that... [the Defendant] have certain minimum contact with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." 326 U.S. 310, 316 (1945). "Under the minimum contacts' test, a defendant may be subject to either specific ...

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