Antitrust Law Daily Wrap Up, ANTITRUST—E.D. La.: Claims against patent holder for asserting “frivolous” infringement claims dismissed on jurisdictional grounds, (Jul 3, 2013)

By Jeffrey May, J.D.

The federal district court in New Orleans has dismissed an action, alleging antitrust, patent misuse and other claims, against a patent holder that had purportedly threatened companies with “frivolous” legal action for violating its patents. The court lacked personal jurisdiction over the Utah patent holder—eTagz, Inc. (Athletic Training Innovations, LLC v. eTagz, Inc., June 30, 2013, Brown, N.).

The plaintiff, Athletic Training Innovations, LLC (ATI), sold athletic equipment and specially designed training shoes over the Internet and the phone. When the company shipped shoes to a purchaser, it accompanied the product with a DVD that demonstrated how to perform certain exercises.

eTagz holds patents concerning the use of a hangtag having a computer-readable medium that is attached to a product by a vendor and removed by a purchaser. Etagz has allegedly threatened a number of companies that have included CDs or DVDs with their products with patent infringement litigation, claiming that its patents encompass the attachment of media for products at retail.

ATI, arguing that its practice of placing a DVD in the shipping container did not infringe on the patents, brought this action alleging antitrust claims and seeking declarations of non-infringement and invalidity of the patents.

ATI unsuccessfully alleged that the court had specific personal jurisdiction over eTagz based on a cease-and-desist letter, three phone calls, and one email sent to ATI's employees in Louisiana. Cease-and-desist letters were insufficient to establish minimum contacts with a state to confer specific personal jurisdiction. In addition, the three alleged phone calls were similarly analogous to a cease-and-desist letter and could not be considered independently sufficient as minimum contacts, the court explained. In order for specific personal jurisdiction to exist, there had to be other activities, such as “initiating judicial or extra-judicial patent enforcement within the forum, or entering into an exclusive license agreement or other undertaking which imposes enforcement obligations with a party residing or regularly doing business in the forum.”

The case is No. 12-2540.

Attorneys: Kenneth L. Tolar for Athletic Training Innovations, LLC. Chauntis T. Jenkins (Porteous, Hainkel & Johnson) for eTagz, Inc.

Companies: Athletic Training Innovations, LLC; eTagz, Inc.

Cases: Antitrust LouisianaNews