IP Law Daily, COPYRIGHT—W.D. Mo.: Software provider’s motion to dismiss for lack of personal jurisdiction denied, but motion to transfer venue granted, (Sep 27, 2022)

By Deborah J. Challener, J.D.

While a Missouri federal court had personal jurisdiction over a corporation because of its contacts with the state, the Western District of Wisconsin was a more appropriate forum for the case.

The federal district court in the Western District of Missouri has held that a health records software provider is subject to personal jurisdiction in Missouri on a copyright claim where it had minimum contacts with the forum. Nevertheless, the federal court granted the software provider’s motion to transfer venue because the case could have been brought in the Western District of Wisconsin and the convenience of the parties clearly favored transfer (Spertus v. Epic Systems Corp., September 21, 2022, Kays, G.).

Dr. John Spertus owns the copyright to a questionnaire used by healthcare professionals to measure the impact of heart disease on a patient’s life. He sued Epic Systems Corp. in the Western District of Missouri for copyright infringement. Spertus alleged that Epic, a health records software provider, included an unlicensed copy of one of his questionnaires on its software and thereby distributed unlicensed copies of the questionnaire to its clients. Epic moved to dismiss for lack of personal jurisdiction, or, in the alternative, transfer to the Western District of Wisconsin.

Personal jurisdiction. Epic argued that it lacked “minimum contacts” with Missouri because its activities in Missouri–such as one year of contract negotiations and three years implementing its software at a hospital and medical school in St. Louis–occurred before Spertus’ copyright infringement claim accrued. The court rejected this argument and held that the nature, quality, and quantity of Epic’s contacts weighed in favor of finding personal jurisdiction. The court noted that Epic’s alleged infringement began much earlier than Spertus’ discovery of the infringement and continued after the claim accrued. The court further found that there was a close relationship between the claim–copyright infringement–and Epic’s contacts with Missouri and Missouri had a clear interest in providing a forum for Spertus, a resident of Missouri.

The Calder effects test. Because copyright claims sound in intentional tort, the court also applied the test set out in Calder v. Jones, 465 U.S. 783 (1984), as an additional factor to determine whether Epic had minimum contacts with Missouri. The court held that Spertus had sufficiently alleged (1) knowing infringement of his copyright, (2) that Epic knew Spertus was a resident of Missouri and incorporated his questionnaire into its software in Missouri, and (3) that Epic expressly aimed its actions at Missouri. Thus, the court concluded that the Calder effects test weighed in favor of finding personal jurisdiction.

Transfer of venue. Epic argued that the case should be transferred to the Western District of Wisconsin under 28 U.S.C. § 1404(a) for the convenience of the parties and witnesses in the interest of justice. The court first determined, as required under § 1404(a), that the case could have been brought in the Western District of Wisconsin because both personal jurisdiction and venue were proper there. The court then held that the convenience factors clearly favored transfer: Most of the witnesses were in Wisconsin, the convenience of the parties favored Wisconsin, relevant documents could be produced electronically, and depositions could be conducted via teleconference, pretrial motion practice would not require Spertus to travel, and the conduct Spertus complained of–e.g., Epic’s decision to include the questionnaire on its software–occurred in Wisconsin. Although Spertus did choose to sue in Missouri, the court concluded that none of the other interest of justice factors were implicated.

The court denied Epic’s motion to dismiss for lack of personal jurisdiction because Epic had minimum contacts with Missouri but granted its motion to transfer because the case could have been brought in the Western District of Wisconsin and it was a more convenient forum.

The case is No. 4:22-cv-00183-DGK.

Attorneys: Eric S. Johnson (Kutak Rock LLP) for John A. Spertus. Robert M. Thompson (Bryan Cave Leighton Paisner LLP) for Epic Systems Corp.

Companies: Epic Systems Corp.

Cases: Copyright MissouriNews