IP Law Daily, PATENT—N.D. Cal.: German SEP licensing company not subject to personal jurisdiction in California, (Jul 12, 2022)

By Brian Craig, J.D.

Lenovo and Motorola failed to establish that the Germany-based licensing company has sufficient minimum contacts with California concerning the cellular connectivity patents.

In a case brought by Lenovo and Motorola against a licensing company based in Germany over cellular connectivity patents, the federal district court in San Jose, California, has dismissed all claims because the court lacked personal jurisdiction. Following jurisdictional discovery, the court concluded that Lenovo and Motorola failed to establish that the German licensing company has sufficient minimum contacts with the state. The court concluded that four meetings that took place in San Francisco, use of a California consultant, licensing agreements with California-based Apple, and having board members who are California residents did not establish sufficient minimum contacts in California to support the patent claims (Lenovo [United States] Inc. et al v. IPCom GmbH & Co., KG, July 8, 2022, Davila, E.).

Lenovo (United States) Inc. (“Lenovo U.S.”) and Motorola Mobility LLC (“Motorola”) brought an action against IPCom GmbH & Co. KG (“IPCom”), alleging that IPCom failed to offer Lenovo and Motorola a license to its standard essential patents (“SEPs”) on fair, reasonable, and non-discriminatory (“FRAND”) terms and conditions. Lenovo and Motorola asserted patent and antitrust claims pertaining to IPCom’s breach of its FRAND obligations and two declaratory judgments of non-infringement for U.S. Patent Nos. 6,307,844 and 6,920,124. IPCom, a company headquartered in Germany, characterizes itself as a small intellectual property consulting and licensing company. IPCom filed a motion to dismiss for lack of personal jurisdiction. After nearly two years of jurisdictional discovery, the court entered its ruling.

Jurisdiction—patent claims. The court first concluded that Lenovo and Motorola failed to establish sufficient minimum contacts to exercise specific personal jurisdiction over the claims seeking declaratory judgment of noninfringement. To establish sufficient minimum contacts, courts consider: (1) whether the defendant purposefully directed its activities at residents of the forum; (2) whether the claim arises out of or relates to the defendant’s activities with the forum; and (3) whether assertion of personal jurisdiction is reasonable and fair. These contacts must be from the defendant’s own choice and must show that the defendant deliberately reached out beyond its home—by, for example, exploiting a market in the forum state or entering a contractual relationship centered there.

Here, the court found that four meetings that took place in San Francisco over four years did not target a California company and did not purport to invoke any benefits or privileges of California operation to give rise specific jurisdiction. Likewise, the German company’s contractual relationship with an attorney who is a resident of California, used as a consultant on matters that do not relate to the patent claims in this case, did not establish minimum contacts to establish personal jurisdiction. Furthermore, the court found that IPCom’s licensing agreements with California-based Apple did not support personal jurisdiction where the licensing agreements did not relate to the patents in this case. Allegations that IPCom’s board members are California residents, without more, failed to establish either purposeful direction or availment under the minimum contacts inquiry. Therefore, the court concluded that no personal jurisdiction existed over the German company relating to the patent claims.

Jurisdiction—antitrust, state law claims. Next, the court concluded that no personal jurisdiction existed over the German company based on antitrust claims and breach of contract claims. The court ruled that Lenovo and Motorola could not access the antitrust “nationwide contacts” theory to establish personal jurisdiction over a foreign defendant in any district of the United States for certain antitrust claims. The German company’s licensing negotiations with Motorola neither give rise nor relate to the antitrust claim. The claim did not arise out of these discussions, as mere negotiations without a demand for non-FRAND terms cannot breach IPCom’s FRAND commitment. Because the court could not exercise personal jurisdiction over the patent or antitrust claims, there also was no basis for exercising pendent jurisdiction over the breach of contract or declaratory judgment claims.

Therefore, the court dismissed all claims. The court allowed Lenovo and Motorola to file a motion to request leave to amend their complaint.

The Case is No. 5:19-cv-01389-EJD.

Attorneys: Matthew W. Holder (Sheppard Mullin Richter Hampton LLP) for Lenovo [United States] Inc. and Motorola Mobility, LLC. Martin Jay Black (Dechert LLP) for IPCom GmbH & Co. KG.

Companies: Lenovo (United States) Inc.; Motorola Mobility, LLC; IPCom GmbH & Co. KG

Cases: Patent TechnologyInternet CaliforniaNews