Federal Circuit affirms dismissal of Ford patent suit
The US Court of Appeals for the Federal Circuit has affirmed the dismissal of a claim brought by a company accused of patent infringement by Ford.
In a precedential decision handed down yesterday, June 8, the Federal Circuit found that the US District Court for the Northern District of Texas had correctly dismissed a complaint for lack of personal jurisdiction.
New World International, a seller of tyres and vehicle batteries, had sought an order that it didn’t infringe two design patents, US number D489,299, which claims the design of a vehicle hood exterior, and US number D501,685, which claims the design of a vehicle headlamp.
The patents are owned by Ford Global Technologies, the Delaware-headquartered company that manages and licenses Ford Motor Company’s IP.
In January 2015, Ford Global sued New World and its internet retailer, Auto Lighthouse Plus, at the US District Court for the Eastern District of Michigan.
Ford Global later filed an amended complaint that dropped the claims under the ‘299 and ‘685 design patents.
In April the same year, New World filed its suit in the Northern District of Texas, seeking a declaratory judgment of non-infringement and invalidity of the patents.
As part of this, New World claimed that the district court had specific personal jurisdiction over Ford Global.
But the district court disagreed with New World, finding that cease-and-desist letters sent to New World in Texas by Ford Global were not sufficient to establish jurisdiction.
It also found that a licence agreement between Ford Global and an exclusive licensee for the importation and sale of non-original equipment throughout the US didn’t “impose continuing obligations on Ford Global to enforce or defend the patents in Texas”.
New World then filed a motion for reconsideration and a motion for leave to file an amended complaint to add further allegations in support of specific jurisdiction.
The district court acknowledged a factual error in its previous dismissal order, but said that, even with the error corrected, the court lacked specific personal jurisdiction.
It also denied New World’s motion for leave to file an amended complaint as untimely, so New World appealed.
The company argued that under precedent, Ford Global’s licence creates the basis for a finding of jurisdiction because it “imposes continuing obligations on Ford Global by virtue of its character as an exclusive licence”, by preventing Ford Global granting a licence to New World.
It also claimed that indemnification and enforcement provisions in the licence were independently sufficient bases for specific jurisdiction.
But the Federal Circuit disagreed, rejecting the idea that the “mere existence of an exclusive licence, regardless of its content, establishes specific jurisdiction over the licensor”.
“New World also has not demonstrated that Ford Global has assumed a meaningful obligation to enforce or defend the Ford design patents under the licence provisions regarding infringement suits brought against third parties,” said the court.
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