Apple gets greenlight to pursue Wi-Fi case in California
Apple has succeeded in persuading the US Court of Appeals for the Federal Circuit that it should be able to fend off claims relating to Wi-Fi messaging patents in a California court.
The Federal Circuit handed down the precedential decision on Monday, April 18, reversing and remanding an earlier decision by a Northern California federal court.
The appeals court said the lower court had erred when it held that it lacked jurisdiction over Apple’s opponent Zipit Wireless because its communications with Apple's headquarters in the state were enough to justify bringing the case in that part of California.
Zipit is a Delaware corporation with a principal place of business in Greenville, South Carolina, and with each of its 14 employees located in South Carolina.
Zipit is the assignee of US patent numbers, 7,292,870 and 7,894,837, directed to wireless instant messaging devices that use Wi-Fi to send and receive instant messages.
The parties’ communications regarding the patents-in-suit date back to at least 2013, when Zipit first contacted Apple in the Northern District of California.
Over the course of three years, the parties exchanged several rounds of correspondence and met in person at Apple’s Cupertino headquarters located in Northern California.
The Federal Circuit heard how the parties discussed the possibility of Apple buying or licensing the patents-in-suit from Zipit; the status and perceived strength of ongoing inter partes review proceedings involving the patents-in-suit; and technical details regarding potential infringement (and allegations of willful infringement).
Nature of communications
Ultimately, these discussions led to Zipit filing a patent infringement action against Apple, and the tech company countersued seeking a declaratory judgment of noninfringement.
The district court later held that it would be unreasonable to exercise personal jurisdiction over Zipit based on the nature of Zipit’s communications with Apple in the Northern District of California.
The district court held that patent infringement notice letters and related communications can never form the basis for personal jurisdiction. But on appeal, the Federal Circuit agreed with Apple that the district court erred
The court stated: “Guided by the Supreme Court and our own precedent, we conclude, as the district court likely would have absent its erroneous interpretation of our precedent, that Zipit is subject to specific personal jurisdiction in the Northern District of California for purposes of Apple’s declaratory judgment action. We therefore reverse the judgment dismissing Apple’s declaratory judgment complaint and remand for further proceedings.”
The court concluded that Apple had established the requisite minimum contacts, highlighting that Zipit sent “multiple letters and claim charts accusing Apple of patent infringement” and in fact had “travel[ed] to Apple’s offices in California to discuss these accusations.”
A reasonable venue
This, the court determined, made the exercise of specific personal jurisdiction over Zipit “presumptively reasonable”.
The court then analysed whether Zipit had established a “compelling case” that the exercise of jurisdiction would be unreasonable.
After analysing each of the factors set out in Burger King v Rudzewicz, (1985), the court concluded that Zipit had not done so.
Specifically, the court found that “the majority of [the] reasonableness factors weigh in favour of adjudicating in California or, at the least, do not weigh significantly in favour of either party,” and therefore jurisdiction over Zipit would not be unreasonable.
The Federal Circuit determined that this is not “one of the ‘rare’ situations in which sufficient minimum contacts exists but where the exercise of jurisdiction would be unreasonable”.
“Zipit has not met its burden to present a compelling case that these factors in the aggregate would render the exercise of jurisdiction unreasonable,” it contended.
The Federal Circuit reversed the district court’s judgment dismissing Apple’s complaint for declaratory judgment of noninfringement for lack of personal jurisdiction and remand for further proceedings.
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