In a previous post I wrote about parties to a biodiesel processor dispute battling over home court advantage. There, Agri-Process Innovations (API) succeeded in getting its case against Greenline Industries heard in API’s home state of Arkansas.
The most common litigation tool for getting a case heard on your home turf is the declaratory judgment action (DJ). In the patent infringement context, this means the accused infringer (or DJ plaintiff) beats the patent holder (or DJ defendant) to the punch by filing suit first and asking the court for a judgment of no infringement or patent invalidity.
The DJ plaintiff in a patent case must show that an actual controversy exists between the parties having adverse legal interests and that the DJ plaintiff is engaging in infringement or concrete steps with the intent to engage in infringement.
As in all lawsuits, the DJ plaintiff also has to establish personal jurisdiction (PJ) over the DJ Defendants. Personal jurisdiction can be either general (i.e., the defendant has sufficient contacts in the forum state generally to justify PJ regardless of whether there was a connection between the acts leading to the lawsuit and the state) or specific (there was a connection between the specific acts leading to the lawsuit and the forum state).
Idaho Energy LP, dba Energy Products of Idaho (EPI) is an Idaho company that designs, manufactures and sells fluidized bed energy systems. Harris Contracting Company (Harris), Alliant Energy Corporate Services and Von Roll, Inc. (collectively DJ Defendants) are co-holders of U.S. Patent No. 7,263,934 (‘934 patent), entitled “Methods for generating energy using agricultural biofuel.”Â
The ‘934 patent is directed to a process for producing steam from ethanol byproducts such as grain stillage syrup by combusting the byproducts in a fluidized bed reactor.
After several communications and license offers between Harris and EPI and one alleged instance of Harris threatening one of EPI’s potential customers about the ‘934 patent, EPI filed a DJ action in federal court in Boise, Idaho seeking a declaratory judgment of patent invalidity and making other claims including business defamation, unfair competition, trade libel and interference with prospective economic advantage.
The DJ Defendants moved to dismiss the case for lack of DJ jurisdiction and lack of PJ. Recently, Judge Edward J. Lodge issued an order (epi_order.pdf) in which he found that there was DJ jurisdiction, but EPI had failed to establish PJ over the DJ defendants. Â
The court found that none of the DJ Defendants did business in Idaho or had any other continuous presence in the state, so there was no general jurisidiction over them.Â
As to specific jurisdiction, the court held that none of the alleged actions leading to the lawsuit had a connection to Idaho. The alleged improper statement made to EPI’s potential customer did not involve Idaho customers and was not directed to the state.
The court also noted that letters threatening infringement litigation or the need for a license are insufficient to confer personal jurisdiction without other actions directed to the forum state. So EPI’s DJ was dismissed for lack of PJ.
