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Round Rock Research LLC v. Asustek Computer Inc.

United States District Court, D. Delaware

August 20, 2013

ROUND ROCK RESEARCH LLC, Plaintiff,
v.
ASUSTEK COMPUTER INC., et al., Defendants

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[Copyrighted Material Omitted]

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Brian Farnan, Esq., Wilmington, Delaware; Paul Bondor, Esq. (argued), New York, New York; Attorneys for Plaintiff.

John Day, Esq., Wilmington, Delaware; James Pistorino, Esq. (argued), Palo Alto, California; Attorneys for Defendants.

OPINION

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MEMORANDUM OPINION

Richard G. Andrews, U.S. DISTRICT JUDGE.

The Defendants ASUSTeK Computer Inc. and ASUS Computer International, Inc. (" ACI" ) filed a Motion to Dismiss [for lack of personal jurisdiction], or, in the Alternative, to Transfer [to the Northern District of California]. (D.I. 17). The motion was briefed (D.I. 18, 22, 28) and argued. (D.I. 33). The Court granted jurisdictional discovery, and received further jursidictional briefing (D.I. 49, 54) and supplemental jurisdictional briefing. (D.I. 58, 59).

ASUSTeK is a Taiwanese company. (D.I. 15, ¶ 2). It has no physical presence in the United States. ACI is a California company, with a principal place of business in Fremont, California. ( Id. ¶ 3). It is a wholly-owned subsidiary of ASUSTeK. ( Id. ). ASUSTeK produces ASUS brand computers and computer-related products. The Amended Complaint alleges generally that ASUS brand products infringe Plaintiff's ten asserted patents. The Amended Complaint specifically names various ASUS products as infringing, to wit, the VW246H LCD monitor, Eee Slate tablet computers, CM desktop computers, Eee " All-in-One" personal computers, Bamboo, U, UL, F, N, M, X, A, G, K, K52, UX, and B series notebook computers, Internet Radio series internet radios, Skype Phone AiGuru S2 internet phones, Essentio and Eee desktop computers, T and R servers, and AMD and Intel series motherboards. (D.I. 15). It appears that ASUSTeK sells these computer products to its Singapore subsidiary, ASUS Technology Pte Ltd, which then sells computers to ACI (D.I. 51, Exh. 4, Depo. at 299), which then sells computers to retailers such as Best Buy and Office Depot, which, among other things, sell the computers in Delaware. ACI also sells its full line of products directly to Delaware consumers. ( Id. at 46). Over 6½ years, ACI's U.S. sales exceed $5,000,000,000. ( Id. at 232).

What are the procedural principles relevant to consideration of a motion to dismiss for lack of personal jurisdiction? The plaintiff bears the burden of showing personal jurisdiction. " [I]n reviewing a motion to dismiss under Rule 12(b)(2), [the court] must accept all of the plaintiff's allegations as true and construe disputed facts in favor of the plaintiff." Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002) (internal quotation omitted). " [O]nce the defendant raises the question of personal jurisdiction, the plaintiff bears the burden to prove, by a preponderance of the evidence, facts sufficient to establish

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personal jurisdiction." Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir. 1992). Thus, when the plaintiff has a plausible jurisdictional theory, but insufficient evidence to prove the theory, the plaintiff should be granted jurisdictional discovery.

Although the plaintiff bears the burden of demonstrating facts that support personal jurisdiction, courts are to assist the plaintiff by allowing jurisdictional discovery unless the plaintiff's claim is " clearly frivolous." If a plaintiff presents factual allegations that suggest " with reasonable particularity" the possible existence of the requisite " contacts between [the party] and the forum state," the plaintiff's right to conduct jurisdictional discovery should be sustained.

Toys " R" Us, Inc. v. Step Two, S.A., 318 F.3d 446, 456 (3d Cir. 2003) (citations omitted).

What are the substantive principles relevant to the existence of personal jurisdiction? In this Court, a plaintiff has to show the existence of personal jurisdiction under Delaware law, and that such jurisdiction is not inconsistent with the Constitution's requirement of due process. For a non-resident defendant, Delaware law is set forth in its long-arm statute. See 10 Del. C. § 3104. The due process analysis, in a patent case such as this, must follow decisions of the Supreme Court and the Federal Circuit. See Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1564 (Fed. Cir. 1994).

Interpretation of the Delaware long-arm statute has resulted in some decisions that offer conflicting principles. For example, analysis of the long-arm statute is a separate undertaking from analysis under the due process clause, and yet it appears that the results should be the same. Consider:

Delaware courts apply a two-step analysis in determining the issue of personal jurisdiction over a nonresident. First, we must consider whether Delaware's long arm statute is applicable, recognizing that 10 Del.C. § 3104(c) is to be broadly construed to confer jurisdiction to the maximum extent possible under the Due Process Clause. Next, the court must determine whether subjecting the nonresident defendant to jurisdiction in Delaware violates the Due Process Clause of the Fourteenth Amendment.

Hercules Inc. v. Leu Trust & Banking (Bahamas) Ltd., 611 A.2d 476, 480-81 (Del. 1992) (citations omitted) (emphasis added). Further:

The existence of personal jurisdiction depends upon two independent considerations-the long arm statute and due process. Satisfying the first part of this analysis simply means that the legislative requirements of service of process have been met. It does not mean that due process is satisfied, nor should it be confused with that concept. Step one is nothing more than an application of the language of the long arm statute while the second step involves issues of constitutional dimensions.

Id. at 483 (citation omitted).

In relevant part, the Delaware long arm statute provides:

(c) As to a cause of action brought by any person arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nonresident, or a personal representative, who in person or through an agent:
(1) Transacts any business or performs any character of work or service in the State;
(2) Contracts to supply services or things in this State;

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(3) Causes tortious injury in the State by an act or omission in this State;
(4) Causes tortious injury in the State or outside of the State by an act or omission outside the State if the person regularly does or solicits business, engages in any other persistent course of conduct in the State or derives substantial revenue from services, or things used or consumed in the State; . . .

10 Del. C. § 3104. The first three subsections provide for specific jurisdiction while the fourth provides for general jurisdiction. See Boone v. Oy Partek AB, 724 A.2d 1150, 1155 ...


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