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S.A. v. Lenovo Group Ltd.

United States District Court, D. Delaware

August 22, 2019

3G LICENSING, S.A., KONINKLIJKE KPN N.V. and ORANGE S.A., Plaintiffs,
v.
LENOVO GROUP LTD., LENOVO HOLDING CO., INC., LENOVO UNITED STATES INC. and MOTOROLA MOBILITY LLC, Defendants.

          REPORT AND RECOMMENDATION

          CHRISTOPHER J. BURKE, UNITED STATES MAGISTRATE JUDGE

         Presently pending in this patent infringement matter is Defendant Lenovo Group Ltd.'s ("Lenovo Group") motion to dismiss for lack of personal jurisdiction, filed pursuant to Federal Rule of Civil Procedure 12(b)(2) ("Motion"). (D.I. 192) Plaintiffs 3G Licensing, S.A., Koninklijke KPN N.V. and Orange S.A. (collectively, "Plaintiffs") oppose the Motion. For the reasons set forth below, the Court recommends that the Motion be GRANTED with prejudice.

         I. BACKGROUND

         A. Factual Background

         1. The Parties

         Plaintiff 3G Licensing, S.A. is an intellectual property licensing corporation that has its headquarters in Luxembourg. (D.I. 19 at ¶ 6) Plaintiff Orange S.A. (formerly France Telecom S.A.) is a multi-national telecommunications solution provider headquartered in Paris, France. (Id., at ¶ 7) Plaintiff Koninklijke KPN N.V. is a telecommunications (including fixed, mobile, television and internet) and ICT solution provider headquartered in The Hague, The Netherlands. (Id. at ¶ 8)

         According to sworn declarations submitted by Kurt Cranor, Defendant Lenovo (United States) Inc.'s Executive Director, North America Chief Financial Officer, (D.I. 194 at ¶ 1), Defendant Lenovo Group is a "holding company" incorporated in China, with its principal place of business in Hong Kong, (id. at ¶ 2).[1] Mr. Cranor states that Lenovo Group "has no operations" and "does not develop, manufacture, sell, distribute, or export any products." (D.I. 215 at ¶ 3) He further explains that Lenovo Group:

is not registered to do business in Delaware, or in any other state in the United States. . . . [] does not have any employees, offices, or bank accounts in Delaware ... has never paid any taxes or fees in the State.. . . has not authorized anyone in Delaware or the United States to accept service of process on its behalf. . . . does not import or ship any products into the United States . . . [and] does [not] manufacture, sell or offer for sale any products in the United States.

         (D.I. 194 at ¶¶ 4-5)

         According to Mr. Cranor, the other three Defendants are all affiliates and subsidiaries of Lenovo Group. (Id. at ¶ 3; see also D.I. 214 at 2) Defendants Lenovo (United States) Inc. and Lenovo Holding Co., Inc. are Delaware corporations with their respective principal places of business in Morrisville, North Carolina. (D.I. 194 at ¶ 3) Defendant Motorola Mobility LLC is a Delaware limited liability company with its principal place of business in Chicago, Illinois. (Id.)

         Additional relevant information regarding Lenovo Group and the personal jurisdiction issues discussed herein will be set out in Section III.

         2. The Patents

         Plaintiffs currently assert infringement of United States Patent Nos. 9, 014, 667, 7, 933, 564, 7, 995, 091 and 6, 856, 818. (D.I. 19 at ¶ 20; D.I. 200 at 4) Plaintiffs allege that certain smartphones and other mobile telecommunication devices ("accused products") infringe the asserted patents. (See, e.g., D.I. 19 at ¶ 95; D.I. 200 at 4) Among those accused products are the Motorola Moto Z Droid ("Moto Z"), and the Moto G and Moto E products. (See generally D.I. 19; see also D.I. 201, ex. 2)

         B. Procedural History

         On January 30, 2017, Plaintiffs filed a complaint for patent infringement against Defendants, Lenovo (United States) Inc., Lenovo Holding Co., Inc. and Lenovo Group. (D.I. 1) Plaintiffs filed a first Amended Complaint against these same three Defendants on April 3, 2017. (D.I. 12) Plaintiffs then filed the operative Second Amended Complaint on May 30, 2017, adding a new Defendant, Motorola Mobility LLC. (D.I. 19)

         Lenovo Group was not served with the Second Amended Complaint until January 4, 2019. (See D.I. 193 at 1) Lenovo Group then filed the instant Motion on February 8, 2019. (D.I. 192) The Motion has been referred to the Court for resolution, (D.I. 4), and was fully briefed as of March 8, 2019, (D.I. 214).[2]

         II. STANDARD OF REVIEW

         A. Personal Jurisdiction

         Rule 12(b)(2) requires the Court to dismiss any case in which it lacks personal jurisdiction. Fed.R.Civ.P. 12(b)(2); Nespresso USA, Inc. v. Ethical Coffee Co. SA, 263 F.Supp.3d 498, 502 (D. Del. 2017). When a defendant moves to dismiss a lawsuit for lack of personal jurisdiction, the plaintiff bears the burden of showing the basis for jurisdiction; in a situation like this, where no evidentiary hearing has been held, the plaintiff must only make a prima facie showing that personal jurisdiction exists. See Nespresso, 263 F.Supp.3d at 502; Hardwire, LLC v. Zero Int'l, Inc., Civil Action No. 14-54-LPS-CJB, 2014 WL 5144610, at *5 (D. Del. Oct. 14, 2014) (citing cases); Power Integrations, Inc. v. BCD Semiconductor Corp., 547 F.Supp.2d 365, 369 (D. Del. 2008). To make out this prima facie showing, the plaintiff must '"establish[] with reasonable particularity sufficient contacts between the defendant and the forum state.'" Mellon Bank (E.) PSFS, Nat'l Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992) (citations omitted); see also bioMerieux, S.A. v. Hologic, Inc., C.A. No. 18-21-LPS, 2018 WL 4647483, at *2 (D. Del. Sept. 26, 2018). In reviewing a motion to dismiss for lack of personal jurisdiction, all factual inferences to be drawn from the pleadings, affidavits, declarations and exhibits must be drawn in the plaintiffs favor. Round Rock Research LLC v. ASUSTeK Comput. Inc., 967 F.Supp.2d 969, 972 (D. Del. 2013); Power Integrations, 547 F.Supp.2d at 369; see also Hardwire, 2014 WL 5144610, at *5.

         The Supreme Court of the United States has recognized two classifications of personal jurisdiction: "general jurisdiction" and "specific jurisdiction." Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (internal quotation marks and citations omitted). The Supreme Court distinguished between these concepts in International Shoe Co. v. Washington, 326 U.S. 310 (1945), which remains the '"canonical opinion'" in the area of personal jurisdiction. Daimler AG v. Bauman, 571 U.S. 117, 126 (2014) (citation omitted). "Specific jurisdiction" encompasses causes of action that '"aris[e] out of or relate[] to the defendant's contacts with the forum.'" Goodyear, 564 U.S. at 923-24 (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984)). "General jurisdiction" encompasses complaints arising from dealings that are distinct from the defendant's activities in the state. Id. at 924 (citing Int'l Shoe, 326 U.S. at 318); see also Daimler, 571 U.S. at 127. A court may exercise "general jurisdiction over foreign (sister-state or foreign-country) corporations" only when the corporation's "affiliations with the State [in which suit is brought] are so 'continuous and systematic' as to render [it] essentially at home in the forum State." Daimler, 571 U.S. at 127 (quoting Goodyear, 564 U.S. at 919).

         In order to establish personal jurisdiction in the face of a challenge like that at issue here, a plaintiff must adduce facts sufficient to satisfy two requirements-one statutory and one constitutional. Hardwire, 2014 WL 5144610, at *6. In analyzing the statutory prong, the Court must consider whether the defendant's actions fall within the scope of Delaware's long-arm statute. Id.; Power Integrations, 547 F.Supp.2d at 369. In analyzing the constitutional prong, the Court must determine whether the exercise of jurisdiction comports with the defendant's right to due process. Hardwire, 2014 WL 5144610, at *6; Power Integrations, 547 F.Supp.2d at 369 (citing Int'l Shoe, 326 U.S. at 316). Due process is satisfied if the Court finds the existence of'"minimum contacts' between the non-resident defendant and the forum state, 'such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.'" Power Integrations, 547 F.Supp.2d at 369 (quoting Int'l Shoe., 326 U.S. at 316).

         In assessing a personal jurisdiction question in this patent case, authority from the United States Court of Appeals for the Federal Circuit is controlling. Avocent Huntsville Corp. v. Aten Int'l Co.,552 F.3d 1324, 1328 (Fed. Cir. 2008); Boston Sci. Corp. v. Wall Cardiovascular Techs., LLC,647 F.Supp.2d 358, 364 (D. Del. 2009). With regard to the statutory prong of the analysis, the Federal Circuit defers to the law of the relevant state courts (here, Delaware) and federal courts; in assessing the constitutional prong, the Federal Circuit follows its own ...


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