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Boston Scientific Corp. v. Micro-Tech Endoscopy USA Inc.

United States District Court, D. Delaware

January 15, 2020

BOSTON SCIENTIFIC CORPORATION and BOSTON SCIENTIFIC SCIMED, INC., Plaintiffs,
v.
MICRO-TECH ENDOSCOPY USA INC., MICRO-TECH NANJING CO., LTD. and HENRY SCHEIN INC., Defendants.

          REPORT AND RECOMMENDATION

          CHRISTOPHER J. BURKE UNITED STATES MAGISTRATE JUDGE.

         In this patent infringement action filed by Plaintiffs Boston Scientific Corp. and Boston Scientific Scimed, Inc. ("Plaintiffs") against Defendants Micro-Tech (Nanjing) Co., Ltd. ("Micro-Tech Nanjing") Micro-Tech Endoscopy USA Inc. ("Micro-Tech USA"), and Henry Schein Inc. ("Henry Schein") (collectively, "Defendants"), pending is a motion in which: (1) Micro-Tech Nanjing moves for dismissal due to lack of personal jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2); and (2) Defendants each move for dismissal of the operative complaint due to failure to state a claim, pursuant to Federal Rule of Civil Procedure 12(b)(6) (the "Motion"). (D.I. 9) For the reasons set forth below, the Court recommends that the Motion be DENIED.

         I. BACKGROUND

         A. Factual Background

         Plaintiffs develop and manufacture medical devices, including endoscopic products for the treatment of diseases of the digestive system. (D.I. 1 at ¶¶ 2-3) Among the medical devices that Plaintiffs have developed and sold are the Resolution™ and Resolution 360™ hemostatic clips, which are used to stop bleeding in the gastrointestinal tract. (Id. at ¶ 13)

         Defendants are also in the business of producing and selling hemostatic clips, and compete with Plaintiffs by selling the allegedly infringing SureClip™, Sure Clip™ MINI and SureClip™ PLUS Hemostasis Clips (the "SureClip Hemostasis Clip products" or the "accused products"). (Id. at ¶ 17) The three Defendants include one foreign and two domestic companies.

         The foreign company Defendant-Micro-Tech Nanjing-is a corporation organized under the laws of Jiangsu Province, China; it also has its principal place of business located there. (Id. at ¶ 5) Micro-Tech Nanjing allegedly manufactures, imports and distributes medical devices, including endoscopic instruments. (Id. at ¶¶ 5, 11, 17) Plaintiffs' Complaint asserts that Micro-Tech Nanjing manufactures the accused products so that they may later be sold in the United States. (Mat ¶11)

         With regard to Micro-Tech Nanjing's business, Defendants put forward the sworn declaration of Jie Yin (the "Yin Declaration"), who is described as a "General Manager Assistant" of that company. (D.I. 11 at ¶ 1) The Yin Declaration does not rebut the Complaint's allegation that Micro-Tech Nanjing manufactures the accused products. And it confirms that Micro-Tech Nanjing "sell[s] certain of these products to Micro-Tech USA," though it explains that Micro-Tech Nanjing does so "in the country of manufacture or in international waters, not in the United States [such that] Micro-Tech USA takes title to the products outside the United States." (Id. at ¶ 11) The Yin Declaration thus asserts that Micro-Tech Nanjing "does not import those products into the United States, either now or in the past." (Id.) The Yin Declaration also states that Micro-Tech Nanjing has no direct connection to Delaware. That is, the Yin Declaration explains that Micro-Tech Nanjing has no real or personal property in Delaware, no officers or employees in Delaware, does not regularly solicit business in or derive revenue from activities in Delaware, and does not sell any of its products in Delaware. (Id. at ¶¶ 3-4, 6-7) Further, according to the Yin Declaration, it is not possible for Delaware residents to place orders for the accused products through Micro-Tech Nanjing's website. (Id. at ¶ 9).

         The two domestic Defendants-Micro-Tech USA and Henry Schein-are Delaware corporations with principal places of business respectively located in Ann Arbor, Michigan and Melville, New York. (D.I. 1 at ¶¶ 4, 6) Micro-Tech USA and Henry Schein distribute Micro-Tech Nanjing's devices in the United States. (Id. at ¶¶ 4, 6, 17, exs. D-E)

         Additional information regarding Micro-Tech Nanjing, its relationship with the other two Defendants and the personal jurisdiction issues discussed herein will be set out in Section III. A.

         B. Procedural Background

         Plaintiffs filed their Complaint on November 26, 2018. (D.I. 1) While Micro-Tech USA and Henry Schein accepted service of process, (D.I. 5; D.I. 6), Micro-Tech Nanjing filed a waiver of service on December 14, 2018. (D.I. 7)

         In their Complaint, Plaintiffs assert that Defendants infringe three patents: United States Patent Nos. 9, 980, 725 ("the 725 patent"), 7, 094, 245 ("the '245 patent") and 8, 974, 371 ("the '371 patent") (collectively, "the patents-in-suit"). (D.I. 1 at ¶ 1) The 725 and '371 patents cover an apparatus for applying hemostatic clips to tissue. (Id. at ¶¶ 23-29, 52-58) The '245 patent covers an apparatus for causing the hemostasis of a blood vessel for use through an endoscope, (id. at ¶¶ 37-44), as well as a method for using such an apparatus, ('245 patent, cols, 17;26-18;26).[1]

         Plaintiffs allege that Defendants infringe all three patents by making, using, selling, offering to sell and/or importing into the United States for sale the accused products. (D.I. 1 at ¶¶ 17, 22, 35, 51) Additionally, Plaintiffs allege that Defendants induce customers and end-users of the accused products to infringe the method of the '245 patent. (Id. at ¶ 36)

         Defendants filed the instant Motion on March 13, 2019. (D.I. 9) The Motion was fully briefed by April 3, 2019. (D.I. 20)

         On July 30, 2019, this case was referred to the Court to hear and resolve all pretrial matters up to and including expert discovery matters. (D.I. 22) Thereafter, the Court held a Case Management Conference and issued a Scheduling Order. (Docket Entry, Sept. 9, 2019; D.I. 29; D.I. 30 (hereinafter "Tr."))

         Before the Court could issue a decision on the instant Motion, however, on September 23, 2019, Plaintiffs filed a motion seeking leave to file a supplemental brief relating to the Motion (the "motion for leave"). With the motion for leave, Plaintiffs sought leave to address their view as to how Federal Rule of Civil Procedure 4(k)(2) applies to the Motion, based in significant part on assertions made by Defendants' counsel during the Case Management Conference. (D.I. 32) After considering Defendants' opposition to the motion for leave, (D.I. 33; D.I. 34), the Court granted the motion, accepted Plaintiffs' opening supplemental brief, and set a schedule for the parties to file supplemental answering and reply briefs, (D.I. 38).[2] This supplemental briefing was completed on October 18, 2019. (D.I. 43)

         II. STANDARD OF REVIEW

         A. Personal Jurisdiction, Rule 12(b)(2) and Rule 4(k)(2)

         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 bioMérieux, S.A. v. Hologic, Inc., Civil Action 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, the Court may consider the pleadings, affidavits, declarations and exhibits, and must construe all disputed facts 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, a plaintiff must adduce facts sufficient to satisfy two requirements-one statutory and one constitutional. Hardwire, 2014 WL 5144610, at *6. In the typical analysis of the statutory prong, courts consider whether the defendant's actions fall within the scope of a state's long-arm statute. Id. at *6; Power Integrations, 547 F.Supp.2d at 369. In analyzing the constitutional prong, courts 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).

         However, certain disputes over personal jurisdiction implicate Rule 4(k)(2), which "serves as a federal long-arm statute[.]" M-I Drilling Fluids UK Ltd. v. Dynamic Air Ltda., 890 F.3d 995, 999 (Fed. Cir. 2018). Rule 4(k)(2) allows '"a court to exercise personal jurisdiction over a defendant if (1) the plaintiffs claim arises under federal law, (2) the defendant is not subject to jurisdiction in any state's courts of general jurisdiction, and (3) the exercise of jurisdiction comports with due process.'" Id. (quoting Synthes (U.S.A.) v. G.M. Dos Reis Jr. Ind. Com de Equip. Medico, 563 F.3d 1285, 1300 (Fed. Cir. 2009)). '"The third requirement under Rule 4(k)(2)-the due process analysis-contemplates a defendant's contacts with the entire United States, as opposed to the state in which the district court sits.'" Id. (quoting Synthes, 563 F.3d at 1295). Rule 4(k)(2) was enacted by the 1993 amendments to the Federal Rules in order to "close[] a loophole" that existed when a foreign defendant had sufficient contacts with the United States to justify the exercise of jurisdiction, but lacked sufficient contacts with any single state to satisfy a state long-arm statute or the due process constraints of the Fourteenth Amendment. Synthes, 563 F.3d at 1296 (citing the 1993 advisory committee notes to Rule 4(k)(2)). The Rule is thus meant to allow a district court to exercise personal jurisdiction over a foreign defendant whose contacts with the United States, but not with the forum state, satisfy due process. M-I Drilling, 890 F.3d at 999.

         In assessing a personal jurisdiction question in a patent case, authority from the United States Court of Appeals for the Federal Circuit is controlling. See Avocent Himtsville Corp. v. Aten Int'l Co.,552 F.3d 1324, 1328 (Fed. Cir. 2008); Boston Set Corp. v. Wall Cardiovascular Techs., LLC,647 F.Supp.2d 358, 364 (D. Del. 2009). With regard to the typical way in which the statutory prong is analyzed (i.e., by looking to a state's long-arm statute), the Federal Circuit defers to the law of the relevant state courts and federal courts; thereafter, in assessing the constitutional prong, the Federal Circuit follows its own law. Round Rock Research, 967 F.Supp.2d at 973; Graphics Props. Holdings Inc. v. Asus ...


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