Argument Preview

Two cases being argued next week at the Federal Circuit attracted amicus briefs. One is Trimble Inc. v. PerDiemCo LLC. In this case, Trimble, the plaintiff-appellant, asks the Federal Circuit to reverse a district court’s dismissal of a declaratory judgment action based on a lack of personal jurisdiction over a patent owner. This is our argument preview.

Trimble explains in its opening brief that “PerDiemCo has the required minimum contacts with the forum because it purposefully directed its patent-enforcement activities at Trimble, a forum resident, and this declaratory-judgment lawsuit arose out of and is related to those activities.” In this regard, Trimble argues that the district court committed two fundamental errors.

First, Trimble claims the “district court [erroneously] did not require PerDiemCo to shoulder its burden” of presenting a “compelling case” that “other considerations rendered it unreasonable to exercise jurisdiction over it.”

Second, Trimble contends the district court erred in reasoning that the Federal Circuit opinion of “Red Wing Shoe compelled it to dismiss the case.” According to Trimble, the district court’s understanding of Red Wing Shoe was “incorrect for several reasons.” Trimble first states that “Red Wing Shoe could not and did not overturn settled Supreme Court precedent.” Then Trimble asserts that, “[e]ven if read broadly, Red Wing Shoe is distinguishable because PerDiemCo did more than simply send a cease-and-desist letter and offer to license its patents: it hassled Trimble for months and expressly threatened to sue for patent infringement.” Trimble further distinguishes its case from Red Wing Shoe because of two recent Federal Circuit opinions. According to Trimble, the court’s opinions in Jack Henry and Genetic Veterinary Sciences make clear that “Red Wing Shoe could not and did not adopt a bright-line, wooden rule privileging infringement assertions.”

Trimble concludes its opening brief by arguing in the alternative that the “time has come for the Court to bury Red Wing Shoe.” Trimble asserts that the Federal Circuit can reconsider and overrule Red Wing Shoe either as a panel or en banc.

In its response brief, PerDiemCo first explains that Trimble’s alternative argument, that Red Wing Shoe should be overruled, is incorrect. According to PerDiemCo, Red Wing Shoe is “consistent with the Supreme Court’s personal jurisdiction jurisprudence [and] is consistent with other Circuits’ declaratory judgment personal jurisdiction precedent outside the patent context.” Next, PerDiemCo asserts that “Red Wing Shoe held that a patentee should be afforded ‘sufficient latitude to inform others of its patent rights’ and seek settlement a disputed patent claims, through, for example, a nonexclusive license offer, ‘without subjecting itself to jurisdiction in a foreign forum.’” Accordingly, PerDiemCo argues its “contacts with the Northern District of California are indirect, extremely limited, and closely mirror the fact pattern of Red Wing Shoe.” Moreover, PerDiemCo asserts that, when “considered in light of the five fairness factors, the Court should hold, de novo, that PerDiemCo has made a compelling case that the Northern District of California’s personal jurisdiction over it would be an offense to principles of fair play and substantial justice.”

In its reply, Trimble first contends that PerDiemCo’s response brief “does not dispute that it had the requisite ‘minimum contacts’ with Northern California.” Second, Trimble reiterates that PerDiemCo failed to make a “compelling” showing that other considerations made it unreasonable or unfair for the district court to assert personal jurisdiction. Third, Trimble argues that PerDiemCo’s out-of-circuit authorities do not justify adherence to a rule that patent owners may threaten lawsuits yet remain immune to personal jurisdiction. Finally, Trimble asserts again that the Federal Circuit should and can overrule Red Wing Shoe in this case.

The R Street Institute, Public Knowledge, the Electronic Frontier Foundation, Engine Advocacy, and the Innovation Defense Foundation filed an amicus brief in support of Trimble. In it, the amici contend that Red Wing Shoe “was incorrectly decided and should now be deemed overruled.” In support of their argument, the amici first argue that Red Wing Shoe “is inconsistent with controlling Supreme Court precedent.” But, more importantly, the amici assert that Red Wing Shoe has led to “rampant forum shopping in patent cases.” According to the amici, under a strict reading of Red Wing Shoe, “accused infringers are placed in a situation where their only declaratory judgment option is to sue in the patent owner’s home forum.” Moreover, the amici argue that, “[i]n many cases, this may be a forum with little to no relationship to the alleged infringer, the accused products, or any sales.”

Oral arguments will be heard on Tuesday, October 6. We will keep track of this case and report on any developments.