More details to come, but below is the opinion of Judge Session granting the State’s request to remand the MPHJ litigation back to VT State Court. I predicted this result here.
Bill Sorrell, Attorney General for the State of Vermont addressed The U.S. House of Representatives’ Committee on Energy and Commerce regarding patent trolls, and specifically, as I’ve commented on before, the need for States to be allowed to intervene on behalf of troll targets. If any federal legislation should be passed on this issue, its the concept that States shouldn’t be preempted under the patent laws from asserting claims of unfair competition.
MPHJ filed a motion to dismiss yesterday (filing is below). Nothing surprising here – MPHJ asks the court to review issues of personal jurisdiction first before ruling on remand issue then claims that no personal jurisdiction exists under general or specific jurisdictional principles.
A few interesting aspects after my quick read of the paper:
- MPHJ attempts to minimize its contacts within the state, claiming that the state’s basis is THREE letters sent to entities in Vermont.
- MPHJ focuses almost exclusively on Federal Circuit precedent which isn’t controlling on this issue and suggests that Second Circuit law is in lock-step with the Federal Circuit’s opinions.
In regards to the letters, if true, MPHJ can win on this argument. However, my understanding is that MPHJ (or its subsidiaries) has sent hundreds of letters and has made phone contact with individuals in VT. In fact, it would seem odd for the state of VT to take such a strong position against MPHJ if it was a mere three letters that were sent to businesses in the state. Thus, I would imagine that the state will be able to show that MPHJ has made a substantial number of contacts within VT.
As to the specific jurisdiction caselaw, I’m not sure this is as clear as MPHJ makes it out to be. One of the cases cited by MPHJ in support of their position is Fiedler v. First City Nat. Bank of Houston, 807 F. 2d 315 (2nd Cir. 1986) where the court did not find personal jurisdiction over defendants due to minimal contacts within the state of NY. Interestingly, the court looked at other cases Parke-Bernet Galleries, Inc. v. Franklyn, 26 N.Y.2d 13, 308 N.Y.S.2d 337, 256 N.E.2d 506 (1970) (jurisdiction proper over a California resident who participated in a New York art auction via a telephone link with an agent of the auctioneer who then relayed defendant’s bids) and CT Chemical (USA), Inc. v. Horizons International, Inc., 106 F.R.D. 518 (S.D.N.Y.1985) (defendant established a telephonic course of dealing with the plaintiff-seller and travelled to New York to have lunch with the seller in order to discuss and negotiate the contract) where the court did find PJ. The Court cited with approval the reasoning of Judge Sweet who stated with regards to these cases “the defendants had established a pattern of commercial dealings with each plaintiff centered in New York and used the telephonic link to this state as a means of projecting themselves into local commerce.” Depending on what evidence the state can produce, it may be able to show that MPHJ was projecting itself into local commerce and thus satisfy personal jurisdiction in the 2nd circuit.
Other interesting aspects of note – MPHJ has yet to answer the complaint and MPHJ responded to the State’s Motion for Remand today (more on that later).