HY-Tech Diode, LLC v. Lumileds Holding B.V.

          MEMORANDUM OF OPINION AND ORDER

          L. Scott Coogler United States District Judge

         Plaintiff, HY-Tech Diode, LLC (“HY-Tech” or “Plaintiff”), brings this patent infringement action against Defendants Lumileds Holding B.V. (“Lumileds Holding”) and Lumileds Malaysia SDN. BHD (“Lumileds Malaysia”) (collectively, “Defendants”). Before the Court are Defendants’ motions to dismiss for lack of personal jurisdiction and failure to state a claim upon which relief can be granted (docs. 24 & 25), and Defendants’ motion to stay discovery (doc. 37). For the reasons stated below, Defendants’ respective motions to dismiss (docs. 24 & 25) are due to be denied, and Defendants’ motion to stay discovery (doc. 37) is due to be denied as moot.

         I. Background

         HY-Tech is an Alabama limited liability company. HY-Tech is a subsidiary of Hong-Yuan Technology Co., Ltd. (“Hong-Yuan”), a Chinese company. HY-Tech was formed to commercialize a new manufacturing process for light-emitting diode (“LED”) chips. HY-Tech is the assignee of U.S. Patent No. 7, 749, 038 (“’038 Patent”), the patent at issue in this case. HY-Tech is the sole owner of and has the exclusive right to sue for infringement of the ‘038 Patent.

         Defendant Lumileds Holding is a corporation organized under the laws of the Netherlands, with its principal place of business in the Netherlands. Defendant Lumileds Malaysia is a subsidiary of Lumileds Holding organized under the laws of Malaysia, with its principal place of business in Malaysia.

         In 2004, Yu-Chao Wu, the scientist who founded Hong-Yuan, developed a new process to manufacture LEDs. His process eliminated the old “cup” process’s inability to produce LEDs with consistent light color and intensity. Mr. Wu began using his new process to produce and sell commercial LEDs. HY-Tech claims that the entire industry soon adopted Mr. Wu’s process and that the process became known as the “chip scale packaging” (“CSP”) process. Mr. Wu patented the process in the Republic of China (Taiwan) on February 18, 2004, and he later patented the process in the United States on February 17, 2005. The United States Patent and Trademark Office issued U.S. Patent No. 7, 749, 038 to Hong-Yuan on July 6, 2010. Hong-Yuan later assigned the patent to HY-Tech.

         Based on public statements made by Defendants, HY-Tech learned that Defendants incorporated CSP processing techniques into their manufacturing process, thereby infringing the ‘038 Patent. HY-Tech alleges that three products infringe the ‘038 Patent: (1) LUXEON Rebel LEDs, which are used by Mercedes-Benz in Vance, Alabama; (2) the LUXEON FlipChip Line; and (3) LEDs that are used in iPhones sold in Alabama. (See Doc. 2.) HY-Tech also alleges that, “[s]ince at least 2015, ” both Defendants have sold infringing products to Future Lighting Solutions in Huntsville, Alabama, and to Mercedes-Benz in Vance, Alabama. (Id. at 26–27.) HY-Tech hired an expert in materials science and engineering to test a CSP LED product allegedly made by Defendants. The expert found that the process used to make the tested product was consistent with at least Claims 1, and likely Claims 3 and 17, of HY-Tech’s ‘038 Patent and was inconsistent with prior LED manufacturing processes.

         Because Defendants lack the right to use or sell products in the United States that were produced using the process claimed in the ‘038 Patent, HY-Tech brought suit. HY-Tech filed its corrected complaint on February 5, 2019, asserting claims of patent infringement against both defendants. (See Doc. 2.) In response, each defendant moves to dismiss for lack of personal jurisdiction and failure to state a claim. (See Docs. 24 & 25.)

         II. Personal Jurisdiction

         A. Standard

         In a Rule 12(b)(2) motion to dismiss, the plaintiff generally “bears the burden of establishing a prima facie case of jurisdiction over the movant, non-resident defendant.” PVC Windoors, Inc. v. Babbitbay Beach Constr., N.V., 598 F.3d 802, 810 (11th Cir. 2010) (quoting Morris v. SSE, Inc., 843 F.2d 489, 492 (11th Cir. 1988)). “A prima facie case is established if the plaintiff presents enough evidence to withstand a motion for directed verdict.” Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990). The court must treat facts alleged in the complaint as true if they are not controverted by affidavits submitted by the defendant. Id. However, if the defendant submits affidavits, the plaintiff must produce additional evidence supporting jurisdiction unless the defendants’ affidavits are only conclusory. Stubbs v. Wyndham Nassau Resort & Crystal Palace Casino, 447 F.3d 1357, 1360 (11th Cir. 2006). When the plaintiff’s evidence conflicts with the defendant’s evidence, the court must “construe all reasonable inferences in favor of the plaintiff.” Id. Further, “where a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, ” the defendant must then “present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985); Avocent Huntsville Corp. v. Aten Intern. Co., Ltd., 552 F.3d 1324, 1331 (Fed. Cir. 2008).

         A federal district court “may exercise personal jurisdiction to the extent authorized by the law of the state in which it sits and to the extent allowed under the Constitution.” Meier ex rel. Meier v. Sun Int’l Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir. 2002); see also Daimler AG v. Bauman, 571 U.S. 117, 125 (2014). Personal jurisdiction is generally a two-step inquiry, as the court must consider whether exercising personal jurisdiction is consistent with both the forum state’s long-arm statute and the Due Process Clause of the Fourteenth Amendment. Mut. Serv. Ins. Co. v. Frit Indus., Inc., 358 F.3d 1312, 1319 (11th Cir. 2004). However, for federal courts in Alabama, “the two inquiries merge, because Alabama’s long-arm statute permits the exercise of personal jurisdiction to the fullest extent constitutionally permissible.” Sloss Indus. Corp. v. Eurisol, 488 F.3d 922, 925 (11th Cir. 2007) (citing Ala. R. Civ. P. 4.2(b)); see also Ex parte Edgetech I.G., Inc., 159 So.3d 629, 633 (Ala. 2014). Thus, this Court need only consider the limits of the Due Process Clause. Mut. Serv. Ins. Co., 358 F.3d at 1319.

         To subject a nonresident defendant to personal jurisdiction, due process requires that the defendant “have certain minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). There are two types of personal jurisdiction-general jurisdiction and specific jurisdiction-but both are based on the defendant’s contacts with the forum state. General jurisdiction exists over defendants “when their affiliations with the State are so continuous and systematic as to render them essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). The contacts must be so great that any suit in the forum state is justified, even on matters unrelated to the defendant’s contacts with the forum state. See Int’l Shoe Co., 326 U.S. at 318. Corporate defendants are subject to general jurisdiction at their place of incorporation and their principal place of business. See Daimler, 571 U.S. at 137. “‘[A] corporation’s operations in a forum other than its formal place of incorporation or principal place of business’ will be ‘so substantial and of such a nature as to render the corporation at home in that State’ only in ‘exceptional’ cases.” Carmouche v. Tamborlee Mgmt., Inc., 789 F.3d 1201, 1204 (11th Cir. 2015) (quoting Daimler, 571 U.S. at 139 n.19).

         By contrast, the inquiry whether a court may assert specific jurisdiction over a nonresident defendant focuses on “the relationship among the defendant, the forum, and the litigation.” Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775 (1984) (quoting Shaffer v. Heitner, 433 U.S. 186, 204 (1977)). For a court to exercise specific jurisdiction, the suit must “arise out of or relate to” the defendant’s contacts with the forum state. Bristol-Myers Squibb Co. v. Superior Court, 137 S.Ct. 1773, 1786 (2017). Further, the defendant’s contacts must create a “substantial connection” with the forum state. Walden v. Fiore, 571 U.S. 277, 284 (2014). Specific jurisdiction does not require a large volume of contacts with the forum state, as even a single purposeful contact can give rise to personal jurisdiction. See McGee v. Int’l Life Ins. Co., 355 U.S. 220, 223 (1957); see also Licciardello v. Lovelady, 544 F.3d 1280, 1285 (11th Cir. 2008) (“The Court has made clear . . . that ‘[s]o long as it creates a “substantial connection” with the forum, even a single act can support jurisdiction.’” (citing Burger King, 471 U.S. at 475 n.18)). The contacts with the forum state must be purposeful and created by the “defendant himself, ” not merely “between the plaintiff (or third parties) and ...