United States District Court, N.D. Alabama, Western Division
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 ...