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Case 4:18-cv-06185-HSG Document 51-3 Filed 03/29/19 Page 1 of 5
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`Case 4:18-cv-06185-HSG Document 51-3 Filed 03/29/19 Page 2 of 5
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`Case 4:18-cv-06185-HSG Document 51-3 Filed 03/29/19 Page 3 of 5
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`3/15/2019
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`Case 4:18-cv-06185-HSG Document 51-3 Filed 03/29/19 Page 4 of 5
`Case 4:18-cv-0618EedrkSGAbiammummttiEriLR8e FEdledeGlSleQJtileE-Ilame 4 of 5
`sufficient for personal jurisdiction. But she abandoned the Red Wing Shoe rule without acknowledging
`it even existed.
`
`In Jack Henry, the plaintiffs (a group of banks) brought a declaratory judgment action in the
`Northern District of Texas against Plano Encryption Technologies LLC after the Eastern District of
`Texas-based limited liability company sent the banks letters accusing patent infringement. The U.S.
`district court dismissed the case for improper venue, holding that PET’s infringement letters by
`themselves did not create personal jurisdiction, citing the Federal Circuit’s bright-line Red Wing Shoe
`rule.[8]
`
`The Federal Circuit reversed. In concluding venue was proper, the court found PET’s letters both
`supported declaratory judgment jurisdiction and established minimum contacts. Judge Newman,
`stating the decision was “guided by precedent,” concluded that as the source of the minimum
`contacts, the burden fell on PET to make a “compelling case” that exercising jurisdiction was
`unreasonable and unfair. Because PET did not argue that jurisdiction in the Northern District was
`“inconvenient or unreasonable or unfair,” Judge Newman found PET did not meet its burden.
`
`Importantly, the court emphasized that PET’s sole business was enforcing its intellectual property.
`The court also noted that PET was subject to general jurisdiction in Texas and was registered to do
`business throughout the state. Judge Newman maintained that precedent did not establish “the
`generalization that letter charging infringement can never provide specific jurisdiction.”
`
`Judge Kara Farnandez Stoll, joined by Judge Evan Wallach, concurred in the judgment but explicitly
`acknowledged the bright-line rule and argued the court should revisit it. The concurrence reasoned it
`was inappropriate to apply “unique” policy considerations to the patent context. In their view, “[o]nce
`it has been decided that a defendant purposefully established minimum contacts within the forum
`State, these contacts may be considered in light of other factors to determine whether the assertion
`of personal jurisdiction would comport with ‘fair play and substantial justice."’[9]
`
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`+272.1Aÿ2=0ÿ:0/.+.41ÿC7+ÿ]A,.:0:ÿ>Jÿ650/0:012K^ÿ/41/8,:0:ÿ2=72ÿ7+ÿ2=0ÿ+4,5/0ÿ4-ÿ2=0ÿN.1.N,N
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`A010578._72.41ÿ2=72ÿ802205ÿ/=75A.1Aÿ.1-5.1A0N012ÿ/71ÿ10E05ÿ654E.:0ÿ+60/.-./ÿ9,5.+:./2.41;^ÿ
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`C7+ÿ.17665465.720ÿ24ÿ7668Jÿ],1.a,0^ÿ648./Jÿ/41+.:0572.41+ÿ24ÿ2=0ÿ672012ÿ/4120F2;ÿG1ÿ2=0.5ÿE.0CKÿ]Z4\1/0
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`B2720Kÿ2=0+0ÿ/4127/2+ÿN7Jÿ>0ÿ/41+.:050:ÿ.1ÿ8.A=2ÿ4-ÿ42=05ÿ-7/245+ÿ24ÿ:0205N.10ÿC=02=05ÿ2=0ÿ7++052.41
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`ÿQ=0ÿW;B;ÿB,650N0ÿU4,52X+ÿ50/012ÿ46.1.41ÿ50A75:.1AÿE01,0ÿ.1ÿ672012ÿ+,.2+ÿ.1ÿQUÿI0752871:ÿTTUÿE;ÿ`57-2
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`.N67/2+ÿ7//,+0:ÿ.1-5.1A05+ÿ71:ÿ2.82+ÿ2=0ÿ-.08:ÿ.1ÿ-7E45ÿ4-ÿ141657/2./.1Aÿ012.2.0+ÿ>Jÿ7884C.1Aÿ2=0Nÿ24
`-45,Nÿ+=46ÿ,1:05ÿ2=0ÿA,.+0ÿ2=0Jÿ750ÿ142ÿ]/41:,/2.1Aÿ>,+.10++;^ÿG1ÿ-7/2Kÿ2=0.5ÿ7//,+7245Jÿ7/2.41+ÿ750
`2=0ÿ+480ÿ>,+.10++ÿ2=0Jÿ/41:,/2;ÿ
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`Zff\ÿÿhijklmknÿpmqrÿstlniÿujkvÿwnxiyÿ
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`9,5.+:./2.41ÿ4E05ÿ.2ÿ.+ÿ142ÿ507+417>80ÿ45ÿ-7.5;ÿ
`ÿdÿ:0/8757245Jÿ9,:AN012ÿ687.12.--Kÿ+00D.1Aÿ24ÿ+,66452ÿ2=0ÿ0F05/.+0ÿ4-ÿ605+4178ÿ9,5.+:./2.41ÿ.1ÿ.2+ÿ=4N0
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`:.+N.++ÿ50a,.50+ÿ0.2=05ÿ2=0ÿY0:0578ÿU.5/,.2ÿ24ÿA5712ÿN71:7N,+ÿ508.0-ÿ45ÿ2=0ÿ:.+25./2ÿ/4,52ÿ24ÿ/052.-Jÿ71
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`Judge Newman’s decision appears to animate her position in Avocent that a single commercial-type
`contact with the forum, plus an accusatory letter to the plaintiff in the forum, is sufficient for
`personal jurisdiction. Although letters accusing infringement and offering to license patents are not
`generally considered commercial-type contacts, when an entity’s sole business is attempting to
`commercialize its patents, demand letters look much closer to a commercial-type contact.
`
`The U.S. Supreme Court’s recent opinion regarding venue in patent suits in TC Heartland LLC v. Kraft
`Foods Group Brands LLC, signaled a policy change against allowing patentees to forum shop.[10]
`Allowing a nonpracticing entity to manipulate venue through calculated strikes from its forum unfairly
`impacts accused infringers and tilts the field in favor of nonpracticing entities by allowing them to
`forum shop under the guise they are not “conducting business.” In fact, their accusatory actions are
`the sole business they conduct.
`
`Jack Henry seems broadly consistent with recent Supreme Court cases overturning bright-line rules.
`[11]
`
`Practice Tips After Jack Henry
`
`Jack Henry’s abandonment of the bright-line rule favors a fairness inquiry. While the court’s
`statement that a due process analysis involves a “diversity of facts” suggests that infringement
`letters should merely be considered when assessing whether the plaintiff met its burden of proof, the
`decision appears to shift the burden to the patentee to make a “compelling case” why exercising
`jurisdiction over it is not reasonable or fair.
`
`A declaratory judgment plaintiff, seeking to support the exercise of personal jurisdiction in its home
`forum, should emphasize the breadth and detail of infringement letters sent into the forum. Under
`the court’s precedent, this should satisfy the plaintiff’s burden to show minimum contacts. Under Jack
`Henry, this shifts the burden to the patentee. The patentee should emphasize the inconvenience,
`unreasonableness, or unfairness resulting from the court exercising personal jurisdiction over it.
`
`Dismissal of a case for lack of personal jurisdiction triggers the right to appeal, while refusal to
`dismiss requires either the Federal Circuit to grant mandamus relief or the district court to certify an
`
`https://www.law360.com/articles/1138786/print?section=ip
`
`3/4
`
`

`

`Case 4:18-cv-06185-HSG Document 51-3 Filed 03/29/19 Page 5 of 5
`
`  
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