Case 1:12-cv-00574-LPS Document 360 Filed 03/22/16 Page 1 of 9 PageID #: 12398
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE .
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`ROBERT BOSCH LLC,
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`L
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`Plaintiff,
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`v.
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`ALBEREE PRODUCTS, INC., API
`KOREA CO., LTD., SAVER
`AUTOMOTIVE PRODUCTS, INC., and
`COSTCO WHOLESALE CORPORATION,
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`Defendants.
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`Civil Action No. 12-574-LPS
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`REDACTED PUBLIC VERSIO~
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`COSTCO WHOLESALE CORPORATION,
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`Counter-Defendants. )
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`Counter-Plaintiff,
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`v.
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`ROBERT BOSCH LLC and ROBERT BOSCH
`GMBH,
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`MEMORANDUM ORDER
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`At Wilmington this 17th day of March, 2016:
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`Having reviewed the parties' briefing (D.I. 200, 209, 223) on API Korea Co., Ltd. 's
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`("API") Renewed Motion to Dismiss the Second Amended Complaint for Lack of Personal
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`Jurisdiction (D.I. 200), IT IS HEREBY ORDERED that APrs motion to dismiss is DENIED.·
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`1.
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`On September 29~ 2014, the Court denied without prejudice API's Motion to
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`Dismiss the Second Amended Complaint for Lack of Personal Jurisdiction, and granted Robert
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`1
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`Case 1:12-cv-00574-LPS Document 360 Filed 03/22/16 Page 2 of 9 PageID #: 12399
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`Bosch LLC's ("Bosch"" ·or "Plaintiff') request for jurisdictional discovery with respect to API.
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`(D.l. 76, 77) In its Memorandum Opinion issued that day, the Court set out the factual
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`background and applicable legal standards, which the Court will not repeat in full here. 1
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`-See
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`Robert Bosch; LLC 1•. Alberee Prods., Inc., 70 F. Supp. 3d 665, 670-77 (D. Del. 2014). With
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`. regard to API, the Court concluded:
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`Although Bosch argues there is an agency relationship between
`API and Alberee or Saver, Bosch does not offer any significant
`evidence of such relationships. Bosch's only support for its
`position is that ( 1) Albert Lee, the owner of Alberee, and Choon
`Bae Lee, the owner of API, jointly applied for a patent related to
`wiper blades in Korea and are co-inventors on a U.S. Patent; (2)
`API sells millions of components to Alberee; and (3) Saver has
`represented itself as having manufacturing facilities in Korea. API
`is a Korean company with no evident relationship with Saver or
`Costco. Alberee takes possession of the API-manufactured
`components in Busan, Korea, importing them to the United States
`through Los Angeles, California.
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`Nor has Bosch met its burden to demonstrate personal jurisdiction
`over API under the dual jurisdiction theory. . . . API sold
`components to a Maryland company, which assembled and sold
`them to another Maryland company, which in tum sold them to a
`national distributor. Aside from the components appearing in
`Delaware as finish¢ products, there is ilo evidence ~at API has
`· any ties to Delaware other than this suit. Examining the limited
`evidence presented, it is insufficient to establish that API had the
`requisite intent to serve Delaware.
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`Id. at 680 (internal. citations omitted).
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`1Bosch continues to bear only a prima facie burden for establishing personal jurisdiction
`over API, as there has not been a jurisdictional hearing regarding jurisdictional discovery, and the ·
`parties have not indicated that the jurisdictional facts are und1sputed. See Celgard, LLC 1·. SK
`Innovation Co., 2015 U.S. App. LEXIS 11536, at *9 (Fed. Cir. July 6, 2015) ("In this case~
`jurisdictional discovery was conducted and the district court did not conduct a jurisdictional
`hearing, but we see no indication that the parties agreed that the jurisdictional facts were not in
`dispute .... As such, Celgard must make a prima facie showing of jurisdiction.").
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`2
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`Case 1:12-cv-00574-LPS Document 360 Filed 03/22/16 Page 3 of 9 PageID #: 12400
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`. . 2.
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`Plaintiff argues that jurisdictional discov~ has revealed evidence that API has an
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`agency relationship with Alberee and Saver. 2 Under agency theory, a defendant company may be
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`subject to personal jurisdiction under Delaware's long-ann statute based on contacts attributed to
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`the defendant compants affiliate. See Intellectual Ventures I LLC v. Nikon Corp., 935 F. Supp.
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`2d 787, 793 (D. Del. 2013); C.R. Bard, Inc. v. Guidant Corp., 997 F. Supp. 556, 559-60 (D. Del.
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`· 1998). Agency theory may be applied not only to parents and subsidiaries, but al~ to companies
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`that are "two arms of the same business group," operate in concert with each other,. and enter into
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`agreements with each other that are nearer than arm's length .. See Cephalon, Inc."· Wats01z
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`Phann., Inc., 629 F. Supp. 2d 338, 348 (D. Del. 2009); Wesley-Jessen Corp. v. Pilkington
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`Visioncare, Inc., 863 F. Supp. 186, 188-89 (D. Del.1993). Among the factors for determining
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`whether an agency relationship exists are: "(1] the·extent of overlap of officers and directors,
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`[2] methods of financing, [3] the division of responsibility for day-to-day management, and
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`[4] the process by which each corporation obtains its business.'~ Eastman Chem. Co. 1·. AlphaPet
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`Inc., 2011WL6004079, at *12 (D. Del. Nov. 4, 2011) (internal citation omitted).
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`3.
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`Plaintiff does not point to any overlap of officers or directors. Witjl respect to
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`-
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`financing methods, Plaintiff contends that sales to Alberee~ which constitute
`provide capital for API (see D.I. 21 O Ex. 1 at 42-43, 97), and that API has relied on
`photos of Saver and Alberee products in a loan application (see id. at 79-81, 92-94; D.I. 210 Ex.
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`2 at API0021856-6 J ). The Court disagrees that either of these circumstances leads to a
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`~Although Plaintiff also argues for an '"alter ego'· relationship~ it does not point to any
`· fraud or inequity which would allow the Court to '"pierce the corporate veil." See Applied
`Biosystems, Jnc.1·. Cruachem. Ltd., 772 F. Supp. 1458, 1463 (D. Del. 1991) ("Under the alter
`ego or piercing the corporate veil doctrine, courts will ignore the corporate boundaries between
`parent and subsidiary if fraud or inequity is shown.'').
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`3
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`Case 1:12-cv-00574-LPS Document 360 Filed 03/22/16 Page 4 of 9 PageID #: 12401
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`. conclusion that API' s method of financing reflects an agency relationship as opposed to an arms·
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`length buyer-seller relationship. (See D.I. 210 Ex. lat 45-46) (API's 30(b)(6) witness stating
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`"[t]hey [Alberee] are our largest customer, so that would be the relationship~') With respect to
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`involvement in day-to-day management, Plaintiff points to: ( 1 ) a bank report for Alberee and
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`Saver referring to
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`(2) an email
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`from a non-officer Saver employee referring to
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`(3) Alberee~s involvement in design and product quality issues via
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`multiple visits per year by Alberee CEO Albert Lee to API's plant in Korea (see D.l. 210 Ex. 1 at
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`52-54); and (4) APrs use of the name •'Saver'· at its manufacturing plant and in its domain name,
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`which API' s 30(b )( 6) witness has testified was chosen because API wanted - but was unable.:.... to
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`sell finished products under the Saver brand.in Korea (id. at 71-74; D.l. 210 Ex. 2 at
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`API002184 7). Here too, the Court disagrees that any of these circumstances should result in a
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`finding of an agency relationship. Neither the bank report nor the email from a non-official
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`employee are admissions by API. While the latter may create a factual dispute re~arding APr s
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`representation that A1beree is APl's customer (compare DJ. 210 Ex~ 4 at SA VEROl88970 with
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`D.I. 210 Ex. I at 45-46)!' it cannot be viewed as reflectingAlberee~s involvement in APrs ~'day­
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`to-day management." Godfrey l'. United States, 748 F.2d 1568, I 575 (Fed. Cir. I 984)
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`(describing day.to-day management as including daily office visits, making personnel decisions,
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`ordering materials and supplies, conducting correspondence, setting job prices, negotiating
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`contracts, preparing invoices, disbursing and signing checks, making bank deposits, using
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`business address, and being on the payroll). The same goes for Mr. Albert Lee's occasional visits
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`to APrs plant. See id. Although APl~s use of the brand name Saver suggests a closer than arms-
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`Case 1:12-cv-00574-LPS Document 360 Filed 03/22/16 Page 5 of 9 PageID #: 12402
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`length relationship, API has provided an adequate explanation for the use of the brand name,
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`which Plaintiff does not appear to dispute. Finally, with respect to obtaining busmess, Plaintiff
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`· emphasizes that
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`nvolves a long-tenn arrangement to supply
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`components to Alberee (see D.I .. 210 Ex. 1 at 97), which, in tum, receives most of its components
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`for the accused products from API (see D.I. 210 Ex. 3 at 9). Alberee's business is primarily
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`aimed at supplying Saver, and Saver obtains its business from nationwide retailers such as
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`. Costco. (See D.I. 210 Ex. 1at46-48, 120-21) While this fourth factor could weigh in favor ofa
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`finding of agency, it is insufficient in the totality of the circumstances to allow the Court to
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`conclude that an agency relationship exists. Accordingly, the Court will not attribute Alberee or
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`Saver's jurisdictional contacts to API.
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`4.
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`Next, Plaintiff argues that jurisdictional discovery h~ revealed additional facts in
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`support of a finding of dual, or stream-of-commerce, jurisdiction based on subsections c( 1) and
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`c( 4) of Delaware's long-arm statute. See 10 Del. C. § 3104. Under this approach, jurisdiction
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`exists when a defendant displays '"an intent to serve the Delaware market'' and "this intent results
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`in the introduction of r a] product into the market and ... plaintiffs cause of action arises from
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`injuries caused by that product." Belden Techs., Inc. 1·. LS Corp., 829 F. Supp. 2d 260, 267-68
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`(D. Del. 2010). Here, jurisdictional discovery has shown that API is not only aware that the
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`components it ships to Alberee are used in wiper blade products sold in the United States through
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`a U.S. distribution chain involving Alberee, Saver, and Costco (see D.I. 210 Ex. 1 at 33, 48-49,
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`110-13, 120-21), but also knows that Costco is '"one of the largest distributors in the U.S." (id. at
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`121). Furthermore, the finished wiper blade products have actually been sold by Costco in
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`Delaware. (See D.I. 40 at~ 3) In the absence of any evidence. that API intended to exclude
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`Case 1:12-cv-00574-LPS Document 360 Filed 03/22/16 Page 6 of 9 PageID #: 12403
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`Delaware from the U.S. distribution of the finished wiper blade products containing the API
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`components, the Court finds that API had an intent to serve the Delaware market, and it is
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`undisputed that this cause of action arises from injuries caused by those products. Accordingly,
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`the Court may exercise dual jurisdiction over API pursuant to Delaware's long-arm statute.
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`5.
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`The Court must next detennine whether such an exercise of jurisdiction comports
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`with the requirements of Due Process. In Asahi Metal Industry Co. v. Superior Court, the
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`Supreme Court was divided on the question of whether "mere awareness on the part.of a foreign
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`defendant that the components it manufactured, sold, and delivered outside the United States
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`would reach the forum State in the stream of commerce constitutes 'minimum contacts" between
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`the defendant and the forum State~'~ such that the requirements of Due Process were satisfied.
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`480 U.S. 102, l 05 ( 1987). Justice Brennan, writing for four justices, fook the view that
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`''jurisdiction premised on the placement of a product into the stream of commerce is consistent
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`with the Due Process Clause;" for: "[a]s long as a participant in this process is aware that the
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`final product is being marketed in the. forum State, the possibility of a lawsuit there cannot come
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`as a surprise.'~ Id. at 117 (plurality opinion). Justice O'Connor~ also writing for four justices,
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`rejected Justice Brennan~ s approach and wrote instead:
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`The ·~substantial connection" between the ·defendant and the forum
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`State necessary for a finding of minimum contacts must come
`about by an action of the defendant purposefully directed toward
`the forum State. The placement of a product into the stream of
`commerce, without more, is not an act of the defendant
`purposefully directed toward the forum State.
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`'Id. at 112 (plurality opinion) (internal citation omitted). The Federal Circuit has ckphasized that
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`"[i)f [the Defendant] is able to satisfy Justice O'Connor~s test, there [is] no need to address
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`Case 1:12-cv-00574-LPS Document 360 Filed 03/22/16 Page 7 of 9 PageID #: 12404
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`whether the less restrictive test proposed by Justice Brennan should be the standard ... under the
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`due process clause." Commissariat AL 'Energie Atomique v. Chi Mei Optoelectronics Corp.,
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`395 F.3d 1315, 1324 {Fed. Cir. 2005); see also Bever~v Hills Fan Co. v. Royal Sovereign Corp.,
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`21F.3d1558, 1566 (Fed. Cir. 1994). The O'Connor test is satisfied when a party engages in
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`"[ a]dditional conduct ... indicat[ing] an intent or purpose to serve the market in the forum State,
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`for example .. ·. marketing the product through a distributor who has agreed to serve as the sales
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`agent in the forum State.'~ Asahi, 480 U.S. at 112.
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`6.
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`Here: jurisdictional discovery has revealed evidence supporting an inference ''that
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`the distribution channel formed by [ API, Alberee, Saver, and Costco] was intentionally
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`established, and that defendants knew, or reasonably could have foreseen, that a termination
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`point.of the channel was [Delaware)." Bever{vHills Fan, 21 F.3d at 1564. API's CEO and
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`30(b)(6) witness, Choon Bae Lee, testified thatAPI develops products with a view toward their
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`feasibility in the U.S. market, as the finished products sold by Alberee incorporating the API
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`components are sold in the United States. (See D.I. 210 Ex. 1 at 100-04) To this.end, API makes ·
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`components for finished products that are protected by a U.S. patent (see id. at 109-I 0), and Mr.
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`C.B. Lee attends a yearly trade show in the United States to observe wiper blade products (id. at
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`13-14, 35-36). Indeed, Mr. C.B. Lee acknowledged that API was "targeting the U.S. market'"
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`(Id. at l 03) This goes beyond evidence of mere foreseeability that API' s components would be
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`sold in Delaware. Rather, API had knowledge that its eomponents were used by Alberee in
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`finished products sold to Saver for distribution through nationwide retailers such as Costco. API
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`"purposefully shipped the accused [product] into [Delaware] through an establish~d distribution
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`channel [and] [t]he cause of action for patent infringement is alleged to arise out of these
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`Case 1:12-cv-00574-LPS Document 360 Filed 03/22/16 Page 8 of 9 PageID #: 12405
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`activities." Bever~v Hills Fan, 21 F.3d at 1565.3 That API does not know either where Delaware
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`is (see D.I. 21 O Ex. 1 at 45) or whether the finished products are actually sold in Delaware (see
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`id. at 118-20) does not alter this conclusion.
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`7.
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`The Courfs conclu.sion is not inconsistent with the Federal Circuifs
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`detennination in Celgard, LLC ''·SK Innovation Co., 2015 U.S. App. LEXIS 11536 (Fed. Cir.
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`July 6, 2015), that personal jurisdiction based on stream-of-commerce could not be exercised
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`over the.defendant there. In Ce/gard, the
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`evidence fail[ed] to show that [defendantrs separators actually
`have been found in North Carolina, much less that [defendant
`could] foresee that its [products would] make their way there.
`Celgard~s inability to show that [defendant could] foresee that its
`separators will make their way to North Carolina also necessarily
`implies that [defendant] did not also have "~something more," a
`purposeful availment of the privileges and laws of North Carolina,
`as required by Justice 0' Connor: s fonn ulation of the stream-of(cid:173)
`commerce test.
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`Id. at *20-21 (citing Asahi~ 480 U.S. at 112). Here, by contrast, the finished products were
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`actually sold in Delaware (D.I. 40 at~ 3) and, as discussed above, API purposefully availed itself '.
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`of the privileges and laws of Delaware by designing products for the U.S. market-products that
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`enjoy U.S. patent protection and are partly based on knowledge of the U.S. market obtained
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`through trade shows. Hence, here, unlike in Celgard, exercising personal jurisdiction over API
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`based on stream-of-commerce comports with Due Process.
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`This Memorandum Order is issued under seal because several of the parties~ filings were
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`3 As stated in the Court's previous Memorandum Opinion, the fact that API supplies only
`components and not the final assembly does not insulate API from jurisdiction. See generanv
`LG.Phillips LCD Co., Ltd.''· Chi Mei Optoelectronics Corp., 551 F. Supp. 2d 333, 339 (D. Del.
`2008).
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`Case 1:12-cv-00574-LPS Document 360 Filed 03/22/16 Page 9 of 9 PageID #: 12406
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`filed under seal. (See, e.g., D.I. 209, 223) The parties shall meet and confer and shall, no later
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`than March 21, 2016, provide the. Court with a proposed redacted version of this Memorandum
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`Order. Thereafter, the Court will issue a publicly-avcµIabl
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