Case 1:18-cv-00826-CFC Document 26 Filed 10/09/18 Page 1 of 2 PageID #: 553
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`
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`
`
`
`
`C.A. No. 18-826-CFC
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`
`))))))))))))))))))))
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`
`
`Plaintiff,
`
`
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`Counterclaim Plaintiff,
`
`
`
`v.
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`
`
`v.
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`INGENICO INC.,
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`
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`
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`IOENGINE, LLC,
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`Defendant.
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`IOENGINE, LLC,
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`INGENICO INC., INGENICO CORP. and
`INGENICO GROUP S.A.,
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`
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`Counterclaim Defendants.
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`INGENICO DEFENDANTS’ MOTION TO DISMISS
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`For the reasons set forth in the Opening Brief filed contemporaneously herewith,
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`Counterclaim Defendants Ingenico Inc., Ingenico Corp., and Ingenico Group S.A. (“Ingenico
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`Defendants”) respectfully move the Court for an order dismissing Counterclaim Plaintiff
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`IOENGINE, LLC’s Counterclaims (D.I. 12) in their entirety.
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`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 1 of 20
`
`

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`Case 1:18-cv-00826-CFC Document 26 Filed 10/09/18 Page 2 of 2 PageID #: 554
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`
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`
`
`OF COUNSEL:
`
`Kerry L. Timbers
`Sunstein Kann Murphy & Timbers LLP
`125 Summer Street
`Boston, MA 02110
`(617) 443-9292
`ktimbers@sunsteinlaw.com
`
`
`Dated: October 9, 2018
`
`
`
`
`
`
`/s/ Frederick L. Cottrell, III
`Frederick L. Cottrell, III (#2555)
`Christine D. Haynes (#4697)
`Richards, Layton & Finger, P.A.
`One Rodney Square
`920 North King Street
`Wilmington, DE 19801
`(302) 651-7508
`cottrell@rlf.com
`haynes@rlf.com
`
`Attorneys for Plaintiff and Counterclaim
`Defendants
`
`
`
`
`2
`
`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 2 of 20
`
`

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`Case 1:18-cv-00826-CFC Document 27 Filed 10/09/18 Page 1 of 18 PageID #: 556
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`
`
`
`
`
`C.A. No. 18-826-CFC
`
`
`))))))))))))))))))))
`
`
`
`Frederick L. Cottrell, III (#2555)
`Christine D. Haynes (#4697)
`Richards, Layton & Finger, P.A.
`One Rodney Square
`920 North King Street
`Wilmington, DE 19801
`(302) 651-7508
`cottrell@rlf.com
`haynes@rlf.com
`
`Attorneys for Plaintiff and Counterclaim
`Defendants
`
`
`
`OF COUNSEL:
`
`Kerry L. Timbers
`Sunstein Kann Murphy & Timbers LLP
`125 Summer Street
`Boston, MA 02110
`(617) 443-9292
`ktimbers@sunsteinlaw.com
`
`
`Dated: October 9, 2018
`
`RLF1 20095746v.1
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`INGENICO INC.,
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`
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`
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`IOENGINE, LLC,
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`Defendant.
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`
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`
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`IOENGINE, LLC,
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`
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`
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`INGENICO INC., INGENICO CORP. and
`INGENICO GROUP S.A.,
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`
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`
`
`v.
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`
`
`v.
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`
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`Plaintiff,
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`
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`
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`Counterclaim Plaintiff,
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`Counterclaim Defendants.
`
`
`OPENING BRIEF IN SUPPORT OF
`INGENICO DEFENDANTS’ MOTION TO DISMISS
`
`
`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 3 of 20
`
`

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`Case 1:18-cv-00826-CFC Document 27 Filed 10/09/18 Page 2 of 18 PageID #: 557
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`TABLE OF CONTENTS
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`
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`Page
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`TABLE OF AUTHORITIES .............................................................................................................. ii
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`I.
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`II.
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`III.
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`IV.
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`V.
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`INTRODUCTION .................................................................................................................. 1
`
`NATURE AND STAGE OF THE PROCEEDINGS ............................................................. 1
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`SUMMARY OF THE ARGUMENT ..................................................................................... 1
`
`STATEMENT OF FACTS ..................................................................................................... 2
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`ARGUMENT.......................................................................................................................... 4
`
`A.
`
`B.
`
`The Service of IOENGINE’s Counterclaims on Ingenico France Was
`Defective ..................................................................................................................... 4
`
`The Court Lacks Jurisdiction Over Ingenico France .................................................. 5
`
`1.
`
`2.
`
`Ingenico France is not subject to general jurisdiction because
`it is not “essentially at home” in Delaware ..................................................... 7
`
`Specific jurisdiction is also lacking because the Delaware
`contacts of its subsidiaries cannot be imputed to Ingenico
`France under either an agency or alter ego theory .......................................... 9
`
`C.
`
`IOENGINE’s Infringement Claims Should Be Dismissed Because
`Lumping the Defendants Together Fails to Give Fair Notice to Any
`of Them..................................................................................................................... 11
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`VI.
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`CONCLUSION .................................................................................................................... 14
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`
`
`
`
`
`
`
`
`RLF1 20095746v.1
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`i
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`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 4 of 20
`
`

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`Case 1:18-cv-00826-CFC Document 27 Filed 10/09/18 Page 3 of 18 PageID #: 558
`
`
`CASES
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`AFTG-TG, LLC v. Nuvoton Tech. Corp.,
`689 F.3d 1358 (Fed. Cir. 2012) .....................................................................................................7
`
`Akzona Inc. v. E.I. Du Pont De Nemours & Co.,
`607 F. Supp. 227 (D. Del. 1984) .........................................................................................4, 5, 10
`
`Atuahene v. City of Hartford,
`10 F. App’x 33 (2d Cir. 2001) .....................................................................................................12
`
`Autogenomics, Inc. v. Oxford Gene Tech. Ltd.,
`566 F.3d 1012 (Fed. Cir. 2009) .....................................................................................................7
`
`Bristol-Myers Squibb Co. v. Super. Ct. of Cal., S.F. Cty.,
`137 S. Ct. 1773 (2017)...................................................................................................................9
`
`C.R. Bard Inc. v. Guidant Corp.,
`997 F. Supp. 556 (D. Del. 1998) .................................................................................................12
`
`Celgard, LLC v. SK Innovation Co.,
`792 F.3d 1373 (Fed. Cir. 2015) .................................................................................................7, 9
`
`Cephalon, Inc. v. Watson Pharm., Inc.
`629 F. Supp. 2d 338 (D. Del. 2009) ......................................................................................10, 13
`
`Daimler AG v. Bauman,
`571 U.S. 117 (2014) ..............................................................................................................5, 6, 7
`
`Energy Marine Servs., Inc. v. DB Mobility Logistics AG,
`No. 15-24-GMS, 2016 WL 284432 (D. Del. Jan. 22, 2016) .......................................................13
`
`Freres v. SPI Pharma, Inc.,
`629 F. Supp. 2d 374 (D. Del. 2009) ..............................................................................................8
`
`Greene v. New Dana Perfumes Corp.,
`287 B.R. 328 (D. Del. 2002) ........................................................................................................10
`
`Lucas v. Gulf & Western Industries, Inc.,
`666 F.2d 800 (3d Cir. 1981), abrogated by E.F. Operating Corp. v. American
`Buildings, 993 F.2d 1046 (3d Cir. 1993) .......................................................................................4
`
`M2M Sols. LLC v. Telit Comm’cns PLC,
`No. 14-1103-RGA, 2015 WL 4640400 (D. Del. Aug. 5, 2015) ............................................11, 12
`
`RLF1 20095746v.1
`
`ii
`
`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 5 of 20
`
`

`

`Case 1:18-cv-00826-CFC Document 27 Filed 10/09/18 Page 4 of 18 PageID #: 559
`
`Marten v. Godwin,
`499 F.3d 290 (3d Cir. 2007) ..........................................................................................................6
`
`Mylan Pharmaceuticals, Inc. v. Kremers Urban Development Co.,
`No. 02-1628-GMS, 2003 WL 1843858 (D. Del. Apr. 7, 2003) ....................................................8
`
`N. Star Innovations, Inc. v. Toshiba Corp.,
`No. 16-115-LPS-CJB, 2016 WL 7107230 (D. Del. Dec. 6, 2016) ..............................................12
`
`Neology, Inc. v. Kapsch Trafficcom IVHS, Inc.,
`No. 13-2052-LPS, 2014 WL 4675316 (D. Del. Sept. 19, 2014), report &
`recommendation adopted by C.A. No. 13-2052-LPS, D.I. 39 (D. Del. Oct. 22,
`2014) ............................................................................................................................................12
`
`Nespresso USA, Inc. v. Ethical Coffee Co. SA,
`263 F. Supp. 3d 498, 502 (D. Del. 2017) ............................................................................6, 9, 10
`
`Polar Electro Oy v. Suunto Oy,
`No. CV 11-1100-GMS, 2017 WL 3713396 (D. Del. Aug. 29, 2017) ...........................................6
`
`Rush v. Savchuk,
`444 U.S. 320 (1980) ......................................................................................................................6
`
`Sears, Roebuck & Co. v. Sears plc, 744 F. Supp. 1297 (D. Del. 1990) ............................................11
`
`In re Sunstates Corp. S’holder Litig.,
`788 A.2d 530 (Del. Ch. 2001) .....................................................................................................13
`
`T-Jat Sys. 2006 Ltd. v. Expedia, Inc. (DE),
`No. 16-581-RGA-MPT, 2017 WL 896988 (D. Del. Mar. 7, 2017) ............................................11
`
`Time Share Vacation Club v. Atl. Resorts, Ltd.,
`735 F.2d 61 (3d Cir. 1984) ............................................................................................................6
`
`Walden v. Fiore,
`571 U.S. 277 (2014) ......................................................................................................................9
`
`
`
`
`
`
`
`RLF1 20095746v.1
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`iii
`
`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 6 of 20
`
`

`

`Case 1:18-cv-00826-CFC Document 27 Filed 10/09/18 Page 5 of 18 PageID #: 560
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`I.
`
`INTRODUCTION
`
`Under Fed. R. Civ. P. 12(b)(2), (5) and (6), the Ingenico counterclaim defendants seek
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`dismissal of the counterclaims asserted by IOENGINE, LLC, for these reasons: IOEGINE has
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`failed to properly serve Ingenico Group, S.A.; the Court lacks personal jurisdiction over Ingenico
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`Group S.A; and IOENGINE has failed to state claims for patent infringement and inducement to
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`infringe upon which relief can be granted against Ingenico Inc., Ingenico Corp. and Ingenico Group
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`S.A. In support of their motion, the Ingenico defendants submit the declaration of Ward Hewins.
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`II.
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`NATURE AND STAGE OF THE PROCEEDINGS
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`Ingenico Inc. filed a complaint on June 1, 2018, seeking a declaration that it and its
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`customers do not infringe three patents--pertaining to technology that enables secure mobile
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`payment-- of which IOENGINE, LLC is the assignee. On August 17, 2018, IOENGINE filed an
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`answer, which included counterclaims alleging that Ingenico Inc., as well as Ingenico Corp. and
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`Ingenico Group S.A., infringed and induced infringement of the same three patents. The parties
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`have exchanged initial disclosures but have not begun other discovery.
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`III.
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`SUMMARY OF THE ARGUMENT
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`The Court should dismiss the counterclaims because:
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`1. IOENGINE purported to serve Ingenico Group S.A., a French corporation (“Ingenico
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`France”), by mailing a copy of its counterclaims to the place of business of Ingenico
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`Inc., a U.S. subsidiary of the French company. This is defective service, requiring
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`dismissal of the counterclaims against Ingenico France.
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`2. IOENGINE named Ingenico France as a defendant apparently because it is a parent of
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`Ingenico Inc. and Ingenico Corp., not on account of its activities in Delaware or indeed
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`in the U.S. The Court thus lacks personal jurisdiction over Ingenico France because no
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`factors support viewing it as an agent of its subsidiaries.
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`RLF1 20095746v.1
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`1
`
`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 7 of 20
`
`

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`Case 1:18-cv-00826-CFC Document 27 Filed 10/09/18 Page 6 of 18 PageID #: 561
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`3. IOENGINE has improperly lumped the three Ingenico defendants together in its
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`allegations, failing to provide adequate notice, required by Rule 8(a), of which entity is
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`supposedly responsible for direct infringement and which entity, if different, is
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`responsible for infringement or inducement of infringement.
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`IV.
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`STATEMENT OF FACTS
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`Plaintiff Ingenico Inc. is in the business of developing and distributing hardware, software,
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`technology and services to enable financial institutions, retailers and merchants primarily based in
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`the United States to complete secure payment transactions in stores and through mobile solutions.
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`Declaration of Ward D. Hewins (“Hewins Decl.”) ¶ 8. Ingenico Inc. is a Georgia corporation with
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`a principal place of business in Alpharetta, Georgia. Id. ¶ 7. Ingenico Inc. is wholly owned by
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`Ingenico Corp., a holding company with no commercial operations of any kind. Id. ¶¶ 7, 9.
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`Ingenico Corp. is wholly owned by Ingenico France. Id. ¶ 9.
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`As IOENGINE acknowledges, Ingenico France is incorporated in France and maintains its
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`principal place of business there. Answer and Counterclaims, D.I. 12 ¶ 276. The parties agree that
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`the Court has personal jurisdiction over Ingenico Inc. and Ingenico Corp., but do not agree as to
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`Ingenico France. Joint Status Report, D.I. 22 ¶ 1. The counterclaims allege that all three
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`defendants, grouped together as “Ingenico,” conduct substantial business in Delaware, and
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`regularly solicit business and derive substantial revenue from providing infringing goods and
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`services in this forum. Id. ¶ 283. In fact, none of those allegations are true of Ingenico France.
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`Ingenico France has no office, bank account or post office box in the U.S., does not own or
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`lease any real property in the U.S., and indeed is not authorized or registered to do business in this
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`country. Hewins Decl. ¶¶ 12-13. Ingenico France has no manufacturing facilities in the U.S. and
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`has completed no sales of products in Delaware or anywhere else in the U.S. Id. ¶ 16. Ingenico
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`France does not, anywhere in the U.S., make, use, advertise, market, offer for sale, or sell any of
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`RLF1 20095746v.1
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`2
`
`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 8 of 20
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`

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`Case 1:18-cv-00826-CFC Document 27 Filed 10/09/18 Page 7 of 18 PageID #: 562
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`the products accused in the counterclaims. In the U.S., these activities have been conducted only
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`by its U.S. subsidiary Ingenico Inc. or its predecessor entities. Id. ¶ 18.
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`Ingenico France and its U.S. subsidiaries maintain their own books and records and prepare
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`their own financial statements, and each subsidiary is responsible for its own business activity,
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`revenue, hiring, payroll and budget. Id. ¶¶ 19-20. As is typical of a parent-subsidiary relationship,
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`Ingenico France’s approval is required regarding a variety of transactions and activities, and
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`Ingenico France supervises the business of Ingenico Inc. through financial reporting and Ingenico
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`Inc.’s issuance of periodic management reports detailing the activities, operations and performance
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`of its business. Ingenico France, however, does not direct, or have authority to direct, the day-to-
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`day operations of its U.S. subsidiaries. Id. ¶ 21.
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`No members of Ingenico France’s board of directors sit on the boards of the U.S.
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`subsidiaries, and only one officer of Ingenico France sits on the boards of those subsidiaries.
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`Id. ¶ 22. The U.S. subsidiaries maintain their own offices and their own production, research, sales
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`and distribution facilities in the U.S., which are separate from the operations of Ingenico France,
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`which has no facilities in the U.S. Id. ¶ 23. IOENGINE purported to serve Ingenico France by
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`delivering the summons and counterclaims to Ingenico Inc.’s place of business in Alpharetta, GA.
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`D.I. 18 ¶ 3.
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`
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`IOENGINE’s counterclaims refer to all three Ingenico entities collectively as “Ingenico,”
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`making no distinction among their respective roles and conduct. For example, “Ingenico” is
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`alleged to infringe each asserted patent both directly and “indirectly by way of inducement and
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`contributory infringement, literally and/or under the doctrine of equivalents.” D.I. 12 ¶¶ 491, 680,
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`881. The request for relief asks that the “Counterclaim Defendants” be enjoined “from directly or
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`indirectly infringing, inducing the infringement of, or contributing to the infringement of” the
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`patents in suit. Id. ¶ 893. The accused products are called “Ingenico Infringing Products” or
`3
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`RLF1 20095746v.1
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`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 9 of 20
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`

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`Case 1:18-cv-00826-CFC Document 27 Filed 10/09/18 Page 8 of 18 PageID #: 563
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`“Ingenico Infringing Mobile Products,” id. ¶¶ 300, 315, with no allegation of which entity’s
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`activities pertain to them.
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`V.
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`ARGUMENT
`A.
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`The Service of IOENGINE’s Counterclaims on Ingenico France Was Defective
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`IOENGINE cannot achieve good service on Ingenico France by sending the summons and
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`counterclaims to its U.S. subsidiary’s address in Georgia. Unless a subsidiary is found to be the
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`alter ego or agent of the parent company. service on a subsidiary does not confer jurisdiction over
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`the parent where separate corporate identities are maintained Akzona Inc. v. E.I. Du Pont De
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`Nemours & Co., 607 F. Supp. 227, 237 (D. Del. 1984).
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`To find that Ingenico Inc.is the alter ego of Ingenico France, IOENGINE must prove
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`“control by the parent to such a degree that the subsidiary has become its mere instrumentality.”
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`Id. Alternatively, to find that Ingenico Inc.is an agent of Ingenico France, IOENGINE must show
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`that the separate corporate identities of the subsidiary and the parent are a fiction and that the
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`subsidiary is being operated as a department of the parent. Id. “The parent must have actual,
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`participatory and total control over the subsidiary.” Id. (emphasis added).
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`The burden of proving the adequacy of service rests on the claimant, Lucas v. Gulf &
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`Western Industries, Inc., 666 F.2d 800, 805 (3d Cir. 1981), abrogated by EF Operating Corp. v.
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`American Buildings, 993 F.2d 1046 (3d Cir. 1993), and IOENGINE will be hard-pressed by the
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`facts of Ingenico France’s relationship with its U.S. subsidiaries to meet this burden. Ingenico
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`France has scrupulously respected the separateness of its subsidiaries. As noted above, the
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`subsidiaries maintain their own offices and their own production, research, sales and distribution
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`facilities in the U.S., which are separate from the operations of Ingenico France, which has no
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`facilities in the U.S.
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`RLF1 20095746v.1
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`4
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`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 10 of 20
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`

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`Case 1:18-cv-00826-CFC Document 27 Filed 10/09/18 Page 9 of 18 PageID #: 564
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`Ingenico France and its U.S. subsidiaries maintain their own books and records and prepare
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`their own financial statements, and each subsidiary is responsible for its own business activity,
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`revenue, hiring, payroll and budget. Ingenico France does not direct its subsidiaries’ day-to-day
`
`operations. No members of Ingenico France’s board of directors sit on the boards of the U.S.
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`subsidiaries, and only one officer of Ingenico France sits on the boards of those subsidiaries.
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`These attributes of Ingenico France’s relationship with its subsidiaries refute any notion
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`that it exercises such excessive control that either subsidiary is its “mere instrumentality” (for the
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`alter ego analysis) or is being operated as a department of Ingenico France (for the agency
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`analysis). Even where, as here, the parent is a 100% owner of the subsidiary and must approve
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`certain transactions of the subsidiary, these factors are insufficient to establish agency for purposes
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`of justifying IOENGINE’s service on Ingenico France by delivering the summons to its subsidiary.
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`Akzona, 607 F.Supp. at 237 (enumerating several indicia of parental control that nonetheless do
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`not tag the subsidiary as an alter ego or agent). As the Akzona court concluded, where the facts do
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`not support a finding that the subsidiary is the alter ego or agent of the parent, “service on [the
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`subsidiary] is insufficient to confer jurisdiction over [the parent].” Id. at 240.
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`B.
`
`The Court Lacks Jurisdiction Over Ingenico France
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`Many of the facts supporting Ingenico France’s challenge to the sufficiency of
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`IOENGINE’s service of process are central as well to demonstrating the Court’s lack of personal
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`jurisdiction over Ingenico France.
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`Personal jurisdiction comes in two forms. General or all-purpose jurisdiction exists where
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`a foreign corporation’s “continuous corporate operations within a state [are] so substantial and of
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`such a nature as to justify suit against it on causes of action arising from dealings entirely distinct
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`from those activities.” Daimler AG v. Bauman, 571 U.S. 117, 127 (2014). The second, specific
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`jurisdiction, is present when the suit arises out of or relates to the defendant’s contacts with the
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`RLF1 20095746v.1
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`5
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`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 11 of 20
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`

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`Case 1:18-cv-00826-CFC Document 27 Filed 10/09/18 Page 10 of 18 PageID #: 565
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`forum. Id. Since the Delaware long-arm statute has been construed to be co-extensive with the
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`due process clause of the U.S. Constitution, “the focus of the inquiry traditionally rests on the
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`constitutional component.” Nespresso USA, Inc. v. Ethical Coffee Co. SA, 263 F. Supp. 3d 498,
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`502 (D. Del. 2017). Whether analyzing general or specific jurisdiction, the question is whether
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`the defendant has sufficient contacts with Delaware “such that the maintenance of the suit does
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`not offend traditional notions of fair play and substantial justice.” Id. at 503 (citing Int'l Shoe
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`Co. v. State of Wash., Office of Unemployment Compensation & Placement, 326 U.S. 310, 316
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`(1945)).
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`While a 12(b)(6) motion requires the court to accept the allegations of the non-moving
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`party as true, a 12(b)(2) motion “requires resolution of factual issues outside the pleadings, i.e.
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`whether in personam jurisdiction actually lies.” Time Share Vacation Club v. Atl. Resorts, Ltd.,
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`735 F.2d 61, 66 n.9 (3d Cir. 1984). Once a defendant has raised a jurisdictional defense, the
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`plaintiff bears the burden of making a prima facie showing of personal jurisdiction. Marten v.
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`Godwin, 499 F.3d 290, 295-96 (3d Cir. 2007).
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`All of IOENGINE’s allegations of wrongdoing are directed at “Ingenico,” defined to
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`include all three Ingenico defendants [D.I. 12 ¶ 279]. Courts routinely reject pleadings that try to
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`turn separate corporate entities into one indistinguishable mass. The Supreme Court refused to
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`extend personal jurisdiction by “considering the ‘defending parties’ together and aggregating
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`their forum contacts,” concluding that such an approach to determining jurisdiction is “plainly
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`unconstitutional.” Rush v. Savchuk, 444 U.S. 320, 331-32 (1980). The requisite constitutional
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`test must be met as to each defendant over whom a jurisdiction may be exercised. Id. at 332 .See
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`also Polar Electro Oy v. Suunto Oy, No. CV 11-1100-GMS, 2017 WL 3713396, at *5 (D. Del.
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`Aug. 29, 2017) (while one infringement defendant is a Delaware corporation, and therefore
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`would be “at home” in Delaware, “aggregating [that company’s] Delaware citizenship to
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`RLF1 20095746v.1
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`6
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`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 12 of 20
`
`

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`Case 1:18-cv-00826-CFC Document 27 Filed 10/09/18 Page 11 of 18 PageID #: 566
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`exercise jurisdiction over [a co-defendant Finnish corporation] would be ‘plainly
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`unconstitutional.’”).
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`IOENGINE carries the burden of establishing that the Court has jurisdiction over Ingenico
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`France. See Celgard, LLC v. SK Innovation Co., 792 F.3d 1373, 1378 (Fed. Cir. 2015).1 Because
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`Ingenico France has submitted declarations refuting IOENGINE’s jurisdictional allegations, the
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`Court cannot accept the “bare formulaic accusation[s]” of the counterclaims, and IOENGINE
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`must submit declarations or other evidence sufficient to create a factual dispute regarding
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`Ingenico France’s forum-state contacts. AFTG-TG, LLC v. Nuvoton Tech. Corp., 689 F.3d 1358,
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`1365 (Fed. Cir. 2012).
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`As discussed below, Ingenico France’s contacts with Delaware are insufficient to warrant
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`either general or specific jurisdiction, consistent with due process limitations, over Ingenico
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`France.
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`1.
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`Ingenico France is not subject to general jurisdiction because it is not
`“essentially at home” in Delaware
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`The test for general jurisdiction is whether a corporation’s “affiliations with the State are
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`so ‘continuous and systematic’ as to render [it] essentially at home in the forum State.” Daimler,
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`571 U.S. at 127 (citations omitted). The Supreme Court explained that, other than in an
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`“exceptional case,” a corporation is “at home” only in its “place of incorporation and principal
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`place of business.” Id. at 137, 139 & n.19. IOENGINE concedes that Ingenico France is
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`incorporated, and has its principal place of business, in France. Thus, neither of the standard
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`foundations for general jurisdiction is present.
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`IOENGINE may try to point to the scale of business that Ingenico Inc., the U.S. operating
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`subsidiary of Ingenico France, does in Delaware, but the Supreme Court has decisively rejected the
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`1 In patent cases, Federal Circuit law applies to the issue of personal jurisdiction. Autogenomics,
`Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1016 (Fed. Cir. 2009).
`7
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`RLF1 20095746v.1
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`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 13 of 20
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`

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`Case 1:18-cv-00826-CFC Document 27 Filed 10/09/18 Page 12 of 18 PageID #: 567
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`exercise of general jurisdiction over a parent corporation on the basis that one of its subsidiaries did
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`a sizable amount of business in the forum state: This type of “agency theory” would “subject
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`foreign corporations to general jurisdiction whenever they have an in-state subsidiary or affiliate,
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`an outcome that would sweep beyond even the ‘sprawling view of general jurisdiction’ we rejected
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`in [an earlier decision].” Id. at 759-60 (citation omitted).
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`In at least two patent infringement cases, courts in this District have ruled similarly to this
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`decision. In Mylan Pharmaceuticals, Inc. v. Kremers Urban Development Co., No. 02-1628-GMS,
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`2003 WL 1843858, at *3 (D. Del. Apr. 7, 2003), the court declined to extend specific or general
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`jurisdiction over a German parent company which had no employees, offices, property, sales,
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`inventory, registered agent, or tax liability in the United States. The plaintiff had not “adduced any
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`evidence that [the German parent company], or any of its alleged agents., . . .availed themselves of
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`the benefits or privileges of Delaware in any way, much less created a ‘substantial connection’ with
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`the state.” Id.
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`Similarly, the court granted a motion to dismiss because “[p]ersonal jurisdiction over a
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`foreign holding company in a patent infringement suit may not be exercised merely because of that
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`corporation’s relationship with an allegedly infringing subsidiary.” Freres v. SPI Pharma, Inc.,
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`629 F. Supp. 2d 374, 385 (D. Del. 2009).
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`As the Hewins declaration lays out, Ingenico France, like the defendants in Mylan and
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`Freres, has no employees, offices, property, sales, registered agent, or tax liability in the United
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`States, not to mention that Ingenico France also does not make, distribute or advertise products, or
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`maintain research facilities, in the U.S..
`
`
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`
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`RLF1 20095746v.1
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`8
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`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 14 of 20
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`

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`Case 1:18-cv-00826-CFC Document 27 Filed 10/09/18 Page 13 of 18 PageID #: 568
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`2.
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`Specific jurisdiction is also lacking because the Delaware contacts of its
`subsidiaries cannot be imputed to Ingenico France under either an
`agency or alter ego theory
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`Specific jurisdiction is constitutionally permissible only if the suit arises out of or relates
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`to the defendant’s contacts with the forum. Bristol-Myers Squibb Co. v. Super. Ct. of Cal., S.F.
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`Cty., 137 S. Ct. 1773, 1780 (2017). “[T]he defendant’s suit-related conduct must create a
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`substantial connection with the forum State” and must not be based on “‘random, fortuitous, or
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`attenuated’ contacts he makes by interacting with other persons affiliated with the State.” Walden
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`v. Fiore, 571 U.S. 277, 286 (2014).
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`To the extent that either of the U.S. subsidiaries of Ingenico France has contacts in
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`Delaware, they may not be imputed to Ingenico France. Specific jurisdiction “must arise out of
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`contacts that the ‘defendant [it]self’ creates with the forum State.” Id. at 284 (quoting Burger
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`King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). The forum-state contacts of a third party
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`may only be imputed to a defendant if the third party is the agent or alter ego of the defendant.
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`Celgard, 792 F.3d at 1379. Neither circumstance applies here.
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`The agency theory “examines the degree of control which the parent exercises over the
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`subsidiary” based on the following factors: “the extent of overlap of officers and directors,
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`methods of financing, the division of responsibility for day-to-day management, and the process
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`by which each corporation obtains its business.” Nespresso, 263 F. Supp. 3d at 505.
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`IOENGINE alleges no facts that, if accepted as true, would establish that Ingenico France is
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`the agent of Ingenico Inc. in connection with the manufacture, sale, or offering for sale of the
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`accused products in Delaware. As shown in the Hewins declaration, there is next to no overlap of
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`officers and directors: One officer of Ingenico France sits on the boards of the U.S. subsidiaries.
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`Ingenico France does not direct, and has no authority to direct, the day-to-day operations of its
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`U.S. subsidiaries, and the subsidiaries are responsible for their own business activity and revenue.
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`RLF1 20095746v.1
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`9
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`Ingenico Inc. v. IOENGINE, LLC
`IPR2019-00879 (US 9,059,969)
`Exhibit 2032
`Page 15 of 20
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`

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`Case 1:18-cv-00826-CFC Document 27 Filed 10/09/18 Page 14 of 18 PageID #: 569
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`This Court has found such tokens of separateness to militate against the exercise of jurisdiction
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`under an agency theory. Id.
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`Nor can IOENGINE rely on an alter ego theory, which requires it to show “some fraud,
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`injustice, or inequity in the use of the corporate form,” including a showing that the two
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`corporations did not observe corporate formalities. Cephalon, Inc. v. Watson Pharm., Inc., 629
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`F. Supp. 2d 338, 347–48 (D. Del. 2009). The alter ego theory is analyzed strictly, and Delaware
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`courts “employ a similar analysis to that of deciding whether it is appropriate to pierce the
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`corporate veil.” Greene v. New Dana Perfumes Corp., 287 B.R. 328, 342–43 (D. Del. 2002).
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`Here, IOENGINE can meet neither requirement of the alter ego theory. As the Hewins
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`declaration states, the U.S. subsidiaries are legally separate entities and observe the corporate
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`formalities required to maintain their corporate separateness from each other and from Ingenico
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`France. Ingenico France does not direct the day-to-day operations of its U.S. subsidiaries and
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`those subsidiaries have separate boards of directors and separate accounting systems.
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`Significantly (and to its credit), IOENGINE does not suggest that the counterclaim
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`defendants have used the corporate form to work any fraud, injustice, or inequity. See Cephalon,
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`629 F. Supp. 2d at 348 (alter ego theory fails where plaintiff failed to show fraud or defendants’
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`failure to maintain corporate formalities). Ingenico France merely exercises general supervisory
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`authority over its subsidiaries’ activities in a manner typical of a parent–subsidiary relationship.
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`The court in Akzona, cited earlier in support of this motion’s challenge to the sufficiency of
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`service on Ingenico France, also declined to exercise jurisdiction over the parent company based on
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`many of the facts that caused the court to find service inadequate. 607 F. Supp. at 240. As noted in
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`a subsequent decision from this Court, Akzona “did not distinguish the agency and alter-ego
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`theories. However, it did find that absent total control of the subsidiary, evidenced by interference
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`in the day-to-day operations of the subsidiary, the presence of the subsidiary could not be impu