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No Personal Jurisdiction Because Display of Accused Infringing Device at a Trade Show Held Not to Be an Infringing “Use” in the Forum State

September 09, 2008

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Last Month at the Federal Circuit - October 2008

Judges: Bryson, Prost, Zagel (author and District Judge sitting by designation)

[Appealed from: D.D.C., Judge Friedman]

In Medical Solutions, Inc. v. C Change Surgical LLC, No. 07-1163 (Fed. Cir. Sept. 9, 2008), the Federal Circuit affirmed the district court’s finding that it did not have personal jurisdiction over C Change Surgical LLC (“CCS”) because CCS’s demonstration of the allegedly infringing device at a trade show did not constitute a “use” under the patent laws, and because the district court did not abuse its discretion in denying Medical Solutions, Inc. (“MSI”) further jurisdictional discovery.

MSI is a Virginia corporation that owns several patents related to devices that control the temperature of medical and surgical fluids in an operating room. CCS is a North Carolina limited liability company that developed the IntraTemp, which is a mobile workspace that controls the temperature of surgical fluids. MSI brought a patent infringement action against CCS in the District of Columbia (“the District”). CCS moved to dismiss MSI’s complaint for lack of personal jurisdiction.

MSI alleged that personal jurisdiction existed because CCS promoted, showed, and used its allegedly infringing IntraTemp product at a trade show held in the District. CCS responded, stating that it is not registered to do business in the District and does not market its product in or generate any revenue from the District. MSI alleged that CCS “offered to sell” and “used” its allegedly infringing IntraTemp product at the trade show, which was sufficient to subject CCS to personal jurisdiction under the District’s long-arm statute.

The district court rejected MSI’s arguments and denied MSI’s request for further jurisdictional discovery because MSI failed to show that additional discovery would be beneficial to its establishment of personal jurisdiction.

On appeal, MSI did not argue that CCS’s activities constituted an “offer to sell” under 35 U.S.C. § 271(a). MSI only contended that the district court failed to consider the totality of the circumstances when it determined that CCS’s activities at the trade show did not amount to a “use” under § 271(a). The Federal Circuit held that MSI’s reliance on the totality of the circumstances test in Trintec Industries, Inc. v. Pedre Promotional Products, Inc., 395 F.3d 1275, 1279 (Fed. Cir. 2005), was misplaced because Trintec dealt with an “offer to sell,” and not a “use” under § 271(a).

The Court then stated that what constitutes a “use” of a patented item is highly case-specific. The Court held that based on the ordinary meaning of “use,” which is “to put into action or service,” CCS’s displaying a prototype of its product, along with staffing a booth with representatives and providing brochures, did not amount to “putting the IntraTemp device into service.” Slip op. at 8. The Federal Circuit found that MSI did not put forth evidence indicating that the IntraTemp device was put into service so as to constitute an infringing use. Thus, the Court held that MSI did not establish a prima facie case that CCS’s display and demonstration of the IntraTemp at the trade show constituted a “use.”

The Court also held that the district court did not abuse its discretion when it denied MSI’s request to conduct jurisdictional discovery. MSI’s additional discovery request was only relevant to its “offer to sell” argument, which it abandoned on appeal. The Court also held that there was nothing in the complaint or MSI’s response to the motion to dismiss that made out a prima facie showing of jurisdiction sufficient to require that MSI be permitted to conduct jurisdictional discovery. The Court found that, “[w]hile we can conceive of situations where CCS’s conduct would constitute a ‘use’ under [35 U.S.C. § 271(a)], such a situation would involve, at a minimum, practicing all of the elements of at least one claim.” Id. at 9.

Accordingly, the Federal Circuit found that the district court was entitled to make a judgment call to deny the discovery request.