The World in U.S. Courts: Fall 2014 - Personal Jurisdiction
September.15.2014
NXP Semiconductors USA filed suit against two French corporations and the U.S. sub of one of them seeking a declaration of noninfringement and invalidity relating to patents covering near field communication technology. It alleged that the Court had specific personal jurisdiction over all the defendants. The French company with the U.S. subsidiary was 50% owned by the French Government and 50% owned by an entity created by an act of the French legislature. The Court initially determined that the suit against the French Parent and its subsidiary was not authorized by the Foreign Sovereign Immunity Act because the defendants could not be considered foreign sovereigns.
The Court also rejected NXP's alternative argument that specific personal jurisdiction could attach based on normal jurisdictional considerations, which in the case of a declaratory judgment relating to patent infringement require evidence of the "purposeful direction" of patent enforcement activities at residents of the forum state. The Court found that a number of the actions cited by NXP, including letters threatening litigation and suits against forum residents could not support specific personal jurisdiction because they were directed to enforcement in other jurisdictions. The only forum-related allegation—that NXP, a forum resident, would itself suffer injury as a result of the defendants' enforcement activities—was likewise found to be an inadequate basis for jurisdiction.
Finally, the Court addressed NXP's argument that personal jurisdiction was available under a rule of federal civil procedure authorizing jurisdiction over a non-U.S. defendant where i) the case involves a claim under federal law, ii) the defendant cannot otherwise be sued in any U.S. state, and iii) the defendant's contacts with the U.S. as a whole would be sufficient to establish jurisdiction. The Court rejected the argument, noting that the French parent did not have sufficient contacts with the U.S. as a whole to support jurisdiction. Moreover, if the actions of the parent's U.S. subsidiary were considered (which the Court did not conclude was appropriate), that would only establish a basis for jurisdiction in Texas.