Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-5_07-cv-00625/USCOURTS-alnd-5_07-cv-00625-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:2201 Declaratory Judgement

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See doc. no. 16. 1

See doc. no. 19. 2

See doc. no. 22. 3

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ALABAMA

NORTHEASTERN DIVISION

AVOCENT HUNTSVILLE

CORP., ET AL.,

Plaintiffs,

vs.

ATEN INTERNATIONAL CO.,

LTD.,

Defendant.

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Civil Action No. CV-07-S-625-NE

MEMORANDUM OPINION AND ORDER

This matter is before the court on defendant’s motion to dismiss, or in the

alternative, motion to transfer venue (doc. no. 14) and defendant’s motion for leave

to file a reply to plaintiff’s sur-reply (doc. no. 23). Plaintiffs have filed a response;1

defendant has filed a reply; and plaintiffs have filed a sur-reply. 2 3

I. FACTUAL BACKGROUND

Plaintiff Avocent Huntsville is an Alabama corporation having its principal

place of business in Huntsville, Alabama. Plaintiff Avocent Redmond is a

Washington corporation having its principle place of business in Redmond,

FILED

 2007 Aug-30 PM 03:24

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 5:07-cv-00625-CLS Document 24 Filed 08/30/07 Page 1 of 14
See doc. no. 1 at 2. 4

See doc. no. 16 at 4. 5

See doc. no. 1 at 2. 6

See doc. no. 18, Lin Declaration at 2. 7

See doc. no. 18, Lin Declaration at 2. 8

See id.

9

See id.

10

2

Washington. Both Avocent Huntsville and Avocent Redmond are subsidiaries of 4

Avocent Corporation, a Delaware corporation which is located in Huntsville,

Alabama. Avocent Corporation develops and markets computer hardware devices 5

and systems, including systems that enable workstations to communicate with remote

computers. 

6

Defendant ATEN International Co., Ltd. (“ATEN”) is a corporation existing

under the laws of Taiwan, Republic of China, with its principal place of business in

Taipei, Taiwan. ATEN does not have any offices or employees in the State of 7

Alabama, and has never conducted business in the State of Alabama. No employee 8

of ATEN has ever visited the State of Alabama for any business purpose. All of 9

ATEN’s employees who are knowledgeable about the research and development of

ATEN products and of the inventions claimed in the patents-in-suit are located in

Taiwan.

10

ATEN’s counsel sent a letter on May 28, 2004 to Mr. John Cooper, CEO and

President of Avocent Corporation, that stated in its entirety:

Case 5:07-cv-00625-CLS Document 24 Filed 08/30/07 Page 2 of 14
Doc. no. 16, Exh. 3. 11

Doc. no. 16, Exh. 2. 12

3

Pursuant to Section 154(d) of the U. S. Patent Act, please be

advised that the U.S. Patent Office has published a patent application

owned by our client ATEN Technology, Inc. A copy of the published

patent application is attached. We suggest that you review the claims as

we believe they are relevant to a product your company is making,

using, selling, offering to sell and/or importing.

If you have any questions, please feel free to contact the

undersigned.

11

ATEN wrote a letter to Amazon on April 27, 2006, informing it of the issuance of the

‘112 Patent, and stating in pertinent part:

In light of this development, it has come to our attention that Amazon

is purchasing, using, offering to sell, selling and/or importing the

following products that may be covered by one or more claims of the

‘112 Patent. A copy of the ‘112 Patent is enclosed hereto for your

reference. Below is a partial list of potentially infringing products sold

by Amazon:

. . .

Avocent - SVM200

. . . 

Please be assured that ATEN greatly appreciates business with Amazon.

To that end, we invite you to study the ‘112 Patent and evaluate the

benefits ofinitiating a discussion with ATEN/IOGEAR for the purchase

of the cable KVM product line. Further, in the interest of protecting our

valuable intellectual property, we ask you to discontinue selling the

above referenced products.12

Avocent Redmond brought suit against ATEN and others in the Western

Case 5:07-cv-00625-CLS Document 24 Filed 08/30/07 Page 3 of 14
Doc. no. 16, Thomas Decl., Exh. 1. The letter also states “[a]t least Avocent’s SwitchView 13

line of products infringes the ‘287 patent” and “[a]t least Avocent’s SwitchView IC KVM switch

products infringe the ‘112 patent”. Id.

4

District of Washington in November 2006, alleging that ATEN’s keyboard-videomouse (“KVM”) switches infringe three Avocent Redmond patents that are not at

issue in the instant action. As follow-up to a settlement discussion in the Washington

matter, counsel for ATEN sent a letter to counsel for Avocent Redmond on March 15,

2007, stating:

At the settlement meeting, ATEN brought to Avocent’s attention two of

ATEN’s patents Avocent is infringing. ATEN would like to resolve all

outstanding disputes and avoid any further litigation between the parties.

One of the patents ATEN identified is . . . U.S. Patent No.

6,957,287 (“the ‘287 Patent”) . . .

Another patent ATEN identified is U.S. Patent No. 7,035,112

(“the ‘112 Patent”) . . .13

Plaintiffs filed this action for unfair competition, intentional interference with

business relations, and a declaratory judgment of non-infringement and invalidity of

U. S. Patent No. 6,957,287 (“the ‘287 Patent”), and U.S. Patent No. 7,035,112 (“the

‘112 Patent”) against ATEN on April 6, 2007.

Defendant moves to dismiss the entire action for lack of personal jurisdiction.

Alternatively defendant moves to dismiss Count III and IV for failure to state a claim

and moves to dismiss Counts I and II for lack of subject matter jurisdiction. Further,

Case 5:07-cv-00625-CLS Document 24 Filed 08/30/07 Page 4 of 14
5

and in the alternative, defendant moves to transfer this case to the Western District

of Washington where Avocent Redmond has sued ATEN for Patent infringement.

II. DISCUSSION

Federal district courts are tribunals of limited jurisdiction, “‘empowered to hear

only those cases within the judicial power of the United States as defined by Article

III of the Constitution,’ and which have been entrusted to them by a jurisdictional

grant authorized by Congress.” University of South Alabama v. The American

Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting Taylor v. Appleton, 30

F.3d 1365, 1367 (11th Cir. 1994)). “‘Personal jurisdiction . . . is an essential element

of the jurisdiction of a district . . . court, without which the court is powerless to

proceed to an adjudication.’” Mercantile Capital, LP v. Federal Transtel, Inc., 193

F. Supp. 2d 1243, 1247 (N.D. Ala. 2002) (quoting Ruhrgas AG v. Marathon Oil Co.,

526 U.S. 574, 584 (1999) (in turn quoting Employers Reinsurance Corp. v. Bryant,

299 U.S. 374, 382 (1937)).

When a district court’s jurisdiction is at issue, and an evidentiary hearing has

not been held,

[t]he plaintiff bears the initial burden of alleging personal jurisdiction by

pleading sufficient material facts to establish the basis for exercise of

such jurisdiction. Future Technology Today, Inc. v. OSF Healthcare

Systems, 218 F.3d 1247, 1249 (11th Cir. 2000). If the plaintiff has done

so, the burden shifts to the defendant to make a prima facie evidentiary

Case 5:07-cv-00625-CLS Document 24 Filed 08/30/07 Page 5 of 14
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showing, by affidavits or otherwise, that personal jurisdiction is not

present. Id. If the defendant sustains that responsibility, the plaintiff is

then required to substantiate the jurisdictional allegations in the

complaint by affidavits or other competent proof, and he may not merely

reiterate the factual allegations in the complaint. Id. However, the

allegations in the complaint still must be taken as true to the extent they

are uncontroverted by the defendant’s affidavits. S & Davis Intern., Inc.

v. The Republic of Yemen, 218 F.3d 1292, 1303 (11th Cir. 2000). And

if the parties present conflicting evidence, all factual disputes are

resolved in the plaintiff’s favor, and the plaintiff’s prima facie showing

will be sufficient to survive the motion to dismiss notwithstanding the

contrary presentation by the moving party. Id. 

Mercantile Capital, 193 F. Supp. 2d at 1247 (emphasis supplied). 

Further, “[p]ersonal jurisdiction may be general, which arise [sic] from the

party’s contacts with the forum state that are unrelated to the claim, or specific, which

arise [sic]fromthe party’s contacts with the forum state that are related to the claim.”

 Nippon Credit Bank, Ltd. v. Matthews, 291 F.3d 738, 747 (11th Cir. 2002) (citing

Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415 n.9 (1984);

Madara v. Hall, 916 F.2d 1510, 1516 n.7 (11th Cir. 1990)) (emphasis supplied). 

A. Specific Jurisdiction

Specific jurisdiction arises from the activities of an out-of-state defendant in

the forum state that are related to the plaintiffs’ cause of action. The specific

jurisdiction analysis implicates due process “minimum contacts” principles. See

International Shoe v. Washington, 326 U.S. 310, 316 (1945). 

Case 5:07-cv-00625-CLS Document 24 Filed 08/30/07 Page 6 of 14
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The determination of whether sufficient minimum contacts exist to satisfy the

Due Process Clause of the Fourteenth Amendment also is a two-part inquiry. “First,

we must decide whether each defendant has established ‘minimum contacts’ with [the

forum state]. Second, we must determine whether the exercise of personal

jurisdiction would offend ‘traditional notions of fair play and substantial justice.’”

Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253, 258 (citations and some quotation

marks omitted).

The Eleventh Circuit has adopted a three-part test to determine if minimum

contacts are present: 

First, the contacts must be related to the plaintiff’s cause of action

or have given rise to it. Second, the contacts must involve “some act by

which the defendant purposefully avails itself of the privilege of

conducting activities within the forum . . . , thus invoking the benefits

and protections of its laws.” Third, the defendant’s contacts with the

forum must be “such that [the defendant] should reasonably anticipate

being haled into court there.”Vermeulen [v. Renault, U.S.A., Inc., 965

F.2d 1014, 1016 (11th Cir. 1992), modified and superseded by, 985 F.2d

1534 (11th Cir.), cert. denied, 508 U.S. 907 (1993)]. The availability of

specific jurisdiction depends on the relationship among the defendant,

the forum, and the litigation. Borg-Warner Acceptance Corp. v. Lovett

& Tharpe, Inc., 786 F.2d 1055, 1057 (11th Cir. 1986).

Francosteel Corp. v. M/V Charm, 19 F.3d 624, 627 (11th Cir. 1994). In summary,

when a nonresident person (or entity) purposefully avails himself (or itself) of the

laws of the forum state, courts sitting within that state are entitled to assert specific

Case 5:07-cv-00625-CLS Document 24 Filed 08/30/07 Page 7 of 14
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jurisdiction over that party. 

Plaintiffs assert that this court has specific personal jurisdiction over ATEN

because of three letters; (I) the letter of May 28, 2004 to Mr. John Cooper, CEO and

President of Avocent Corporation, notifying himof a Patent application; (ii) the April

27, 2006 letter from ATEN to Amazon on April 27, 2006, informing it of the issuance

of the ‘112 Patent; and (iii) the March 15, 2007 letter from ATEN’s counsel sent to

counsel for Avocent Redmond informing counsel after a settlement meeting on the

Washington case that Avocent was infringing two of ATEN’s patents(the ‘112 Patent

and the ‘287 Patent involved in the instant case). Plaintiffs argue that ATEN

purposefully directed its infringement allegations, and the resulting harm at Avocent

in Huntsville, and therefore either knew, or should have known, that the harm from

the allegations would be felt in Alabama. Plaintiffs cite Calder v. Jones, 465 U.S.

783, 790 (1984), in support of this argument.

In Calder, the Supreme Court held that a California court could exercise

jurisdiction over two Florida petitioners who allegedly published a libelous article

about a California resident. Even though petitioners’ contacts with California that

were unrelated to the action were minimal, the Court found that jurisdiction by the

California court was appropriate because the petitioners were the “primary

participants in an alleged wrongdoing intentionally directed at a California resident.”

Case 5:07-cv-00625-CLS Document 24 Filed 08/30/07 Page 8 of 14
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Id. at 790. Petitioners knew that the brunt of their alleged conduct would be felt by

respondent in her own state and, “[u]nder the circumstances, petitioners must

reasonably anticipate being haled into court there.” Id. at 789. 

Defendant contends, on the other hand, that Red Wing Shoe Co., Inc. v.

Hockerson-Halberstadt, 148 F.3d 1355, 1360 (Fed. Cir. 1998), governs the outcome.

In Red Wing Shoe, the defendant sent three letters to Red Wing in Minnesota,

charging the companywith infringement of patents that were the subject of the action.

The Federal Circuit found that under the second part of the Due Process/minimum

contacts inquiry, a patentee does not subject itself to personal jurisdiction in a forum

solely by informing a party in that forum of suspected infringement. See id. at 1360-

61. “Grounding personal jurisdiction on such contacts alone would not comport with

principles of fairness.” Id. at 1361. In reaching its decision, the Federal Circuit

distinguished a prior case, Akro Corp. v. Luker, 45 F.3d 1541 (Fed. Cir. 1995), where

specific jurisdiction was found to exist.

 [T]he declaratory judgment action in Akro also was precipitated by a

cease-and-desist letter sent into the forum state and subsequent

negotiations for settlement. See Akro, 45 F.3d at 1542. Nevertheless,

in that case, this court held that the patentee was constitutionally

amenable to suit in the forum state, finding “specific jurisdiction”

because the patentee had substantial contacts with an exclusive licensee

who was incorporated and had its principal place of business there. See

id. at 1543.

Case 5:07-cv-00625-CLS Document 24 Filed 08/30/07 Page 9 of 14
The court notes at the outset a division of authority and confusion concerning whether a 14

“stream of commerce plus” test applies in an analysis of general jurisdiction. “Stream of commerce

plus” refers to Justice O’Connor’s plurality opinion in Asahi Metal Industry Co., Ltd. v. Superior

Court of California, Solano County, 480 U.S. 102 (1987), in which she suggested that placement of

10

Red Wing Shoe, 148 F.3d at 1362 (emphasis supplied).

No such license, exclusive or otherwise, is involved in the instant case.

Moreover, the contacts with the forum (Alabama) are much less than that involved

in Red Wing Shoe. The court easily concludes that ATEN did not purposefully

submit itself to jurisdiction in Alabama by sending the three letters listed above.

Because the court finds defendant does not have minimum contacts with

Alabama, the court need not address the second prong of the due process analysis:

i.e., whether the exercise of personal jurisdiction over defendant in an Alabama court

would offend “traditional notions of fair play and substantial justice.” Robinson, 74

F.3d at 258.

B. General Jurisdiction

“The due process requirements for general personal jurisdiction are more

stringent than for specific personal jurisdiction, and require a showing of continuous

and systematic general business contacts between the defendant and the forum state.”

Consolidated Development Corp. v. Sherritt, Inc., 216 F.3d 1286, 1292 (11th Cir.

2000);see also Helicopteros, 466 U.S. at 414. Plaintiffs assert a stream of commerce

theory to support their assertion of general personal jurisdiction. 

14

Case 5:07-cv-00625-CLS Document 24 Filed 08/30/07 Page 10 of 14
a product into the stream of commerce plus additional conduct indicating an intent or purpose to

serve the market in the forum state would suffice to constitute purposeful availment. See id. at 1032.

Examples of such additional conduct include: “designing the product for the market in the forum

State, advertising in the forum State, establishing channels for providing regular advice to customers

in the forum State, or marketing the product through a distributor who has agreed to serve as the

sales agent in the forum State.” Id. Alabama and the Eleventh Circuit appear to apply a “stream of

commerce plus” test. See Madara v. Hall, 916 F.2d 1510 (11th Cir. 1990) and Ex Prate Alloy

Wheels International Ltd., 882 So. 2d 819 (Ala. 2003). Accord Boit v. Gar-Tec Products, Inc., 967

F.2d 671, 683 (1st Cir. 1992); Lesnick v. Hollingsworth & Vose Co., 35 F.3d 939, 945-46 (4th Cir.

1994); Bridgeport Music, Inc. v. Still N the Water Publ’g, 327 F.3d 472, 479–80 (6th Cir. 2003).

But see Vermeulen v. Renault, U.S.A., Inc., 985 F.2d 1534, 1548 (11th Cir. 1993) (indicating the

Eleventh Circuit had not decided the issue).

Other circuits employ the “stream of commerce” approach from Justice Brennan’s plurality

opinion, finding that a defendant that places products into the stream of commerce and is aware that

the products may be sold in the forum state has purposefully availed itself of the benefits of that

state’s laws. See Ruston Gas Turbines, Inc. v. Donaldson, Co., 9 F.3d 415, 420 (5th Cir. 1993);

Dehmlow v. Austin Fireworks, 963 F.2d 941, 947 (7th Cir. 1992); Barone v. Rich Brothers Interstate

Display Fireworks, Co., 25 F.3d 610, 613-15 (8th Cir. 1994). Under either test, the result in the

present action will be the same under the facts presented.

See doc. no. 16 at 9. 15

See id., Hallman Decl. 16

See id.

17

11

Plaintiffs point to the U.S. version of ATEN’s website that contains a page

called “Clearance Center.” Plaintiffs attach the declaration of an Avocent employee 15

who states he recently purchased an ATEN product off of the Clearance Center web

page from his Huntsville office. It is not clear whether the product purchased or the 16

products available on this web page have any relation to the patents at issue in this

declaratory judgment action. Avocent’s employee also states that he went to a Best

Buy store in Huntsville, Alabama, and saw that Best Buy was selling at least two

different models of ATEN’s KVM switches. Again, it is not clear whether these 17

KVM switches are the ones with patents involved in the Washington action, the

Case 5:07-cv-00625-CLS Document 24 Filed 08/30/07 Page 11 of 14
See doc. no. 16 at 10. 18

See id.

19

See doc. no. 16 at 11. 20

See doc. no. 19 at 8. 21

12

instant action, or neither.

ATEN’s website lists five different distributors of ATEN products, including

three that sell in the United States. IOGEAR’s website shows that ATEN/IOGEAR 18

sells its products through almost forty resellers that appear to cover the entire United

States, and many of IOGEAR’s resellers are internet resellers. At least two of the 19

resellers, CompUSA andBest Buy, identify on their respective web sites that ATEN’s

IOGEAR brand products are for sale in Alabama. Finally, plaintiffs point out that

ATEN’s products are available for sale in Alabama through the GSA schedule.20

ATEN counters that the mere fact that ATEN may do business with businesses

that do business in Alabama is not enough to establish the “substantial, continuous

and systematic contact” necessary to meet the more stringent standard for general

personal jurisdiction. The most instructive case, cited by plaintiffs, is Viam 21

Corporation v. Iowa Export-Import Trading Co., 84 F.3d 424 (Fed. Cir. 1996). That

case also was a declaratory judgment action in which Viam, the purported infringer,

sued the exclusive distributor of an Italian company for a declaration of noninfringement and invalidity of the Italian company’s patent. The court found personal

Case 5:07-cv-00625-CLS Document 24 Filed 08/30/07 Page 12 of 14
13

jurisdiction over defendants in a California court because evidence established “a

regular chain of distribution from [the Italian company] through [its exclusive

distributor] to various markets in the United States.” 84 F.3d at 429. The Italian

company specifically assisted the exclusive distributor with advertising in California.

Furthermore, [the Italian company] did not simply place its product into

the stream of commerce. [It] knowingly and intentionally exploited the

California market through its exclusive distributor’s advertising in

California, and by establishing channels for providing regular advice in

California. [The exclusive distributor] advertised and sold, and is

presently advertising and selling [the Italian company’s] products,

including the subject of the ‘386 patent,” in California . . . and provided

. . . numerous sales aids which [it] knew would be used in California for

welling [its] products there.

84 F.3d at 429. These substantial contacts with the forum are distinct from the

circumstances of the present case. No similar systematic and continuous contact by

ATEN with Alabama has been shown by plaintiffs. Accordingly, general personal

jurisdiction over ATEN does not exist.

IV. CONCLUSION

Based on the foregoing, it is ordered that defendant’s motion to dismiss is

GRANTED, and this action is dismissed without prejudice for lack of personal

jurisdiction. Defendant’s motion for leave to file a reply to plaintiff’s sur-reply is

DENIED AS MOOT. The clerk is directed to close this file.

DONE this 30th day of August, 2007.

Case 5:07-cv-00625-CLS Document 24 Filed 08/30/07 Page 13 of 14
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______________________________

United States District Judge

Case 5:07-cv-00625-CLS Document 24 Filed 08/30/07 Page 14 of 14