Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-00566/USCOURTS-casd-3_12-cv-00566-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

---

5 

10 

15 

20 

25 

2 

3 

4 

6 

7 

UNITED STATES DISTRICT COURT 

8 

SOUTHERN DISTRICT OF CALIFORNIA 

9 

ROCKWELL AUTOMATION, INC. AND 

11 II ROCKWELL AUTOMATION 

12 II 

TECHNOLOGIES, INC., 

) 

) 

) 

) 

Case No. 12cv566-WQH (WMc) 

ORDER: (1) DENYING PLAINTIFF'S 

MOTION TO ENFORCE OUT OF 

1311 Plaintiffs, ) 

) 

DISTRICT SUBPOENA AND (2) 

DENYING DEFENDANT'S MOTION 

v. 

1411 ) 

) 

TO STRIKE 

II KONTRON MODULAR COMPUTERS, 

) 

) (ECF Nos. 1,24) 

) 

16 " 

17 .. 

Defendant. ) 

) 

18 

19 II INTRODUCTION AND PROCEDURAL HISTORY 

Plaintiff, Rockwell Automation ("Rockwell"), sued the W AGO Corporation ("WAGO") 

21 for patent intnngement ofindustrial programmable controllers in the United States District Court 

22 for the Western District of Wisconsin. Rockwell alleges W A GO markets and sells infringing 

23 controllers and Kontron Modular is responsible for the design, development and manufacture of 

24 the accused products. However, Rockwell has not sued Kontron Modular in Wisconsin, 

California, or any other jurisdiction. 

26 Rockwell and W AGO are engaged in discovery. To supplement its discovery efforts in 

27 Wisconsin, Rockwell seeks to compel Kontron Modular, a German company, to produce 

28 documents pursuant to a Subpoena Duces Tecum from the United States District Court for the 

12cv566·WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 1 of 15
5 

10 

15 

20 

25 

Southern District of California and purportedly served on Kontron Modular by delivery to a 

211 receptionist at the offices of Kontron America, Inc. ("Kontron America") in Poway, California. 

3 The subpoena seeks documents from Kontron Modular relating to Rockwell's claims against 

4 W AGO even though Rockwell successfully moved the district court in Wisconsin to compel 

II W AGO to produce the same documents it now seeks here. 

6 II Presently before the Court is Rockwell's original motion to enforce the subpoena, 

7 II Kontron Modular's opposition and Rockwell's reply. The Court heard oral argument and granted 

8 II Kontron Modular's motion for leave to file a sur-reply. Also, the Court permitted Rockwell to 

9 II file a sur-sur reply, but stated no further briefing would be accepted. After Rockwell filed its surII sur reply, Kontron Modular filed supplemental briefing to address what it considered new 

11 II arguments and evidence impermissibly presented in Rockwell's sur-sur reply. The Court struck 

12 II Kontron Modular's supplemental briefing because Kontron Modular did not seek leave to file the 

13 II supplemental briefing. However, the Court permitted Kontron Modular to file a motion to strike 

14 II portions of the sur-sur reply. Accordingly, Kontron Modular filed a motion to strike to which 

II Rockwell filed an opposition. 

16 II In addition to filings supplementing the original motion, counsel for Kontron Modular 

17 II filed a motion to quash the subpoena purportedly served by Rockwell on Thomas Sparrvik. 

18 II Kontron Modular alleges Rockwell served Mr. Sparrvik with a subpoena to testify at a 

1911 deposition. Also, Kontron Modular filed an objection to Rockwell's four additional subpoenasII two directed at Kontron Modular and two directed at Kontron AG (one each for documents, one 

21 II each for documents and testimony) - purportedly served on Thomas Sparrvik. Rockwell 

2211 responded with an opposition to Kontron Modular's motion to quash and a cross-motion to 

23 II enforce the additional subpoenas. Kontron Modular filed a reply/opposition to Rockwell's 

24 II opposition and cross-motion. 

II In sum, the following motions are now pending before the Court: 

2611 1) Rockwell's Motion to Enforce Subpoena Duces Tecum (ECF No.1) 

27 II 2) Kontron Modular's Motion to Quash Subpoena by Thomas Sparrvik (ECF No. 17) 

28 II 3) Rockwell's Cross-Motion to Enforce Subpoena Duces Tecum and Ad Testificandum 

(ECF No. 21) (additional subpoenas) 

2 12cv566-WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 2 of 15
5 

10 

15 

20 

25 

1 II 4) Kontron Modular's Motion to Strike Portions ofRockwell's Sur-Sur Reply (ECF No. 

24) 

211 5) Rockwells Motion to File Documents Under Seal (ECF No. 31) 

3 

4 II KONTRON MODULAR'S MOTION TO STRIKE 

II As an initial matter, the Court denies Kontron Modular's motion to strike portions of 

611 Rockwell's sur-reply for the following reasons. First, the Court permitted both sides to submit 

7 II supplemental briefing to address areas of concern for the Court. Second, the Court does not find 

8 the argument or evidence presented in Rockwell's sur-reply prejudicial because: (1) the new 

9 arguments raised are sufficiently related to the arguments initially presented, (2) the evidence 

II presented was mostly Kontron's own material, (3) Kontron Modular had sufficient opportunity to 

11 present its arguments. Accordingly, the Court denies Kontron Modular's motion to strike. 

12 ROCKWELL'S MOTION TO ENFORCE THE SUBPOENA DUCES TECUM 

13 II Rockwell's Argument! 

14 11 Rockwell moves the Court to compel Kontron Modular to produce "its data sheets, user 

II manuals, technical specification documentation, electronic information (correspondence, Word 

16 II documents, PowerPoints, etc.) and sales numbers for the IPCs it manufactures and supplies to 

1711 WAGO." (Rockwell's Motion; ECF No.1, pg. 3). Rockwell contends the documents are 

18 II relevant and discoverable, its subpoena is lawful and reasonable, and it has been prejudiced by 

1911 Kontron Modular's refusal to comply with its requests. 

II Rockwell argues the documents it seeks are relevant because the documents include 

21 II technical data and specifications ofthe allegedly infringing products. Id. at 5. Rockwell suggests 

22 II the non-technical data, i.e., e-mail correspondence, may include evidence or lead to evidence of 

23 II "Kontron's2 motivation to develop the infringing product" which "is an important factor in 

24 II determining the knowledge and willfulness ofthe parties involved." Id. Also, Rockwell contends 

26 This section includes all ofRockwell's arguments as those arguments developed over the 

course ofthe briefing. However, the Court has omitted the parties' arguments regarding 

27 II production in New York, New York, liability under German law, and compliance with the Hague 

Convention because those issues are superfluous to the Court's analysis. 28 

2 The Court will presume plaintiff's use of "Kontron" refers to Kontron Modular. 

3 12cv566-WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 3 of 15
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

sales data regarding the allegedly infringing products is relevant to Rockwell's damages 

calculation. !d. at 5-6. 

Additionally, Rockwell contends it properly served the subpoena under California law 

because it served Kontron Modular's "general manager." !d. at 7. Rockwell cites Khachatryan v. 

Toyota Motor Sale, Us., Inc., 578 F. Supp. 2d 1224 (C.D. Cal. 2008), among other cases, to 

support its argument that it properly served the subpoena on Kontron Modular via service on 

Kontron America, Kontron Modular's U.S. subsidiary. (Rockwell's Motion; ECF No.1, pg. 7). 

Following Kontron Modular's opposition and assertion that Kontron America is not Kontron 

Modular's subsidiary, Rockwell argued service was still proper because Kontron Modular and 

Kontron America are sister entities, there is serious ambiguity regarding the manner and capacity 

of their relationship, and they should not be permitted to avoid personal jurisdiction through such 

a "transparent corporate shield." (Rockwell's Reply; ECF No.8, pg. 5-6) (citing Sigros v. Walt 

Disney World Co., 129 F. Supp 2d 56, 64 (D. Mass. 2001)). 

Rockwell also addresses the issue of the Court's jurisdiction over Kontron Modular in its 

reply to Kontron Modular's opposition. (Rockwell Reply; ECF No.8). Rockwell contends 

Kontron Modular purposely avails itself ofthe California marketplace because it engineers the 

computers and/or components of the accused products and ships these products to consumers or 

vendors in California. Rockwell relies on WAGO's subjective belief that it purchased the 

accused products from Kontron America, or at least, from Kontron Modular located in 

II California, and the fact that "Kontron AG [the alleged parent company of all Kontrons] does not 

II delineate which products are being sold by which Kontron entity and instead provides contact 

II information for both Kontron Modular in Germany and Kontron America in California in 

II connection with the same product." !d. at 4. Rockwell contends Kontron Modular designed 

products it knew Kontron AG would distribute through its "sophisticated distribution channel," 

presumably including its U.S. subsidiary, Kontron America, located in California. Rockwell 

concludes Kontron Modular could therefore reasonably expect to be brought into court in 

California. 

Alternatively, assuming this Court does not find it has personal jurisdiction of Kontron 

4 12cv566-WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 4 of 15
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

II Modular, Rockwell requests the Court permit Rockwell to take limited jurisdictional discovery of 

Kontron Modular. 

Finally, Rockwell contends Kontron Modular's refusal to comply with its discovery 

II requests is prejudicial because it may inhibit Rockwell's ability to use the documents to oppose 

summary judgment in the underlying Wisconsin federal action. 

Kontron Modular's Opposition 

Kontron Modular argues Rockwell improperly served the subpoena because Rockwell 

failed to effect valid service under California law. Kontron Modular's argument is twofold. First, 

Rockwell failed to serve Kontron Modular's "general manager" when it delivered the subpoena 

II 	 to Kontron America because Kontron America, the entity, is not Kontron Modular's "general 

manager" within the meaning of California Code of Civil Procedure ("CCP") section 416.1 O(b). 

Second, Rockwell's delivery of the subpoena to Ms. Prvulov, a Human Resources Assistant for 

Kontron America, does not constitute service ofthe subpoena on a "general manager" ofKontron 

Modular. Regarding the several cases cited by Rockwell which impute service on a foreign entity 

via service on its domestic counterpart ("general manager"), Kontron Modular notes the 

distinction between the close foreign-domestic business relationships in the cited cases, and the 

distant (or non-existent) foreign-domestic business relationship in the instant case. Kontron 

Modular contends tenuous relations between the Kontrons provide tenuous grounds for imputing 

proper service. Further attenuated, Kontron Modular notes, is the relationship between Kontron 

America's Human Resources Assistant, the individual that received the service, and Kontron 

Modular. 

Even if the Court finds Kontron America is Kontron Modular's "general manager," 

Kontron Modular argues, this Court still lacks personal jurisdiction over Kontron Modular 

because Rockwell failed to demonstrate sufficient minimum contacts. Kontron Modular argues 

Rockwell failed to establish the necessary minimum contacts between Kontron Modular and the 

forum because (1) Kontron Modular does not conduct any business in California, (2) Kontron 

America is not the alter ego or general agent ofKontron Modular, and (3) Kontron America's 

activities in the forum did not give rise to Rockwell's claims in the underlying action. 

5 	 12cv566-WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 5 of 15
4 

1 II Kontron Modular further contends Kontron America could not possibly comply with the 

2 II production request because Kontron America does not have custody or control over the 

3 " documents requested. Moreover, Kontron Modular alleges the documents sought include highly 

valuable and sensitive trade secret information. 

S Kontron Modular points out the proprietary information sought by Rockwell in the instant 

6 II motion is the very same information Rockwell sought, and is in the process of securing, from 

7 WAGO in the underlying Wisconsin federal action. Kontron Modular contends this Court should 

8 deny Rockwell's motion because Rockwell will obtain the same information from WAGO a 

9 party in the underlying action and under that court's jurisdiction as opposed to Kontron 

10 II Modular a non-party to either action and not under either court's jurisdiction. Kontron Modular 

11 concludes such production would create an undue hardship and burden on Kontron Modular. 

12 Finally, Kontron Modular contends Rockwell's request for limited jurisdictional 

13 discovery is unwarranted and unsupported by relevant legal authority. 

14 DISCUSSION 

15 It is undisputed that Rockwell seeks relevant information. The issues here are whether 

16 Rockwell seeks that information from the proper entity, via the proper vehicle, following the 

17 II proper protocols and within the proper jurisdiction. After reviewing the moving papers and 

arguments of counsel, the Court denies Rockwell's motion to enforce the subpoena. 18 

Rockwell Failed to Follow the Protocols for Proper Service 19 

California Code of Civil Procedure Section 416.10, made applicable to the parties by 20 

Federal Rule of Civil Procedure 4(h)(l )(A), requires a party, like Rockwell here, to serve either 21 

an agent designated for service or an appropriate employee or entity, such as a president, chief 22 

executive officer, vice president, secretary or assistant secretary, treasurer or assistant treasurer, 23 

24 controller or chief financial officer, general manager, or any employee authorized by the 

25 corporation to receive service of process. See Khachatryan v. Toyota Motor Sales, U.S.A., Inc., 

26 578 F.Supp.2d 1226 (C.D. Cal. 2008) (noting an organization can be a general manager). General 

27 

28 " 3 The Court notes Kontron Modular challenges jurisdiction and service which are similar but 

distinct concepts and which therefore require similar but distinct analysis. 

6 12cv566-WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 6 of 15
5 

10 

15 

20 

25 

11 

managers must be ofsufficient character and rank, or have sufficient duties and responsibilities, 

2 II as to put them on par with the other service-appropriate executives listed in the statute. See 

3 /I General Motors Corp. v. Superior Court, 15 Ca1.App.3d 81, 86 (1971). Thus, general managers 

4 II may be domestic distributors, salesmen or advertisers, or customer service liaisons of foreign 

II manufacturers even ifthe foreign-domestic relationship is "casual" or "non-exclusive" - so 

6 II long as the domestic entity provides the foreign entity an open channel for the regular flow of 

7 II business from the foreign entity into California. See Khachatryan, 578 F.Supp.2d at 1226; Halo 

8 II Electronics, Inc. v. Bel Fuse Inc., 2010 WL 2605195 (N.D. CaL June 28, 2010); Gray v. Mazda 

911 Motor ofAmerica, Inc., 560 F.Supp.2d 928 (C.D. Cal. 2008); Cosper v. Smith & Wesson Arms 

Co., 53 Ca1.2d 77 (1959). 

In determining whether service was delivered to the proper individual, the Ninth Circuit 

12 II favors the service-recipient's practical function within the organization over the rigid formality of 

13 II the service-recipient's rank. See Direct Mail Specialists Inc. v. Eclat Computerized Techs., Inc., 

1411 840 F.2d 685, 688 (9th Cif. 1988). Indeed, the purpose ofservice is to provide "the means by 

II which a court asserts jurisdiction over the person" and to give the defendant adequate notice of 

16 the pendency of an action. Troll Busters LLC, v. Roche Diagnostics GmbH, 2011 WL 3859721, 

17 *8-9 (S.D. CaL Aug. 31,2011) (concluding service upon domestic sister-subsidiary's general 

18 counsel was reasonably calculated to give notice to its foreign sister-subsidiary). 

19 The Court finds the facts and analysis in Troll Busters informative. In Troll Busters, 

German defendant Roche Diagnostics GmbH ("RDG") challenged Troll Busters' attempted 

21 service on RDG by serving the general counsel of its domestic sister-subsidiary, Roche 

22 Diagnostics Corporation ("RDC"). !d. at *8-10. Like Kontron Modular and Kontron America, 

23 RDG and RDC are sister-subsidiary companies respectively located in Germany and the United 

24 States and acting under the umbrella of a holding company (Roche Holding AG). !d. 

Furthermore, like Kontron Modular and Kontron America, the Roche companies do business 

26 under the same name and share the same website. !d. at *9. Based on these facts, the Troll 

27 Busters' court found a "close relationship between RDC and RDG" and described RDC as 

28 "RDG's domestic operating arm." Id. at *9. The court then found Troll Busters' service on 

7 12cv566-WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 7 of 15
1 

2 

3 

4 

5 

6 

7 

8 

9 

lO 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 II 

RDC's general counsel was reasonably calculated to give notice to RDG because of the close 

relationship between the subsidiaries and because RDC's general counsel: (1) would know what 

to do with the summons and complaint directed at RDG, (2) gave notice to RDG, and (3) stands 

in such a position as to render it fair, reasonable and just to imply the authority on his part to 

receive service. Id. 

Similarly, the Court here finds ample evidence to conclude proper service upon Kontron 

America can impute service upon Kontron Modular. Indeed, the following evidence establishes 

Kontron Modular and Kontron America share a closer relationship than RDG and RDC. 

Rockwell attached (as an exhibit) what appears to be a print-out of a press release on Kontron's 

website.4 (ECF No. 8-2, Exh. 8). The article details Kontron's announcement during the 

Embedded Systems Conference in Silicon Valley, California regarding the latest model in its 

ThinkIO-Duo fan-less PC range. The article only refers to Kontron generally, except in one 

instance in which it directs readers to contact its "sales team to learn more about this product 

family and about product customization by contacting us at: Kontron America Sales Phone: 888­

294-4558." The article also describes Kontron as a designer and manufacturer oftechnology 

products in "a variety ofmarkets" with engineering and manufacturing facilities throughout 

Europe, North America, and Asia-Pacific that "work together with streamlined global sales and 

support services to help customers reduce their time-to-market and gain a competitive 

advantage." The article further directs readers to contact Richard Pugnier or David Pursely for 

questions regarding the article itself or for technical or product information. Both men appear to 

have U.S. telephone numbers and e-mail addresses. Id. Importantly, Kontron (generally) 

describes Use?!- in a Cal~fornia press-release and providing what appears to be a San Diego 

based area code (858) as having "streamlinecf' global sales and support services connecting its 

engineering and manufacturing products with consumers in order to provide its consumers with a 

competitive advantage. Ifthe reader (most likely a consumer) is interested, the page directs the 

reader to contact Kontron America Sales located in Poway, California. Not surprisingly, WAGO, 

4 Kontron America, Kontron Modular, and all other Kontron-affiliated entities appear to utillize 

one website: www.kontron.com 

8 12cv566-WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 8 of 15
5 

10 

15 

20 

25 

1 II a Kontron Modular customer, believes Kontron Modular is located in Poway, California. (ECF 

211 No. 1-4, Exh. 3 p. 6). Finally, Kontron's website lists Thomas Sparrvik as the Chief Operating 

3 II Officer and Vice Chairman of Kontron AG, a member of Kontron's Managing Board of 

411 Directors, and the Chief Executive Officer ofKontron America and Asia-Pacific. (ECF No. 15-2, 

II pg. 18). Thomas Sparrvik resides in San Diego, California. (ECF No. 15-1, pg. 3). 

6 II Thus, Kontron America specifically (and perhaps Kontron generally) opens itselfto the 

7 II U.S. and California marketplace in five notable ways. First, Kontron America is physically 

8 II located in Poway, California. Second, consumers with questions regarding sales or product 

9 II customization are directed to Kontron America. Third, consumers seeking product and technical 

II information about any Kontron entity are directed to contact an "Applications Engineer" with a 

11 II U.S. phone number. Fourth, Kontron touts its "streamlined" (read: interconnected) structure for 

] 2 II consumers globally. Fifth, Thomas Sparrvik (Kontron AG's COO and Kontron America's CEO) 

13 II resides in San Diego and is responsible for the sales, marketing, production and supply chain for 

14 Kontron worldwide. 

Despite this evidence, Kontron Modular argues proper service on Kontron American 

16 cannot impute service on Kontron Modular because there is no flow ofbusiness between the two 

17 entities.s Indeed, according to the declaration ofThomas Sabisch, Kontron Modular's Managing 

18 Director, Kontron Modular does not "sell, supply or distribute the [accused product] to or 

19 through Kontron Ameriea, or in the United States or California at all" nor is Kontron Modular 

"involvcd in the engineering or development ofthese products." (Decl. Thomas Sabisch; ECF 

21 No. 4-1 p. 4). Kontron Modular concludes this fact distinguishes the instant case from the cases 

22 upon which Rockwell relies. Here, unlikc Halo, Khachatryan, Cosper, and Gray, the factual 

nexus between the foreign and domestic entities is missing; there is no flow ofbusiness. 23 

Kontron Modular's distinction is appealing but not compelling because the dispositive 24 

5 Rockwell did not directly counter Kontron Modular's distinction but instead relied on Sigros v. 

26 II Walt Disney World Co. for the proposition that confusion or ambiguity alone can be sufficient to find an 

agency relationship. Sigros v. Walt Disney World Co., 129 F.Supp.2d 56 (D. Mass. 2001). However, 

2711 Rockwell's reliance on Sigros in this regard is unavailing because the Sigros court contemplated and 

relied on the presenee of a co-dt!fendant relationship in which one co-defendant purposefully accessed 

28 II consumers in a foreign state for the benefit of the other co-defendant. !d. at 64. These specific facts are 

not present here. 

9 12cv566-WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 9 of 15
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

fact is the presence oja channel for the regular flow of business and not the actual flow of 

business. See Halo Electronics, Inc. v. Bel Fuse Inc., 2010 WL 2605195 (N.D. Cal. June 28, 

2010) (focusing on the "opportunity for regular contact" between the foreign and domestic 

entities). Therefore, although Thomas Sabisch's declaration indicates there is no flow of business 

between Kontron Modular and Kontron America, the overwhelming evidence of 

interconnectedness between the Kontron entities (mostly from Kontron's own materials) 

establishes the presence of an existing, available channel for the regular flow of business between 

the entities. 

The distinction between channel and flow is further supported by the underlying principle 

II behind appropriate service of process: to notify a defendant of a pending action. See Direct Mail 

Specialists, 840 F.2d at 688 (noting actual receipt of process by the correct person may be a 

factor in finding process valid when there are other factors that make process fair); Cf Summers 

v. McClanahan, 140 Cal. App. 4th 403, 408 (2006) (noting actual notice is not a substitute for 

proper service despite California's liberal, practical approach to service of process issues). Here, 

Kontron Modular did in fact receive notice of the action. 

Accordingly, the Court need not resolve the apparent conflict between what the Kontron 

website and press release purport and what Mr. Sabisch declared because the bottom line is 

sufficiently clear: Kontron America can facilitate the sale and customization of Kontron Modular 

products, thus Kontron America can facilitate service of process on Kontron Modular as its 

general manager. In this regard, the Court finds service on Kontron Modular through Kontron 

America is reasonably calculated to provide notice of the service of process on Kontron Modular. 

See Troll Busters, 2011 WL 3859721, *8-9. 

Nevertheless, Rockwell's actual attempt to serve Kontron Modular failed in two ways. 

1\ First, Rockwell's service upon Ms. Prvulov - a receptionist at Kontron America fails to satisfy 

the requirements for service upon Kontron Modular because Ms. Prvulov is not a "general 

manager" of Kontron Modular. Second, service upon Ms. Prvulov fails because Ms. Prvulov is 

not an appropriate officer or agent of Kontron America. 

Here, Ms. Prvulov a Human Resources Assistant temporarily filling-in as a receptionist 

10 12cv566-WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 10 of 15
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

during the lunch hour - is not a general manager of Kontron Modular. Not only is Ms. Prvulov 

employed in a non-executive, non-officer capacity of a different company headquartered in a 

d!fferent country, she had never heard of Kontron Modular before receiving the service and was 

only temporarily covering the reception desk. (See Decl. ofTanja Prvulov; ECF No. 4-12 p. 2.) 

Not surprisingly, Ms. Prvulov almost immediately "became concerned that [she] made a mistake 

for signing for the documents" and "asked if[the process server] was sure these documents were 

for [Kontron America]." ld. Based on these facts, the Court concludes Ms. Prvulov is not a 

general manager for Kontron Modular under California law. 

Additionally, Rockwell's service would have failed even if Rockwell had intended to 

serve Kontron America. Kontron Modular did not specifically address this scenario and 

Rockwell contends the argument is waived. However, the Court finds a purported service on 

Kontron America similarly defective. Service upon Ms. Prvulov is not sufficient because she is 

not an agent or officer ofKontron America, nor did Kontron America authorize Ms. Prvulov to 

receive service on its behalf. Rather, Kontron America's designated agent for service of process 

is the CT Corporation System located in Los Angeles, California. Because Kontron America's 

designated agent is presumably accessible, and because Rockwell fails to demonstrate any 

evidence to support the contention that Ms. Prvulov "stands in" the position of an officer "as to 

render [service] fair, reasonable and just ... ," this Court further concludes service on Ms. 

Prvulov was invalid as to both Kontron America and Kontron Modular. See Direct Mail, 840 

F.2d at 688; Troll Busters, 2011 WL 3859721 at *8-9 (concluding service upon domestic sistersubsidiary'S general counsel reasonably calculated to give notice to its foreign sister-subsidiary). 

Accordingly, the Court finds Rockwell's service ofthe subpoena invalid. 

This Court Does Not Have Jurisdiction Over Kontron Modular 

The Court cannot compel Kontron Modular to respond to Rockwell's subpoena unless 

the Court has jurisdiction over Kontron Modular. The Court's ruling on the validity of service, 

though related, does not pre-determine the jurisdictional question. See Halo, 20 I 0 WL 2605195 

at *2, *6 (finding facts sufficient for valid service offoreign company through service on its 

domestic counter-part yet finding the same facts insufficient for exercising jurisdiction over a 

11 12cv566-WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 11 of 15
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

foreign company). 

Rockwell and Kontron Modular agree on the applicable standard for determining personal 

II jurisdiction: Rockwell must demonstrate either (a) the Court has general jurisdiction over 

II Kontron Modular because Kontron Modular has "continuous and systematic general business 

II contacts in the forum" and should expect to be haled into court here; or, (b) the Court has 

II specific jurisdiction over Kontron Modular because Kontron Modular (1) purposefully directs or 

II avails itself of conducting business in the forum and (2) the claim arises out ofKontron 

II Modular's forum-related activities. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 

II 797,800-02 (9th Cir.2004) If Rockwell satisfies the specific jurisdiction prongs, the burden 

II shifts to Kontron Modular to "present a compelling case" that the Court's exercise ofjurisdiction 

II would be unreasonable. See Id. at 802 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 

476-78, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)). 

To support its argument for general jurisdiction, Rockwell relies on Cosper and Sigros. 

Rockwell argues Kontron America is more intimately connected to Kontron Modular than the 

Cosper defendant's non-exclusive domestic salesman was connected to its co-defendant, a 

Massachusetts gun manufacturer. See Cosper, 53 CaL 2d at 82-83 (concluding the exercise of 

jurisdiction over a foreign manufacturer proper and not a denial ofdue process because its sales 

representative regularly did business in California). Rockwell attempts to buttress its reliance on 

Cosper with the proposition from Sigros that a court should not permit a foreign entity to hide 

behind the nebulous nature of its relationship with its domestic counterpart in order to avoid 

personal jurisdiction. See Sigros, 129 F. Supp. 2d at 64. 

However, the alleged nebulous nature ofKontron America and Kontron Modular's 

relationship is not the focus ofthe Court's jurisdictional inquiry. A close inspection of the 

Cosper defendants' relationship reveals two important jurisdictional facts not present here: (1) a 

California consumer (the Cosper plaintiff) and (2) evidence ofregularly conducted business. 

Here, unlike Cosper, there is no evidence that Kontron Modular or Kontron America ever sold to 

a California consumer, or injured (infringed the product of) a California resident. Rather it 

appears Rockwell purchased the accused product from WAGO, an entity not affiliated with any 

12 12cv566-WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 12 of 15
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

II Kontron entity. Kontron Modular's only connection is that it allegedly engineered and 

II manufactured the accused product in Germany, then sold it to W AGO. Rockwell contends this 

II sale was facilitated by Kontron America on behalf of Kontron Modular in California. Rockwell 

II bases this contention on WAGO's belief that Kontron America is Kontron Modular. However, 

II this assumption is not evidence. Further, if it was, it would not be enough to demonstrate that 

" Kontron Modular regularly conducts business in California. Accordingly, the Court declines to 

exercise general jurisdiction over Kontron Modular. 

Likewise, there is no evidence to support a finding ofspec{jic jurisdiction. Kontron 

II Modular contends Kontron America has nothing to do with the sale, design, engineering, or 

II manufacture of the accused products; thus, there are no jurisdictionally-relevant ties between 

II Kontron Modular and California. Rockwell argues Kontron Modular ships the accused products 

" to California to be purchased by WAGO in California. However, Rockwell does not provide any 

evidence to support its contention. Nor does Rockwell provide significant evidence of a stream 

of commerce through which Kontron Modular knows, or should know, the accused product 

reaches California. Indeed, according to the declaration ofThomas Sabisch, Kontron Modular is 

not even "involved in the engineering or development of these products." (Decl. Thomas 

Sabisch; ECF No. 4-1 p. 4). Thus, even if Kontron Modular purposefully availed itself of the 

California marketplace through its relationship with Kontron America, there is no evidence that 

Rockwell's claims arise out of Kontron Modular's forum-related activities. 

Finally, even if Rockwell could establish the necessary minimum contacts for personal 

jurisdiction, the Court is compelled to find the exercise of personal jurisdiction over Kontron 

Modular is unreasonable and unfair. Electronicsfor Imaging, Inc., v. Coyle, 340 F.3d 1344, 

1351-52 (Fed. Cir. 2003). Courts consider the following factors in determining whether the 

exercise ofjurisdiction would be unreasonable: (1) the burden on the defendant, (2) the interests 

ofthe forum state, (3) the plaintiffs interest in obtaining relief, (4) the interstate judicial interest 

in obtaining the most efficient resolution of controversies, and (5) the shared interest ofthe 

several states in furthering fundamental social policies. !d. 

In evaluating these factors, the Court considers the context in which this case arises: 

13 12cv566-WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 13 of 15
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

II Rockwell, a non-Cahfornia plaintiff, is seeking discovery ofinfonnation from a German nonII party (Kontron Modular) to supplement the discovery ofthe same infonnation it has successfully 

II compelled in a non-California forum. Under these circumstances, the Court is not inclined to 

II exercise jurisdiction over a foreign non-party for the sole purpose of enforcing a subpoena which 

II seeks duplicate infonnation already compelled by a Wisconsin district court. The burden is too 

II great and it is unnecessary. In comparison, Rockwell's interest in obtaining relief is minor 

II because it has already obtained relief in Wisconsin federal court, the proper forum. Additionally, 

II this Court has no interest in a Wisconsin district court dispute between two non-Californian 

II entities. Put simply, California has no dog in this fight. Nor is it likely the Wisconsin district 

II court has any interest in a California district court interjecting discovery rulings on matters it has 

already considered or should rightfully consider. 

Thus, the only beneficiary ofthe exercise ofjurisdiction here is RockwelL Rockwell 

benefits from access to Kontron Modular's highly proprietary and trade secret infonnation to 

II 	 prosecute its patent infringement action against W AGO. This puts Kontron Modular at a great 

disadvantage because Rockwell's claims imply that either Kontron Modular manufactured a 

product which violates, or has contributed to the violation of, a Rockwell patent. But, as a nonII 	party, Kontron Modular does not have the full panoply of protection a party would rightfully 

enjoy in opposing a patent infringement action or related discovery. For example, Kontron 

Modular does not get the benefit of a Markman hearing, discovery, or expert reports. As a result, 

II 	 Kontron Modular is unable to adequately test or challenge the validity of Rockwell's contentions. 

Nor can Kontron Modular protect its own intellectual property from inappropriate discovery. 

II Likewise, Kontron Mondular cannot appropriately raise the affinnative defenses ofinvalidity or 

prior art even though Rockwell accuses Kontron Modular of violating (or contributing to the 

1/ 	 violation of) Rockwell's patents and other intellectual property. In short, the discovery Rockwell 

seeks in this Court is unfair. Therefore, the burden on Kontron Modular to produce its 

intellectual property is too great to be justified in this context and will not be adequately 

protected by a well-crafted protective order. 

The same reasoning applies to Rockwell's request for jurisdictional discovery. This is not 

14 	 12cv566-WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 14 of 15
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

" the typical case in which a plaintiff is seeking discovery to establish forum jurisdiction over a 

II party to the action in response to that party's Fed. R. Civ. P. 12(b)(2} motion to dismiss. 

II Rockwell has not provided any case-law to support its contention that jurisdictional discovery is 

II warranted on the facts present here. Nor can Rockwell demonstrate it will be prejudiced by the 

" Court's denial ofits request for jurisdictional discovery because (1) it has no claims against 

II Kontron Modular at risk ofdismissal and (2) the discovery it seeks can be, and should be, 

II adjudicated before the Wisconsin federal court, which also satisfies (a) the interstate judicial 

II interest in obtaining the most efficient resolution of controversies and (b) the two jurisdictions' 

II shared interest in furthering fundamental social policies, as, for example, the efficient use of 

II limited judicial resources. 

Kontron Modular Is Not Entitled to Attorneys ' Fees 

Kontron moves for an award ofattomey's fees under Fed. R. Civ. P. 37(a)(5)(B). 

However, the Court finds Rockwell was "substantially justified" in moving to enforce this 

subpoena because Rockwell's jurisdiction and service arguments, though reasoned and wellintentioned, 

simply lacked the factual support necessary for this Court to rule in its favor. See Fed. R. Civ. P. 

37(a)(5)(B). 

CONCLUSION 

For all ofthe foregoing reasons, Rockwell's motion to enforce the subpoena is DENIED. 

IT IS SO ORDERED. 

" DATED: October 19,2012 

Hon. 

~, William McCurine, Jr. 

U.S. Magistrate Judge, U.S. District Court 

15 12cv566-WQH (WMc) 

Case 3:12-cv-00566-WQH-WMC Document 39 Filed 10/19/12 Page 15 of 15