### IN THE UNI TED STATES COURT OFAPPEALS FOR THE FIF TH CIRCUIT

No. 11-50097

PERVASIVE SOFTWARE INC., Plaintiff-Appellant
v. LEXWARE GMBH & COMPANY KG, Defendant-Appellee

Appeal from the United States District Court for the Western District of Texas

Before DENNIS, CLEMENT, and HIGGINSON, Circuit Judges. DENNIS, Circuit Judge: The plaintiff-appellant, Pervasive Software Inc. (“Pervasive”), a Delaware corpor atio n h avin g it s principal office in Austin, Texas, sued defendant-appellee, Lexware GmbH & Co. Kg (“Lexware”), a corporation organized under the laws of the Federal Republic of Germany, for damages and injunctive relief on the basis of breach of contract, quantum meruit, unjust enrichment, and conversion in a Texas s t a t e c o u rt. Lexware removed the case to the federal district court, and that court, in response to Lexware’s motion, dismissed the case for lack of personal jurisdiction over Lexware. Pervasive appealed. We affirm, concluding that Pervasive has failed to establish a prima facie case that Le xw a re had U n i te d S ta te s C o u rt o f A p p ea l s

F i ft h C i rc u i t 

### F I L E D July 20, 2 012 Lyle W . Cayce Clerk U n i te d S ta te s C o u rt o f A p p ea l s

F i ft h C i rc u i t 

### F I L E D July 20, 2 012 Lyle W . Cayce Clerk Case: 11-50097 Document: 00511928888 Page: 1 Date Filed: 07/20/2012No. 11-50097

minimum contacts with Texas to support the exercise of either specific or general personal jurisdiction over Lexware.

I. Facts and Procedural History Pervasive, formerly named Btrieve Techn o logies, Inc., is a computer software manufacturer, incorporated un d e r the law of Delaware, with its principal plac e of b u siness in Austin, Texas. Pervasive sells its software products globally, has employees and offic e s in Germany, Europe, and elsewhere, and conducts business worldwide. Lexware is a German software developer based in Freib ur g , G er m any. It produces German tax and financial software programs for German taxpayers exclusively in the German language. Among its software products, Pervasive ha s d e v eloped and sold globally the Btrieve Client Engine Version 6.15 (“Btrieve” or “Btrieve software”). In 1 1994, Le xware purchased a copy of Btrieve software in Germany from SOS S o f t w a re Service GmbH (“SOS”), a third-party German software distributor. 2 Lexware paid 1,327.25 deutschmarks to SOS for B t ri eve. Included in the software package was a license agreement, the Derivative S o ftware License Agreement (“DSLA”). By purchasing a n d using the Btrieve software package, L e xw a re signified that it entered into the DSLA with Pervasive. The DSLA

Btri eve is a so ft wa re produc t that pr ovide s a dat abas e mo dule that st ore s, edi ts , and 1
se arc hes dat a, and wa s pr oduc ed wi th the pur pos e of being pur chas ed a n d u s e d by othe r so ft wa re deve lop ers , wh o i ncor por ate Btri eve intotheirow n d erivative so ftwa re pr oduc ts

. The partie s dis agree about wh ethe r this so ft wa re sal e too k plac e in 1994 or 1996. 2 “Whe n, as here , the dis tri ct court cond uct ed no evide ntiary hearing, the party se eking to ass ert j u r i s d i cti on mus t pr es ent suf fic ient fac ts as to mak e out only a prim a fac ie cas e sup porting juris dic tio n. We mus t acc ept as tru e that party’s uncontro vert ed allegat ions , and res olve in its favor all conf

lict s betw een the fac ts cont ained in the p a rtie s’ aff idavit s and othe r doc ume ntat ion. ” Al

pi ne Vi ew Co. Ltd. v. Atlas Copc o AB , 205 F.3d 208, 215 (5th C ir. 2000) (c itations om itt ed)

. Altho ugh the dat e o f t h e s al e is not mat eria l, we res olve the conf lict in favor of Pervas ive. 2 Case: 11-50097 Document: 00511928888 Page: 2 Date Filed: 07/20/2012No. 11-50097

specified the terms and conditions of Lexware’s Btrieve software license and contained a Texas choice-of-law clause. The DSLA was for a term of one year, to be renewed automatically until one party terminated the agreement. The DSLA did not require Lexware to make additional payments or royalties to Pervasive,

a n d u n d er the DSLA Pervasive had no obligation to provide Lexware with ongoing technical support or assistance for Btrieve. Two forms accompanied the DSLA: (1) a request that the purchaser identify the product that it purchased; and (2) a request that the purchaser indi c a t e th e product name, category, and description of its d e rivative products. Both forms requested that they be completed and mailed to Pervasive’s office in Austin, Texas. Acco r di n g to Pervasive, Lexware did not return these forms. Lexware incorporated Btri eve into several of its products, German financial and tax software programs that were designed to assist German speaking taxpayers in preparing their German tax returns. The programs were not available in English. Pervasive did not a gr e e to assist Lexware in incorporating Btrieve into its products or pro vi d e Lexware any technical assistance with Btrieve. In 1999 and 2000, Pervasive and Lexware entered into a second, separate license agreement, the European Manufacturing Partner Agreement (EMPA). The EMPA involved a different and new Pervasive product line, the PSQL products. The parties negotiated and executed this agreement during several inp e r s o n meetings of their representatives in Germany. The EMPA require d Lexware to make month ly r e p o rts to Pervasive and to incur a royalty fee to Pervasive each time Lexware sold a d e riv a tive product containing PSQL. Lexware made a one-time, non-refundable prepayment to Pervasive from which

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the royalty fees were to be deducted. In 2002, Lexware released a new German taxpayer product line incorporating PSQL but discontinued it less than one year later because it was commercially unsuccessful. The EMPA had an initial threeyear term that Lexware did not extend. In 2000, Pervasive and Lexware negotiated two addenda to the EMPA. The first (“Addendum 1”) set forth Lexware’s agreement to purchase from Perva s ive 7 , 5 0 0 e n ab lin g t echnology user seats for P S QL, and contained provisions for reporting requirements and royalty fee payments. Lexware prepaid a fee of $1 2 5 , 2 5 0 f o r the 7,500 enabling seats. Addendum 1 to the EMPA was executed by the parties effective June 30, 2000. Th e s ec o n d a d den du m (“ Ad dendum 2”) governed an Educational Grant Pro gr a m . These addenda did not purport to amend or alter the DSLA. In 2006, 2008, and 2009, Lexware purchased three additional items for download f r o m the Pervasive website that were not related to the Btrieve software it bought from SOS in 1994. P erva s ive and Lexware did not communicate directly with each other until 1999, when they be g a n negotiations in respect to the EMPA. They then communicated several times between 1999 and 2003 regarding the EMPA and L e xware’s reporting and royalty fee requirements. In 2002, Lexware asked Pervasive for a certificate that it was a U.S. taxpayer so as to enable Lexware to obtain an exemption from Germ a n taxes in connection with its payment of royalty fees under the EMPA. In 2003, Lexware asked Pervasive for certification that Pervasive was a U.S. corporation for the purposes of U.S. federal taxation. These requests were not related to the DSLA and pertained only to the EMPA and Addendum 1. Pervasive supplied the certificate of its U.S. taxpayer status to Lexware in June 2003. The companies did not communicate again until 2007,

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when Lexware requested a price quote for a new version of PSQL; the e-mail was f o rw a r ded to Pervasive’s German representatives, one of whom then called Lexware to discuss PSQL and Btrieve. Lexware did not purchas e the new version of PSQL. In 2009, Lexware contacted Pervasive and r e qu ested the Btrieve Ultimate P a t c h or update, but Pervasive ultimately did not provide Lexware with that software patch or update. Lexware d o e s not have an office, own property, or have agents or employees in Texas, and it does not promote, market, or sell its products inside Texas. Its products are specifically designed for the German taxpayer market and are only av ailable in the German language. Pervasive did not assist Lexware in incorporating Btrieve into its German taxpayer products or provide it with any other technical support. Lexware has an interactive website, using only the G er m an language, that allows customers to purchase and download free t ri al s o f Lexware’s software products. The website is accessible worldwide, including in Texas. Lexware has sent fifteen internet orders to t welve Texas billing or shipping addresses since 2007. Lexware’s materi al s m ay also be purchased on several third-party vendor websites, which are accessible by persons in Texas. Lexware b o o k s are available for purchase on Amazon’s U.S. website. Pervasive de scribes itself as “a global leader in embeddable data management and data integration software,” and has sold its products to customers in more than 150 countries. It has an i n t e r a ctive website that is accessible worldwide and in Germa ny , a n d it has used foreign third-party distributors. Most of Pervasive’s offices are in Texas, but the company maintains

a European Service and Support Center in Dublin, Ireland, and has several

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off i c e s in Japan and Europe, including in Germany. Pervasive employed two German resident representatives, who used a German e-mail address (pervasive.de) to contact Lexware. Many of Pervasive’s communications with Lexware were in German. Lexware representatives also used German e-mail addresses (lexware.de). In 2008, Pervasive representatives e-mailed Lexware, in the G e r m an language, to request the return of th e B trieve master CD and key generator. 3 Lexware replied, promising to handl e th e request but asking for more information about when and to whom Pervasive gave the CD and key generator. The record does not reflect whether P e rvasive supplied Lexware with this information. In 2009, Pervasive’s German representatives reques ted that Lexware report on its distribution of Lexware software produ c t s that incorpor a ted Btrieve. Lexware refused on grounds that the DSLA did not obligate Lexware to mak e such reports or to pay Pervasive any royalty on the sale of Lexware products. Pervasive then cont a c t ed Lexware to terminate the DSLA. When Lexware rejected its demand, Pervasive sent Lexware a cease-anddesist lette r . O n March 26, 2010, Pervasive filed a complaint against Lexware in the 200th Judicial Dis t rict of Travis County, Texas, seeking damages and injunctive relief. Pervasive raised four causes of action. First, Pervasive claimed that Lexware breached its contractual obligations under the DLSA. Pervasive also claimed that it was entitled to the fair value of Lexware’s use of Btrieve

Nei ther party has pr ovide d a des cri pt ion of thes e ite ms . The Btri eve mas ter CD wa s 3 lik ely the CD on wh ich Lexw are’ s cop y of Btri eve wa s st ore d. Nei ther party expla ins the exact natur e of the “k ey genera tor .” Altho ugh the rec ord doe s not st ate this , we ass ume that the CD and ke y genera tor we re cont ained in the Btri eve p r o d u c t pac ka ge that Lexw are pur chas ed fr omS OS in199 4. 6 Case: 11-50097 Document: 00511928888 Page: 6 Date Filed: 07/20/2012No. 11-50097

under quantum meruit and unjust enrichment. Finally, Pervasive claimed that Lexware committ e d th e tort of c o nver s ion by wrongfully exercising dominion and control over Btrieve. L e xware removed the case to the United States District Court for the Western District of Texas and filed motions to dismiss for lack of personal jurisdiction and failure to state a claim upon which relief can be granted. See Fed. R. Civ. P. 1 2 (b ) ( 2), 12(b)(6). The district court granted Lexware’s 12(b)(2) motion, and Pervasive appealed. II. Discussion A. Standards of Review We review de novo a district court’s determination that it lacks personal jurisdiction. Stripling v. Jordan Prod. Co. , 234 F.3d 863, 869 (5th Cir. 2000). As the party seeking to invoke the power of the court, Pervasive “bears the burden of establishing jurisdiction but is required to present only prima facie evidence.” Seiferth v. Helicopteros Atuneros, Inc. , 472 F.3d 266, 270 (5th Cir. 2006); Luv N’ Care, Ltd. v. Insta-Mix, Inc. , 438 F.3d 465, 469 (5th Cir. 2006). “In determining whether a prima facie case exists, this Court must accept as true [the Plaintiff’s]

u n controverted allegations, and resolve in [its] favor all conflicts between the [juri s dictional] facts contained in the parties’ affidavits and other documentation.” Freudensprung v. Offshore Technical Servs., Inc. , 379 F.3d 327, 343 (5th Cir. 2004) (alterations in original) (qu o ting Nuovo Pigone, SpA v. STORMAN ASIA M/V , 3 1 0 F.3d 374, 378 (5th Cir. 2002)) (internal quotation marks omitted). B. Personal Jurisdiction 1. General Principles

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A federal court sitting in diversity must satisfy two requirement s to exercise personal jurisdiction over a nonresident defendant. First, the forum state’s long-arm statute must confer personal jurisdiction. Second, the exercise of jurisdiction must not exceed the boundaries of the Due Process Clause of the Fourtee n th Am e ndment. Mink v. AAAA Dev. LLC, 190 F.3d 333, 335 (5th Cir. 1999). Bec ause Texas’s long-arm statute h a s been interpreted to extend to the limits of due process, we only need to determine whether subjecting Lexware to suit in Texas in this case would be consistent with the Due Process Clause of the Fourteenth Amendment. Id. The Due Process Clause of the Fourteenth Amendm e nt protects a corporation, as it does an individual, against being made subject to the binding judgments of a forum with which it has established no meaningful “c o n tacts, ties, or relations.” Int’l Shoe Co. v. Washington , 326 U.S. 310, 319 (1945). Thus, “[t]he Due Process Clause

. . . s e t s the outer boundaries of a state tribunal’s authority to proceed against a defendant.” Goodyear Dunlop Tires Opera tions, S.A. v. Brown , 131 S. Ct. 2846, 2853 (2011) (citing Shaffer v. Heitner , 433 U.S. 186, 2 0 7 (1977)). “The canonical opinion in this area remains [International Shoe], in which w e h e l d th at a State may authorize its courts to exercise personal jurisdiction over an out-of-state defendant if the defendant has ‘certain minimum contacts with [the State] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.’” Id. (quoting Int’l Shoe , 326 U.S. at 316 (second alteration in original) (internal quotation marks omitted)). “Endeavoring to give specific conten t t o th e ‘fair play and substantial justice’ concept, the Court in Interna t i o nal Shoe classified cases involving

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out-of-state corporate defendants. First, as in Internati o n a l Shoe itself, jurisdiction un qu e stionably could be asserted where the corporation’s in-state

a c t ivity is ‘continuous and systematic’ and that activity gave rise to the episode-in-suit .” Id. (quoting Int’l Sho e , 326 U.S. at 317). “Further, the Court observed, the commission of certain ‘single or occasional acts’ in a State may be sufficient to render a corporation answerable in that State with respect to those acts, though not with respect to matters unrelated to the forum connections.” Id. (quoting Int’l Shoe , 326 U.S. at 318). “The heading courts today use to encompass these two International Shoe categories is ‘specific j u ri sdiction.’ Adjudicatory authority is ‘specific’ when the suit ‘aris[es] out of or relate[s] to the defendant’s contacts with the forum.’” Id. (alterations in original) (internal citation omitted) (quoting Helicopteros Nacionales de Columbia, S.A. v. Hal l , 4 6 6 U.S. 408, 414 n.8 (1984)). “Sp e c if

i c jurisdiction

. . . depends on an ‘affiliatio[n] between the forum and the underlying controversy,’ princip ally , activity or an occurre nce that takes place in the forum State and is therefore subject to the State’s regulation.” Id. at 2851 (alteration in original) (quoting Arthur T. von Mehren & Donald T. Trautman, Ju r i s d i ction to Adjudicate: A Suggested Analysis , 79 Harv. L. Rev. 1121, 1136 (1966)).

“In t e rnational Shoe distinguished from cases that fit within the ‘specific jurisdiction’ categories, ‘instances in which the continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from th o s e

a c t ivities.’” Id. at 2853 (alteration in original) (quoting Int’l Shoe , 326 U.S. at 318). “Adjudicatory authority so grounded is today called ‘general jurisdiction.’” Id. (quoting Helicopteros , 466 U.S. at 414 n.9). “For an individual, the paradigm

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forum for the exercise of general jurisdiction is the indivi du al ’ s d o micile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home.” Id. at 2853-54 (citing Lea Brilmayer et al., A General Look at General Jurisdiction , 66 Tex. L. Rev. 721, 728 (1988)).

“ S inc e I n te rna t io na l Sho e , this Court’s decisions have elaborate d p ri m arily

on circumstances that warrant the exercise of specific jurisdiction, particularly in cases involvi n g ‘ s i ngle or occasional acts’ occurring or having their impact within the forum State. As a rule in these cases, this Court has inquired whether there w a s ‘some act by which the defendant purposefully avail[ed] itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.’ Hanson v. Denckla , [ 3 5 7 U

. S. 235, 253 ( 1 9 5 8)]. See e.g. , World-Wide Volkswagen Corp. v. Woodson , [444 U.S. 28 6 ( 1 9 8 0) ] (Oklahoma court m ay n o t exercise personal jurisdiction ‘over a nonresident automobile r etailer and its wholesale distributor in a products-liability action, when the defendants’ only connection with Oklahoma is the fact that an automobile sold in New York to New York resi d e n t s b ecame involved in an accident in Oklahoma’); Burger King Corp. v. Rudzewicz , [471 U.S. 462, 474-75 (1985)] (franchisor headquartered in Florida m ay maintain breach-of-contract action in Florida against Michigan franchisees, where agreement contemplated ongoing interactions between franchisees and franchisor’s headquarters); Asahi Metal Industry Co. v. Superior Cour t of Cal., Solano Cnty. , [480 U.S. 102, 105 (1987)] (Taiwanese tire manufacturer settled product liability action brought in California and sought indemnification there f r o m Japanese valve assembly manufacturer; Japanese company’s ‘mere awareness . . . that the components it manufactured, sold, and delivered outside th e United States would reach the

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f o ru m State in the stream of commerce’ held insufficient to permit Califo r ni a court’s adjudi c ation of Taiwanese company’s cross-complaint); id. , at 109, 107 S. Ct. 1026 (opinion of O'Connor, J.); id. , at 116–117, 107 S. Ct. 1026 (Brennan, J., concurring in part and concurring in j u d g ment).” Id. at 2854 (first and last alterations in original). 2. Lack of Specific Jurisdiction—Breach of Contract, Unjust

Enrichment, and Quantum Meruit Claims Specific jurisdiction requires a plaintiff to show that : “ ( 1 ) there are sufficient (i.e., not ‘random fortuitous or attenuated’) pre-litigation connections between the non-resident defendant and the forum; (2) the connection has been purposefully established by the defendant; and (3) the plaintiff’s cause of action arises out of or is related to the defendant’s forum contacts. Once [the] plaintiff makes that sho w i n g, the defendant can then defeat the exercise of specific jurisdiction by showing (4) that it would fail the fairn e s s test, i.e., that the balance of interest factors show that the exercis e o f jurisdiction would be unreasonable.” 1 Robert C. Casad & William B. Richman, Jurisdiction in Civil Actions § 2-5, at 144 (3d ed. 1998) [hereinafter Casad & Rich m a n] (footnote citing cases omitted); see also McFadin v. Gerber , 587 F. 3 d 753,759 (5th Cir. 2009); Seiferth , 472 F.3d at 271; Jones v. Petty-Ray Geophysical, Geosource, Inc., 954 F.2d 1061, 1068 & n.9(5th Cir. 1992). In respect to Pervasive’s breach of contr a c t, unjust enrichment, and quantum meruit claims, Pervasive has not made a prima fac i e showing of any act by which Lexware purposefully av ailed itself of the privilege of conducting activities within the forum state of Texas, so as to invoke the be n e f it s a n d protections of its laws. Accept i n g a s t ru e the facts alleged by Pervasive, all of

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Lexware’s acts giving rise to Pervasive’s claims again s t Lexware took place in Germany, not in Texas. Lexware purchased Pervasive’s software product, Btrieve, in Germany from SOS, a third-party German software distributor. The D S LA, th e license contract between Pervasive and Lexware, was an of f

- th e - sh elf

, out-of-the-box contract that was accepted and activated by Lexware’s purchase of Btrieve from SOS in Germany. There were no prior nego tiations between Pervasive and Lexware and SOS was not an agent of either company. Lexware allegedly l a t e r breached the DSLA in Germany when it refused Pervasive’s demands that it terminate the DSLA and cease and desist its d o m i ni o n and control over Btrieve in Germany. Likewise, Pervasive’s claims against Lexware for unjust enri c h m ent and quantum meruit arose in Germany from Lexware’s refusal of Perva s iv e ’ s d e mand that it cease and desist its dominion over the Btrieve s o f

t w a r e. Consequently, because none of Lexware’s acts giving rise to Pervasive’s claims occurred in or purposefully established contacts with Texas, the a s s e rtion of specific personal jurisdiction over Lexware for those claims in Texas would offend due process. Accordingly, the district court did no t e rr i n granting Lexware’s Rule 12(b)(2) motion to dismiss the complaint against it for lack o f s pecific personal jurisdiction over Lexware. This conclusion is clearly required by the controlling Supreme Court and circuit precedents discussed below. a. Neither Lexware’s purchase and use of Btrieve nor its entry into the DSLA established purposeful contacts with Texas. “The unilateral activity of [a plaintiff] who claim[s] some relationship with

a nonresident defendant cannot satisfy the requirement of contact w ith the forum State.

. . . [I]t is essential in each case that there be some act by which the

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defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Hanson , 357 U.S. at 253. “This ‘purposeful availment’ requirement ensures that

a defendant will not be haled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts, or of the ‘unilateral activity of another party

o r a third person.’” Burger King, 471 U.S. at 475 (quoting Keeton v. Hustle r Magazine, Inc ., 465 U.S. 770, 774 (198 4); World-Wide Volkswagen , 444 U.S. at 299; and Helicopteros , 466 U.S. at 417). Thus, Pervasive’s unilateral acts cannot satisfy the requirement of contact with the forum state and availment of its laws by Lexware. M o r e o v er, it is now well settled that “an individual’s contract with a n out-of-state party alon e [c annot] automatically establish sufficient minimum contacts in the o th e r party’s home forum.” Burger King, 471 U.S. at 478. “The Court long a go rejected the notion that personal jurisdiction might turn on ‘mechanical’ tests, or on ‘conceptualistic

. . . theories of the place of contracting

or of performance.’ Instead, we have emphasized the need for a ‘highly realistic’ approach that recognizes that a ‘contract’ is ‘ordinarily but an intermediate step serving to tie up prior business negotiations with future consequences which themselves are the real object of the business transaction.’ It is these factors— prior negotiations and contemplated future consequences, along with the terms of the contract and the parties’ actual course of dealing—that must be evaluated in determining wheth e r the defendant purposefully established minimum contacts within the forum.” Id. at 478-79 (alteratio n in original) (quoting Int’l Shoe , 326 U.S. at 319; and Hoopeston Canning Co. v. Cullen , 318 U.S. 313, 316, 316-17 (1943)).

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Applying these principles, Lexware, by becoming a party to the DSLA in Germany, did not make minimum contacts with Texas or purposefully avail its elf of the protections and benefits of that state’s laws. There were no prior negotiations between Lexware and Pervasive concerning that contract. The D S LA w a s an of

f

- th e-shelf, out-of-the-box contract that came with Btri eve , which Lexware purchased in Germany from a German software dis tributor. Nothing in the DSLA or the manner of purchase suggested that either party envisioned

a l ong-term interactive business relationship involving Lexware’s purposeful future contacts with Texas. Thus, the DSLA was not “an inter m e di at e step serving to tie up prior business negotiations” by th e p a rt i e s in Texas or a contract calling for Lexware’s future purposeful contacts with Pervasive in the forum state. Id. at 479 (citing Hoopeston Canning Co. , 318 U.S. at 317). Although the DSLA did contain a Texas choice-of-law clause, that clause alone is not dispositive of the issue of specific personal jurisdiction. Burger King, 471 U.S. at 481-82; Interfirst Bank Clifton v. Fernandez , 844 F.2d 279, 284 n.4 (5th Cir. 1988). When combined with other factors, a c h o i c e-of-law clause may reinforce a conclusion that a defendant “deliberate[ly] affiliat[ed] with the forum State and [h a d] reasonable foreseeability of possible litigation there.” Burger King, 471 U.S. at 482

. H o w ever, the presence of a choice-of-law clause is not sufficient in itself to establish personal jurisdiction when, as here, the contacts do not otherwise demonstrate that the defendant “purposefully availed himself of the privilege of conducting business in Texas.” Stuart v. Spademan , 772 F.2d 1185, 1192 (5th Cir. 1985). 4

Pervas ive cit es to tw o Texas court cas es , Mi chi ana Easy Liv in’ Country Inc. v. Ho lten , 4 168 S. W.3 d 777 (Tex. 2005), and Barn hil l v. Autom ated Shri mp Corp. , 222 S. W.3 d 756 (Tex. App .–W aco 2007, no pet .) , to sup port its argum ent that the choi ce- of- law p r o vi s i o n wa s 14 Case: 11-50097 Document: 00511928888 Page: 14 Date Filed: 07/20/2012No. 11-50097

Thus, Lexware’s acts solely within Germany that gave rise to its contractual relationship with Pervasive under the DSLA differentiate this case from Burger King, 471 U.S. 462, in which the Michigan defendant, Rudzewicz, “deliberately ‘reach[ed] out beyond’ Michigan” to negotiate and en t er into a “carefully structured 20-year” franchise contract with the Florida-based f r anchi sor, Burger King, “that envisioned continuing and wi de - re achin g c o nt act s with Burger King in Florida.” Id. at 479-80 (al teration in original) (citation omitted). Rudzewicz’s business partner attended prescribed manag e m e nt

courses in Florida, Rudzewicz purchased restaurant equipment from a Floridabased division of Burger King, and the restaurant was regulated by policy set by Burger King’s Florida-bas e d headquarters. Id. at 466. In contrast, the DSLA involved no prior negotiations between Lexware and Pervasive and did n ot envision “continuing and wide-reaching contacts” between them in Texas. Id. at 4 8 0

. Lexware made no contact with Texas when it purchased the softw ar e

e vi denc e that Pervas ive “ought to be subject to sui t in any juris dic tio n wh ere it ‘enjo y s th e benef its and pr ote cti on of the law s of that st ate. ’” Mi chi ana , 168 S. W

. 3 d at 787 (f oot note om itt ed)

. Nei ther cas e sup ports this theo ry. Mi chi anad oesno t st and forthe pr opo sit ion, as ass ert ed by Pervas ive, that a cont rac ting party alw ays “‘e njoys the benef its and pr ote cti on of the law s of [the for um] st ate, ’” Id. (f oot note om itt ed) , wh en it agree s to a choi ce- of- law claus e. Though the choi ce- of- law and choi c e - o f- for um claus es at iss ue in Mi chi ana st ipul ated that sui ts wo uld be governe d by Indiana law , the court did not rely on the claus es to rejec t Ho lte n’s ass ert ion of sp ecif

ic juris dic tio n, and ins tead foc use d on the cont act s that Mic hiana had wi th Texas

. In Mi chi ana , the court dec lined to find sp ecif ic juris dic tio n wh ere the buyer, a res ide nt of Texas , pur chas ed a rec reat ion vehicl e fr om a st ore that only did bus ines s in Indiana–w hich is com par able to the pr es ent cas e, in wh ich a Texas res i d e n t s o l d a pr oduc t to Lexw are, a so ft wa re com pany doi ng bus ines s in Ge rm any and not in Texas

. Barn hil l correc tly st ated that a choi ce- of- law claus e “‘s tanding al o ne wo uld be ins uff icie nt to conf

er juris dic tio n’” and cons ide red the claus e only as “a fac tor” in its det erm inati on of sp ecif ic juris dic tio n. 222 S. W.3 d at 764 (c itat ion om itt ed)

. In Barn hil l , the court aff irm ed that the tri al court had sp ecif ic juris dic tio n over the cas e not beca use of the choi ce- of- la w c l a u s e , but beca use the dis put ed cont rac t cont em plat ed a long- ter m rela tio nshi p with Texas that the DS LA, in the pr es ent cas e, didno t cont em plat e. 15 Case: 11-50097 Document: 00511928888 Page: 15 Date Filed: 07/20/2012No. 11-50097

program in Germany and thereby entered into the related licensing agreement, the DSLA, with Pervasive in G e r m a ny . The DSLA required only that the purchaser return the object code and source code to Pervasive’s office in Texas
upon the contract’s termination; and purchas e rs were asked to fill out and return two exhibits attached to the DSLA to Pervasive’s office in Texas. It envisioned no additional contact between the purchasing party and Pervasive or it s ho m e s t at e of T exas. Lexware’s subsequent communication about Btrieve was limit e d t o a request for the Btrieve Ultimate Patch, which Pervasive never supplied. None of Lexware’s actions in that c o n n ection demonstrates that it

5 purposefully “reach[ed] out” to Pervas iv e in Texas so as to subject it to Texas courts’ jurisdiction. B urger King, 471 U.S. at 473 (alteration in original) (“[P]arties who ‘reach out beyond one state and create continuing relationships and obligations with citizens of another state’ are subject to the regulations and sanctions in the other State for the consequences of th e ir activities.” (quoting Travelers Health Ass’n v. Virginia , 339 U.S. 643, 647 (1950))). Instead, the record demonstrates that i n r e s p ect to Lexware’s purchase of the Btrieve software, and entry into the DSLA with Pervasive, Pervasive reached beyond Texas and into Germany, Lexware’s principal place of business, not vice versa. In its complaint, Pervasive described itself as “a global leader in embeddable data management and data integration software.” It went on to boast th a t : “For more than two decades, Pervasive Software’s products have delivered value to tens of thousands of customers in more than 150 countries,

Indeed , the DS LA sp ecif ically st ated that Pervas ive wa s not res pons ible for pr ovidi ng 5 any tec hni c a l a s sis tanc e or upgra des to pur chas ers of Btri eve, which further sugges ts that Pervas ive its elf did not inte nd the DS LA to cre ate any long- ter m cont act s betw een Pervas ive and the pur chas er. 16 Case: 11-50097 Document: 00511928888 Page: 16 Date Filed: 07/20/2012No. 11-50097

and international sales and operations currently account for a substantial part of Pervasive Software’s business.” It states that it has “servic[ed] virtually every industry and market around the world.” Pervasive sold its software to a German third-party distributor for sale in Germany. It employed represe n t a t ives who lived in Germany, used German e-mail addresses, and conversed with Lexware largely in German. Thus, in respect to Lexware’s purcha s e o f the Btrieve software and its entry into the DSLA contract with Pervasive in Germany, it was Pervasive, rather than Lexware, that reac h e d o u t of its own state in order to purposefully sell its product and create a contractual relationship with Lexware in Germany. b. Pervasive’s attempt to link the EMPA and its Addendum 1 with the DSLA is futile because neither contract provides such a link or a purposeful contact by Lexware to the forum state. Pervasive argues that Addendum 1 to the EMPA, in linkage with the DSLA, established purposeful contacts by Lexware with Texas. We disagree. We have just explained why Lexware’s entering into the DSLA did not involve any purposeful contact by it with Texas. For similar reasons, the EMPA and its A d d e n du m 1 did not involve any purposeful contact by Lexware with Te x a s either. Pervasive’s argument that the parties agr e e d t o link the EMPA’s Addendum 1 with the DSLA is without merit. In 1999 and 2000, the parties negotiated and executed the EMPA and its Addendum 1 i n G e rmany. In the EMPA, Pervasive licensed Lexware to use certain Pervasive software products, viz. , Pervasive SQL Client/Server engine for Windows NT Netware a n d Li n u x (Suse, Red Hat and Caldera); Pervasive SQL 2000 Workgroup; and Pervasive SQL 2000 Workstation. The EMPA and its

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Addendum 1 deal only with Pervasive’ s SQL 2000 products; they do not affect

or alter the DSLA by which L e xware was licensed to use Pervasive’s Btrieve software product in 1994. The DSLA and the EMPA (with its Addendum 1) are two separate contracts which license Lexware t o u s e two different lines of Pervasive products, Btrieve and Pervasive’s SQL 2000 products, respectively. Pervasive argues that “[b]y its own language, Addendum 1 to the EMPA (the ‘Btrieve Addendum’) licensed 7,500 Btrieve ‘enabling’ seats to Lexware for US $125,250.” But this is simply not so. Addendum 1 t o the EMPA clearly licensed Lexware to use 7,500 “user seats of the Software auth o rized for distribution by [Lexware] as specified in Attachment 1 paragraph 1.1 of the European Manufacturing Partner Agreement.” Th a t Attachment 1 paragraph 1

. 1 of the EMPA provides: “1. Software Authorized for Distribution b y [Lexw are] : 1.1 Pervasive SQL 2000 Cl i e n t/ Server engine for Windows NT; Netware and Linux (Suse, Red Hat and Caldera)[.]” Thus, Addendum 1 to the EMPA licensed Lexware to u s e o nly the Pervasive SQL products and not the Btrieve Client Engine Version 6.15, which we have referred to in shorthand in this opinion as “Btrieve.” Consequently, Addendum 1 to the EMPA did not link the DSLA with the EMPA or link the Btrieve and the Pervasive SQL software products, as Pervasive contends. Pervasive’s argument appears to be based on the appearance of the term “Btrieve” in a single instance in Addendum 1 of the EMPA in which it provides: 1. Btrieve Enabling Technology Program (“Enabling”) “Enabling” means the utilization of a Btrieve connection for internal (internal to the application) use by application software developed, marketed and installed by Lexware. This prerequisit [sic] is linked to the fact that all Lexware application software independent of the

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database management system used, requires “Enabling” in order to function properly.
P e rv a sive, as the drafter of the contract, presumably could have explaine d exactly wh a t th i s p rovision means, but it did not undertake to do so. Instead, Pervasive assumes, without explaining how, that the Addendum 1 to the EMPA somehow links the E M PA w ith the DSLA and thereby makes both contracts applicable to the otherwise separate and disti n c t software products dealt with by each contract, viz. , “Btrieve Client Engine Version 6.15” and “Pervasive SQL Client/Server engine for Windows NT; Netware and Linux (Suse, Red Hat and Caldera),” respectively. In the absence of further alleged facts or explanation by Pervasive, we do n o t think the EMPA and its Addendum 1 can reasonably be read to merge them with the DSLA or to c o nf u s e the software products dealt with separately by each contract. Furthermore, even if the DSLA and the EMPA

were to be linked as Pervasive supposes, this would not c ome any closer to conferring specific jurisdiction upon the Texas forum over Lexware in this case. The EMPA and its Addendum 1, like the DSLA, did not involve any purposeful contact with Texas by Lexware. Thus, the two contracts, together or apart, fail to establish specific jurisdiction over Lexware in Texas. c. Lexware’s internet website sales did not establish personal

jurisdiction over Lexware in Texas Pervasive adduced evidenc e that twelve persons or businesses in Texas bought fifteen software programs from Lexware over the internet during a fouryear period. Conse qu e ntly , P erva s ive argu e s , Lexw are made sufficient minimum contacts to subject it to specific personal jurisdiction in Tex a s . C o n sidering, however, that these internet sales averaged only about $66 each, that none of

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them resulted in actionable harm to anyone in Texas, tha t o nly nine of the fifteen products were derived from Btrieve, and that none of Pervasive’s causes of action arose or resulted from those internet sales, this jurisdictional argument is meritless. 6 Th e Supreme Court has recognized that the internet is “‘a unique a n d wholly new medium o f worldwide human communication.’” Reno v. Am. Civil Liberties Union , 521 U.S. 844, 850 (1997) (footnote omitted). As such, it “raises significant questions about the application of traditional personal jurisdiction doctrine.” 4A Charles Alan Wright et al., Fed. Prac. & Proc. § 1073.1, at 322 (3d ed. 2002) [hereinafter Wright et al]. “Although the Internet and the other new communications technologies do present some strikingly new factual patterns and do change the w ay p ersonal jurisdiction is acquired over some defendants

a t the margins,” id. at 322, “the analysis applicable to a case invo lvi n g jurisdiction based on the Internet

. . . s h o u l d n o t be different at its most basic level from any other personal jurisdiction case. If the defendant is not physically present in or a resident of the forum state, and has not been physically served in the forum state, the federal court must undertake the traditional personal jurisdiction analysis.” Id. at 327. 7

Pervas ive als o argues that the mere availability of so me Lexw are pr oduc ts on thir d- 6 party websi tes acc es sib le fr om Texas is a rele vant cont act by Lexw are wi th Texas

. Pervas ive pr oduc ed no alle g a t i o n s or evide nce that any Texas res ide nt act ually pur chas ed a Lexw are pr oduc t fr om a thir d- party websi te, or that Lexw are inte nded its pr oduc ts to be purchas ed by per so ns or enti tie s in Texas

. There for e, thisar gume nt is wi thou t me rit

. In Interna tiona l Shoe , the Court wa rned that “[i]t is evide nt that the cri teria by wh ich 7
we mark the bound ary line betw een thos e act ivitie s wh i c h j u s t i f y the subjection of a cor por atio n to sui t, and thos e wh ich do not, canno t be sim ply me chani cal or quant itat ive. ” Int’l Shoe , 326 U. S. at 319. Altho ugh inte rac tivity along the Zip po sli ding sc ale can be an im portant fac tor in an inte rnet -bas ed p e r s o n a l juris dic tio n analys is beca use it can pr ovide evide nce of 20 Case: 11-50097 Document: 00511928888 Page: 20 Date Filed: 07/20/2012No. 11-50097

“The exercise of specifi c personal jurisdiction based on the defendant’s contacts with the forum through the Internet requires that the plaintiff satisfy the terms of the appropriate jurisdictional stat ute, and then show that the exercise of jurisdiction will not violate the Constitution.” Id. at 332. “This due
process analysis has b e e n r e f ined

. . . into a three-part test that seems fully applicable to jurisdiction questions generated by the ne w technologies: (1) Did th e plaintiff’s cause of action arise out of or result from the defendant ’ s forum-related contacts? (2) Did the defenda n t purposely direct its activities toward the forum state or purposely avail itself of the privilege of conducting activities therein? (3) Would the exercise of personal jurisdiction over the defendant be reasonable and fair?” Id. at 334 (citing M i n k , 190 F.3d at 336; Bancroft & Masters, Inc. v. Augusta Nat’l Inc. , 223 F.3d 1082, 1086 (9th Cir. 2000); Intercon, Inc. v . Bell Atl. Internet Solutions, Inc. , 205 F.3d 1244, 1247 (10th Ci r . 2 0 0 0); Cybersell, Inc. v. Cybersell, Inc. , 130 F.3d 414, 416 (9th Cir. 1997); CompuServe, Inc. v. Patterson , 89 F.3d 1257, 1263 (6th Cir. 1996)). If the plaintiff’s allegations or evidence of defendant’s internet activities can satisfy each prong of this test, th e exercise of specific jurisdiction by a federal court generally should be upheld. Id. Here, Pervasive has failed to satisfy either of the first two prongs of the three-part test, and we ther e f ore need not consider the third prong.

pur pos eful c ondu ct, s ee Mi nk , 190 F.3dat 33 6 (citingZi pp o M fg. Co. v . Zip

po Do t Com , Inc. , 952 F. Sup p. 119, 124 (W. D. Pa. 1997) ), inte rnet -bas ed juris dic tio nal clai ms mus t cont inue to be evaluat ed on a cas e-b y-ca se bas is, foc usi ng on the nat ure and qualit y of online and offli ne cont act s t o d em ons tra te the requ isi te pur pos efu l cond uct that es tabl ish es per so nal juris dic tio n. 21 Case: 11-50097 Document: 00511928888 Page: 21 Date Filed: 07/20/2012No. 11-50097

Pervasive fails the first part of th e th r ee-part test because the causes of acti o n it a sserts, based on Lexware’s alleged breach of the DSLA in Germany and Lexware’s alleged dominion and control of Btrieve in Germany, did not arise out of or result from the relatively s p a r s e contacts involving Lexware’s fifteen i nternet website sales of its products to twelve Texas billing addresses. See Revell v. Lidov , 317 F.3d 467, 472 (5th Cir. 2002) (“For specific jurisdicti o n we look only to the contact out of which the cause of action arises . . . .”). Moreover, Pervasive al s o f ail s the second part of the three-part test because Lexware’s act i o n s of making its German tax and financial software i nternet-accessible were not purposely directed toward Texas or purp o s e ly availing of the privilege of conducting activities in Texas. In Hanson , the Court said that jurisdiction cannot exist unless “th e r e be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” 357 U.S. at 253; see also Wilson v. Belin , 20 F.3d 644, 647-49 ( 5 th C ir . 1 9 94). “Thus it is not enough that the defendant has contac t s with the forum; a separate requirement in the court’s jurisdictional analysis is that those contacts must have been purposefully established by the defendant.” Casad & Richman,
supra , § 2-5, at 148-49. “In many cases where specific ju ri s di c t i on is unconstitutional, it is not because the defendant’s contacts with the forum are ‘insufficient;’ after all one may be enough. Often the difficulty is not the lack of contacts but rather that such contacts that exist do not count because they have not been established purposefully by the defendant.” Id. § 2-5, at 149-50. That is the case here; none of the contacts relied upon by Pervasive to invoke specific

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jurisdiction over Lexware in the Texas forum count because none of them were established purposefully by Lexware. “The objective of the purposeful availment requirement is to provide predictabil ity and give notice to the defendant that it is subject to suit in the f o rum state, so that the company ‘can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State.’” Hy Cite Corp.

v. Badb u s inessbureau.com, LLC, 297 F. Supp. 2d 1154, 1163 (W.D. Wis. 2004) (quoting World-Wide Volkswagen , 444 U.S. at 297). The p u rposeful availment requirement “ensures that a defendant will not be haled into a jurisdiction solely

as a result of ‘random,’ ‘fortui t o u s , ’ or ‘attenuated’ c ontacts.” Burger King, 471 U.S. at 475 (citations omitted). “Website interactivity is important only insofar

as it reflects commercial activity, and then only insofar as tha t c o m m ercial activity demonstrates purposeful targeting of residents of the forum state or purposeful availment of the benefits or privileges of the forum s t a t e. ” Shamsuddin v. Vitamin Research Prods. , 346 F. S u p p . 2 d 804, 813 (D. Md. 2004). A corporation’s sales to forum r e sidents must be more than “‘isolated’”

occurrences for the assertion of j u risdiction to satisfy the requirements of due
process. Burger King, 471 U.S. at 475 n.18 (citation omitted). Applying these principles, we conclude that Pervasive failed to show that Lexware had purposeful minimum contacts with Texas such that it should have reasonably anticipated being haled into court there. Lexware has no offi c e s or sales agents in Texas and solicits no business there through advertising targeted specifically t o T e xas. Lexware’s only contact with Texas is a commercial, interactive website which is accessible globally but available only in the German

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language. This only coincidentally, and not purposely or deliberately, includes cont a c t w ith a relatively few German taxpayers who happen to access it from Texas. Because Lexware’s website and products we r e not available in English and have little utility for Texas or U.S. taxpayers, Lexware’s contacts with Texas via its website cannot be interpreted as purposeful attempts to develop a market for Lexware’s German tax return preparation programs in Texas or to avail itself of the protections of that state’s laws. “[T]he foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.” World-Wide Volkswagen , 444 U.S. at 297. In essence, Lexware’s actions toward Texas and its affiliation with that state were not so deliberate and substantial that Lexware should have reasonably anticipated being haled into court in Texas.

3. Lack Of Specific Jurisdiction—Conversion The Texas long-arm statute states that a nonresident is considered to be doing business in the state—and therefore is subject to personal jurisdiction— if it “commits a tort in whole or in part in [Texas].” Tex. Civ. Prac. & Rem. Code § 17. 0 42; see also McFadin , 587 F.3d at 761 (quoting Guidry v. United States Tobacco Co. , 188 F.3d 619, 628 (5th Cir. 1999)). The tort of conversion is defined 8

as “‘the wrongful ex e r c i s e of dominion and control over another’s property in denial o f o r inconsistent with his rights.’” Bandy v. First State Bank, Overton, Tex. , 835 S.W.2d 609, 622 (T e x . 1992) (quoting Tripp Village Joint Venture v.

“The plai ntif

f bear s the init ial bur d e n o f p l e a ding allegat ions suf fic ient to bring a 8
nonre sid ent def

enda nt within the pr ovis ions of the long- arm st atut e.” Am eri ca n Typ e Culture Collecti on, Inc. v . Cole ma n , 83 S .W. 3d 801, 807(Tex. 2002)

. 24 Case: 11-50097 Document: 00511928888 Page: 24 Date Filed: 07/20/2012No. 11-50097

MBank Lincoln Centre, N.A. , 774 S.W.2d 746, 750 (Tex.App.—Dallas 1989, writ denied)). After reviewing the pleadings and the evidence pr e sented, we agree with the district court that Pervasive has failed to make a prima facie showing that Lexware commi t t e d a conversion of Pervasive’s property “in whole or in part” in Texas. Accordingly, Pervasive cannot subj e c t Lexware to specific personal jurisdiction in Texas under the Texas long-arm statute on grounds of the tort of conversion. It is undisputed that L e xw a re lawfully received dominion, control, and license to use the B tri e v e software under the DSLA when Lexware purchased the Btrieve software package from SOS in Germany in 1994. There is no allegation or evidence that Lexware acted to exercise dominion and control over the Btrieve software by refusing to return it to Pervasive in any country other than Germany. In its complaint, Pervasive alleges that Lexware committed the tort of conversion by “wrongfully exercising dominion or control over the Btrieve Software in a manner inconsistent with Pervasive Software’s rights.” In effect, Pervasive alleges that Lexware’s license to use and control Btrieve ceased when Pervasive notified Lexwar e that it was terminating the DSLA and demanded that Lexware cease and desist dominion and control over Btrieve. However, that conversion, if it occurred as alleged by Pervasive, was committed in Germany, not Texas. Pervasive argues that Lexware, which has offices only in Germany, retained a copy of the Btrieve software after Pervasive attempted to terminate the DSLA, and therefore converted that copy of the softwa r e. The Btrieve software therefore was converted, if at all, in Germany, not in Texas. Because the tort was not committed, in whole or in part, in Texas, it does not fall under Texas’s long-arm statute. See Tex. Civ. Prac. & Re m . § 17.042; Tuscano v.

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Osterberg, 82 S.W.3d 457, 470 (Tex.App.—El Paso 2002) (co n c l u ding that the Texas court could not exercise personal jurisdiction o v e r the plaintiff’s conversion claim because th e plaintiff provided no proof that the defendants converted any property or materials in Texas), abrogated on other gro u n ds by BMC Software Belgium, N.V. v. Marchand , 83 S

. W

. 3 d 789, 793 (Tex. 2002); Central Tex. Cattle Co. v . McGinness , 842 S.W.2d 388, 391 (Tex.App.—San Antonio 1992) (concluding that the Texas court could not exercise personal jurisdicti o n o v e r the plaintiff’s alleged conversion of cattle because all the defendant’s a c t i o ns with regard to the cattle occurred outside of Texas); cf. Goodyear Dunlop, 131 S. Ct. at 2851 (“Because the episode-in-suit

. . . occurred in France, and the tire alleged to have caused the accident w a s m anufactured and sold abroad, North Carolina courts lacked specific jurisdiction to adjudicate the controversy.”). The mere fact that the converted item originated in Texas is

not s ufficient to create personal jurisdiction under the long-arm statute; th e it e m must be in Texas when the conversion actually occurs. See Laykin v. McFall , 830 S.W.2d 266, 269-70 (Tex.App.—Amarillo 1992, orig. proceeding) (holding that there i s no personal jurisdiction over a conversion claim where a ring, sent voluntarily out o f T e x a s to a broker in California, was not converted until the broker refused to return it and therefore converted it in California, not Texas). Because the alleged conversion by Lexware occurred, if at all, in Germany, when Lexware refused to return its copy of Btrieve to Pervasive, the Texas district court lacked specific personal jurisdiction over the conversion claim. In its complaint, Pervasive alleged only th a t L e xware converted the Btrieve software. In response to Lexware’s Rule 12(b)(6) motion, Pervasive also

a r gu e d that Lexware converted a master CD and key generator by retaini n g

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them after Pervasive attempted to terminate the DSLA. However, these alleged conversions also occurred in Germany and therefore the Texas long-arm statute is not applicable. Therefore, because Pervasive has not pleaded or argued that Lexware committed the alleged conversions in whole or in p a rt i n Texas, Pervasive did not make a prima facie showing that Lexware ca n b e h al e d into Texas courts under the Texas long-arm statute.

4. General Personal Jurisdiction Pervasive also failed to make a pri m a f a cie case of general personal jurisdiction. “A court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so ‘continuous and systematic’ as to render them essentially a t h o m e in the forum State.” Goodyear Dunlop , 131 S. Ct. at 2851 (quoting Int’l Shoe , 326 U.S. at 317). In International Shoe , the Supreme Court explained that “continuous activity of some s o rt s within a state is not enough to support the demand that the corporation be amenable to suits unrelated to that activity

. . . the continuous corporate operations within a state [must be] so substantial and of s u c h a nature as to justify suit against it on

causes of action arising from dealings entirely distinct from those activities.” Int’l Shoe , 326 U.S. at 318; see also Goodyear Dunlop , 131 S. Ct. a t 2856. Lexware had only sporadic and attenua t e d contacts with the state of Texas, largely through its intermittent communications with Pervasive and fifteen internet website sales, over a four-year period, to tw e lv e G e rman taxpayer

consumers with billing a d dresses in Texas, totaling approximately 650 Euros (appr o ximately $915). Only nine of these sales—totaling approximately 330 E uro s (ap p roxi m at ely $ 4 6 5)

—c o nt aine d Btrieve - derive d s of tw are . Th e s e c o nt act s

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were neither continuous nor systematic and do not satisfy the standard set out b y the Supreme Court for establishing general personal jurisdiction over Lexware. The Supreme Court has held that a court may exercise general personal jurisdiction over a company in only one case that postdated International Shoe. In Perkins v. Benguet Consol. Mining Co. , 342 U.S. 437 (1952), th e S u preme Court found there to be general personal jurisdiction because the defendant, a Philippine mining corporation, had ceased ac t ivity in the Phillippines during World War II, conducted all its business in Ohio, and the company president maintained an office in O h i o in which all company files were kept and from which all company activities were supervise d

. Because Ohio had become the corporation’s principal place of business, Ohio was authori z e d to exerci s e ge neral personal jurisdiction over the company. Id. at 447-48; see also Goodyear Dunlop , 131 S. Ct. at 2856. In a subsequent case, th e Court held that a Columbian corporatio n di d not h ave “the kind of continuous and systematic general business contacts the Court found to exist in Perkins .” Helicopteros Nacionales , 466 U.S. at 4 1 6

. I n Helicopteros , the nonresident defendant, a Columbian corporation, sent its chief executive officer to Texas for a contract-ne gotiation session; accepted checks drawn on a Texas bank; purchased helicopters, equipment, and training services from a Texas-based company for substantial sums of money; and sent personnel to a Texas-based company’s facilities in Texas for training. Id. at 409, 416. Helicopter Nacionales’ contacts with Texas far e xc e e d e d Lexware’s contacts with the state in the present case, and still the Supreme Court held that they did not “constitute the kind of continuous and systematic general business contacts

. . . found to exist in Perkins ,” and were insufficient to

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support the exercise of jurisdiction over a claim that neither “ar[o]se out of . . .

n o [r] related to” the defendant’s activities in Texas. Id. at 415–416 (i n t e r n al quotation marks omitted). Th e C o urt in Helicopteros concluded that “mere purchases [made in the forum State], even if occurring at regular intervals, are not enough to warra n t a S tate’s assertion of [general] jurisdiction over a nonresident corporation in a cause of action not related to thos e p u r c h a se t r a n s actions.” Id. at 418. In the same vein, the Court in Goodyear Dunlop concluded: “[w]e see no reason to differentia t e from the ties to Texas held insufficient in Helicopteros , the sales of petitioners’ t ir e s sporadically made in North Carolina through intermediaries.” 131 S. Ct. at 2856. Measured against Goodyear Dunlop, Helicopteros, and Perkins , it is clear that Lexware has not had continuous and systematic contacts in Texas such that it would be permissible to subject Lexware to general personal jurisdiction in the forum state of Texas. Unlike the defendant in Perkins , whose sole wartime business activity was conducted in O h i o , Lexware is in no sense at home in Texas. Lexware’s attenuated connections to the s t a t e f all far short of the “‘the continuous and systematic general business contacts”’ necessary to make Lexware “at home” in the f o ru m. These connections therefore do not empower Texas to ent e rt ain suit against Lexware on claims unrelated to anything that connects Lexware to the state. Goodyear Dunlop , 1 3 1 S

. Ct. at 2857 (quoting Helicopteros , 466 U.S. at 416). C. In its January 4, 2011 order, the district court grant e d L e xw a re’s Rule 12(b)(2) motion and dismissed the case without prejudice. It therefore did not reach Lexware’s 12(b)(6) motion. Pervasive argues that the district court should

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have addressed P ervasive’s conversion claim only in the 12(b)(6) motion and that it erred by conflating merits issues raised in the 12(b)(6) motion with its analysis of the 12(b)(2) motion. The district court did not e rr i n first addressing the 12(b)(2) motion to dismiss for lack of personal jurisdiction over Lexware or in granting that motion. “Personal jurisdicti o n, [like subject matter jurisdiction], is ‘an essential element of the jurisdiction of a district

. . . court,’ without which the court is ‘powerless to proceed to an adjudication.’” Ruhrgas AG v. Marathon Oil Co. , 526 U.S. 574, 584 (1999) (second alteration in original) (quoting Emp’rs Reinsurance Corp. v. Bryant , 299 U.S. 374, 382 (1937)). “The requirement that jurisdiction be established as a threshold m a t t er . . . is inflexible and without exception,” id. at 577 (quoting Steel Co. v. Citizens for a Better Env’t , 523 U.S. 83, 94-95 (1998) (internal quotation marks omitted), because “[j]urisdiction is power to declare the law, and [w]ithout jurisdiction the court cannot proceed at all in any cause.” Id. (quoting Steel Co. , 523 U.S. at 94) (i n t e rn al quotation marks omitted). Thus, subject matter jurisdiction and personal jurisdiction claims are “threshold grounds for denying audience to a case on the m e rits,” and require that the courts reach the threshold claims before reaching claims on the merits. Id. at 584-85. Ac c o r di n gly, we see no error in the district court’s decision to dispose of the personal jurisdiction issue first and in not proceeding further after concluding that it lacked personal jurisdiction over Lexware. D. Finally, Pervasive argues that the district court should hav e granted its requests for leave to amend the complaint.“Whether leave to amend should be granted is entrusted to the sound discretion of the district court, and that court’s ruling is reversible only for an abuse of discretion.” Wimm v. Jack Eckerd Corp. ,

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3 F.3d 137, 139 (5th Cir. 1993). Where, as in the present case, the district court provides no explanation for denying leave to amend, we affirm only where “the

reason for the denial is ‘readily apparent’

. . . [and] the record reflects ‘ample and obvious grounds f

o r denying leave to amend.’” Mayeaux v. La. Health Serv. & I ndem. Co. , 376 F.3d 420, 426 (5th Cir. 2004) (footnotes omitted). In th i s c a s e , the futility of amendment was readily apparent, and the record provided ample and obvious grounds for denying the motion based on futility. See Cent. Laborers’ Pension Fund v. Integrated Elec. Servs. Inc. , 497 F.3d 546, 556 (5th Cir. 2007). Pervasive made only a general request for leave to amend and did not identify how amendment would confer personal jurisdiction over Lexware. Pervasive did not identify any additional cause of action it might plead or explain how it might survive a personal jurisdiction challenge. None of the facts adverted t o b y Pervasive in any way suggests that it may have a c a u s e of action against Lexware arising out of or related to Lexware’s contac t s w ith the forum state. Therefore, w e f

i nd no error in the district court’s decision to deny Pervasive’s motion to amend its complaint. III. CONCLUSION For these reasons, the judgment of the district court is AFFIRMED.

31 Case: 11-50097 Document: 00511928888 Page: 31 Date Filed: 07/20/2012