Opinion ID: 668246
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 2 Beverly is the current owner of U.S. Design Patent No. 304,229 (the '229 patent), which issued on October 24, 1989. That patent is directed to the design of a ceiling fan. Beverly is incorporated in Delaware and has its principal place of business in California. 3 Ultec is the manufacturer of a ceiling fan which Beverly alleges infringes the '229 patent. Ultec is incorporated in the People's Republic of China (PRC) and manufactures the accused fan in Taiwan. Royal imports into and distributes the accused fan in the United States. It is incorporated in New Jersey. 4 On December 11, 1991, Beverly filed suit against Ultec and Royal in the United States District Court for the Eastern District of Virginia. Beverly's complaint alleged in relevant part that both defendants are infringing and inducing infringement of the '229 patent by selling the accused fan to customers in the United States, including customers in Virginia; and that defendants are selling the accused fan to the Virginia customers through intermediaries. 5 Ultec and Royal subsequently filed a motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. In support of their motion, defendants submitted several declarations. A first declaration was from James Cheng (the Cheng Declaration), the President of Ultec. In that declaration, Mr. Cheng stated that Ultec has no assets or employees located in Virginia; has no agent for the service of process in Virginia; does not have a license to do business in Virginia; and has not directly shipped the accused fan into Virginia. A second declaration was from T.K. Lim (the Lim Declaration), the President of Royal. In that declaration, Mr. Lim stated that Royal, as well, has no assets or employees in Virginia; has no agent for the service of process in Virginia; does not have a license to do business in Virginia; made a one-time sale of unrelated goods to Virginia in 1991 which represented less than three percent of Royal's total sales that year; and has not sold the accused fan to distributors or anyone else in Virginia. 6 Beverly then submitted several declarations in opposition to the motion. A first declaration was from Lyndal L. Shaneyfelt (the first Shaneyfelt Declaration), a private investigator. In that declaration, Mr. Shaneyfelt stated that, on December 4, 1991, he purchased one of the accused fans from the Alexandria, Virginia outlet of a company known as Builder's Square; that a manual accompanying the fan identified Royal as the source of the fan; that the fan was accompanied by a warranty which Royal would honor; and that Builder's Square has approximately six retail outlets located throughout Virginia. A second declaration was from Shelley A. Greenberg (the Greenberg Declaration), the President of Beverly. In that declaration, Mr. Greenberg stated that Beverly does a substantial amount of business in Virginia; that Beverly's Virginia customers include all six Builder's Square outlets; and that Beverly sells a commercial embodiment of the '229 patent to customers in Virginia through these outlets. 7 The trial court, after argument from the parties and consideration of their written submissions, ruled on the motion. The court correctly recognized that there were two limits to its jurisdictional reach: Virginia's long-arm statute and the Due Process Clause of the U.S. Constitution. 1 The court found its analysis of the limits imposed by the Due Process Clause conclusive of the matter. 8 Relying on Supreme Court precedent as interpreted by the Fourth Circuit in Chung v. NANA Development Corp., 783 F.2d 1124 (4th Cir.), cert. denied, 479 U.S. 948, 107 S.Ct. 431, 93 L.Ed.2d 381 (1986), the court concluded that the relevant inquiry was whether defendants' contacts with the forum were sufficiently purposeful that litigation in the forum could reasonably have been foreseen. The only purposeful contact the court considered relevant was the one-time shipment of unrelated goods referred to in the Lim Declaration. 2 Finding that such contact was not sufficient to make litigation in Virginia reasonably foreseeable, the court granted the motion to dismiss. On March 6, 1992, an order granting judgment for defendants was entered consistent with the court's ruling. 9 Beverly subsequently filed a motion for reconsideration of the March 6 judgment. In support of that motion, Beverly submitted a second declaration by Mr. Shaneyfelt (the second Shaneyfelt Declaration). In that declaration, Mr. Shaneyfelt stated that, as of March 17, 1992, based on telephone conversations with unnamed employees at the six Builder's Square outlets, fifty-two of the accused fans were available for sale at these outlets. Defendants then moved to strike this evidence, and opposed the motion for reconsideration. On April 8, 1992, the court denied the motion for reconsideration, presumably denying the motion to strike. 3 This appeal followed.