In The Absence Of Supreme Court Consensus, Personal Jurisdiction Premised On A Stream-Of-Commerce Theory Is Assessed On A Case-By-Case Basis

In AFTG-TG, LLC v. Nuvoton Technology Corp., No. 11-1306 (Fed. Cir. Aug. 24, 2012), and AFTG-TG, LLC v. Winbond Electronics Corp., No. 11-1307 (Fed. Cir. Aug. 24, 2012), the Federal Circuit affirmed the district court's dismissal of certain defendants for lack of personal jurisdiction, finding that the record and pleadings demonstrated insufficient contacts with the forum state.

AFTG-TG, LLC and Phillip M. Adams & Associates, LLC (collectively "AFTG") filed two complaints in the District of Wyoming against Pegatron Corporation, Pegatron Technology Service, Inc., Unihan, ASUSTeK Computer Inc., and ASUS Computer International (collectively "Defendants"), generally alleging that the Defendants' manufacture, use, testing, and importation of computer chips, motherboards, computers, and other products directly infringed AFTG's patents and that the Defendants knowingly and intentionally induced and contributed to others' infringement. The Defendants filed motions to dismiss for lack of personal jurisdiction, and the district court granted the motions, evaluating personal jurisdiction under Wyoming's long-arm statute, which explicitly reaches to the full extent of the U.S. and Wyoming constitutions. AFTG appealed.

"In the absence of [Supreme Court] consensus, this court has assessed personal jurisdiction premised on the stream-of-commerce theory on a case-by-case basis by inquiring whether the particular facts of a case support the exercise of personal jurisdiction." Slip op. at 7.

"This case is not a close call, regardless of how one articulates the stream of commerce theory." Id. at 13.

On appeal, the Federal Circuit noted that "[t]he Supreme Court has yet to reach a consensus on the proper articulation of the stream-of-commerce theory," and that "[i]n the absence of such a consensus, [the Federal Circuit assesses] personal jurisdiction premised on the stream-of-commerce theory on a case-by-case basis by inquiring whether the particular facts of a case support the exercise of personal jurisdiction." Slip op. at 7. The Court held that the district court employed such a fact-driven approach and correctly found insufficient contacts to support the exercise of personal jurisdiction.

The Court explained that the Supreme Court did not resolve the "long-standing split" on the stream-of-commerce theory in its decision in McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780 (2011). Because McIntyre did not produce a majority opinion, the Court was bound...