Comprehensive Ruling On Personal Jurisdiction And Transfer Issues Offers Cautions And Gems For In-House Counsel And Trial Lawyers

In a 46-page order, Judge Timothy Batten denied a motion to dismiss under FRCP 12(b)(2) and (3) for lack of personal jurisdiction and improper venue, or in the alternative to transfer venue brought by OMsignal, Inc. ("OMsignal") filed in connection with the complaint of Sarvint Technologies, Inc. ("Sarvint") in Case No. 1:15-cv-70-TCB in the United States District Court for the Northern District of Georgia, Atlanta Division.

Background Facts

Sarvint brought suit for infringement of U.S. Patent No. 6,970,731 (the '731 Patent) relating to a "smart shirt" that can unobtrusively measure a person's vital signs without external wiring or electrode patches. This "wearable motherboard" was developed at the Georgia Institute of Technology by Sarvint's co-founders Dr. Sundaresan Jayaraman and Sungmee Park. The '731 Patent was assigned by Sarvint's cofounding inventors to Georgia Tech Research Corporation ("GTRC") which then exclusively licensed it to Sarvint. Sarvint accuses an OMsignal fitness shirt of infringing the '731 Patent.

The Court noted that Sarvint is headquartered in the district as is the owner GTRC. OMsignal is based in and operated out of Montreal, Canada, with no "brick-and-mortar place of business" in Georgia. OMsignal operates a standard e-commerce website and admits to selling accused products in Georgia. OMsignal argued its contacts are minimal - no offices, places of business, employees, officers, directors, bank accounts, business records, real property, or registration in Georgia and that it has never traveled to the state.

Motion to Dismiss

Once personal jurisdiction is challenged, the plaintiff has the initial burden to "make out a prima facie case of jurisdiction." Order at 5. "[T]he court must draw all reasonable inferences arising from the proof, and resolve all factual disputes, in the plaintiff's favor." Id., citing Trintec Indus., Inc. v. Pedre Promotional Prods., Inc., 395 F.3d 1275, 1283 (Fed. Cir. 2005). After stating this principle, the Court next turned to application of the two-part inquiry set forth in Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 626 (11th Cir. 1996) (noting that the issue of personal jurisdiction in a patent infringement action is governed by Federal Circuit law as explained in LSI Indus. Inc. v. Hubbell Lighting, Inc., 232 F.3d 1369, 1371 (Fed. Cir. 2000)). The two-part inquiry is:

(1) whether jurisdiction exists under Georgia's long-arm statute; and

(2) whether exercising such jurisdiction is consistent with federal due process.

Despite holdings that the Georgia long-arm statute is co-extensive with federal due process...