When Sending A Cease And Desist Letter Establishes Personal Jurisdiction

• Published date: 24 November 2021
• Subject Matter: Intellectual Property, Patent
• Law Firm: Haug Partners
• Author: Mr Rich Kurz and Anna Lukacher

A patentee may establish "minimum contacts" in a forum, thus subjecting itself to specific personal jurisdiction, by sending a cease and desist letter to the forum. Precedent concerning this issue has been evolving. Previously, the Federal Circuit held in Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc. that the district court for the District of Minnesota did not have personal jurisdiction over the defendant (a Louisiana corporation with a principal place of business in New Mexico) because it did not have minimum contacts with Minnesota to support personal jurisdiction-even though the defendant had sent the plaintiff (a Minnesota corporation with a principal place of business in Minnesota) a cease and desist letter with an offer of a license to the defendant's patent. 148 F.3d 1355, 1357 (Fed. Cir. 1998). However, the Federal Circuit has since clarified that Red Wing Shoe did not set a blanket rule that cease and desist letters were insufficient to establish minimum contacts with a forum for personal jurisdiction.

The evolution of the Federal Circuit's precedent has helped to clarify when such communications do rise to the level of minimum contacts for personal jurisdiction in a forum in which a defendant does not otherwise have minimum contacts. Overall, the cases have shown that while the act of solely sending a cease and desist letter may not by itself satisfy minimum contacts to support personal jurisdiction in a forum (as in Red Wing Shoe), under the right set of facts this letter accompanied by more, e.g., an offer of a license, a draft complaint, or multiple communications regarding the same, may establish minimum contacts in the forum to subject the party to specific personal jurisdiction.

I. TRIMBLE INC. V. PERDIEMCO LLC, 997 F.3D 1147 (FED. CIRC. 2021)

Recently, the Federal Circuit clarified the Red Wing Shoe precedent and overturned the District Court for the Northern District of California's finding of personal jurisdiction when the defendant was not incorporated in California, did not have any employees in California, or transact business in California. Defendant Perdiemco LLC was the assignee of the patents at issue. Trimble Inc. v. Perdiemco LLC, 997 F.3d 1147, 1150 (Fed. Cir. 2021). Defendant initially sent a letter to Innovative Software Engineering, LLC ("ISE") accusing ISE's products and services of using technology covered by defendant's patents. Id. at 1151. To this letter the defendant attached, among other things, an unfiled complaint designated for the Northern District of Iowa asserting defendant's patents against ISE's products and services, and also an offer of a nonexclusive license to defendant's patents. Id. at 1151. ISE, a wholly owned subsidiary of Trimble, sent defendant's letter to Trimble, which then began discussions with defendant. Id. at 1150-51. Over the course of three months, defendant communicated with Trimble at least twenty-two times by letter, email, and telephone. Id. at 1151. During these communications, defendant threatened to sue Trimble and ISE for patent infringement in the Eastern District of Texas and identified its retained counsel. Id. at 1151. Subsequently, Trimble and ISE filed a complaint seeking a declaratory judgment of noninfringement against defendant in the Northern District of California. Id. at 1151-52. Defendant was a...