Patent Baristas

After Autogenomics sued Oxford Gene Technology in U.S. District Court for a declaratory judgment of invalidity and non-infringement of claims of U.S. Patent No. 6,054,270, the court dismissed for lack of personal jurisdiction. On appeal, the U.S. Court of Appeals for the Federal Circuit agreed because the district court had neither general nor specific personal jurisdiction over Oxford. Autogenomics v. Oxford Gene Technology (08-1217).

Oxford, a British biotechnology company, owns the ’270 patent, which relates to oligonucleotide microarrays for analysis of polynucleotides. Oxford is not registered to do business in California and doesn’t have any facilities, assets, employees, or agents there. Autogenomics is a California biotechnology company, which uses microarray technology in its business.

To support jurisdiction, Autogenomics cited:

1. Licensing Negotiations Between Autogenomics and Oxford: In early 2006, Oxford contacted Autogenomics regarding the ’270 patent, which Oxford contends is infringed by Autogenomics’s manufacture and sale of microarray products.
2. Licenses: Oxford entered into non-exclusive licenses with “about ten” California companies with respect to its microarray technology.
3. The Agilent Agreement: According to an Oxford press release and an article from a publicly available website, Oxford and Agilent Technologies (Agilent)—a company with offices in California—completed a collaborative agreement in 2007.
4. Conferences: Oxford attended three scientific conferences—trade shows in Autogenomics’s terminology—in California in 2003, 2005, and 2007.
5. Sales: In April 2006, Oxford sold 20 microarrays to a California company for $7,600. According to Oxford, the sale constituted about 1% of its revenue that year.
6. Publication: Oxford published an “application note” on Nature.com, the globally-accessible website of Nature, a United Kingdom scientific publication. Autogenomics characterizes the application note as an advertisement to California companies, noting that the University of California is one of the top ten institutional visitors to Nature.com.

Autogenomics argued that the district court has personal jurisdiction over Oxford on two bases: general and specific personal jurisdiction. General jurisdiction, on one hand, “requires that the defendant have ‘continuous and systematic’ contacts with the forum state and confers personal jurisdiction even when the cause of action has no relationship with those contacts.”  Specific jurisdiction, on the other hand, must be based on activities that arise out of or relate to the cause of action, and can exist even if the defendant’s contacts are not continuous and systematic.

The Federal Circuit felt this was not enough:

The district court correctly ruled that it lacked general personal jurisdiction over Oxford. Oxford does not have contacts with the forum state that qualify as “continuous and systematic general business contacts.” Helicopteros, 466 U.S. at 416. Rather, this “is a classic case of sporadic and insubstantial contacts with the forum state, which are not sufficient to establish general jurisdiction over the defendants in the forum.” Campbell Pet Co. v. Miale, 542 F.3d 879, 884 (Fed. Cir. 2008).

Where a defendant is not subject to general personal jurisdiction in the forum state, a district court may nonetheless exercise specific personal jurisdiction over the defendant subject to a three part test:

(1) the defendant purposefully directed its activities at residents of the forum, (2) the claim arises out of or relates to those activities, and (3) assertion of personal jurisdiction is reasonable and fair. With respect to the last prong, the burden of proof is on the defendant, which must “present a compelling case that the presence of some other considerations would render jurisdiction unreasonable” under the five-factor test articulated by the Supreme Court in Burger King.

In Avocent, the court concluded the following:

While exclusive licensing agreements and other undertakings that impose enforcement obligations on a patentee or its licensee reflect the kind of “other activities” that support specific personal jurisdiction in a declaratory judgment action, the defendant patentee’s own commercialization activity does not. What the patentee makes, uses, offers to sell, sells, or imports is of no real relevance to the enforcement or defense of a patent, because “the federal patent laws do not create any affirmative right to make, use, or sell anything.”

Despite the uneveness of the decision, the Federal Circuit felt that remedies could still be had:

Although we too are concerned that foreign patentees like Oxford may engage in significant commercialization and licensing efforts in a state while benefiting from the shelter of the Avocent rule, we are nonetheless bound by Avocent. We note, however, that it is not the case that the 50% of all patentees who are foreign “are always immunized from adjudication” as the dissent suggests. Jurisdiction over foreign patentees like Oxford continues to be available in the United States District Court for the District of Columbia. See 35 U.S.C. § 293.