Richards Layton & Finger
 

Chief Judge Stark Dismisses Defendant for Improper Venue

January 30, 2018

In Koninklijke KPN N.V. v. Kyocera Corp., No. 17-87-LPS-CJB (D. Del. Dec. 18, 2017), Chief Judge Stark denied defendant Kyocera Corp.’s motion to dismiss for lack of personal jurisdiction, but granted defendant Kyocera International, Inc.’s motion to dismiss for improper venue.

The Court first found that Kyocera International’s venue defense was neither waived (since the Federal Circuit recognized TC Heartland as a change in law) nor forfeited by joining a motion for judgment on the pleadings filed in related cases. Chief Judge Stark pointed out that Kyocera International’s motion to dismiss preceded its joinder in the motion for judgment on the pleadings, and that Kyocera had at various points continued to contest venue. Under these circumstances, according to the Court, no forfeiture took place. The Court then found that venue was not proper under the patent venue statute because Kyocera International did not maintain a physical presence in Delaware, which, according to the Court, was not “seriously” disputed. The Court did conclude that venue was proper as to Kyocera Corp., however, since the patent venue statute applied only to domestic corporations (which Kyocera Corp., a Japanese company, was not).

Additionally, Chief Judge Stark concluded that Kyocera Corp. was subject to personal jurisdiction under a “dual jurisdiction” or “stream of commerce” theory because Kyocera Corp. stated in a securities filing that it manufactured and sold products for sale throughout the United States. In rejecting Kyocera Corp.’s personal jurisdiction challenge, the Court found that the Supreme Court’s decision in Bristol-Myers Squibb v. Superior Court of California, San Francisco County, 137 S. Ct. 1773 (2017), did not bar the exercise of specific jurisdiction; unlike in Bristol-Myers, there was a connection here between the forum and the cause of action, since Kyocera Corp. intended to serve the Delaware market with the accused products.

The Court also denied the defendants’ request that they be transferred together on convenience grounds to the Southern District of California, since related cases were pending before Chief Judge Stark and because the plaintiff, Koninklijke KPN N.V., expressed a willingness to dismiss its claims without prejudice against Kyocera International and proceed solely against Kyocera Corp. The Court granted Kyocera Corp. leave to renew its motion to transfer should Koninklijke seek to dismiss its claims against Kyocera International.

Key Point: Patentees accusing corporate affiliates or subsidiaries of infringement based on the same accused products must analyze venue carefully before filing suit or risk having their claims adjudicated in separate venues.