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In the United States District Court for the District Of Case 1:16-cv-00815-WJ-SCY Document 33 Filed 02/06/17 Page 1 of 22 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO ______________________ APPLIED CAPITAL, INC. Plaintiff, v. No. 1:16-cv-00815-WJ-SCY THE ADT CORPORATION, ADT, LLC, and ICONTROL NETWORKS, INC., Defendants. MEMORANDUM OPINION AND ORDER DENYING DEFENDANT ICONTROL’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION and GRANTING PLAINTIFF’S REQUEST FOR JURISDICTIONAL DISCOVERY and REFERRING MATTER TO MAGISTRATE JUDGE FOR DISCOVERY THIS MATTER comes before the Court upon a Motion to Dismiss for Lack of Personal Jurisdiction, filed on September 12, 2016 by Defendant IControl Networks, Inc. (Doc. 15). In this patent infringement case, Plaintiff Applied Capital, Inc. (“Applied Capital”) alleges that Defendants infringed United States Patent No. 8,378,817 (“the ‘817 patent). Defendants are the ADT Corporation and ADT, LLC (collectively, “ADT”) and IControl Networks, Inc. (“IControl”). Having reviewed the relevant pleadings of the parties and the applicable law, the Court finds that IControl’s motion is denied at this time, and that a final ruling on personal jurisdiction will be made following limited jurisdictional discovery. BACKGROUND The ‘817 patent is a home monitoring system. Plaintiff alleges that ADT is infringing on the patent by making, using or selling the ADT Pulse; and that IControl “powers” and provides Case 1:16-cv-00815-WJ-SCY Document 33 Filed 02/06/17 Page 2 of 22 servers and software for the ADT Pulse and for IControl One home monitoring service, which are the allegedly Infringing Products. Compl., ¶13, 15, 16. Applied Capital is a New Mexico corporation with its principal place of business in Albuquerque, New Mexico; both Defendants ADT and IControl are Delaware corporations. The complaint alleges one claim for Infringement of the ‘817 Patent, and asserts federal jurisdiction under 35 U.S.C. § 271 et seq., (infringement of patent), 28 U.S.C. §§ 1331 and 1338(a) (trademark and unfair competition). In this motion, IControl contends that this Court lacks personal jurisdiction over IControl because the complaint fails to allege sufficient facts from which the Court may plausibly infer that personal jurisdiction over IControl exists in New Mexico. In its argument, IControl relies heavily on the filed Declaration of Paul Dawes, IControl’s Executive Vice President. Ex. 2 (Doc. 15-2, “Dawes Declaration”). DISCUSSION I. Legal Standard Personal jurisdiction in patent cases is governed by the law of the Federal Circuit. Grober v. Mako Prods., 686 F.3d 1335, 1345 (Fed. Cir. 2012). “Personal jurisdiction over foreign defendants in federal court typically depends on the existence of sufficient contacts between the defendant and the forum state, requiring the plaintiff to establish that the exercise of personal jurisdiction [would be proper] in the courts of the forum state.” Merial Ltd. v. Cipla Ltd., 681 F.3d 1283, 1293 (Fed.Cir.2012) (citations omitted). The Court may exercise personal jurisdiction over a defendant if the defendant “is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located.” Radio Sys. Corp. v. Accession, Inc., 638 F.3d 785, 788 (Fed.Cir.2011) (citations omitted). Personal jurisdiction for an out-of-state defendant is “a two-step inquiry: ‘whether a 2 Case 1:16-cv-00815-WJ-SCY Document 33 Filed 02/06/17 Page 3 of 22 forum state’s long-arm statute permits service of process and whether assertion of personal jurisdiction violates due process.’” Grober, 686 F.3d at 1345 (citing Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1017 (Fed.Cir.2009)). The New Mexico long-arm statute is coextensive with constitutional limitations imposed by the Due Process Clause and so “the usual two step analysis collapses into a single search for the outer limits of what due process permits.” F.D.I.C. v. Hiatt, 117 N.M. 461, 463-64 (1994). See Tercero v. Roman Catholic Diocese, 132 N.M. 312, 318 (2002) (“transaction of any business” element of the long arm provision is sufficient to fulfill the due process standard of minimum contacts if the cause of action arises from the particular transaction of business, and the minimum contacts were purposefully initiated by the defendant”); Trujillo v. Williams, 465 F.3d 1210, 1217 (10th Cir. 2006); Tarango v. Pastrana, 616 P.2d 440, 441 (N.M. Ct. App. 1980) (three-step inquiry of long-arm statute collapses into two-step inquiry, which is whether a defendant has established minimum contacts with New Mexico and whether the cause of action arises from those contacts).1 The constitutional touchstone for determining whether an exercise of personal jurisdiction comports with due process is “whether the defendant purposefully established minimum contacts in the forum state.” Nuance Commc’ns, Inc., v. Abbyy Software House, 626 F.3d 1222, 1230 (Fed.Cir.2010) (internal citations omitted) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985) and International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). In other words, a defendant must purposefully avail itself of the benefits and 1 The Federal Circuit has noted that sometimes the inquiries under a state’s long-arm statute and the due process clause coalesce into one “because the reach of the state long-arm statute is the same as the limits of the due process clause, so that the state limitation ‘collapses into’ the due process requirement.” See Trintec Industries, Inc. v. Pedre Promotional Products, Inc., 395 F.3d 1275, 1279 (Fed.Cir. 2005). 3 Case 1:16-cv-00815-WJ-SCY Document 33 Filed 02/06/17 Page 4 of 22 protections of the forum state such that the defendant should reasonably anticipate out-of-state litigation. Burger King Corp., 471 U.S. at 474. A plaintiff satisfies the “minimum contacts” standard by showing that the court may exercise either general or specific jurisdiction over the defendant. McManemy v. Roman Catholic Church of Diocese of Worcester, 2 F.Supp.3d 1188, 1199 (D.N.M.,2013) (citing Helicopertos Nacionales de Colombia,S.A. v. Hall, 466 U.S. 408, 414 (1984). General jurisdiction arises when a defendant maintains contacts with the forum state that are sufficiently “continuous and systematic,” even when the cause of action has no relation to those contacts.” Grober, 686 F.3d at 1345 (citing Helicopteros, 466 U.S. at 414–16). Specific jurisdiction “arises out of or relates to the cause of action even if those contacts are isolated and sporadic.” AFTG– TG, LLC v. Nuvoton Tech. Corp., 689 F.3d 1358, 1360 (Fed.Cir.2012) (internal quotation and citation omitted). The plaintiff has the burden of making a prima facie showing of jurisdiction. Under the prima facie burden, the district court must resolve all factual disputes in the plaintiff's favor in evaluating the jurisdictional question. Celgard, LLC v. SK Innovation Co., Ltd., 792 F.3d 1373, 1378 (Fed.Cir. 2015). IControl contends that Applied Capital has failed to show a basis for either general or specific jurisdiction. II. Nature of Allegations Allegations regarding jurisdiction must be individualized according to defendant. Calder v. Jones, 465 U.S. 783, 790 (1984) (“Each defendant’s contacts with the forum State must be assessed individually.”). Also, to sufficiently plead that an entity has minimum contacts with a forum state, a complaint must allege specific facts showing “sufficient activities” in the forum state. Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 1324, 1338 (Fed. Cir. 2008) (finding 4 Case 1:16-cv-00815-WJ-SCY Document 33 Filed 02/06/17 Page 5 of 22 plaintiff's complaint “fatally deficient” because the complaint merely alleged that the defendant engaged in “unspecified sales and marketing activity” through agents or affiliates). IControl argues that Applied Capital makes conclusory and generalized allegations regarding jurisdiction which are insufficient to establish jurisdiction over IControl, pointing specifically to ¶¶ 5 and 6 in the complaint which refers to “Defendants” collectively and makes boilerplate allegations about jurisdiction without supplying necessary facts to render such allegations plausible. See, e.g., Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 1324, 1338 (Fed. Cir. 2008) (finding plaintiff's complaint “fatally deficient” because the complaint merely alleged that the defendant engaged in “unspecified sales and marketing activity” through agents or affiliates). IControl also contends that Applied Capital offers no individual facts regarding IControl’s contacts with New Mexico and fails to identify a single IControl business transaction in New Mexico. While the Court agrees with IControl that Applied Capital could have been more specific about the facts pertaining to each Defendant, there is sufficient factual description of the allegedly infringing conduct as to IControl. See, e.g., Compl., ¶13 (“ADT pulse is powered by IControl”); ¶¶18, 19 (describing allegations of infringement with regard to IControl and ADT, respectively). There is also a reason why Applied Capital refers to Defendants collectively, and that is because Defendants ADT and IControl are alleged to infringe on the ‘817 patent “either alone or as the “mastermind” directing or controlling the actions and/or participation of each other defendant and/or any third parties.” Compl., ¶20. Thus, to the extent the complaint is somewhat lacking in specificity, it is not enough to grant IControl’s motion on that basis. III. General Jurisdiction 5 Case 1:16-cv-00815-WJ-SCY Document 33 Filed 02/06/17 Page 6 of 22 For general jurisdiction to exist, a defendant must have contacts with the forum State that are “so continuous and systematic as to render the [foreign corporation] essentially at home in the forum state.” Goodyear Dunlop Tires Ops.
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