Addressing the issue of personal jurisdiction over an alleged infringement defendant, the US Court of Appeals for the Federal Circuit affirmed the district court’s dismissal of the complaint, finding no specific jurisdiction over the defendant based on pre-patent-issuance activities. NexLearn, LLC v. Allen Interactions, Inc., Case No. 16-2170 (Fed. Cir., June 19, 2017) (Moore, J).

The parties in the case entered into a non-disclosure agreement (NDA) and end user license agreement (EULA) to allow Allen to learn more about NexLearn’s software. After sharing information about its product, including a trial version of the software, NexLearn sued for patent infringement and breach of contract, asserting that Allen developed its own product based on information it learned. Both the NDA and EULA contained a choice of law provision stating that Kansas law governed. The EULA went a step further, providing that any dispute arising out of or related to the agreement or the product must be brought exclusively in a court sitting in Wichita, Kansas. NexLearn filed suit in Kansas, and Allen, a Minnesota corporation, moved to dismiss the complaint for lack of personal jurisdiction. Allen argued that it was not subject to jurisdiction in Kansas because of its limited contacts with the forum, which amounted to a single sale of its product and represented less than 1 percent of its revenue over the past five years. Furthermore, Allen argued that because NexLearn’s complaint asserted that its breach of contract claim was supplemental to its patent infringement claim, NexLearn must establish personal jurisdiction over its infringement claim. After the district court dismissed on the personal jurisdiction issue, NexLearn appealed.

The Federal Circuit noted that NexLearn did not allege general jurisdiction, so it declined to address that issue. The Court further noted that the contacts NexLearn asserted over Allen occurred more than five years before the issuance of NexLearn’s patent at issue and therefore did not “arise out of or relate to the defendant’s contacts with the forum.” Since the activities occurred before NexLearn ever had a property right, the Court determined that they could not constitute infringing acts giving rise to specific personal jurisdiction over NexLearn’s claim. 

The Federal Circuit also concluded that the NDA and EULA provisions did not render Allen subject to specific jurisdiction in Kansas. The Court determined that neither agreement specified the forum for disputes relating specifically to patent infringement. The Court found no evidence of Allen’s deliberate affiliation with Kansas, or any reasonable foreseeability of possible litigation there relating to infringement. 

With respect to the post-patent issuance contacts, the Federal Circuit concluded that Allen’s two email contacts with NexLearn employees did not establish specific jurisdiction because they were manufactured by NexLearn’s unilateral acts. Finally, NexLearn argued that Allen’s website conferred specific jurisdiction because Kansas is listed in its drop-down menu of states and a Kansas resident could purchase products from its website. The Federal Circuit again disagreed, stating that while a Kansas resident could purchase Allen’s software from the website, there was no evidence that any such sale had taken place. The mere existence of an interactive website does not create a substantial connection to the state. The Court concluded that the contacts created only an “attenuated affiliation” with Kansas as opposed to a “substantial connection” to warrant the exercise of specific jurisdiction.