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Polar Electro Oy v. Suunto Oy

United States Court of Appeals, Federal Circuit

July 20, 2016

POLAR ELECTRO OY, Plaintiff-Appellant
v.
SUUNTO OY, Defendant-Appellee AMER SPORTS WINTER & OUTDOOR, DBA SUUNTO USA, FIRSTBEAT TECHNOLOGIES OY, Defendants

         Appeal from the United States District Court for the District of Delaware in No. 1:11-cv-01100-GMS, Judge Gregory M. Sleet.

          John P. Moran, Holland & Knight, LLP, Washington, DC, argued for plaintiff-appellant. Also represented by Anthony J. Fuga, Chicago, IL.

          Jeffery A. Key, Key & Associates, Chicago, IL, argued for defendant-appellee.

          Before Newman, Lourie, and Chen, Circuit Judges.

          Lourie, Circuit Judge.

         Polar Electro Oy ("Polar") appeals from the decision of the United States District Court for the District of Delaware granting Suunto Oy's ("Suunto") motion to dismiss for lack of personal jurisdiction. See Polar Electro Oy v. Suunto Oy, No. 11-1100, 2015 WL 2248439 (D. Del. May 12, 2015). Because the district court erred in determining that Suunto lacked sufficient minimum contacts with Delaware to support specific jurisdiction, we vacate and remand.

         Background

         Polar, a Finnish company based in Finland, owns U.S. Patents 5, 611, 346 and 6, 537, 227, directed to a method and apparatus for measuring heart rates during physical exercise and athletic performance. Polar sued Suunto, Amer Sports Winter & Outdoor ("ASWO"), and Firstbeat Technologies Oy ("Firstbeat") in the United States District Court for the District of Delaware, alleging that the defendants infringed its patents, directly and indirectly, through the manufacture, use, sale, offer for sale, and importation of certain Suunto products.

         Suunto is a Finnish company with a principal place of business and manufacturing facilities in Finland. ASWO is a Delaware corporation with a principal place of business in Utah. Suunto and ASWO are sister companies, ultimately owned by the same parent company. ASWO distributes Suunto's products in the United States pursuant to a distribution agreement. J.A. 352–66. Under that agreement, Suunto is responsible for supplying the products from Finland and for providing "outbound logistics services." J.A. 358.

         As the supplier, Suunto is obligated to ship its products to addresses specified by ASWO. Id. According to Polar, the accused Suunto products are shipped via a standard ordering process from Finland to the United States, which comprises: (1) Suunto receiving an order for a product; (2) Suunto packaging that order at its factory in Finland; (3) Suunto then placing the packaged product on its shipping dock for a third-party shipper to pick up; and (4) the third-party shipper delivering the order to an address provided by ASWO, such as the address of a U.S. retailer. Appellant's Br. 8.[*] ASWO pays for shipping, and title to the goods passes from Suunto to ASWO at Suunto's shipping dock in Finland. At least ninety-four accused products have been shipped from Finland to retailers in Delaware using that standard ordering process. J.A. 293–94. At least three retail stores in Delaware sell the accused Suunto products.

         Suunto also owns the website, www.suunto.com/us. Customers can use the "Dealer Locator" feature on that website to locate retailers in Delaware that sell Suunto products. ASWO maintains that feature, however. In addition, customers can order Suunto products on the Suunto website. ASWO fulfills such online orders via an e-commerce platform that ASWO owns. At least eight online sales have been made in Delaware. J.A. 293–94.

         In the district court, Suunto filed a motion to dismiss the complaint against it for lack of personal jurisdiction. The district court held Suunto's motion in abeyance while the parties conducted jurisdictional discovery. After the completion of jurisdictional discovery, Suunto renewed its motion, which the district court granted without an evidentiary hearing. Polar, 2015 WL 2248439, at *1.

         The district court first considered whether exercising jurisdiction over Suunto would be proper under the Delaware long arm statute, Del. Code Ann. tit. 10, § 3104(c). The court found that the specific-jurisdiction provisions, § 3104(c)(1) and (c)(3), were not met because Suunto did not directly sell the accused products in Delaware. Polar, 2015 WL 2248439, at *3. Nevertheless, the court found the long arm statute satisfied under a "dual jurisdiction" theory, as articulated by the Delaware Superior Court in Boone v. Oy Partek Ab, 724 A.2d 1150, 1157–58 (Del. Super. Ct. 1997), aff'd, 707 A.2d 765 (Del. 1998), with the partial satisfaction of § 3104(c)(1) and (c)(4). Polar, 2015 WL 2248439, at *4. The court found that Polar demonstrated Suunto's "intent to serve the Delaware market"; and that "this intent result[ed] in the introduction of the product into the market and . . . [the] cause of action ar[ose] from injuries caused by that product." Id. The court noted that under the Delaware dual-jurisdiction law, an intent to serve the U.S. market is sufficient to establish an intent to serve the Delaware market. Id. (citing Power Integrations, Inc. v. BCD Semiconductor Corp., 547 F.Supp.2d 365, 373 (D. Del. 2008)). The court thus found that Polar proved the intent element based on Suunto's relationship with its U.S. distributor, ASWO.

         The district court next considered whether exercising jurisdiction over Suunto comports with due process. The court relied on J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873 (2011), and concluded that Suunto did not have sufficient contacts with Delaware to support specific jurisdiction. Polar, 2015 WL 2248439, at *5–6. The court found that Suunto sold its products through ASWO in the United States, and that the record only indicated that Suunto had a general intent to serve the U.S. market at large, without any particular focus on Delaware. Although ASWO's dealings with Delaware retailers and customers were foreseeable, the court reasoned, there was not "something more" in Suunto's activities directed toward Delaware beyond placing its products into the stream of commerce. Id. at *5. The court also noted that it was ASWO who maintained the "Dealer Locator" feature on Suunto's website, that the website listed Delaware along with other states, and that the limited online orders were fulfilled by ASWO, not Suunto. Id. The court thus reasoned that those facts did not show "special" attention to Delaware by Suunto. Id. The court therefore concluded that due process considerations prevented its exercise of jurisdiction over Suunto.

         Accordingly, the district court dismissed the complaint against Suunto for lack of personal jurisdiction. ASWO and Firstbeat remained in the suit. Polar moved for entry of final judgment under Federal Rule of Civil Procedure 54(b). The district court granted the motion and entered final judgment in favor of Suunto and against Polar. Polar timely appealed to this court. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

         Discussion

         In a patent case, we review a district court's determination of personal jurisdiction without deference, applying Federal Circuit law to jurisdictional issues that are "intimately involved with the substance of the patent laws." Grober v. Mako Prods., Inc., 686 F.3d 1335, 1345 (Fed. Cir. 2012) (internal quotation marks and citation omitted). We review any factual findings underlying the jurisdictional determination for clear error. Id.

         In a case such as this, a plaintiff need only make a prima facie showing of personal jurisdiction where, as here, the parties conducted jurisdictional discovery, the jurisdictional facts are in dispute, and the district court determined personal jurisdiction without an evidentiary hearing. Celgard, LLC v. SK Innovation Co., 792 F.3d 1373, 1378 (Fed. Cir. 2015). Under ...


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