United States District Court, D. Utah, Northern Division
ORBIT IRRIGATION PRODUCTS, INC., a Utah corporation, Plaintiff,
MELNOR, INC., a Delaware corporation, Defendant.
MEMORANDUM DECISION AND ORDER DENYING MOTION TO
Waddoups United States District Court Judge
Clark Waddoups Orbit Irrigation Products, Inc.
(“Orbit”) brings this action against Melnor, Inc.
(“Melnor”) claiming patent infringement of
certain of its irrigation timers and seeking injunctive
relief. Melnor moves to dismiss on the basis that the court
lacks personal jurisdiction. Although Melnor also initially
challenged venue and moved the court to transfer venue, at
the hearing on the motion held March 29, 2017, Melnor orally
moved to withdraw its venue motion pending the Supreme
Court's resolution of TC Heartland, LLC v. Kraft
Foods Group Brands, LLC, S.Ct. No. 16-341, cert.
granted, 2016 U.S. LEXIS 7572 (Dec. 14, 2016), which the
court granted without prejudice.
has met its burden of showing that Melnor has sufficient
contacts with Utah under the stream of commerce theory to
allow the court to exercise personal jurisdiction.
Accordingly, the court DENIES Melnor's motion to dismiss.
(Dkt. No. 23).
is a Utah corporation that manufactures irrigation timers. It
holds U.S. Design Pat. No. D750, 977, which protects various
ornamental aspects of a line of Orbit's irrigation
timers. Melnor, a Delaware corporation with a principal place
of business in Virginia, also manufactures irrigation timers.
Orbit alleges that Melnor changed the designs on at least
five models of its irrigation timers that now infringe on
Orbit's patented design.
support of its motion to dismiss for lack of personal
jurisdiction, Melnor offered the Declaration of its President
and Chief Executive Officer, Juergen Nies. According to Nies,
Melnor does not have any direct business contacts in Utah,
does not have an office or other place of business in Utah,
is not licensed to do business in Utah, does not have any
officers, employees, or agents residing in Utah, and does not
warehouse any of its products in Utah. Melnor also asserts
that it does not “directly” sell or ship any
products to customers or distributors in Utah and does not
target any of its commercial activities to Utah. Melnor does
have an official website maintained on a server located in
Virginia, but Melnor claims it is designed to be
arguing that this court has jurisdiction, Orbit points to the
following contacts that Melnor allegedly has to Utah. First,
Melnor has intentionally established relationships with
nationwide distributors including Home Depot and Amazon for
the sale of its irrigation timers into the state of Utah.
Second, Melnor's website purposefully directs consumers,
including Utah consumers, to purchase its products through
what it identifies as “Melnor retailers, ” which
include Home Depot and Amazon, by providing “Where to
Buy” links to these third-party websites that lead
directly to pages displaying Melnor products. In the case of
Amazon, a Utah consumer who follows the Amazon link from
Melnor's website can select the product, input a Utah
shipping address and payment information, and complete the
purchase of the Melnor product. In the case of Home Depot, a
Utah consumer who follows the Home Depot link from
Melnor's website is led directly to a page displaying
Melnor products for sale that have two shipment options. The
first allows the user to have the product shipped directly to
a Utah address, and the second allows the customer to have
the product shipped to any one of 22 Utah Home Depot stores
that is convenient to the customer. Additionally,
approximately five months prior to the initiation of
litigation, two Orbit employees purchased Melnor products
through these websites and have asserted that both Amazon and
Home Depot either shipped the allegedly infringing product
directly to a Utah address and/or shipped the allegedly
infringing product to a Utah Home Depot store where it was
then picked up by the purchaser.
Circuit law controls the determination of specific personal
jurisdiction in a patent infringement case. Trintec
Indus., Inc. v. Pedre Promotional Prods., Inc., 395 F.3d
1275, 1279 (Fed. Cir. 2005). This determination requires the
court to make two inquiries: First, does jurisdiction exist
under Utah's long-arm statute? Second, “if such
jurisdiction exists, would its exercise be consistent with
the limitations of the due process clause?”
Id. These “two inquiries coalesce into
one” where 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.” Id. (internal quotation marks
omitted). Because Utah's long arm statute extends to the
limit of federal due process, Starways, Inc. v.
Curry, 1999 UT 50 ¶ 7, 980 P.2d 204, 206 (Utah
1999), the sole inquiry here is whether due process
requirements are met.
bears the initial burden of establishing personal
jurisdiction. Elecs. for Imaging, Inc. v. Coyle, 340
F.3d 1344, 1350 (Fed. Cir. 2003). Where there has been no
discovery on the jurisdictional issue, Orbit is required only
to make a prima facie showing of jurisdiction to defeat
Melnor's motion to dismiss. Id. at 1349. In
evaluating this showing, the court is required to resolve any
factual disputes in the light most favorable to Orbit.
Id. The court's three-part inquiry under Federal
Circuit law is “(1) whether the defendant purposefully
directed its activities at residents of the forum, (2)
whether the claim arises out of or relates to those
activities, and (3) whether assertion of personal
jurisdiction is reasonable and fair.” 3D Sys., Inc.
v. Aarotech Labs., Inc., 160 F.3d 1373, 1378 (Fed. Cir.
1998). At oral argument, Melnor specifically indicated that
it does not contest the second or third part of this test.
Therefore, the court evaluates only whether Orbit has
successfully shown that Melnor purposefully directed
activities at Utah residents.
parties agree that Beverly Hills Fan Co. v. Royal
Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994) governs
what constitutes purposeful availment of a forum in the
context of stream of commerce cases. “Under the stream
of commerce theory, if . . . the defendant purposefully
shipped the accused product into a state through an
established distribution channel, and the cause of action for
patent infringement is alleged to arise out of these
activities, then no more is usually required to establish
specific jurisdiction.” Phillip M. Assocs., LLC v.
Winbond Elecs. Corp., No. 1:05-CV-64 TS, 2010 WL
3489400, at *7 (D. Utah Sept. 1, 2010) (citing Beverly
Hills Fan, 21 F.3d at 1565 (Fed. Cir. 1994) (internal
quotation marks omitted).
to World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286 (1980), Melnor's arrangement with nationwide
retailers who have an established distribution channel is a
significant fact that supports specific jurisdiction.
“[I]f the sale of a product of a manufacturer or
distributor . . . is not an isolated occurrence, but arises
from the efforts of the [defendants] to serve, directly or
indirectly, the market for its product in other states, it is
not unreasonable to subject it to suit.” Id.
at 297. Furthermore, “[t]he forum State does not exceed
its powers under the Due Process Clause if it asserts
personal jurisdiction over a corporation that delivers its
products into the stream of commerce with the expectation
that they will be purchased by consumers in the forum
State.” Id. at 297-98.
Beverly Hills Fan, the Federal Circuit also
discussed the Supreme Court's decision in Asahi Metal
Indus. Co. v. Superior Court, 480 U.S. 102 (1987) that
addressed the split in lower courts about the “exact
requirements of the stream of commerce theory.”
Beverly Hills Fan, 21 F.3d at 1566. It noted that
four justices, as expressed by Justice O'Connor, would
require “more than the mere act of placing a product in
the stream of commerce . . . there must be in addition
‘an action of the defendant purposefully directed
toward the forum State.'” Id. (citing
Asahi, 480 U.S. at 112). For another four justices,
as expressed by Justice Brennan, a showing of
“additional conduct” is not needed when the
stream of commerce involves “the regular and
anticipated flow of products from manufacture to distribution
to retail sale, ” as opposed to an “unpredictable
current or edd[y].” Id. (citing
Asahi, 480 U.S. at 117). Ultimately, the Federal
Circuit did not join this debate in Beverly Hills
Fan, because it found that under either theory, the
defendants purposefully availed themselves of the forum by
placing a product in the stream of commerce to be shipped via
an established distribution channel, with known likely
destinations for their products, such that they could
reasonably have anticipated being brought into court at those
also directs the court to American Covers, Inc. v.
Premier Accessory Group, LLC, 2:15-cv-432 TS, 2016 WL
1337253 (D. Utah Apr. 5, 2016), a case with facts similar to
those here where the court held that federal due process was
met for jurisdictional purposes. In American Covers,
the manufacturer defendant sold its products to AutoZone,
which had retail locations in all 50 states. In addition, the
defendant also had a website with a “Buy It Now”
button that navigated to a listing for its products on
Amazon. The defendant argued that it did not have a specific
intention of having its products sold in Utah, and that once
it sold the products to AutoZone, it had no control over
where AutoZone resold the products. The court concluded that