JACK HENRY & ASSOCIATES, INC., COMMUNITY BANK OF TEXAS NA, AMERICAN NATIONAL BANK OF TEXAS NA, GREEN BANCORP, INC., GREEN BANK NA, MOODY NATIONAL BANK NA, FIRST SONORA BANCSHARES INC, FIRST NATIONAL BANK OF SONORA, EXTRACO BANKS NA, CITIZENS STATE BANK, TEXAS GULF BANK NA, JEFFERSON BANK, Plaintiffs-Appellants
PLANO ENCRYPTION TECHNOLOGIES LLC, Defendant-Appellee
from the United States District Court for the Northern
District of Texas in No. 3:15-cv-03745-N, Judge David C.
Heidrick, Polsinelli PC, Kansas City, MO, argued for
plaintiffs-appellants. Also represented by Russell S. Jones,
Jr.; Michael David Pegues, Dallas, TX.
Seth Pitcock, The Pitcock Law Group, New York, NY, argued for
Newman, Wallach, and Stoll, Circuit Judges.
NEWMAN, CIRCUIT JUDGE.
Henry & Associates, Inc. ("Jack Henry") and
eleven Texas banks ("the Banks"), collectively
"Appellants," appeal the ruling of the United
States District Court for the Northern District of Texas,
dismissing this declaratory judgment action against Plano
Encryption Technologies LLC ("PET"). The district
court held, citing Federal Circuit rulings, that PET's
contacts with the Northern District did not subject it to
personal jurisdiction, and therefore that venue was
the venue statute and guided by precedent, we conclude that
PET is subject to personal jurisdiction in the Northern
District. We reverse the dismissal and remand for further
in the Northern District
a Limited Liability Company established in the State of
Texas, and is registered to do business throughout Texas,
with its registered address in Plano, Texas. Plano is in the
Eastern District of Texas. The Banks all have their principal
offices or branches or customers in the Northern District of
declares that its "sole business is to enforce its
intellectual property." J.A. 543 (Declaration of Bradley
Liddle, Chief Executive Officer). Mr. Liddle wrote to each of
the Banks, identifying PET's patents, stating that the
Banks are believed to be infringing the patents, and inviting
non-exclusive licenses. The letters to all the Banks are
similar, see, e.g., the following letter addressed
to Robert Hulsey (President and CEO) and Steve Booker (EVP)
of American National Bank of Texas, at its address in
Terrell, Texas. Terrell is in the Northern District:
PET has reviewed the technology of American National Bank of
Texas ("ANBTX") and believes that ANBTX is
infringing several claims of its patents, including without
limitation U.S. Patent Nos. 5, 974, 550; 5, 991, 399; and 6,
587, 858. Our review of your mobile apps indicates that your
company infringes at least claims 1, 9, 29 and 37 of U.S.
Patent No. 5, 991, 399 (the '399 patent), as illustrated
by the claims charts attached as Exhibit A. . . . that ANBTX
infringes at least claims 14-17 of U.S. Patent No. 5, 974,
550 (the '550 patent), as illustrated by the claims
charts attached as Exhibit B. . . . at least claim 6 of U.S.
Patent No. 6, 587, 858 (the '858 patent) is infringed in
connection with at least your online banking features, as set
forth in the claims charts attached as Exhibit C.
J.A. 137 (footnote omitted). Exhibit A is entitled
"Draft Settlement Claims Chart-U.S. Patent No. 5, 991,
399 vs. ANBTX," and consists of 22 pages of
"infringement" analysis for claims 1, 9, 29, and 37
of Patent No. 5, 991, 399, claim clause by claim clause. J.A.
139-60. Exhibit B is 16 pages of infringement analysis of
claims 14-17 of Patent No. 5, 974, 550, JA 161-76; and
Exhibit C is 4 pages of infringement analysis of claim 11 of
Patent No. 6, 587, 858. JA 177-80. The letter further states:
PET actively licenses and enforces its patent rights and has
recently filed a lawsuit against Citizens National Bank for
infringement of the technology covered by these patents.
Plano Encryption Technologies, LLC v. Citizens National
Bank, Civ. No. 2:15-cv-1168 (E.D. Tex.). We write to
invite you to take a license to our patent portfolio.
letters and attachments were sent to each of the Banks,
i.e., to Bob Malone (President and CEO) and Patrick
Holt (EVP and COO) of Sonora Bank at its address in Sonora,
in the Northern District of Texas, J.A. 326; to Cory Newsom
(President and CEO) and Dwight Overton (EVP) of City Bank at
its address in Lubbock, in the Northern District of Texas,
J.A. 573; to F. Scott Dueser (President and CEO) and Gary
Webb (EVP) of First Financial Bank at its address in Abilene,
in the Northern District of Texas, J.A. 575; to Eddie Schulz
(President and CEO) and Kyle McNeese (SVP) of Lubbock
National Bank at its address in Lubbock, in the Northern
District of Texas, J.A. 577; and to J. Pat Hickman (CEO) and
David Jones (General Counsel) of Happy State Bank, at its
address in Amarillo, in the Northern District of Texas, J.A.
621. These banks have their principal offices in the Northern
District, and the other banks have branches or customers in
the Northern District. It is not disputed that all the Banks
conduct banking business in the Northern District of Texas.
All the letters from PET state that "review
indicates" PET patents are infringed and refer to
PET's pending lawsuit against Citizens National Bank in
the Eastern District.
Henry provides software systems for the Banks' mobile
apps, and states that it is indemnifying the Banks for any
liability for infringement. Jack Henry's counsel wrote to
PET, giving reasons why the PET patents are not infringed,
questioning patent validity, and requesting PET and its
counsel to meet and discuss the issues. J.A. 132-35.
not respond to Jack Henry. PET's counsel at Chaudhari
Law, PLLC wrote to each of the Banks, stating that "only
your bank is accused of infringement." These letters
disputed Jack Henry's views of non-infringement and
invalidity, and further stated:
We have a successful history of enforcing the intellectual
property rights of our clients against in-fringers. In
addition to obtaining numerous licenses, we have also won
jury verdicts against infringers, including one last
September in Marshall, TX, which was one of ...