United States District Court, D. Minnesota
Frank Farrell, Jr., And Alexander Farrell, for Plaintiff.
Mark Privratsky, for Defendant.
REPORT AND RECOMMENDATION
FRANKLIN L. NOEL, Magistrate Judge.
THIS MATTER came before the undersigned United States Magistrate Judge on Defendant's motion to dismiss or, in the alternative, to transfer venue (ECF No. 10). The matter was referred to the undersigned for Report and Recommendation pursuant to 28 U.S.C. § 636 and Local Rule 72.1. For the reasons set forth below, the Court recommends that Defendant's motion be DENIED.
I. FINDINGS OF FACT
A. Procedural Background
Plaintiff Equine PSSM Genetics, LLC (Equine PSSM) owns a patent which depicts technology utilized in equine genetic testing. Compl. ¶ 8, ECF No. 1. Specifically, United States Patent No. 8, 268, 557 (557 patent) claims a method for testing horses for the genetic disorder Polysaccharide Storage Myopathy (PSSM). Id. Equine PSSM licenses this genetic test to the University of Minnesota. Id. ¶ 10. All testing under the license is conducted by the University of Minnesota, with customers shipping biological samples to the University for testing. Id.
Equine PSSM commenced this action on February 21, 2014, alleging that Defendant Animal Genetics (Animal Genetics) had knowledge of Equine PSSM's pending patent application for the technology at issue, but began to provide infringing services for PSSM testing prior to the issuance of the 557 patent. Id. ¶ 14-15. Further, the complaint states that this Court has personal jurisdiction over Animal Genetics because "Animal Genetics has continuous and systematic contacts in Minnesota." Id. ¶ 5. In response, Animal Genetics argues that it is not subject to personal jurisdiction in Minnesota and therefore filed the instant motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3) for lack of personal jurisdiction and improper venue or, in the alternative, to transfer venue. Mot. to Dismiss, ECF No. 10.
B. Jurisdictional Facts
After Animal Genetics filed its motion to dismiss, the parties stipulated to limited jurisdictional discovery. Stipulation 1-3, ECF No. 21. Animal Genetics agreed to provide information related to any contracts with Minnesota entities as well as information pertaining to Animal Genetics' sales, revenue, and advertising in Minnesota. Id. at 2-3.
This discovery revealed that, over the past five years, Animal Genetics has conducted 3, 720 tests nationwide for PSSM. Privralzky Decl. Ex. A, at 2, ECF No. 27-1. Of that number, 156 tests were conducted for approximately 39 Minnesota customers. Id. For all of its services offered in the United States, Animal Genetics has approximately 32, 518 customers nationwide with 524 customers in Minnesota. Id. Further, Animal Genetics reported total revenue from all of its services over the last five years nationwide a $6, 987, 452. Id. Approximately $2, 060 of this total was generated from PSSM testing for Minnesota customers, or 0.0002% of Animal Genetics' net overall revenue. Id.; Def.'s Reply Mem. in Supp. of Mot. to Dismiss 10 n.7, ECF No. 26. Evaluating services beyond PSSM testing, Animal Genetics receives approximately $75, 074 in revenue from various sales and services provided to Minnesota customers, or 0.01% of its net overall revenue. ECF No. 27-1 at 2; ECF No. 26 at 10 n.8.
Animal Genetics additionally reported having no offices or agents based in Minnesota. DeKloet Aff. ¶ 4, ECF No. 15. No Animal Genetics employee has traveled to Minnesota within the last five years and the company directs no advertising to the state. ECF No. 27-1 at 1. The corporation does, however, maintain a license agreement with the University of Minnesota on an unrelated patent. Id.
Although Animal Genetics contends it does not ship product to Minnesota, Id. at 1, 3, any potential customer with access to the internet (including those in Minnesota) can download a PSSM test order form from Animal Genetics' website. Farrell Decl. ¶ 10, ECF No. 25. The customer then completes the form and mails it, along with a genetic sample (such as horse hair), to Animal Genetics' testing facilities in Florida. Id. Upon receiving the sample, Animal Genetics conducts relevant testing in its testing facility in Tallahassee, Florida. ECF No. 15 ¶ 8. Results are subsequently sent to the ...