from the United States District Court for the Northern
District of California in No. 5:14-cv-04963-LHK, Judge Lucy
Matthew J. Silveira, Jones Day, San Francisco, CA, argued for
plaintiff-appellant. Also represented by Patrick Thomas
E. Glauser, DiNovo, Price, Ellwanger & Hardy LLP, Austin,
TX, argued for defendant-appellee. Also represented by Andrew
DiNovo, Jay D. Ellwanger.
Charles Duan, Public Knowledge, Washington, DC, for amici
curiae Public Knowledge, Electronic Frontier Foundation. Also
represented by Vera Ranieri, Electronic Frontier Foundation,
San Francisco, CA.
Moore, Kilpatrick Townsend & Stockton LLP, San Francisco,
CA, for amici curiae for AO Kaspersky Lab, Limelight
Networks, Inc., QVC, Inc., SAS Institute Inc., Symmetry LLC,
Harrison J. Frahn, IV, Simpson Thacher & Bartlett, LLP,
Palo Alto, CA, for amici curiae Thirty-Four Law Professors.
Prost, Chief Judge, Newman, and Dyk, Circuit Judges.
Inc., ("Xilinx") appeals from a judgment of the
United States District Court for the Northern District of
California dismissing Xilinx's declaratory judgment
action against Papst Licensing GmbH & Co. KG
("Papst") for lack of personal jurisdiction.
Because we hold that the district court has specific personal
jurisdiction over Papst with respect to Xilinx's
declaratory judgment action, we reverse and remand.
is a Delaware corporation that is headquartered in San Jose,
California. Xilinx designs, develops, and markets
programmable logic devices for use in electronics systems.
Papst is the assignee of U.S. Patent Nos. 6, 574, 759 and 6,
704, 891 (collectively, "the patents-in-suit"),
which are directed to methods for generating and verifying
memory tests in electronics.
is organized under the laws of Germany and has its principal
place of business there. Papst is a non-practicing entity
that is solely in the business of monetizing and licensing
intellectual property rights. According to Papst, it
"has always been in the business of obtaining and
licensing patents, it does not manufacture or sell any
consumer products, and it has always had fewer than 30
employees." J.A. 1133. Xilinx points to various Papst
marketing materials and its website in which Papst describes
itself as "a global patent licensing and monetization
firm specialized in enforcing infringed patents with the goal
to conclude a license agreement with the infringer."
Exhibit 9 at 1, Declaration of Jason M. Gonder, Xilinx,
Inc. v. Papst Licensing GmbH & Co. KG, No.
5:14-cv-04963-LHK (N.D. Cal. Apr. 15, 2015), ECF No. 53-9
materials explain the business model by which Papst acquires
and then asserts patent rights. "Before agreeing to
purchase a patent, " Papst performs "due
diligence" to "identify patent infringement by
comparing the patent claims against the potentially
infringing products." J.A. 1733. Papst's due
diligence involves "identify[ing] the companies
potentially involved in infringements, and the markets they
are selling their product in-where they are located, and how
large they are, including where the product is made as well
as where it is sold." Id.
Papst identifies infringers, it "notif[ies] them that
[Papst] believe[s] they are infringing." Id.
Papst "then travel[s] extensively to visit the
infringers." Id. "After technical
discussions confirming the infringement, the conversation
moves towards licensing the patents through an
agreement." Id. "If negotiations fail,
[Papst] is prepared to effectively enforce the respective
patents in courts. Especially in the United States, Germany,
and the Netherlands [Papst has] years and years of experience
in patent litigation." Exhibit 9 at 1. Papst's
marketing materials explain that Papst has "been very
successful with legal actions. With [Papst's] outside
partners including attorneys, [Papst has] been very
successful and won many high-profile patent cases." J.A.
has repeatedly filed patent infringement suits in California
federal courts. The record shows that Papst has filed patent
infringement lawsuits in California at least seven times
between 1994 and 2007 based on other patents in Papst's
actions leading up to the filing of this declaratory judgment
action are consistent with Papst's business model. Before
acquiring the patents-in-suit in October 2012, Papst
performed its due diligence by investigating potential
infringers and targets for licensing of those patents. Xilinx
describes the investigation as involving twenty-nine target
companies, twenty-eight of which are based, or have
significant presence, in California. One of the companies
that Papst investigated was Xilinx.
January 2014, Papst sent a patent-infringement notice letter
to Xilinx. In the letter, Papst identified several of
Xilinx's products that allegedly infringed the
patents-in-suit, and stated that "Papst proposes
commencing discussions with Xilinx so that Xilinx can
consider taking a license to the Papst Patents." J.A.
1053. After Xilinx did not respond to Papst's first set
of letters, in April 2014, Papst sent a second letter,
"again encourag[ing] Xilinx to participate in a dialogue
regarding taking a license to the" patents-in-suit. J.A.
1056. On October 16, 2014, three representatives of Papst,
including Papst's managing director, its senior counsel,
and its Texas-based outside counsel, traveled to California
to meet with Xilinx. The purpose of the meeting was to
discuss Papst's allegations of infringement of the
patents-in-suit and Xilinx's potential licensing of these
patents. No agreement resulted from these contacts.
November 7, 2014, Xilinx filed this declaratory judgment
action in the Northern District of California seeking a
declaration that Xilinx's products do not infringe the
patents-in-suit and that the patents are invalid. On the same
day that Xilinx filed its declaratory judgment action in
California, Papst filed an infringement suit against Xilinx
in the District of Delaware asserting the same
patents-in-suit. Papst moved to dismiss the California
declaratory judgment action for lack of personal
jurisdiction, or in the alternative, transfer the action to
the District of Delaware.
9, 2015, the court granted Papst's motion and dismissed
the declaratory judgment action for lack of personal
jurisdiction. The court first determined that it lacked
general jurisdiction over Papst because it "is not at
home in California, " recognizing that "Papst is
not incorporated in California, nor does it have its
principal place of business" there. J.A. 8-10.
court also held that it lacked specific personal jurisdiction
over Papst. The court observed that "Papst certainly has
many connections to the state of California." J.A.
22-23. However, relying principally on our decisions in
Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc.,
148 F.3d 1355 (Fed. Cir. 1998), and its progeny, the court
recognized that "even if the 'purposefully
directed' and 'arises out of' prongs are
satisfied by the defendant's enforcement activities"
in the forum, "[n]ot all assertions of jurisdiction
based on enforcement activities comport with 'fair play
and substantial justice.'" J.A. 11 (citing
Avocent Huntsville Corp. v. Aten Int'l Co., 552
F.3d 1324, 1333 (Fed. Cir. 2008)). The court determined that
Papst's California contacts were "either related
solely to Papst's attempts to license the patents, which
the Federal Circuit has held insufficient, or according to
Federal Circuit law are irrelevant to the parties'
instant dispute." J.A. 23. With respect to Papst's
prior litigation in California, the court explained that
these "enforcement activities regarding other patents
are irrelevant to the question at hand: whether this Court
can assert specific jurisdiction over Papst based on its
efforts to enforce the patents-in-suit." J.A. 22.
"The Federal Circuit has 'consistently' made
clear that the 'other ...