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Rotochopper, Inc. v. Bandit Industries, Inc.

United States District Court, D. Minnesota

May 3, 2017

Rotochopper, Inc., Plaintiff,
Bandit Industries, Inc.; Defendant.

          Alexander Farrell, Esq., and Jonathan D. Jay, Esq., Hellmuth & Johnson PLLC, counsel for Plaintiff.

          Andrew M. Grove, Esq., Howard & Howard Attorneys PLLC; and Steven L. Reitenour, Esq., Bowman & Brooke, counsel for Defendant.


          Donovan W. Frank United States District Judge


         This matter is before the Court on Defendant Bandit Industries, Inc.'s Motion to Dismiss. (Doc. No. 9.) For the reasons set forth below, the Court grants Defendant's motion.


         Plaintiff Rotochopper, Inc., is a Minnesota company with its principal place of business in St. Martin, Minnesota. (Doc. No. 1 (“Compl.”) ¶ 1.) Defendant is a Michigan Corporation with its principal place of business in Remus, Michigan. (Id. ¶ 2; Doc. No. 11 (“Mocny Decl.”) ¶ 4.) Plaintiff is the owner by assignment of the entire right, title, and interest in U.S. Patent No. 6, 207, 228 (the '228 Patent), entitled Concurrent Fragmentation and Impregnation Machine and Processing. (Compl. ¶¶ 9, 10, Ex. A (the '228 Patent).) In this action, Plaintiff alleges that Defendant manufactures, assembles, and sells horizontal wood grinder products, stump grinders, hand-fed chippers, and whole-tree chippers, including a horizontal grinder called “The Beast.” (Compl. ¶¶ 11-12.) Plaintiff further alleges, upon information and belief, that Defendant has marketed and sold “The Beast” along with a separate coloring system that, when used together, infringe the '228 Patent (together, the “allegedly infringing product”). (Id. ¶¶ 6, 14.) “The Beast” can be sold with or without a coloring system. Plaintiff alleges that Defendant sells “The Beast” throughout the United States, including through a dealer in Minnesota. (Doc. No. 14 (“Brick Decl.”) ¶ 8.)

         According to Defendant, “The Beast” is made and sold by a separate Michigan entity, Smoracy, LLC, and that Defendant helps Smoracy, LLC, market certain large specialty products, including the allegedly infringing product. (Mocny Decl. ¶¶ 9-10.) Defendant also submits that the allegedly infringing product is not mass produced and costs approximately $500, 000. (Id. ¶ 11.) In addition, Defendant submits that only two have ever been produced and none has ever been manufactured or sold in Minnesota. (Id. ¶¶ 11, 12.) Defendant has sold 119 other products in Minnesota, totaling approximately $7, 000, 000 in sales; however, Defendant submits that these products are unrelated to the allegedly infringing product and account for less than 1% of Defendant's total annual sales. (Id. ¶ 13.) Defendant also points out that it does not have any offices in Minnesota, does not own or lease property in Minnesota, has no bank accounts in Minnesota, and has no employees in Minnesota. (Id. ¶¶ 15-18.) Defendant acknowledges that it has an independent dealer in Minnesota, but submits that the dealer is not an employee and does not (and is not authorized to) sell the allegedly infringing product. (Id. ¶ 14.)

         On October 5, 2016, Plaintiff sued Defendant for patent infringement, asserting a single claim for the direct infringement of the '228 Patent. (Id. ¶¶ 32-37.) Defendant now moves to dismiss the claim for lack of personal jurisdiction. (Doc. No. 9.)


         I. Motion to Dismiss

         Defendant seeks dismissal of Plaintiff's claims for lack of personal jurisdiction. To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must make a prima facie showing that personal jurisdiction exists; that is, a plaintiff must allege facts to support a reasonable inference that defendant may be subjected to jurisdiction in the chosen forum. Steinbuch v. Cutler, 518 F.3d 580, 585 (8th Cir. 2008) (citing Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004)). If, as is the case here, the defendant denies jurisdiction, the plaintiff bears the burden of proving facts supporting personal jurisdiction. See Wells Dairy, Inc. v. Food Movers Int'l, Inc., 607 F.3d 515, 518 (8th Cir. 2010) (quotation omitted). Once a defendant offers affidavits to challenge personal jurisdiction, “facts, not mere allegations, must be the touchstone” in determining whether personal jurisdiction exists. Dever, 380 F.3d at 1072 (citation omitted); see also Abbasi v. Leading Edge Aviation Servs., Inc., Civ. No. 16-295, 2016 WL 4007571, at *3 (D. Minn. July 26, 2016).

         In determining whether personal jurisdiction exists in a patent infringement case, courts apply Federal Circuit law. See 3D Sys. v. Aarotech Labs., Inc., 160 F.3d 1373, 1377 (Fed. Cir. 1998). Under Federal Circuit law, “[p]ersonal jurisdiction over an out-of-state defendant is appropriate if the relevant state's long-arm statute permits the assertion of jurisdiction without violating federal due process.” Id. at 1376-77. Minnesota's long-arm statute extends jurisdiction to the maximum limit consistent with federal due process; therefore the Court need only evaluate whether the requirements of due process are satisfied. Wessels, Arnold & Henderson v. Nat'l Med. Waste, Inc., 65 F.3d 1427, 1431 (8th Cir. 1995).

         Federal due process requires that defendants have “certain minimum contacts” with the forum state such that “maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotations omitted). A defendant's conduct and connection with the forum state must be such that the defendant should reasonably anticipate being haled into court there. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). It is essential in each case that the defendant has purposefully availed itself of the privilege of conducting activities within the forum ...

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