United States District Court, D. Minnesota
ARP WAVE, LLC, a Minnesota Limited Liability Company; and ARP MANUFACTURING, LLC, a Minnesota Limited Liability Company, Plaintiffs,
GARRETT M. SALPETER; NEUROLOGICAL FITNESS AND RECOVERY FACILITIES, LLC, a Texas Limited Liability Company; ARPWAVE AUSTIN, LLC, a Texas Limited Liability Company; NEUROLOGICAL FITNESS EQUIPMENT AND EDUCATION, LLC, a Texas Limited Liability Company; and JOHN DOES I-X, Defendants.
JEFFREY D. SHEWCHUK, SHEWCHUK IP SERVICES, LLC; BORIS PARKER
AND NICHOLAS M. WENNER, PARKER & WENNER, P.A., FOR
TERRAZAS AND JOHN MATTHEW MURRELL, CLEVELAND TERRAZAS PLLC;
JOHN M. WEYRAUCH AND PETER R. FORREST, DICKE, BILLIG &
CZAJA, PLLC, FOR DEFENDANTS.
Patrick J. Schiltz United States District Judge
ARP Wave, LLC and ARP Manufacturing, LLC (collectively
“ARPwave”) bring this patent-infringement action
against defendants Garrett Salpeter; ARPwave Austin, LLC;
Neurological Fitness and Recovery Facilities, LLC; and
Neurological Fitness Equipment and Education, LLC. In
addition to their claims for patent infringement, plaintiffs
bring claims for misappropriation of trade secrets and
confidential information, breach of contract, conversion,
interference with contractual and business relationships, and
defendants have moved to dismiss the patent-infringement
claims-and all defendants save Salpeter have moved to dismiss
other claims-for lack of proper venue. For the reasons that
follow, the Court grants defendants' motion in part and
dismisses the patent-infringement claims without prejudice.
manufactures and distributes devices that electronically
stimulate muscles. ECF No. 1 at ¶¶ 1-2.
ARPwave's devices-and its treatment system-are designed
to help athletes and others to relax and strengthen muscles,
recover from injury, and better absorb force. See
Id. at ¶¶ 22, 26.
first started using ARPwave's devices in 2006, while
playing college hockey. See Id. at ¶¶
34-35. Salpeter “had a life-changing experience using
the ARPwave system” and “was amazed at the
ability of the ARPwave System to bring people back faster
from all kinds of injuries and to reverse chronic
pain.” Id. at ¶ 36.
December 2008, ARPwave and Salpeter entered into a
“clinic master lease and license agreement”
(“the 2008 agreement”). ECF No. 1 at ¶ 38;
ECF No. 1-1. Under the agreement, Salpeter leased various
devices from ARPwave and received a license to provide
ARPwave's treatment system to the public. ECF No. 1 at
¶¶ 37-38, 42; ECF No. 1-1. Salpeter received
training regarding ARPwave's proprietary devices and
treatment system in Minneapolis. ECF No. 1 at ¶¶
43-44. In January 2009, Salpeter registered ARPwave Austin in
Texas and marketed the licensed treatment system to the
public through ARPwave Austin. Id. at ¶¶
39, 45-46. ARPwave alleges that “Salpeter exercises
full dominion, ownership and operational control over
[ARPwave Austin].” Id. at ¶ 7.
2010, ARPwave Austin and Salpeter executed a new agreement
with ARPwave (“the 2010 agreement”). ECF No. 1 at
¶ 50; ECF No. 1-2. This agreement granted Salpeter and
ARPwave Austin a five-year lease on a newly developed ARPwave
device called the “RX 100, ” as well as a license
to use the associated protocols. See id.
the 2008 and 2010 agreements contained identical
forum-selection clauses, providing (in relevant part) as
follows: “Venue for the enforcement of this
Agreement shall be limited to the Hennepin County,
Minnesota, Federal or State District Court to the exclusion
of all other courts . . . . ” ECF No. 1-1 at p. 5,
¶ 21 and at p. 9, § 7, ¶ 2 (2008 agreement)
(emphasis added); ECF No. 1-2 at p. 5, ¶ 21 and at p. 8,
§ 6, ¶ 2 (2010 agreement) (emphasis added).
March 2012, Salpeter entered yet another agreement with
ARPwave (“the 2012 agreement”). ECF No. 1 at
¶ 55; ECF No. 1-3. This agreement granted Salpeter a
five-year lease on a new ARPwave device called the “POV
Sport, ” as well as a license to use the associated
protocols. ECF No. 1 at ¶¶ 55-56; ECF No. 1-3. The
2012 agreement also contained a forum-selection clause that
was worded somewhat differently from the forum-selection
clauses in the 2008 and 2010 agreements. The forum-selection
clause in the 2012 agreement provided (in relevant part) as
EACH PARTY CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE COUNTY OF HENNEPIN, STATE OF
MINNESOTA AND IRREVOCABLY AGREES THAT ALL ACTIONS OR
PROCEEDINGS RELATING TO THIS AGREEMENT OR ANY RELATED
AGREEMENTS MUST BE LITIGATED IN SUCH COURTS. EACH PARTY
ACCEPTS FOR ITSELF, GENERALLY AND UNCONDITIONALLY, THE
EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS.
ECF No. 1-3 at p. 5, ¶ 7.9 (emphasis added).
action, ARPwave alleges that Salpeter failed to make the
payments required by the agreements and, following expiration
of the agreements, refused to return the devices leased to
him under the agreements. ECF No. 1 at ¶¶ 49, 54,
58. ARPwave also alleges that Salpeter and the other
defendants are still using ARPwave's proprietary devices
and treatment system to provide services to members of the
public, albeit under another brand name. See ECF No.
1 at ¶¶ 61-63. Specifically, ARPwave alleges that
Salpeter registered a new LLC in Texas in April 2016
(Neurological Fitness and Recovery Facilities) and that this
company is being used to promote the “Neufit”
treatment system. Id. at ¶ 61. According to
ARPwave, the Neufit treatment system “is a converted
copy of ARPwave proprietary and patented Systems and
technology previously leased and licensed to
2017, Salpeter registered another new LLC in Texas
(Neurological Fitness Equipment and Education). Id.
at ¶ 62. Both of these new companies (collectively
“the Neurological Fitness LLCs”) have the same
address. Id. at ¶¶ 4-5, 61-62. ARPwave
alleges that Salpeter “is the current Chief Operating
Officer” (as well as a “director and
member”) of both of the Neurological Fitness LLCs, and
that he “exercises full dominion, ownership and
operational control over [them].” Id. at
¶¶ 4-5, 7.
also alleges that defendants are using a device that they
refer to as the “Neubie” “to perform . . .
methods of electrotherapeutic stimulation, diagnosis,
treatment and adjustment” that are “virtually
identical” to the treatment system licensed from
ARPwave. ECF No. 1 at ¶ 63. ARPwave also alleges that
the “Neubie” infringes on three ARPwave utility
patents, specifically U.S. Patent No. 8, 768, 474 (issued in
2014) (see ECF No. 1 at ¶¶ 31, 80; ECF No.
1-7), U.S. Patent No. 9, 302, 102 (issued in 2016)
(see ECF No. 1 at ¶¶ 32, 81; ECF No. 1-8),
and U.S. Patent No. 9, 526, 892 (also issued in 2016)
(see ECF No. 1 at ¶¶ 33, 82; ECF No. 1-9).
the defendants now move to dismiss ARPwave's
patent-infringement claims for lack of venue. See
ECF No. 9; ECF No. 11. All of the defendants (with the
exception of Salpeter) also move to dismiss ARPwave's
other claims for lack of proper venue. ECF No. 11 at 9-10;
ECF No. 19 at 5.
does not seem to dispute that, in the absence of the
forum-selection clauses, venue over this case would not lie
in this District. ARPwave contends, however, that because of
the forum-selection clauses, ARPwave may sue defendants in
this District. Defendants disagree. Defendants argue that an
entity cannot be bound by a forum-selection clause in an
agreement to which the entity is not a party, and point out
that ARPwave Austin signed only one of the agreements and
that neither of the Neurological Fitness LLCs signed any of
the agreements. Defendants also argue that, even if all of
them are bound by all of the forum-selection clauses, venue
over some of the claims would still not lie in this District,
as those claims are not within the scope of the clauses.
Court will first address the question of which defendants are
bound by the forum-selection clauses, and then the question
of which claims fall within the scope of those clauses.
Which Defendants Are Bound By the Forum-Selection
contend that an entity cannot be bound by a forum-selection
clause unless the entity is a party to the agreement
containing the clause. Because only Salpeter signed all three
of the agreements, defendants argue, only Salpeter is bound
by all three forum-selection clauses. ECF No. 11 at 9-10; ECF
No. 19 at 5. ARPwave Austin signed only the 2010 agreement
and thus contends that it is bound only by the forum-
selection clause contained in that agreement. Id.
And the Neurological Fitness LLCs did not sign any of