porauto indus. v. kabo tool - cert petition

8/11/2019 Porauto Indus. v. Kabo Tool - Cert Petition

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No. __________

IN THE

SUPREME COURT OF THE UNITED STATES

PORAUTO INDUSTRIAL CO., LTD; ACCUAIRE

CORP.; AND CHIH-HSIANG HSU,

Petitioners,

v.

KABO TOOL COMPANY; AND CHIH-CHING

HSIEH,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the

Federal Circuit

PETITION FOR A WRIT OF CERTIORARI

Jack Chen Min Juan, Esq.

Micah S. Echols, Esq.

Counsel of Record

Brian R. Hardy, Esq.

Marquis Aurbach Coffing

10001 Park Run Dr.

Las Vegas, NV 89145

(702) 382-0711

[email protected]

Counsel for Petitioners


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i

QUESTIONS PRESENTED

This is a specific personal jurisdiction case in

which the Respondents, Kabo Tool Company and

Chih-Ching Hsieh (collectively Plaintiffs), alleged a

single claim of patent infringement of a wrench

design (U.S. Patent No. 7,066,057) against

Petitioners, Porauto Industrial Co., Ltd; Accuaire

Corp.; and Chih-Hsiang Hsu (collectivelyDefendants). Although Plaintiffs and Defendants

are both based in Taiwan, where Plaintiffs have

maintained a parallel litigation involving the same

wrench design, the Federal Circuit refused to

intervene and dismiss Defendants from a Nevada

Federal District Court lawsuit due to a lack of

specific personal jurisdiction. The parties agree that

there is no general personal jurisdiction over

Defendants.

The questions presented are:

1. Whether affidavits of counsel cannot

provide a sufficient basis to subject Defendants to

specific personal jurisdiction in Nevada for a case

alleging patent infringement.

2. Whether the controlling Federal Circuit

reasonable factors for determining specific personal

jurisdiction in cases alleging patent infringement are

limited by the stream of commerce theory set forth

by the plurality opinion inAsahi Metal Industry Co.,Ltd. v. Superior Court, 480 U.S. 102, 107 S.Ct. 1026

(1987).


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ii

PARTIES TO THE PROCEEDINGS

Petitioners, Porauto Industrial Co., Ltd;

Accuaire Corp.; and Chih-Hsiang Hsu, were the

petitioners in the United States Court of Appeals for

the Federal Circuit and the defendants in the United

States District Court, District of Nevada.

Respondents, Kabo Tool Company and Chih-

Ching Hsieh, were the respondents in the United

States Court of Appeals for the Federal Circuit and

the plaintiffs in the United States District Court,

District of Nevada.

CORPORATE DISCLOSURE STATEMENT

Pursuant to Supreme Court Rule 29.6,

petitioners Porauto Industrial Co., Ltd; Accuaire

Corp.; and Chih-Hsiang Hsu state the following:

Porauto Industrial Co., Ltd and Accuaire

Corp. are not publicly held companies, and no

publicly held company owns 10% or more of the stock

of these companies. Chih-Hsiang Hsu is an

individual.


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iii

TABLE OF CONTENTS

QUESTIONS PRESENTED ....................................... i

PARTIES TO THE PROCEEDINGS ........................ ii

CORPORATE DISCLOSURE STATEMENT ........... ii

TABLE OF AUTHORITIES ..................................... vi

OPINIONS BELOW ....................................................1

JURISDICTION ..........................................................1

CONSTITUTIONAL PROVISIONS ...........................1

STATEMENT OF THE CASE ....................................2

A. Plaintiffs Complaint Alleging a Single Claim for

Patent Infringement ...................................................3

B. Defendants De Minimis Contacts with

Nevada and Motion to Dismiss for Lack of Personal

Jurisdiction ..................................................................5

C. The District Courts Orders Denying Defendants

Motion to Dismiss and Reconsideration. ....................7

D. The Federal Circuits Improper Reliance Upon

Affidavits of Counsel, Failure toApply Controlling

Federal Circuit Law, and Failure to Distinguish the

Stream of Commerce Theory from the NationalContacts Theory Set Forth inAsahi. ..........................8

REASONS FOR GRANTING THE PETITION .........9


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iv

A. Affidavits of Counsel Cannot Provide a Sufficient

Basis to Subject Foreign lien Defendants to Specific

Personal Jurisdiction in Nevada for a Case Alleging

Patent Infringement. ................................................10

B. In Cases Alleging Patent Infringement, the

Controlling Federal Circuit Reasonableness Factors

Must Be Applied for a Specific Personal Jurisdiction

Analysis. ....................................................................12

C. The Federal Circuit Has Admittedly Failed to

Distinguish the Stream of Commerce Theory from the

National Contacts Theory Set Forth in Asahi for

Determining Personal Jurisdiction in Cases Alleging

Patent Infringement. ................................................15

1. Asserting Personal Jurisdiction Over

Defendants in Nevada Is Overly Burdensome

on Them. .........................................................16

2. Nevada Does Not Have An Interest In

Adjudicating the Dispute. ..............................19

3. Plaintiffs Can Obtain Relief in a More

Convenient Forum and Effective Manner. ....19

4. Defendants Dismissal from this

Litigation is Necessary to Effectuate an

Efficient Resolution of the Matter. ................ 20

5. The Shared Interest of the Several States

Demands Defendants Dismissal from this

Litigation. .......................................................21


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v

CONCLUSION ..........................................................23

APPENDIX

Order of the United States Court of Appeals for the

Federal Circuit, May 5, 2014 ....................................1a

Order of the United States District Court, District of

Nevada, March 6, 2014 .............................................4a

Order of the United States District Court, District of

Nevada, September 20, 2013 ....................................6a

United States Court of Appeals for the Federal

Circuit, Denial of Panel Rehearing, June 20,

2014 .........................................................................24a


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vi

TABLE OF AUTHORITIES

Cases

3D Systems, Inc. v. Aarotech Laboratories, Inc., 160

F.3d 1373 (Fed. Cir. 1998) ........................................ 14

Akro Corp. v. Luker, 45 F.3d 1541 (Fed. Cir. 1995) ..... 14

Asahi Metal Industry Co., Ltd. v. Superior Court, 480U.S. 102, 107 S.Ct. 1026 (1987) ........................passim

Beverly Hills Fan Co. v. Royal Sovereign Corp., 21

F.3d 1558 (Fed. Cir. 1994) .................. 7, 10, 13-14, 15

Blanckmer v. U.S., 284 U.S. 421, 52 S.Ct. 252

(1932) .........................................................................18

Boit v. Gar-Tec Prods., Inc., 967 F.2d 671 (1st Cir.

1992) ..........................................................................11

Chlebda v. H. E. Fortna & Bro., Inc., 609 F.2d 1022

(1st Cir. 1979) ............................................................11

Daimler AG v. Bauman, 134 S.Ct. 746 (2014) ...........3

Deprenyl Animal Health, Inc. v. Univ. of Toronto

Innovations Found., 297 F.3d 1343 (Fed. Cir.

2002) ..........................................................................13

Figueroa Colon v. Radisson Cable Beach Resort, 310

F.Supp.2d 437 (D.P.R. 2004) ....................................11

Genetic Implant Sys., Inc. v. Core-Vent Corp., 123

F.3d 1455 (Fed. Cir. 1997) ........................................ 14


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vii

Gillars v. U.S., 182 F.2d 962 (D.C. Cir. 1950) .........18

Goodyear Dunlop Tires Operations, S.A. v. Brown,

131 S.Ct. 2846 (2011) ..................................................3

Harris Rutsky & Co. Ins. Servs., Inc. v. Bell &

Clements Ltd., 328 F.3d 1122 (9th Cir. 2003) ..........13

Merial Ltd. v. Cipla Ltd., 681 F.3d 1283 (Fed. Cir.

2012) ..........................................................................22

Nuance Comms., Inc. v. Abbyy Software House, 626

F.3d 1222 (Fed. Cir. 2010) ........................................ 14

Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403

(Fed. Cir. 2009) ..........................................................21

U.S. v. Best, 76 F.Supp. 138 (D. Mass. 1948) ........... 18

U.S. v. Korolkov, 870 F.Supp. 60 (S.D.N.Y. 1994) ... 18

U.S. v. Taveras, 2006 WL 1875339, *15 (E.D.N.Y.

July 5, 2006) ..............................................................18

Constitutional Provisions

United States Const. Amend. XIV .......................... 1-2

Other Authorities

SEMA Show Website, http://www.semashow.com .....6


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1

Defendants respectfully petition this Court

for a writ of certiorari to review the judgment of

the United States Court of Appeals for the Federal

Circuit in this matter.

OPINIONS BELOW

The decision of the Federal Circuit Court of

Appeals is reprinted in the Appendix (App.) at 1a

3a. The District Courts order denying Defendants

motion for reconsideration is reprinted at App. 4a

5a. The decision of the United States District Court,

District of Nevada, is reprinted at App. 6a23a. The

Federal Circuits order denying panel rehearing is

reprinted at App. 24a25a.

JURISDICTION

The Federal Circuit filed its decision on

May 5, 2014. App. 1a3a. Defendants timely filed apetition for rehearing, which the Federal Circuit

denied on June 20, 2014. App. 24a25a. This Court

has jurisdiction according to 28 U.S.C. 1254(1).

CONSTITUTIONAL PROVISIONS

The Fourteenth Amendment to the United

States Constitution, Section 1, provides:

All persons born or naturalized in the

United States, and subject to the

jurisdiction thereof, are citizens of the

United States and of the state wherein

they reside. No state shall make or


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enforce any law which shall abridge the

privileges or immunities of citizens of

the United States; nor shall any state

deprive any person of life, liberty, or

property, without due process of law;

nor deny to any person within its

jurisdiction the equal protection of the

laws.

STATEMENT OF THE CASE

This petition seeks clarity of the Federal

Circuits continuing failure to distinguish the stream

of commerce theory adopted by the plurality opinion

inAsahi Metal Industry Co., Ltd. v. Superior Court,

480 U.S. 102, 107 S.Ct. 1026 (1987) and the

alternative national contacts theory in cases alleging

patent infringement. In the instant case, the Federal

Circuit concluded that the exercise of specific

personal jurisdiction over Defendants wasreasonable and fair. App. 3a. In reaching this

conclusion, the Federal Circuit relied upon affidavits

of counsel and Ninth Circuit regional case law on

specific jurisdiction instead of the Federal Circuits

own mandatory controlling factors. So, before

reaching the Asahi issue, Defendants also ask this

Court to clarify that affidavits of counsel cannot

provide a basis to subject Defendants to specific

personal jurisdiction in Nevada.

The contours of specific personal jurisdictionin the context of cases alleging patent infringement

against foreign alien defendants is particularly


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important, as this Court has previously noted in

similar circumstances. See, e.g., Goodyear Dunlop

Tires Operations, S.A. v. Brown, 131 S.Ct. 2846,

2853 (2011) (We granted certiorari to decide

whether the general jurisdiction the North Carolina

courts asserted over petitioners is consistent with

the Due Process Clause of the Fourteenth

Amendment.); see also Daimler AG v. Bauman, 134

S.Ct. 746, 753 (2014) (We granted certiorari todecide whether, consistent with the Due Process

Clause of the Fourteenth Amendment, Daimler is

amenable to suit in California courts for claims

involving only foreign plaintiffs and conduct

occurring entirely abroad.). Therefore, Defendants

respectfully request that this Court grant this

petition for a writ of certiorari to resolve the

personal jurisdiction issues presented.

A. Plaintiffs Complaint Alleging a Single

Claim for Patent Infringement.

As asserted in Plaintiffs complaint, Plaintiff

Kabo Tool Company is a Taiwan corporation with its

headquarters and principal place of business at

No. 367, Pei Yang Rd, Fengyuan Dist., Taichung

City, Taiwan. PA 3234. Plaintiff Chih-Ching Hsien

is a citizen of Taiwan with his residence at No. 367,

Pei Yang Rd, Fengyuan Dist., Taichung City,

Taiwan. PA 32. Plaintiff Hsien is the chief executive

officer of Kabo and is the named inventor on a

substantial majority of the patents held by Kabo. Id.

Kabo is a manufacturing and supply company that

provides various electrical, hydraulic, mechanical,


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and other industrial tools including, but not limited

to, the wrench at issue in the instant litigation.

PA 32.

Defendant Hsu is a citizen of Taiwan residing

in Taipei, Taiwan and is the principal director of

Accuaire Corp. and Porauto Industrial Co., Ltd. (the

Foreign Corporate Defendants). PA 32. The

Foreign Corporate Defendants are Taiwancorporations with their headquarters and principal

place of business at 4F-1 No.155 Sec.1, Keelung Rd.,

Taipei 110, Taiwan. Id.According to the allegations

set forth in Plaintiffs complaint, the Defendants

have allegedly infringed upon U.S. Patent

No. 7,066,057 (the Patent) which was assigned to

Plaintiff Kabo. PA 33. Based upon these allegations,

Plaintiffs have haled Defendants away from their

native country of Taiwan to defend themselves

against a single cause of action for alleged patent

infringement in Las Vegas, Nevada. PA 3334.

In their complaint, Plaintiffs alleged generally

that Defendants were distributing or selling

infringing products throughout Nevada including in

this judicial district. PA 32. Without any further

specification, Plaintiffs also alleged that Defendants

have placed infringing products into the stream of

commerce, via an established distribution channel,

with the knowledge and/or understanding that such

products are sold in the State of Nevada. PA 33.

Thus, Plaintiffs complaint outlined certain factors

for personal jurisdiction without any specific details.


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B. Defendants De Minimis Contacts with

Nevada and Motion to Dismiss for Lack

of Personal Jurisdiction.

Aside from the fact that: (1) all of the

information, documents, and individuals involved in

the alleged acts reside in Taiwan; (2) the information

and documents are written in Chinese; and (3) the

native language for all individuals involved isChinese, Plaintiffs have incorrectly selected Las

Vegas, Nevada as the location to file their lawsuit.

PA 3144. A review of Defendants contacts with

Nevada evidences that such contacts are truly de

minimis.

First, the Foreign Corporate Defendants are

not Nevada (or even U.S.) corporations. PA 32.

Neither of the Foreign Corporate Defendants pay nor

have paid taxes in Nevada. The Foreign Corporate

Defendants do not have telephone listings inNevada, and they maintain no accounts in any

financial institutions in the State. In addition, the

Foreign Corporate Defendants do not maintain or

lease any offices, distribution facilities, or

manufacturing plants in Nevada, nor do they

otherwise own, rent, lease, or occupy any real or

personal property in Nevada. The Foreign Corporate

Defendants have never availed themselves of the

courts of Nevada or anywhere in the United States.

Second, Defendant Hsus contacts withNevada (and the U.S.) are equally tenuous, if not

more so than the Foreign Corporate Defendants.


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Defendant Hsu is not a resident of Nevada or the

United States and, although served with process

while attending the Specialty Equipment Marketing

Association (SEMA) Show,1 he has never lived or

worked in Nevada. Defendant Hsu does not pay and

has never paid taxes in Nevada. Hsu has traveled to

Nevada only very sporadically and then generally for

the purpose of attending (like many other

international visitors) the annual SEMA show. Hsuhas not personally transacted business in Nevada,

does not directly derive any revenue from goods used

or consumed or services rendered in Nevada, and

does not personally employ anyone in Nevada.

Defendant Hsu does not have a telephone listing in

Nevada, maintains no accounts in any financial

institutions in the State, and has never availed

himself of the Nevada or United States courts.

Defendant Hsu does not own, rent, lease, or occupy

any other real or personal property in Nevada.

Due to the lack of personal jurisdiction

(specific or general), Defendants filed a motion to

1 According to its website, The SEMA Show is the premier

automotive specialty products trade event in the world

(PLEASE NOTE: THE SEMA SHOW IS NOT OPEN TO

THE GENERAL PUBLIC). It draws the industrys brightest

minds and hottest products to one place, the Las

Vegas Convention Center. As part of the AAIW, the SEMA

Show attracts more than 100,000 industry leaders frommore than 100 countries for unlimited profit opportunities in

the automotive, truck and SUV, powersports, and RV markets.

Seehttp://www.semashow.com (last accessed Sept. 16, 2014).


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dismiss in the District Court. PA 4560. In their

opposition, Plaintiffs submitted the bare affidavit of

Jas S. Dhillon who is one of the counsel for Plaintiffs

in this litigation. PA 8082. Mr. Dhillons affidavit

asserted that he was personally familiar with the

facts set forth herein . . . PA 81. Mr. Dhillon also

alleged upon information and belief that Mr. Hsu

maintains a residence in Los Angeles, California and

he regularly travels to Las Vegas for business. Id.The affidavit of counsel also asserts, without further

specification, that Mr. Dhillon had obtained various

documents and communications in a separate

litigation suggesting that Defendants use a company

JS Products to distribute the wrench that is the

subject of the infringement claim. PA 8182. None of

the allegations in Mr. Dhillons affidavit were

corroborated by documentation. And, Plaintiffs never

moved the District Court to amend their complaint

to include more specific allegations to support their

claim for personal jurisdiction in Nevada.

C. The District Courts Orders Denying

Defendants Motion to Dismiss and

Reconsideration.

Despite the controlling nature of Federal

Circuit law upon a personal jurisdiction analysis in a

patent case (see Beverly Hills Fan Co. v. Royal

Sovereign Corp., 21 F.3d 1558, 1564 (Fed. Cir.

1994)), the District Court, nevertheless, applied

Ninth Circuit law in denying Defendants motion to

dismiss. App. 6a23a. This failure was significant

because the District Court concluded that of the


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seven reasonableness factors in the Ninth Circuit

test, Defendants were favored in exactly half of the

factors. App. 14a22a. And, under the five

reasonableness factors of the Federal Circuit test,

Defendants would have prevailed.

Due to the District Courts error of not

applying controlling Federal Circuit law and the

likelihood that a proper application of thereasonableness factors would result in dismissal,

Defendants filed a motion for reconsideration.

PA 138155. Yet, the District Court denied the

motion without any discussion. App. 4a5a. For the

first time, the District Court also revealed that it

had relied upon another declaration of counsel in

denying Defendants motion to dismiss.

Supplemental Appendix (SA) 266284. The District

Court also denied Defendants request for permission

to appeal according to 28 U.S.C. 1292(b). App. 4a

5a.

D. The Federal Circuits Improper Reliance

Upon Affidavits of Counsel, Failure to

Apply Controlling Federal Circuit Law,

and Failure to Distinguish the Stream of

Commerce Theory from the National

Contacts Theory Set Forth inAsahi.

In an effort to avoid being haled into a Nevada

court from Taiwan, Defendants sought extraordinary

relief in the Federal Circuit for the application of thefive mandatory reasonableness factors for personal

jurisdiction. Although Defendants should have had


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the benefit of the controlling Federal Circuit

reasonableness factors, the Federal Circuit simply

concluded that specific personal jurisdiction of all

Defendants was reasonable and fair. App. 3a. The

Federal Circuit also denied Defendants timely

petition for rehearing. App. 24a25a.

REASONS FOR GRANTING THE PETITION

The Federal Circuits decision raises three

main issues that are presented to this Court for

review: (1) the Federal Circuit relied upon affidavits

of counsel to subject Defendants to personal

jurisdiction in Nevada; (2) the Federal Circuit failed

to apply controlling Federal Circuit law for the

specific personal jurisdiction analysis; and (3) the

Federal Circuits conclusion that specific personal

jurisdiction over Defendants in Nevada

unnecessarily conflates the distinction made by this

Court in Asahi that personal jurisdiction must bemade upon a stream of commerce theory, not a

national contacts theory.

Because the Federal Circuit exclusively

reviews patent cases, including personal jurisdiction

issues arising in patent cases, this Court provides

the only avenue to review decisions of the Federal

Circuit. Due to the uniqueness of the Federal

Circuit, there is often not a circuit split to justify

review according to Supreme Court Rule 10(a). As

such, Defendants seek review under both Rule 10(a)and 10(c), which allows for certiorari to be granted

when the decision of a court of appeals decides an


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important question of federal law that is unsettled or

conflicts with relevant decisions of this Court. The

tension betweenAsahidecided by this Court and the

Federal Circuits view of personal jurisdiction is

apparent. Cf. Beverly Hills Fan Co. v. Royal

Sovereign Corp., 21 F.3d at 15641565 (failing to

distinguish between the results from the differing

Asahi stream of commerce and national contacts

tests). Upon these grounds, the Court should grantthis petition for a writ of certiorari.

A. Affidavits of Counsel Cannot

Provide a Sufficient Basis to Subject

Foreign Alien Defendants to Specific

Personal Jurisdiction in Nevada for a

Case Alleging Patent Infringement.

The Federal Circuit made a ruling contrary to

well established precedent regarding affidavits of

counsel in the context of a personal jurisdictionanalysis. Specifically, the Federal Circuit noted that

the District Court denied the motion on the papers

based on, among other things, allegations that

petitioners directly sold and distributed the accused

products in Nevada through a long-standing

distribution partnership with a Nevada corporation.

App. 2a. A closer review reveals that the Federal

Circuit improperly based its decision upon the

affidavits of counsel.

The District Court noted in its order that [a]sa factual basis for allegations made in the complaint,

plaintiffs supplied an affidavit regarding discovery


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obtained. PA 15. Later in the District Courts order,

it noted that [t]he plaintiffs affidavit states that

Mr. Hsu was personally involved. PA 18. Clearly,

the Federal Circuit believed that the District Court

based its decision on presented, substantiated facts.

The problem, however, is that the only affidavits

presented were affidavits authored and signed by

Plaintiffs counsel. Yet, [m]ere allegations in the

complaint or arguments of counsel are not sufficientto establish personal jurisdiction over a defendant.

Figueroa Colon v. Radisson Cable Beach Resort, 310

F.Supp.2d 437, 438 (D.P.R. 2004). Similarly, the

First Circuit held that plaintiffs may not rely on

unsupported allegations in their pleadings to make a

prima facie showing of personal jurisdiction.Boit v.

Gar-Tec Prods., Inc., 967 F.2d 671, 675 (1st Cir.

1992). The First Circuit also explained that believing

that jurisdictional allegations must be taken as true

is an elementary mistake. Id. (citing Chlebda v. H.

E. Fortna & Bro., Inc., 609 F.2d 1022, 1024 (1st Cir.

1979)).

Indeed, only two affidavits were included in

any of the briefing provided to the District Court

an affidavit of Jas S. Dhillon and an affidavit of

Roseanna M. Castillo. PA 8082; SA 278, n. 2. Both

affiants are attorneys for Plaintiffs. Thus, their

testimony should have no weight with respect to the

personal jurisdiction assessment, especially given

that these attorney affiants have no personal

knowledge of the allegation that Defendants

supposedly conduct business in Nevada.


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In summary, the Court should clarify that

Defendants cannot be subject to specific personal

jurisdiction in Nevada based upon affidavits of

counsel.

B. In Cases Alleging Patent Infringement,

the Controlling Federal Circuit

Reasonableness Factors Must Be

Applied for a Specific PersonalJurisdiction Analysis.

The Federal Circuit incorrectly deferred to the

District Courts reliance upon Ninth Circuit

precedent to resolve the personal jurisdiction issues

by using a seven-factor assessment of

reasonableness. App. 1a3a. Specifically, the District

Court order examined:

(1) the extent of the defendants

purposeful interjection into the forumstates affairs; (2) the burden on the

defendant of defending in the forum;

(3) the extent of conflict with the

sovereignty of the defendants state;

(4) the forum states interest in

adjudicating the dispute; (5) the most

efficient judicial resolution of the

controversy; (6) the importance of the

forum to the plaintiffs interest in

convenient and effective relief; and

(7) the existence of an alternativeforum.


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App. 18a19a (citing Harris Rutsky & Co. Ins.

Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122,

1132 (9th Cir. 2003)).

As noted above, Federal Circuit case law must

be exclusively relied upon where the personal

jurisdictional inquiry is intimately involved with the

substance of the patent laws. Electronics for

Imaging, Inc. v. Coyle, 340 F.3d 1344, 1348 (Fed. Cir.2003). Notably, Federal Circuit precedent is distinct

from the Ninth Circuit precedent when

contemplating the reasonableness of asserting

personal jurisdiction:

(1) the burden on the defendant; (2) the

interests of the forum state; (3) the

plaintiffs interest in obtaining relief;

(4) the interstate judicial systems

interest in obtaining the most efficient

resolution of controversies; and (5) theshared interest of the several states in

furthering fundamental substantive

social policies.

Deprenyl Animal Health, Inc. v. Univ. of Toronto

Innovations Found., 297 F.3d 1343, 1355 (Fed. Cir.

2002). While overlap exists, the differences between

the two standards are important, as the Federal

Circuit has previously acknowledged that

application of Ninth Circuit law would not promote

[the Federal Circuits] mandate of achieving nationaluniformity in the field of patent law. Beverly Hills


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Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1564

(Fed. Cir. 1994).

In this case, the Federal Circuit undeniably

applied Ninth Circuit law to assess whether

Defendants were subject to personal jurisdiction in

the District Courta direct violation of its own

precedent. App. 1a3a; 6a23a. Moreover, the

application of Federal Circuit law to a personaljurisdiction issue in cases alleging patent

infringement is mandatory and non-waivable.

Indeed, the law of the Federal Circuit, rather than

that of the regional circuit in which the case arose,

applies to determine whether the district court

properly declined to exercise personal jurisdiction

over an out-of-state accused infringer. Nuance

Comms., Inc. v. Abbyy Software House, 626 F.3d

1222, 1230 (Fed. Cir. 2010) (citing Akro Corp. v.

Luker, 45 F.3d 1541, 1543 (Fed. Cir. 1995)).

Time and again, this Court has reiterated,

[W]e apply Federal Circuit law because the

jurisdictional issue is intimately involved with the

substance of the patent laws. Genetic Implant Sys.,

Inc. v. Core-Vent Corp., 123 F.3d 1455, 1457 (Fed.

Cir. 1997) (citation omitted). Under [jurisdictional]

circumstances such as these, we have held we owe

no special deference to regional circuit law.Beverly

Hills Fan Co., 21 F.3d at 1565. When analyzing

personal jurisdiction for purposes of compliance with

federal due process, Federal Circuit law applies. 3D

Systems, Inc. v. Aarotech Laboratories, Inc., 160 F.3d

1373, 1376 (Fed. Cir. 1998). Consequently, the clear


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precedent mandates that the Federal Circuit should

have applied Federal Circuit law to the personal

jurisdiction issues presented.

Therefore, because this Court is the only

avenue for review of the Federal Circuits unique

ability to review issues arising in patent cases, the

Court should grant certiorari.

C. The Federal Circuit Has Admittedly

Failed to Distinguish the Stream of

Commerce Theory from the National

Contacts Theory Set Forth in Asahi for

Determining Personal Jurisdiction in

Cases Alleging Patent Infringement.

The Federal Circuits conclusion that personal

jurisdiction was proper is at odds with Asahi.

Specifically, the Federal Circuit, in reviewing the

District Courts orders, concluded that jurisdictionover the petitioners in Nevada would be reasonable

and fair. App. 3a. Implicit within the Federal

Circuits conclusory order is the same tension found

inBeverly Hills Fan Co. v. Royal Sovereign Corp., 21

F.3d 1558 (Fed. Cir. 1994). In Beverly Hills Fan Co.,

the Federal Circuit assimilated the stream of

commerce theory of personal jurisdiction and the

national contacts theory presented in the competing

Asahi opinions. Id. at 1566 (We need not join this

debate here, since we find that, under either version

of the stream of commerce theory, plaintiff made therequired jurisdictional showing.). Yet, the proper

application of Asahi cannot be minimized. Properly


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limited and applied to the Federal Circuit

reasonableness factors, Asahicalls for the dismissal

of Defendants due to the lack of specific personal

jurisdiction. In fact, Asahi held that a defendants

awareness that the stream of commerce may or will

sweep the product into the forum State does not

convert the mere act of placing the product into the

stream into an act purposefully directed toward the

forum State. Asahi, 480 U.S. at 112, 107 S.Ct. at1032.

1. Asserting Personal Jurisdiction Over

Defendants in Nevada Is Overly

Burdensome on Them.

Although the Federal Circuit and the District

Court employed an incorrect reasonableness test, the

District Court properly assessed that Defendants

would endure substantial hardship in defending

themselves in a foreign legal system. PA 2021. Infact, the unique burdens placed upon one who must

defend oneself in a foreign legal system should have

significant weight in assessing the reasonableness of

stretching the long arm of personal jurisdiction over

national borders. Asahi Metal Indus. Co., Ltd., 480

U.S. at 114, 107 S.Ct. at 1033. In every case where a

court attempts to assert jurisdiction over a foreign

alien defendant, those interests

as well as the Federal interest in

Governments foreign relations policies,will be best served by a careful inquiry

into the reasonableness of the assertion


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of jurisdiction in the particular case,

and an unwillingness to find the serious

burdens on an alien defendant

outweighed by minimal interest on the

part of the plaintiff or the forum State.

Great care and reserve should be

exercised when extending out notions of

personal jurisdiction into the

international field.

Id.at 115, 1034 (internal citations omitted).

In the instant case, the serious burdens on

Defendants far outweigh the minimal interest on the

part of Plaintiffs. Indeed, the burden of defending

this patent infringement suit in a foreign country

would be great on Defendants. Defendants principal

place of business is in Taiwan, and all documents in

Defendants possession that are or may be relevant

to this action are located in Taiwan. Moreover, theindividuals involved in the alleged acts reside in

Taiwan, and the information and documents are

written in Chinese. Finally, and perhaps the most

persuasive is the fact that the native language for

the individuals involved (on both sides) is Chinese.

For these reasons alone, this factor favors

Defendants. However, the burden upon Defendants

is not limited to this factor.

Plaintiffs are well aware of the fact that many

of the key individual witnesses reside in Taiwan andthat it is extremely difficult (if not impossible) to hail

any third-party witnesses to the United States to


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testify or be deposed. Notably, a Taiwanese citizen

cannot be compelled to respond to a United States

District Court subpoena. For nearly a century, the

U.S. courts have recognized the limits of their

subpoena powers: [A]liens who are inhabitants of a

foreign country cannot be compelled to respond to a

subpoena. They owe no allegiance to the United

States. U.S. v. Best, 76 F.Supp. 138, 139 (D. Mass.

1948) (citing Blanckmer v. U.S., 284 U.S. 421, 52S.Ct. 252 (1932)); Gillars v. U.S., 182 F.2d 962 (D.C.

Cir. 1950). When potential witnesses are not

citizens of the United States and do not reside here,

they are not amenable to United States subpoenas.

U.S. v. Korolkov, 870 F.Supp. 60, 65 (S.D.N.Y. 1994).

[T]he federal district courts power of subpoena does

not extend to non-citizens beyond the nations

borders. U.S. v. Taveras, 2006 WL 1875339, *15

(E.D.N.Y. July 5, 2006). Simply put, in choosing

Nevada as the forum of choice, Plaintiffs have made

it more difficult for Defendants to defend themselves

given the limits of the subpoena power.

It is without question that litigation in a

foreign country would make it exceedingly difficult

for Defendants to carry on their business if all

officers and employees are based in Taiwan and

absent for an extended period of time. Thus, this

factor weighs strongly in favor of Defendants, and

this Court should compel the Federal Circuit to

dismiss Defendants from the instant litigation for

lack of personal jurisdiction.


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2. Nevada Does Not Have An Interest In

Adjudicating the Dispute.

Nevada does not have any interest in

adjudicating a dispute between solely Taiwanese

citizenry. Indeed, a States interest directly relates to

whether a resident was injured. Asahi Metal Indus.

Co., Ltd., 480 U.S. at 114. Specifically, the Asahi

court reasoned that because the plaintiff was not astate resident, the states legitimate interests in the

dispute diminished considerably. Id.

In the instant case, damages and injury, if

any, are those of a Taiwan company and/or Taiwan

citizens, as none of the parties are residents of

Nevada. PA 32. A judgment, if any is awarded, will

have no direct impact on Nevada. Certainly, Nevada

and the U.S. Courts need to allow Taiwanese courts

to handle disputes involving its own citizenry,

particularly where Plaintiffs have alreadycommenced parallel litigation in Taiwan. PA 82.

Therefore, this factor favors Defendants and

supports the dismissal of Defendants from this

litigation for lack of personal jurisdiction.

3. Plaintiffs Can Obtain Relief in a More

Convenient Forum and Effective Manner.

Plaintiffs can also obtain convenient and

effective relief, if warranted, in another court where

jurisdiction over Defendants actually existstheTaiwanese judicial system. The plaintiffs interest

in obtaining relief factor is present in both

reasonableness tests. The Federal Circuit did not


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question the District Courts reasoning that if

Nevada were not the proper forum for litigation,

then Plaintiffs would have to litigate in Taiwan,

which the District Court observed, would not

present an obvious inconvenience since Taiwan is

the home of both the [Plaintiffs] and the

[Defendants]. App. 22a. Consequently, this factor is

present in both tests and still favors Defendants.

Moreover, Plaintiffs previously initiated a similarlegal action in Taiwan, wherein Defendants have

posted a $515,000 bond. PA 82. Plaintiffs, unhappy

with that outcome, decided to extend their legal

action abroad to the District of Nevada. However,

the Taiwan suit is still ongoing and is better suited

to hear this action, as Plaintiffs will be allowed their

day in court in a much more convenient forum.

4. Defendants Dismissal from this

Litigation is Necessary to Effectuate an

Efficient Resolution of the Matter.

In an effort to obtain the most efficient

resolution of the controversy, this Court should

compel the Federal Circuit to order Defendants

dismissed and allow resolution of the matter in the

underlying case in Taiwan. Not only does Taiwan

possess the majority of witnesses, parties, and

evidence, but it is also home to the first lawsuit filed

in relation to the wrench invention presently at

issue. It strains logic to conclude that efficient

resolution occurs by permitting Plaintiffs to engage

in multi-national legal actions concerning essentially

the same invention. Requiring Defendants


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21

representatives to travel to Nevada to litigate this

case would thwart the judicial systems interest in

obtaining the most efficient resolution of this case.

Moreover, given the pending action in Taiwan, it is

possible for the Taiwanese court and the United

States courts to reach differing conclusions resulting

in inconsistent decisions. Consequently, the most

efficient and consistent resolution would be to allow

the Taiwanese courts (that are already handling theunderlying case) to handle the instant matter.

Again, this factor favors Defendants and heavily

weighs against any personal jurisdiction.

5. The Shared Interest of the Several States

Demands Defendants Dismissal from

this Litigation.

This Court has been very clear in announcing

that the unique burden placed upon one who must

defend oneself in a foreign legal system should havesignificant weight in assessing the reasonableness of

stretching the long arm of personal jurisdiction over

national borders. Asahi Metal Indus. Co., Ltd., 480

U.S. at 114. Similarly, the Federal Circuit has noted

that the fifth factor is concerned with the potential

clash of substantive social policies between

competing fora and the efficiency of a resolution to

the controversy. Touchcom, Inc. v. Bereskin & Parr,

574 F.3d 1403, 1418 (Fed. Cir. 2009).

Fundamental substantive social policies alsoindicate that personal jurisdiction is not reasonable.

Equitable considerations should be taken into


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account. Plaintiffs previously initiated a similar

legal action in Taiwan. PA 82. Paradoxically,

Plaintiffs argue that the Taiwan litigation has no

bearing on the present case while simultaneously

pointing to the $515,000 bond that Defendants

posted in the same case as evidence of Defendants

alleged purposeful contact with Nevada. Clearly,

Plaintiffs cannot have it both ways. In fact,

Plaintiffs legal action in Taiwan is intimatelyrelated to the present suit. The fact that Defendants

have posted a $515,000 bond in Taiwan is an

equitable fact favoring them. Defendants paid a

significant sum to meet the requirements in the

preexisting litigation. Plaintiffs, obviously unhappy

with that outcome, decided to extend their legal

action abroad to Nevada. However, the Taiwan suit

is still ongoing.

This Court should view Defendants bond

payment, along with the timing of Plaintiffs decisionto file the instant action, as evidence that

fundamental substantive social policies support the

decision to decline exercising personal jurisdiction

over Defendants to allow the parties to fully exhaust

the legal remedies that Plaintiffs first sought in

Taiwan. This final equitable argument touches upon

the Constitutional principle of comity, which

requires that this lawsuit, at a minimum, be stayed

pending the outcome of the Taiwan lawsuit. See

Merial Ltd. v. Cipla Ltd., 681 F.3d 1283, 1299 (Fed.

Cir. 2012) (The first-to-file rule is a doctrine of

federal comity, interned to avoid conflicting decisions

and promote judicial efficiency.) (citations omitted).


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In sum, the majority of the five

reasonableness factors set forth by the Federal

Circuit favor Defendants. Therefore, this Court

should grant certiorari to address the Federal

Circuits tension with the application ofAsahito the

five reasonableness factors for specific personal

jurisdiction.

CONCLUSION

For the foregoing reasons, this petition for a

writ of certiorari should be granted.

September 18, 2014 Respectfully submitted,

Jack Chen Min Juan, Esq,

Micah S. Echols, Esq.

Counsel of Record

Brian R. Hardy, Esq.

Marquis Aurbach Coffing10001 Park Run Dr.

Las Vegas, NV 89145

(702) 382-0711

[email protected]

Counsel for Petitioners


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1a

Filed: 05/05/2014

NOTE: This order is nonprecedential.

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

______________________________________________

IN RE PORAUTO INDUSTRIAL CO., LTD.,ACCUAIRE CORP. AND CHIH-HSIANG HSU,

Petitioners.

______________________________________________

2014-130

______________________________________________

On Petition for Writ of Mandamus to the

United States District Court for the District ofNevada in No. 2:12-cv-01859-LDG-NJK, Judge

Lloyd D. George.______________________________________________

ON PETITION______________________________________________

Before LOURIE, DYK, and REYNA, Circuit Judges.

LOURIE, Circuit Judge.

ORDER

Petitioners Accuaire Corp., Porauto Industrial

Co., Ltd., and Chih-Hsiang Hsu seek a writ of

mandamus directing the United States District

Court for the District of Nevada to dismiss the

underlying patent infringement case. Respondents

Kabo Tool Company and Chih-Ching Hsien oppose.


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2a

In October 2012, respondents, a Taiwanese

tool company and its CEO, filed suit in a federal

district court in Nevada for infringement of a U.S.

patent. Petitioners, also Taiwanese residents, moved

for dismissal of the complaint for lack of personal

jurisdiction. The district court denied the motion on

the papers based on, among other things, allegations

that petitioners directly sold and distributed the

accused products in Nevada through a long-standingdistribution partnership with a Nevada corporation.

The district court further found that the burden

imposed on petitioners in having to litigate in

Nevada did not outweigh the interest of the United

States in protecting U.S. patents and Nevadas

interest in seeking redress for harms that have

taken place in that state resulting from the alleged

infringement.

The remedy of mandamus is a drastic one, to

be invoked only in extraordinary situations. Kerr v.U.S. Dist. Court, 426 U.S. 394, 402 (1976).

Accordingly, three conditions must be satisfied

before it may issue. Cheney v. U.S. Dist. Court, 542

U.S. 367, 380 (2004). The petitioner must show a

clear and indisputable right to relief. Id. at 381

(quoting Kerr, 426 U.S. at 403). The petitioner must

lack adequate alternative means to obtain the

relief it seeks. Mallard v. U.S. Dist. Court, 490 U.S.

296, 309 (1989); Cheney, 542 U.S. at 380; Kerr, 426

U.S. at 403. And even if the first two prerequisites

have been met, the issuing court, in the exercise of

its discretion, must be satisfied that the writ is


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appropriate under the circumstances. Cheney, 542

U.S. at 381.

Petitioners have not met this standard. Based

on the arguments in the papers, we are not prepared

to issue a writ of mandamus to disturb the district

courts ultimate conclusion that jurisdiction over the

petitioners in Nevada would be reasonable and fair.

Nor have petitioners explained why any argumentconcerning a lack of jurisdiction cannot be

meaningfully reviewed on appeal after final

judgment. Thus, petitioners have also failed to

establish that they lack an alternative means to

obtain the relief they seek. See Bankers Life & Cas.

Co. v. Holland, 346 U.S. 379, 383 (1953) ([I]t is

established that the extraordinary writs cannot be

used as substitutes for appeals . . . even though

hardship may result from delay and perhaps

unnecessary trial[.]).

Accordingly,

IT IS ORDERED THAT:

The petition for a writ of mandamus is denied.

FOR THE COURT

/s/ Daniel E. OToole

Daniel E. OToole

Clerk of Court

s26


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4a

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

KABO TOOL COMPANY,

et al.,

Plaintiffs,

v.

PORAUTO INDUSTRIAL

CO., LTD., et al.,

Defendants.

Case No. 2:12-cv-01859-

LDG (NJK)

ORDER

Filed: 03/06/14

For good cause shown,

THE COURT ORDERS that Plaintiffs Motion

for Leave to File Surreply to Defendants Motion toDismiss (#40), which document (and the Defendants

opposition thereto) the Court considered in Denying

Defendants Motion to Dismiss, is GRANTED.

THE COURT FURTHER ORDERS that

Plaintiffs Motion to Seal Declaration (#42) is

GRANTED.


Defendants Motion to Reconsider or Amend (#54)

the Courts Order Denying Defendants Motion toDismiss is DENIED.


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Defendants Motion to Set Aside Clerks Entry of

Default (#59) is GRANTED; The Clerk of the Court

shall strike the Entry of Default at Docket #58.


Defendants Motion to Stay Proceedings Pending

Appeal (#60) is DENIED.


Defendants Objection (#72) to the Magistrate

Judges October 31, 2013, Order Denying Motion to

Stay Discovery is DENIED.

DATED this 5th day of March, 2014.

/s/ Lloyd D. George

Lloyd D. George

United States District Judge


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6a

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

KABO TOOL COMPANY,

et al.,

Plaintiffs,

v.

PORAUTO INDUSTRIAL

CO., LTD., et al.,

Defendants.

Case No. 2:12-cv-01859-

LDG (NJK)

ORDER

Filed: 09/20/13

Plaintiffs, Mr. Hsien and Kabo, own the 057

patent, entitled wrench with jaws having different

tilt angles. Plaintiffs claim that defendants, Mr.

Hsu, Accuaire, and Porauto, imported and sold awrench product that infringed the 057 patent.

Defendants distributed the infringing product

throughout Nevada via an on-going business

relationship with a Nevada corporation. Defendants

move to dismiss (#10) for lack of personal

jurisdiction under Federal Rule of Civil Procedure

Rule 12(b)(2), stating that the infringement took

place in Taiwan, all parties are foreign subjects, and

all evidence and witnesses are in Taiwan. Plaintiffs

oppose the defendants Motion to Dismiss (#12),

arguing the infringement took place in Nevada, and

the plaintiffs wish to enforce the patent under the

laws of the country that issued the patent. Having


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7a

read and considered the papers and complaint, the

Court will DENY the defendants Motion to Dismiss.

Motion to Dismiss

Motion to dismiss standard requires courts to

engage in a two-part analysis. Ashcroft v. Iqbal, 556

U.S. 662, 677-79 (2009). First, the courts accept only

non-conclusory allegations as true. Iqbal, 556 U.S.

at 677. Threadbare recitals of the elements of a

cause of action, supported by mere conclusory

statements, do not suffice. Id. (citing Bell Atlantic

Corp. v. Twombly, 550 U.S. at 555). However, the

Court must draw all reasonable inferences in favor

of the plaintiff. Mohamed v. Jeppesen Dataplan,

Inc., 579 F.3d 943, 949 (9th Cir. 2009). After

accepting as true all non-conclusory allegations and

drawing all reasonable inferences in favor of the

plaintiff, the Court must then determine whether

the complaint states a plausible claim for relief.Iqbal, 556 U.S. at 677 (citing Twombly, 550 U.S. at

555). A claim has facial plausibility when the

plaintiff pleads factual content that allows the court

to draw the reasonable inference that the defendant

is liable for the misconduct alleged. Id. This

plausibility standard is not a probability

requirement, but is more than sheer possibility. Id.

Background

Kabo Tool Company (Kabo or plaintiff) is aTaiwan corporation that manufactures electrical,

hydraulic, mechanical, and other industrial tools,

including the wrench product at issue. Chih-Ching


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8a

Hsien (Mr. Hsien or plaintiff) is a citizen of

Taiwan and the CEO of Kabo. Mr. Hsien was duly

assigned U.S. Patent No. 7,066,057 (the 057

patent), entitled Wrench with jaws having

different tilt angles. Mr. Hsien then assigned the

057 patent to Kabo.

Plaintiffs claim that Chih-Hsiang Hsu (Mr.

Hsu), Accuaire Corp. (Accuaire), and PorautoIndustrial Co., Ltd. (Porauto) (collectively,

defendants) infringed patent 057 by importing and

selling wrench products, which embody patent 057

(infringing product). Both Porauto and Accuaire

are Taiwan corporations. Neither Porauto nor

Accuaire is incorporated in Nevada or the United

States. However, Porauto and Accuaire maintain an

ongoing business relationship spanning at least 10

years with JS Product, Inc. (JSP). JSP is a Nevada

corporation with its principal place of business in

Las Vegas, NV. JSP distributes and sells wrenchproducts throughout Nevada. Through JSP,

Accuaire and Porauto distribute numerous products,

including the infringing product. Accuaire, Porauto,

and JSP frequently, often daily, communicate

regarding ordering, sale, and distribution of

numerous products, including the infringing product.

Plaintiffs further allege that defendants have taken

active steps to facilitate direct infringement of the

057 patent in Nevada. After plaintiffs sought an

injunction in Taiwan, defendants posted a $15

million New Taiwan Dollar Bond (approximately

$515,000 U.S. dollars) to keep shipments flowing to

JSP, specifically ensuring that shipments of the


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9a

infringing product would not be a problem for the

fourth quarter of 2011.

Mr. Hsu, a citizen of Taiwan, is the Sole

Director of Accuaire and the Chairman of the Board

of Porauto. Mr. Hsu is not a resident of Nevada or

the United States. However, Mr. Hsu has been

personally involved with JSP. Mr. Hsu handles

much of JSPs business with product manufacturersin Taiwan. Mr. Hsu provided advice to JSP

regarding a previous infringement claim brought by

Kabo against JSP. Mr. Hsu regularly travels to Las

Vegas on business-related activity to meet with JSP

and for the AAPEX/SEMA Show.

While Mr. Hsu was physically present in

Nevada, plaintiffs served him with a Summons and

the Complaint both personally and as an agent for

Accuaire and Porauto. Defendants move to dismiss

for lack of personal jurisdiction under Federal Ruleof Civil Procedure Rule 12(b)(2), stating that the

infringement took place in Taiwan, both parties are

subjects of Taiwan, and all the evidence and

witnesses are in Taiwan. Plaintiffs oppose the

defendants Motion to Dismiss since the

infringement took place in Nevada, and the plaintiffs

wish to enforce the patent under the laws of the

country that issued the patent.


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10a

Personal Jurisdiction

Rule 12(b)(2) provides that a court may

dismiss a complaint for lack of jurisdiction over the

person. Fed. R. Civ. Proc. 12(b)(2). Since Mr. Hsu,

Accuaire, and Porauto move to dismiss the complaint

for lack of personal jurisdiction, Mr. Hsien and Kabo

have the burden of showing that jurisdiction in this

Court is proper under Nevadas long-arm statuteand comports with Due Process under the US

Constitution. Rio Properties Inc. v. Rio Intern.

Interlink, 284 F. 3d 1007, 1019 (9th Cir. 2002);

Fed.Rules Civ.Proc.Rule 4(k)(1)(A). Nevadas long-

arm statute allows jurisdiction in Nevada courts

over a party to a civil action on any basis not

inconsistent with the constitution of this state or the

Constitution of the United States. NRS 14.065(1);

Graziose v. American Home Products Corp., 161 F.

Supp.2d 1149, 1152 (D. Nev. 2001). The statute has

been liberally construed to reach the outer limits offederal Constitutional Due Process. Id.

Constitutional Due Process requires that, in order

to subject a defendant to a judgment in personum, if

he be not present within the territory of the forum,

he have certain minimum contacts with it such that

the maintenance of the suit does not offend

traditional notions of fair play and substantial

justice. International Shoe Co. v. Washington, 326

U.S. 310, 316 (1945). The assertion of personal

jurisdiction can be satisfied only if Mr. Hsu,

Accuaire, and Porauto individually had sufficient

minimum contacts with Nevada such that bringing

suit in the district of Nevada would not offend the


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11a

traditional notions of fair play and substantial

justice. Id. Defendants contacts with Nevada

should be analyzed in regard to each partys contacts

with Nevada. Harris Rutsky & Co. Ins. Services, Inc.

v. Bell & Clements Ltd., 328 F.3d 1122, 1130 (9th

Cir. 2003).

Subject matter jurisdiction is established

under 28 U.S.C. 1338 (a) - the district courts shallhave original jurisdiction of any civil action arising

under any Act of Congress relating to patents. In

the complaint, the plaintiffs assert that Kabo is the

assigned owner of the 057 patent and the

defendants infringed that patent. In support of this

claim, plaintiffs attached a copy of the patent 057

paperwork to the complaint.

As a factual basis for allegations made in the

complaint, plaintiffs supplied an affidavit regarding

discovery obtained in the matter of JS Products, Inc.v. Kabo Tool Company, et al.Case No. 2:11-cv-01856-

RJC-(GWH), United States District Court, District of

Nevada. This Court may consider evidence

presented in the plaintiffs affidavits to assist in its

determination. Data Disc, Inc. v. Systems Tech.

Assoc., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977).

Since this Court will consider the affidavit, the

plaintiffs need only make a prima facie showing of

jurisdiction to survive the defendants motion to

dismiss. Harris, 328 F.3d at 1128. The analysis of

contacts for personal jurisdiction may be founded on

specific or general jurisdiction. Panavision Intern.,

L.P. v. Toeppen, 141 F.3d 1316, 1320 (1998).


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12a

General Jurisdiction

For general jurisdiction to exist, the

defendants must engage in continuous and

systematic general business contacts that

approximate physical presence in Nevada.

Heliocopteros Nacionales de Columbia, S.A. v. Hall,

466 U.S. 408, 415 (1984). Plaintiffs do not claim that

general jurisdiction in Nevada is reasonable orproper for Mr. Hsu, Accuaire, or Porauto.

Specific Jurisdiction

Plaintiffs have shown a prima facie claim for

specific jurisdiction in Nevada. The Ninth Circuit

established a three-prong test for analyzing a claim

of specific jurisdiction:

(1) The non-resident defendant must

purposefully direct his activities orconsummate some transaction with the

forum or resident thereof; or perform

some act by which he purposefully

avails himself of the privilege of

conducting activities in the forum,

thereby invoking the benefits and

protections of its laws;

(2) The claim must be one which arises out

of or relates to the defendants forum-

related activities and;


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13a

(3) The exercise of jurisdiction must

comport with fair play and substantial

justice, that is, it must be reasonable.

Schwarzenegger v. Fred Martin Motor Co. 374 F.3d

797, 802 (9th Cir. 2004).

The plaintiffs bear the burden of satisfying

the first two prongs, then the burden shifts to thedefendants to present a compelling case that the

exercise of jurisdiction in Nevada would not be

reasonable. Bancroft & Masters v. Augusta Natl

Inc., 223 F.3d 1082, 1086 (9th Cir. 2000).

Purposeful Availment or Purposeful Direction

Purposeful availment is often used for both

purposeful availment and purposeful direction, but

the two are distinct concepts. Schwarzenegger, 374

F.3d at 802 (citing Harris, 328 F.3d at 1130).Purposeful availment is most often used in suits

regarding contracts whereas purposeful direction is

associated with tort suits. Id. Since patent

infringement cases are most akin to tort actions,

purposeful direction is more appropriate in

determining the defendants contacts with Nevada.

Panavision, 141 F.3d at 1321.

Purposeful direction looks for evidence that

the defendants actions outside Nevada are directed

at Nevada, such as distributing goods in Nevadathat originated in Taiwan. Keeton v. Hustler

Magazine, Inc., 465 U.S. 770, 77475 (1984). The

Supreme Court has held that Due Process permits


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14a

the exercise of personal jurisdiction over a defendant

who purposefully direct[s] his activities at

residents of a forum, even in the absence of physical

contacts with the forum. Burger King v. Rudzewiz,

471 U.S. 462, 476 (1985) (citing Keeton, 465 U.S. at

77475). Purposeful direction is evaluated under the

three-part effects test traceable to the Supreme

Courts decision in Calder v. Jones, 465 U.S. 783,

787-91 (1984). The Calder effects test issummarized:

(a) Defendant committed intentional acts;

(b) expressly aimed at the forum state;

(c) causing harm, the brunt of which is

suffered and which the defendant

knows is likely to be suffered in the

forum state.

Harris, 328 F.3d at 1131.

(a) Committed an intentional act

The Restatement (Second) of Torts defines

act to have specialized meaning denoting an

external manifestation of the actors will and does

not include any of its results, even the most direct,

immediate, and intended. 2, 1964; Schwarzenegger,

374 F.3d at 806. In the Complaint, the plaintiffs

claim that Accuaire, and Porauto committed an

intentional act directed at Nevada by placing the

infringing product into the stream of commerce, viaan established distribution channel, with the

knowledge that such products are sold in Nevada.

Under the definition given in Restatement (Second)


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47/56


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17a

posting a bond in order to ensure shipments of the

infringing product to Nevada. Mr. Hsu was

personally aware of the claims of infringement, and

he intentionally acted to continue harm to plaintiffs

by giving advice to JSP in furtherance of the

infringement.

(2) Forum Related Activities

When determining whether the claims arise

out of forum related activity, the Ninth Circuit has

established a but for test. Ballard v. Savage, 65

F.3d 1495, 1500 (1995) (citing Shute v. Carnival

Cruise Lines, 897 F.2d 377 (9th Cir. 1990), rev on

other grounds, 499 U.S. 585 (1991)). The plaintiffs

must show that their claim could not have arisen

but for Mr. Hsus, Accuaires, or Porautos contacts

with Nevada. Id. It is the general rule under

United States patent law that no infringement

occurs when a patented product is made and sold inanother country. Microsoft Corp. v. AT&T Corp.,

550 U.S. 437, 441 (2007). The manufacturing of the

infringing product in Taiwan is not an infringement

of a U.S. patent. On the other hand, importing

infringing product into the United States, without

authority, is an infringement of an exclusive right.

Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct.

1351, 1367 (2013); 35 U.S.C. 271(a). Plaintiffs

allege that, through their connection with JSP,

Accuaire and Porauto distribute the infringing

product throughout Nevada. But for these actions,

there would have been no infringement of the 057

patent in Nevada. Mr. Hsu giving advice to JSP


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18a

regarding the lawsuit, may not have independently

infringed the patent, but it was an act intended to

further or allow the infringement to take place.

Personally conducting business on behalf of Accuaire

and Porauto at the SEMA Show and with JSP in

order to create channels of distribution in Nevada,

would be a but for cause of infringement. Since

Mr. Hsu, Accuaire, and Porauto have offered no

factual basis to refute the plaintiffs accusation, thisCourt will construe the facts in the light most

favorable to the plaintiffs.

(3) Reasonableness

Once the plaintiffs meet the first two prongs,

the burden of proof shifts to the defendants to

present a compelling case that the presence of some

other considerations would render jurisdiction

unreasonable. Burger King, 471 U.S. at 476-77. In

addressing the reasonableness question, this Courtwill consider seven factors:

(i) Extent of defendants purposeful

interjection (ii) Burden on the

defendant in defending the forum,

(iii) Extent of conflict with the

sovereignty of the Defendants state,

(iv) The forum states interest in

adjudicating the dispute, (v) The most

efficient judicial resolution of the

controversy, (vi) The importance of theforum to plaintiffs interest in


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19a

convenient and effective relief, and

(vii) Existence of an alternative forum.

Harris, 328 F.3d at 1132. No single factor is

dispositive; this Court must balance all seven

factors. Core-Vent Corp. v. Nobel Industries AB, 11

F.3d 1482, 1488 (1993).

(i) Purposeful Interjection

Purposeful interjection is still a factor in

determining overall reasonableness even though

plaintiffs have established minimum contacts.

Harris, 328 F.3d at 1132 (citing Ins. Co. of North

America v. Marina Salina Cruz, 649 F.2d 1266, 1271

(9th Cir. 1981)). As detailed previously, Mr. Hsus,

Accuaires, and Porautos contacts with Nevada are

sufficient in regard to the plaintiffs claim. Accuaire

and Porauto have an on-going business relationship

with a Nevada corporation to distribute theinfringing product throughout Nevada. Mr. Hsu is

personally involved with JSP to the point that they

solicited his advice regarding lawsuits involving the

infringing product. Defendants paid a significant

sum to ensure that shipments of the infringing

product would continue to be available to the Nevada

corporation. This factor falls in favor of the plaintiff.

(ii) Defendants Burden in Litigating

The unique burden placed upon one whomust defend oneself in a foreign legal system should

have significant weight in assessing the

reasonableness of stretching the long arm of


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personal jurisdiction over national borders. Asahi

Metal Ind. v. Superior Court, 480 U.S. 102, 114

(1987). Defendants state that if they are forced to

litigate in Nevada, it would be a significant burden.

Defendants claim that all the evidence and

witnesses are in Taiwan. Further, all the

documentation is in Chinese, the native language of

both the plaintiffs and defendants. Language is a

significant barrier. However, since infringement of aU.S. patent does not happen until an infringing

action takes place in the United States, not all

evidence or documentation would be in Taiwan.

28 U.S.C. 1400(b). Some evidence of the

infringement would be in the United States.

Nonetheless, since the Supreme Court in Asahihas

given added weight to the burden of defending

oneself in a foreign land, this factor falls to the

defendants.

(iii) Sovereignty

Litigation against an alien defendant creates

a higher jurisdictional barrier than litigation against

a citizen from a sister state because important

sovereignty concerns exist. Sinatra v. National

Enquirer, Inc., 854 F.2d 1191, 1199 (9th Cir. 1988).

Although this factor is important, it is not

controlling. Gates LearJet Corp. v. Jensen, 743 F.2d

1325, 1333 (9th Cir. 1984). Defendants claim that

Taiwan has the greater interest in litigating conflicts

between citizens of Taiwan. Generally, that is true.

However, the Complaint is in regard to a U.S. patent

and conduct that took place within the United


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22a

defendants have shown a previous ability to travel to

Nevada to conduct business and transmit

information. This factor, at best, comes out

neutrally.

(vi) Convenient and Effective Relief for Plaintiff

If Nevada were not a proper forum for

litigation, the plaintiffs would be forced to litigate inTaiwan. This would not present an obvious

inconvenience since Taiwan is the home of both the

plaintiffs and the defendants. This factor falls in

favor of the defendants.

(vii) Alternative Forum

The burden of proving the unavailability of an

alternative forum is on the plaintiffs. Core-Vent, 11

F.3d at 1490. Plaintiffs have not demonstrated the

unavailability of an alternative forum. The onlyevidence provided by the plaintiffs is in the affidavit

where they state that they are unaware of another

United States jurisdiction that would have personal

jurisdiction over the defendants. Defendants assert

that Taiwan is an acceptable jurisdiction. This

factor falls more in favor of defendants.

Overall, with all seven factors weighed and

considered, the defendants have not made a

compelling case showing that jurisdiction in Nevada

would create an unreasonable burden. Whilejurisdiction in Nevada may not be as convenient to

the defendants, it does not present an unreasonable

burden. The defendants have been conducting


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23a

business in Nevada for over 10 years. If the

defendants have the ability to sufficiently conduct

business, they also have the ability to defend their

actions in Nevada.

The Court finds that the exercise of personal

jurisdiction over the defendants is appropriate.

Accordingly, for good cause shown,

THE COURT ORDERS that Defendants

Motion to Dismiss for Lack of Personal Jurisdiction

(#10) is DENIED.

DATED this 20th day of September, 2013.

/s/ Lloyd D. George

Lloyd D. George

United States District Judge


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Filed: 06/20/2014

NOTE: This order is nonprecedential.

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT______________________________________________

IN RE PORAUTO INDUSTRIAL CO., LTD.,

ACCUAIRE CORP.AND CHIH-HSIANG HSU,Petitioners.

______________________________________________

2014-130______________________________________________

On Petition for Writ of Mandamus to the

United States District Court for the District ofNevada in No. 2:12-cv-01859-LDG-NJK, Judge

Lloyd D. George.______________________________________________

ON PETITION

______________________________________________

Before LOURIE, DYK, and REYNA, Circuit Judges.

PER CURIAM.

ORDER

Petitioners Porauto Industrial Co., Ltd., et al.,

filed a petition for panel rehearing.

Upon consideration thereof,

IT IS ORDERED THAT:

The petition for panel rehearing is denied.


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FOR THE COURT

June 20, 2014 /s/ Daniel E. OTooleDate Daniel E. OToole

Clerk of Court

porauto indus. v. kabo tool - cert petition

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