United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION AND ORDER
BARBARA M. G. LYNN CHIEF JUDGE.
the Court is Defendant ZTE Corp.'s Motion to Dismiss for
Lack of Personal Jurisdiction. (ECF No. 30). For the reasons
stated below, the Motion is DENIED.
Factual and Procedural Background
6, 2017, Plaintiff filed a complaint alleging infringement of
seven patents.(Compl., ECF No. 30). Plaintiff alleges
that certain ZTE devices utilize patented software
technologies for conserving battery usage and extending
battery life. (Id. ¶¶ 11-18).
ZTE Corp. is a Chinese corporation with its principal place
of business in Shenzhen, China. (Compl. ¶ 3).
Defendant ZTE (USA), Inc. is a wholly owned subsidiary of ZTE
Corp. incorporated in New Jersey with its principal place of
business in Richardson, TX. (Id. ¶ 2).
Corp. is the fourth largest supplier of mobile devices in the
United States, and ZTE (USA), Inc. is its exclusive
distributor in the United States. (Resp. at 6, ECF. No. 40).
ZTE devices are designed and manufactured by ZTE Corp. in
Shenzhen, China. (Id. at 6). Title is transferred to
ZTE (USA), Inc. in Hong Kong. (Id. at 10). Devices
are then imported for sale in the United States, including in
the Northern District of Texas. (Id.)
October 3, 2017, ZTE Corp. filed a Motion to Dismiss for Lack
of Personal Jurisdiction. (ECF No. 30). On November 2, 2017,
Plaintiff responded that personal jurisdiction over ZTE Corp.
is proper under the stream of commerce theory. (ECF No. 40).
On November 16, 2017, Defendant replied, challenging
Plaintiff's formulation of the stream of commerce theory
and reasserting that jurisdiction over it in this Court
violates due process. (ECF No. 44). On January 16, 2018, the
Court granted Plaintiff leave to file a surreply. (ECF No.
Circuit law governs the law of personal jurisdiction in
patent-related cases. Avocent Huntsville Corp. v. Aten
Int'l Co., 552 F.3d 1324, 1328 (Fed. Cir. 2008).
When a defendant challenges personal jurisdiction, the
plaintiff bears the burden of proof on the issue.
Celgard, LLC v. SK Innovation Co., 792 F.3d 1373,
1378 (Fed. Cir. 2015). When a district court's
determination of personal jurisdiction is based on affidavits
and other written materials, and no jurisdictional hearing is
conducted, the plaintiff need only establish a prima facie
case for personal jurisdiction. Id. Under this
standard, the court must accept the uncontroverted
allegations in the plaintiff's complaint as true, and all
factual disputes must be resolved in favor of the plaintiff.
whether personal jurisdiction over an out-of-state defendant
is proper is a two-part inquiry. Elecs. for Imaging, Inc.
v. Coyle, 340 F.3d 1344, 1349 (Fed. Cir. 2003). First, a
court must analyze and apply the long-arm statute of the
state in which it sits. Id. Second, the court must
determine whether exercising jurisdiction over the defendant
in the forum comports with the Due Process Clause of the
United States Constitution. Id. Because the Texas
long-arm statute and the federal Constitution are
co-extensive, the analysis in this case is reduced to a
single inquiry: whether exercising jurisdiction over the
nonresident defendant is consistent with the Due Process
Clause. Stroman Realty, Inc. v. Antt, 528 F.3d 382,
385 (5th Cir. 2008).
process issue requires a two-step inquiry. First, a defendant
must have sufficient “minimum contacts” with the
forum. International Shoe Co. v. Washington, 326
U.S. 310, 316 (1945). Second, the requirement that a
defendant litigate in the forum must not offend
“traditional notions of fair play and substantial
justice.” Id. The plaintiff bears the burden
of establishing minimum contacts, and upon that showing, the
burden shifts to the defendant to prove that the exercise of
jurisdiction would offend traditional notions of fair play
and substantial justice. Id.
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286
(1980), the Supreme Court first recognized the stream of
commerce theory of specific jurisdiction as a proper basis
for establishing minimum contacts. The Court held that a
“forum State does not exceed its powers under the Due
Process Clause if it asserts personal jurisdiction over a
corporation that delivers its products into the stream of
commerce with the expectation that they will be purchased by
consumers in the forum State.” Id. at 297-298.
exact requirements of the stream of commerce theory are
unclear. In Asahi Metal Industry Co. v. Superior
Court, the plurality opinion, authored by Justice
O'Connor, declared that personal jurisdiction under the
stream of commerce theory requires that the defendant
purposefully avail itself of the privilege of conducting
activities within the forum. 480 U.S. 102, 112 (1987).
Justice O'Connor stated that, “[t]he
‘substantial connection' between the defendant and
the forum State necessary for a finding of minimum contacts
must come about by an action of the defendant
purposefully directed toward the forum State.”
Id. (emphasis in original). In contrast, Justice
Brennan and three other Justices who concurred in the result
concluded that a defendant who places goods in the stream of