Petzila, Inc. v. Anser Innovation LLC , 620 F. App'x 941 ( 2015 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
PETZILA, INC., A DELAWARE CORPORATION,
Plaintiff-Appellant
v.
ANSER INNOVATION LLC, A MINNESOTA
LIMITED LIABILITY COMPANY,
Defendant-Appellee
______________________
2015-1104
______________________
Appeal from the United States District Court for the
Northern District of California in No. 3:14-cv-01354-EMC,
Judge Edward M. Chen.
______________________
Decided: July 28, 2015
______________________
NICOLAS SPIROS GIKKAS, The Gikkas Law Firm, Palo
Alto, CA, for plaintiff-appellant.
GRANT DAVID FAIRBAIRN, Fredrikson & Byron, PA,
Minneapolis, MN, for defendant-appellee. Also represent-
ed by CHELSEA L. SOMMERS.
______________________
2 PETZILA, INC. v. ANSER INNOVATION LLC
Before LOURIE, DYK, and MOORE, Circuit Judges.
MOORE, Circuit Judge.
Petzilla, Inc., d/b/a Petzila (“Petzilla”) appeals from
decisions by the United States District Court for the
Northern District of California dismissing its case for lack
of personal jurisdiction and denying-in-part jurisdictional
discovery. For the reasons set forth below, we affirm.
BACKGROUND
Petzilla and Anser Innovation LLC are start-up com-
panies that developed products that allow pet owners to
video-chat with their pets and release an edible treat. In
2013, Anser sent a letter to Petzilla in California, inquir-
ing whether Petzilla was interested in licensing Anser’s
U.S. Patent No. 7,878,152 (“the ’152 patent”) for Petzilla’s
PetziConnect product. Petzilla answered by letter that
while PetziConnect was not “in conflict” with the ’152
patent, there could be cross-licensing opportunities be-
tween the companies. J.A. 102. Anser responded by
letter that it was not interested in collaborating with
Petzilla; that Petzilla should cease-and-desist from mak-
ing, using, or offering for sale PetziConnect; and that if
Petzilla made PetziConnect commercially available, Anser
would take legal action.
On March 24, 2014, Petzilla brought this action, seek-
ing declaratory judgment of noninfringement and invalid-
ity of the ’152 patent. Anser moved to dismiss for lack of
personal jurisdiction. Anser is a Minnesota limited liabil-
ity company headquartered in Minnesota. Petzilla moved
for expedited jurisdictional discovery to “(1) build a fuller
factual record that sufficient contacts exist between Anser
and California and (2) rebut contrary assertions made in
Anser’s motion to dismiss and supporting declaration
from its CEO.” J.A. 173–74. With its motion, Petzilla
proposed requests for production, interrogatories, and
subpoenas to third parties for the production of docu-
PETZILA, INC. v. ANSER INNOVATION LLC 3
ments. Petzilla also sought leave to depose Anser and its
CEO.
On May 20, 2014, the district court granted-in-part
and denied-in-part Petzilla’s discovery motion. Petzilla,
Inc. v. Anser Innovation LLC, No. 3:14-cv-1354-EMC
(N.D. Cal. May 20, 2014), ECF No. 28 (J.A. 310–13). The
court found that the requested discovery was overly broad
and that Petzilla had not shown a need for depositions of
both Anser and its CEO, interrogatories if a deposition
were allowed, or third-party discovery. Id. at 3 (J.A. 312).
The court ruled that Petzilla could request documents
from Anser and depose either Anser or its CEO, with the
discovery “limited to Anser’s relationships with distribu-
tors and retailers—in particular, whether Anser contract-
ed with an exclusive distributor or retailer to sell the
patented product in California and [whether] the agree-
ment was analogous to an exclusive patent license.” Id. at
4 (J.A. 313). Petzilla requested documents from Anser
but did not depose Anser or its CEO.
Petzilla moved for leave to file a motion for reconsid-
eration of the discovery order, arguing that the produced
documents contradicted statements in Anser’s motion to
dismiss and the supporting declaration from its CEO.
The court denied the motion, but granted Petzilla an
extension of time to depose Anser’s CEO, noting that
Petzilla could use the deposition to address the alleged
inconsistencies. Despite this extension, Petzilla did not
depose Anser’s CEO.
On September 23, 2014, the court granted Anser’s re-
newed motion to dismiss for lack of personal jurisdiction.
Petzilla, Inc. v. Anser Innovation LLC, No. 3:14-cv-1354-
EMC, 2014 WL 4744434, at *1 (N.D. Cal. Sept. 23, 2014).
This appeal followed. We have jurisdiction under 28
U.S.C. § 1295(a)(1).
4 PETZILA, INC. v. ANSER INNOVATION LLC
DISCUSSION
I.
We review personal jurisdiction determinations de
novo, applying Federal Circuit law. Autogenomics, Inc. v.
Oxford Gene Tech. Ltd., 566 F.3d 1012, 1016 (Fed. Cir.
2009). Because the district court determined personal
jurisdiction without an evidentiary hearing, Petzilla
needed to make only a prima facie showing that Anser
was subject to personal jurisdiction. Id. at 1017. We
accept Petzilla’s uncontroverted allegations as true and
resolve any factual conflicts in its favor. Id.General personal jurisdiction requires that the de-
fendant have continuous and systematic contacts with the
forum state, while specific personal jurisdiction can exist
even if the contacts are not continuous and systematic.
Id. In actions for declaratory judgment of patent nonin-
fringement and invalidity, specific personal jurisdiction
can arise from cease-and-desist communications in com-
bination with “additional activities” that “relate in some
material way to the enforcement or defense of the patent”
and are purposefully directed at the forum. Id. at 1019–
20. A defendant patentee’s own commercial activities are
irrelevant to this special test because they are not mate-
rially related to patent enforcement or defense. Id. at
1019.
The district court wrote that Petzilla “appear[ed] to
agree” that general personal jurisdiction did not extend to
Anser, and that regardless, Anser’s “isolated and sporad-
ic” contacts with California were insufficient to demon-
strate general personal jurisdiction. Petzilla, 2014 WL
4744434, at *4. The court determined that Anser was not
subject to specific personal jurisdiction because Anser’s
sending a cease-and-desist letter to Petzilla was its only
California activity relating to the enforcement or defense
of the ’152 patent.
PETZILA, INC. v. ANSER INNOVATION LLC 5
On appeal, Petzilla argues that the court had specific
personal jurisdiction over Anser based on Anser’s cease-
and-desist letter in combination with Anser’s agreement
with Tuffy’s Pet Foods, Inc. 1 Petzilla contends that the
Tuffy’s agreement was “an exclusive implied patent
license (or its functional equivalent),” Appellant’s Br. 17,
and thus a sufficient “additional activity” because (1) it
gave Tuffy’s the exclusive right to make and sell treats
and “treat packs” for use in Anser’s PetChatz products,
and (2) the treats and treat packs are required for practic-
ing the methods of claims 1, 8, and 11. Claims 1 and 8
recite “[a] method for communicating with an animal
comprising . . . a food dispenser,” and claim 11 recites
“[t]he method of claim 8 further comprising dispensing
food to the animal.” ’152 patent col.4 l.56–col.5 l.10; col.5
ll.23–47; col.6 ll.6–7.
We agree with the district court that it lacked specific
personal jurisdiction over Anser. First, Anser’s sending
cease-and-desist letters to Petzilla in California is insuffi-
cient to establish personal jurisdiction. See Autogenomics,
566 F.3d at 1019. Second, Petzilla did not show that
Anser purposefully directed “additional activities” at
California that related in some material way to the validi-
ty and enforceability of the ’152 patent. See id. at 1020.
Anser’s entering into the Tuffy’s agreement is not
enough. The agreement did not give Tuffy’s an exclusive
license to the ’152 patent, obligate Anser to enforce the
’152 patent, or give Tuffy’s the right to sue others for
infringement of the ’152 patent. See, e.g., Breckenridge
Pharm., Inc. v. Metabolite Labs., Inc., 444 F.3d 1356,
1366–67 (Fed. Cir. 2006) (holding that exclusively licens-
ing the patent to an entity in the forum state constituted
1 Petzilla does not appeal the district court’s deter-
mination that it did not have general personal jurisdiction
over Anser.
6 PETZILA, INC. v. ANSER INNOVATION LLC
sufficient “additional activity” where the entity was given
the right to sue others for patent infringement); Akro
Corp. v. Luker, 45 F.3d 1541, 1543 (Fed. Cir. 1995); (hold-
ing that exclusively licensing the patent to an entity in
the forum state constituted sufficient “additional activity”
where the entity was given the right to sue others for
patent infringement and the patentee was obligated to
enforce the patent). Instead, the agreement gave Tuffy’s
only “a royalty free, nonexclusive limited license” to use
Anser’s intellectual property “solely in connection with”
the sale of “treat packs” and contained no provision relat-
ing to the enforcement or defense of the ’152 patent
against third parties. Petzilla, 2014 WL 4744434, at *6.
The agreement also did not give Tuffy’s exclusive dis-
tribution or retail rights to a patented product. See, e.g.,
Genetic Implant Sys., Inc. v. Core-Vent Corp., 123 F.3d
1455, 1458 (Fed. Cir. 1997) (holding that giving exclusive
distribution and retail rights in the forum state for a
patented product constituted sufficient “additional activi-
ty”). Even if the agreement gave Tuffy’s the exclusive
right to make and sell treats and “treat packs” for use in
PetChatz, the treats and treat packs are not patented
products. The Tuffy’s agreement distinguished “treat
packs” from “treat pack dispensers,” Petzilla, 2014 WL
4744434, at *2, which indicates that the treat packs were
not “food dispenser[s]” as recited in claims 1 and 8. Even
if the treat packs were “food dispenser[s]” as used in
claims 1 and 8 and the treats were “food” as used in
claim 11, Petzilla has not shown that the treats or treat
packs met any other limitation of these claims. Therefore,
on this record, the treats and treat packs were not patent-
ed products. See Southwall Techs., Inc. v. Cardinal IG
Co., 54 F.3d 1570, 1575 (Fed. Cir. 1995). We are not
persuaded by Petzilla’s other arguments. Because Petzil-
la has not shown that Anser purposefully directed “addi-
tional activities” at California that related in a material
way to the validity and enforceability of the ’152 patent,
PETZILA, INC. v. ANSER INNOVATION LLC 7
the district court correctly ruled it did not have personal
jurisdiction over Anser. 2
II.
We review a district court’s denial of jurisdictional
discovery under the law of the regional circuit, here the
Ninth Circuit, which reviews such denials for abuse of
discretion. Autogenomics, 566 F.3d at 1021–22 (citing
Digeo, Inc. v. Audible, Inc., 505 F.3d 1362, 1370 (Fed. Cir.
2007)). Under this standard, we uphold denials “unless
there is the clearest showing that the denial will result in
actual and substantial prejudice to the complaining
litigant.” Digeo, 505 F.3d at 1370.
The district court did not abuse its discretion in deny-
ing-in-part jurisdictional discovery. Petzilla has not
shown that the denial will cause actual and substantial
prejudice, for example by showing a reasonable probabil-
ity that the outcome would have been different had addi-
tional discovery been allowed. Petzilla has not identified
the additional discovery it believes should have been
permitted or shown that such discovery would have
provided any information that it could not have obtained
from deposing Anser or Anser’s CEO, which was permit-
ted under the discovery order.
CONCLUSION
Because the district court did not have personal juris-
diction over Anser and did not abuse its discretion by
2 Petzilla argues for the first time on appeal that
our decisions on personal jurisdiction in declaratory
judgment actions were overruled sub silentio by the
Supreme Court’s decision in Medtronic, Inc. v. Mirowski
Family Ventures, LLC, 134 S. Ct. 843 (2014). We reject
this argument as untimely.
8 PETZILA, INC. v. ANSER INNOVATION LLC
denying-in-part Petzilla’s request for jurisdictional dis-
covery, we affirm.
AFFIRMED
COSTS
Costs to Anser.