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Columbia Sportswear North America, Inc. v. Ventex Co., Ltd.

United States District Court, D. Oregon

September 30, 2019

COLUMBIA SPORTSWEAR NORTH AMERICA, INC. and COLUMBIA SPORTSWEAR COMPANY, Plaintiffs,
v.
VENTEX CO., LTD. and DAN MEYER, Defendants.

          David W. Axelrod and Nicholas F. Aldrich, Jr., Schwabe, Williamson & Wyatt PC Of Attorneys for Plaintiffs.

          James E. Geringer, Klarquist Sparkman LLP, Of Attorneys for Defendants.

          OPINION AND ORDER

          Michael H. Simon, United States District Judge.

         Plaintiffs Columbia Sportswear North America, Inc. (“CSNA”) and Columbia Sportswear Company (“CSC”) (collectively, “Columbia”) filed this lawsuit against Defendants Ventex Co., Ltd. (“Ventex”) and Dan Meyer (“Meyer”). Columbia recently dismissed all claims against Meyer. Against Ventex, Columbia alleges infringement of three patents, in violation of 35 U.S.C. § 101, et seq.; unfair competition in violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125; unfair competition in violation of Oregon's Unlawful Trade Practices Act, Or. Rev. Stat. § 646.605, et seq.; and breach of contract. Ventex has moved to dismiss all claims, arguing that the Court lacks personal jurisdiction over Ventex. For the reasons that follow, Ventex's motion is denied.[1]

         STANDARDS

         In a motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2) of the Federal Rules of Civil Procedure, the plaintiff bears the burden of proving that the court's exercise of jurisdiction is proper. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (citing Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990)). When resolving such a motion on written materials, rather than after an evidentiary hearing, the court need “only inquire into whether the plaintiff's pleadings and affidavits make a prima facie showing of personal jurisdiction.” Id. (quotation marks omitted) (quoting Caruth v. Int'l Psychoanalytical Ass'n, 59 F.3d 126, 128 (9th Cir. 1995)). Although a plaintiff may not rest solely on the bare allegations of its complaint, uncontroverted allegations must be taken as true. Id. In addition, conflicts between the parties over statements in affidavits must be resolved in the plaintiff's favor. Id. (citing Am. Tel. & Tel. Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996) and Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1087 (9th Cir. 2000)).

         “Federal Circuit law governs the issue of personal jurisdiction in . . . patent-related cases.” Deprenyl Animal Health, Inc. v. Univ. of Toronto Innovations Found., 297 F.3d 1343, 1348 (Fed. Cir. 2002). The general standards governing personal jurisdiction in the Ninth and Federal Circuits, however, are virtually identical. See, e.g., Celgard, LLC v. SK Innovation Co., 792 F.3d 1373, 1377-78 (Fed. Cir. 2015); Elecs. for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1348-49 (Fed. Cir. 2003); Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1200-01 (Fed. Cir. 2003).

         BACKGROUND

         CSC is the parent company of CSNA. Both corporations are organized under the laws of the State of Oregon, and both have their principal places of business in Portland, Oregon. CSNA owns the patents at issue. Ventex is a foreign company based in Seoul, South Korea. Ventex manufactures textiles for use in clothing, including outdoor wear. Meyer is an Oregon resident and, through his company Peak Performance Textiles, LLC, was the sole sales representative for Ventex in the United States. In 2010, CSC and Ventex entered into a Material Component Supply Agreement (“Agreement”) (ECF 38). CSNA is an intended beneficiary of that Agreement. Columbia alleges that under the Agreement, Ventex earned millions of dollars in revenue by producing textiles for use in Columbia products.

         The Agreement includes terms and conditions intended to protect CSC's intellectual property rights, including trademarks, patents, and copyrights. Agreement, §§ 1, 4. The Agreement even defines “Trademarks” to include, in addition to marks, “any other intellectual property associated with Materials or Finished Goods, including but not limited to all . . . patents . . . owned or licensed by Columbia or its affiliates.” Id. at 3, § 1.16. Under the Agreement, Ventex must “only use the Trademarks on or in connection with the Materials and only in a manner expressly set forth in writing by Columbia.” Id. at 4, § 4.1. The Agreement further provides that Ventex “will not at any time directly contest . . . the validity of any of the Trademarks.” Id. The Agreement further requires Ventex to maintain the confidentiality of Ventex's relationship with CSC. Id. at 5, § 5.3. The Agreement also provides that it will be “exclusively governed in all respects by and interpreted in accordance with the laws of the State of Oregon, ” that any dispute between the parties “will be settled by binding arbitration pursuant to the commercial rules of the American Arbitration Association, ” that any arbitration proceeding must take place in Portland, Oregon, and that no provision will “prevent either party from seeking interim or permanent injunctive relief against the other in any court of competent jurisdiction.” Id. at 13-14, § 16.6.

         As alleged in the First Amended Complaint (“FAC”), in 2010 (the year the parties entered into the Agreement), Columbia launched its “Omni-Heat® Reflective” line of products, which “used reflective elements positioned on the fabric in a discontinuous array . . . so as to allow . . . moisture permeability of the base fabric while also providing the advantages of heat reflectivity.” FAC (ECF 26) at ¶ 20. CSNA filed patent applications for related lines of products, including the D657, 093 (“D'093”) Design Patent, entitled “HEAT REFLECTIVE MATERIAL.” The U.S. Patent and Trademark Office (“PTO”) issued the D'093 Design Patent to CSNA in April 2012. That patent features reflective material positioned on the base fabric in evenly stacked, wavy lines.

         According to Columbia, in 2012 Ventex sought to become a manufacturer of Columbia's Omni-Heat® fabric, which practiced the D'093 Design Patent. Columbia declined Ventex's request. Columbia alleges that after Columbia denied Ventex's request, Ventex began to collaborate with Seirus Innovative Accessories, Inc. (“Seirus”), a California company, to develop a fabric known as HEATWAVE (“Heatwave”). According to Columbia, Heatwave infringed on- and was designed to compete with-fabrics using the D'093 Design Patent. Columbia also asserts that Meyer, Ventex's sole sales representative in the United States, facilitated Ventex and Seirus's infringing activities. Columbia contends that after a meeting between Meyer and Seirus in 2012 at a trade show in Utah, Ventex agreed to make the Heatwave fabric for Seirus. Meyer also participated in later communications between Ventex and Seirus, including providing Seirus with a price quote for the Heatwave fabric. According to Columbia, Meyer also represented Ventex at trade shows, promoting materials using the allegedly infringing Heatwave fabric.

         After these initial communications between Ventex, Seirus, and Meyer, Ventex manufactured the Heatwave fabric for Seirus, which Seirus then incorporated into its glove liners, hats, and socks. According to Columbia, by March 2013, Seirus had ordered 3, 000 yards of Heatwave fabric from Ventex, and Seirus and Ventex had entered into a vendor agreement for that material. Columbia further alleges that Ventex knew that the Heatwave fabric might infringe on Columbia's D'093 Design Patent, informed Seirus about the D'093 patent, and sought legal advice about the risks of infringing a design patent. Columbia also alleges that after Columbia and Ventex signed their Agreement in 2010, Ventex used on its website both the name “Columbia Sportswear” and Columbia's trademark falsely to designate Columbia as one of Ventex's customers.

         In 2013, CSNA sued Seirus in federal court in the Western District of Washington, alleging infringement of the D'093 Design Patent. Shortly thereafter, CSNA amended its complaint against Seirus to add two additional patents, U.S. Patent Nos. 8, 424, 119 (“'119 Patent”) and 8, 453, 270 (“'270 Patent”). (The D'093 Design Patent, the '119 Patent, and the '270 Patent comprise the three patents at issue in the pending lawsuit against Ventex.) In January 2015, CSNA refiled its patent infringement lawsuit against Seirus in federal court in the District of Oregon, where it was assigned to United States District Judge Marco Hernandez. In March 2016, Seirus and CSNA filed a Joint Motion for Entry of Judgment Re U.S. Patent D657, 093, and the Court issued a judgment of validity. Columbia Sportswear N. Am., Inc., v. Seirus Innovative Accessories, Inc., Case No. 3:15-cv-64-HZ (D. Or.). CSNA also moved for partial summary judgment, asserting that Seirus infringed on the D'093 Design Patent. In August 2016, Judge Hernandez granted that motion against Seirus.

         In January 2017, Ventex filed petitions for inter partes review (“IPR”) of the two additional Columbia patents. The PTO's Patent Trial and Appeal Board (“PTAB”) later dismissed the petitions and terminated the IPR proceedings for the '119 and '270 Patents. In its orders, the PTAB found that Seirus was in privity with Ventex and that Seirus was the real party in interest in the two IPRs.

         In September 2017, Judge Hernandez granted Seirus' motion to transfer venue in Columbia's patent infringement case against Seirus to the Southern District of California but continued to preside over the case. Later that month, a jury found Seirus liable for infringement of the D'093 Design Patent based on its sales of Heatwave products. Judge Hernandez entered judgment awarding CSNA more than $3 million against Seirus. Columbia Sportswear N. Am., Inc. v. Seirus Innovative Accessories, Inc., Case No. 3:17-cv-1781-HZ (S.D. Cal) (ECF 403). That case is currently on appeal to the Federal Circuit.

         DISCUSSION

         In the case pending before this Court, Ventex moves under Rule 12(b)(2) to dismiss Columbia's FAC for lack of personal jurisdiction. Columbia does not argue that there is general jurisdiction over Ventex. Rather, Columbia asserts only specific jurisdiction. Ventex argues that there is no basis for specific jurisdiction. As discussed below, the Court finds that it has specific personal jurisdiction over Ventex based on Columbia's claims of patent infringement and breach of contract. The Court also finds that it has pendant personal jurisdiction based on Columbia's claims of unfair competition.

         A. Personal Jurisdiction Generally

         The law of the Federal Circuit governs personal jurisdiction concerning patent-related claims. Deprenyl Animal Health, 297 F.3d at 1348. Under Ninth Circuit law, for all non-patent claims when no applicable federal statute otherwise governs personal jurisdiction, the district court applies the law of the forum state. Schwarzenegger, 374 F.3d at 800 (9th Cir. 2004) (citing Panavision Int'l L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998)). Oregon's long-arm statute is co-extensive with constitutional standards. Gray & Co. v. Firstenberg Mach. Co., 913 F.2d 758, 760 (9th Cir. 1990) (citing Or. R. Civ. P. 4(L)). Thus, for the non-patent claims, the Court need only determine whether its exercise of personal jurisdiction over a defendant would offend constitutional due process requirements. See Schwarzenegger, 374 F.3d at 800-01 (holding that when a state long-arm statute is coextensive with federal due process requirements, “the jurisdictional analysis under state law and federal due process are the same”).[2]

         Due process requires that a defendant “have certain minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.'” Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945) (citations omitted). The Supreme Court has rejected the application of “mechanical” tests to determine personal jurisdiction. Id. at 319; see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478-79 (1985) (rejecting “mechanical tests” and “conceptualistic . . . theories of the place of contracting or of performance” to determine personal jurisdiction (citations omitted)). Rather, a court should consider the “quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure.” Int'l Shoe, 326 U.S. at 319.

         A forum state may exercise two forms of personal jurisdiction over a nonresident defendant: general jurisdiction and specific jurisdiction. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 918-20 (2011). A court may exercise general personal jurisdiction over a defendant whose contacts with the forum are “continuous and systematic, ” even if those contacts are unrelated to the plaintiff's claims. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16 (1984). If the court lacks general personal jurisdiction, it may nevertheless have specific personal jurisdiction if: (1) the defendant has certain minimum contacts with the forum state; (2) the controversy arose out of those contacts; and (3) a court's exercise of jurisdiction is reasonable. See Burger King, 471 U.S. at 472-74. After a court asserts general personal jurisdiction over a defendant, the court may hear any claim against that defendant. Bristol-Myers Squibb Co. v. Super. Ct. of Cal., S.F. Cty., 137 S.Ct. 1773, 1780 (2017). A plaintiff relying on ...


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