U.S. Court of Appeals for the Federal Circuit, University of Massachusetts v. L’Oréal S.A., Docket No. 2021-1969

Jurisdictional Discovery

 

Personal Jurisdiction (Foreign Corporation)

 

Technology Licensed by Foreign Corporation to the U.S. Corp. Could Suffice to Allow Jurisdictional Discovery. R & D Abroad Could Suffice as Well

 

Patent-Infringement Claims

 

L’Oréal

 

 

 

 

Appeal from the United States District Court for the District of Delaware in No. 1:17-cv-00868-CFC-SRF.

 

 

(…) UMass also challenges the district court’s personal-jurisdiction determinations. See Personal Jurisdiction Report and Recommendation at 17–26; Personal Jurisdiction Order at 1–4. Because we find that at the very least jurisdictional discovery was appropriate, we vacate and remand to the district court, without reaching the question of whether UMass made a sufficient prima facie showing that L’Oréal S.A. was subject to personal jurisdiction based on the complaint and evidence submitted at the time of the Rule 12(b)(2) motion. See Autogenomics, Inc. v. Oxford Gene Technology Ltd., 566 F.3d 1012, 1016–17 (Fed. Cir. 2009). Personal-jurisdiction analysis for patent-infringement claims is governed by Federal Circuit law. See Synthes (U.S.A.) v. G.M. Do Reis Jr. Ind. Com. de Equip. Medico, 563 F.3d 1285, 1293 (Fed. Cir. 2009); Electronics for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1348 (Fed. Cir. 2003). A denial of jurisdictional discovery, however, is reviewed for abuse of discretion, applying the law of the regional circuit. Autogenomics, 566 F.3d at 1021–22. In the Third Circuit,“ if the plaintiff presents factual allegations that suggest with reasonable particularity the possible existence of the requisite contacts . . . , the plaintiff’s right to conduct jurisdictional discovery should be sustained.”  Eurofins Pharma US Holdings v. BioAlliance Pharma SA, 623 F.3d 147, 157 (3d Cir. 2010) (cleaned up and emphasis added); see also Compagnie Des Bauxites de Guinee v. L’Union Atlantique S.A. d’Assurances, 723 F.2d 357, 362 (3d Cir. 1983) (“A plaintiff who is a total stranger to a corporation should not be required, unless he has been undiligent, to try such an issue on affidavits without the benefit of full discovery.” (citation omitted)). In other words, jurisdictional discovery should be allowed unless plaintiff is attempting to “undertake a fishing expedition based only upon bare allegations” or a claim is “clearly frivolous.” Eurofins, 623 F.3d at 157; Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446, 456 (3d Cir. 2003) (citation omitted). Here, the district court abused its discretion in not allowing jurisdictional discovery on the record before it. In front of the magistrate judge, UMass made more than clearly frivolous, bare allegations that L’Oréal S.A. was subject to personal jurisdiction, either because L’Oréal S.A. introduced the accused products into the stream of commerce or because L’Oréal USA operated as L’Oréal S.A.’s agent in certain potentially relevant respects. See Plaintiffs’ Memorandum of Law in Opposition to Defendant L’Oréal S.A.’s Motion to Dismiss at 1–17, University of Massachusetts v. L’Oreal S.A., No. 1:17-cv-00868 (D. Del. Dec. 8, 2017), ECF No. 27. For example, as potentially relevant to both theories, UMass put forward evidence buttressing the possibility that L’Oréal S.A. researched and developed the addition of adenosine to skin-care products, J.A. 263–69; J.A. 1070; J.A. 1073–77, and L’Oréal S.A.’s own submitted declaration indicated that L’Oréal S.A. may have licensed that technology to L’Oréal USA, J.A. 553–54 (Rabinowitz Decl. ¶ 6) (“From time to time, L’Oréal S.A. and L’Oréal USA engage in the sale of goods or services between the two companies.”). For its part, L’Oréal S.A. did not specifically deny allegations that it developed and licensed the relevant technology to L’Oréal USA, stating only that “L’Oréal S.A. does not directly develop, sell, market, or advertise to consumers in Delaware any of the products at issue in this action,” without making it clear what it meant by “directly develop.” J.A. 553–54 (Rabinowitz Decl. ¶ 6).

 

 

Because this evidence raises the possibility that discovery might have uncovered the requisite contacts under our precedent, see, e.g., Nuance Communications, Inc. v. Abbyy Software House, 626 F.3d 1222, 1233–34 (Fed. Cir. 2010); Celgard, LLC v. SK Innovation Co., 792 F.3d 1373, 1379–82 (Fed. Cir. 2015), we vacate the jurisdictional determinations. UMass is entitled to jurisdictional discovery before any jurisdictional determination, if one remains necessary, is made.

 

 

 

 

 

(U.S. Court of Appeals for the Federal Circuit, June 13, 2022, University of Massachusetts v. L’Oréal S.A., Docket No. 2021-1969)