U.S. Court of Appeals for the Seventh Circuit, REXA, Inc. v. Mark V. Chester and MEA, Inc., Docket No. 20-2953

Assignment

Breach of an Implied Contractual Obligation (of Employee) to Assign Patent Rights (to Employer, Then to Successor Corporation)

 

May Employer’s Rights Under a Written Employment Agreement Be Assigned Without the Employee’s Consent?

 

May an Implied-In-Fact Contractual Obligation Regarding Intellectual-Property Rights Be So Assigned?

 

Successor Corporation

 

Patent Law

 

Illinois Law

 

Wisconsin Law

 

Common Law of Massachusetts (Contract Formation)

 

 

 

 

(…) REXA also challenges the district court’s grant of summary judgment to Chester on Count IV, REXA’s claim for breach of an implied-in-fact contractual obligation to assign any patent rights in connection with the patent application. In evaluating such a claim, federal courts “apply state-law principles of contract formation to determine whether an implied contract existed.” Farmers Edge Inc. v. Farmobile, LLC, 970 F.3d 1027, 1031 (8th Cir. 2020) (citing Teets v. Chromalloy Gas Turbine Corp., 83 F.3d 403, 407 (Fed. Cir. 1996)). The parties agree that REXA’s claim for breach of an implied-in-fact contract arises under the common law of Massachusetts, where Koso employed Chester.

 

 

Massachusetts law provides that if an employer “contemplates the discovery of an invention” and contracts with an employee to build it such that the employee “must have reasonably understood that such inventions as resulted from his performance of the contract should belong to the employer,” the employee has “an implied obligation to assign any patents ... for said inventions to his employer.” Nat’l Dev. Co. v. Gray, 55 N.E.2d 783, 787 (Mass. 1944) (citations omitted). Subsequent cases have extended that proposition. When an employee—even if hired in a general capacity—is specifically “directed during the course of his employment to develop or perfect new or existing machinery or processes, his employer becomes the owner of resulting inventions and may compel the assignment of patents taken in the employee’s name.” Steranko v. Inforex, Inc., 362 N.E.2d 222, 233–34 (Mass. App. Ct. 1977); see also Silica Tech, L.L.C. v. J-Fiber, GmbH, 2009 WL 2579432, at *13 (D. Mass. Aug. 19, 2009) (same).

 

 

REXA is correct that the question of whether an employer’s rights under a written employment agreement may be assigned without the employee’s consent is materially distinct from whether an implied-in-fact contractual obligation regarding intellectual-property rights may be so assigned. The concerns that weigh against permitting a successor corporation to enforce a contract for employment, a personal service, do not necessarily apply to an implied contractual right to assign intellectual property. Chester and MEA do not sufficiently account for the differences between employment and intellectual-property rights. Notably, in other cases involving similar allegations, courts and parties have assumed that successors-in-interest may enforce the type of implied-in-fact contractual right at issue here.

 

 

Yet, we decline to hold that as a matter of Massachusetts law, an implied-in-fact obligation to assign patent rights may be transferred to a successor-in-interest. After all, state courts are the “ultimate expositors” of their own laws. Smart Oil, LLC v. DW Mazel, LLC, 970 F.3d 856, 863 (7th Cir. 2020) (citation omitted). “A federal court sitting in diversity must proceed with caution in making pronouncements about state law,” especially given that such pronouncements “inherently involve a significant intrusion on the prerogative of the state courts to control that development.” Lexington Ins. Co. v. Rugg & Knopp, Inc., 165 F.3d 1087, 1092 (7th Cir. 1999) (citations omitted). Here, there is no need to resolve the Massachusetts state-law issue concerning the transferability of implied-in-fact obligations to assign patents. Instead, we adjudicate REXA’s implied-in-fact contractual claim by applying a requirement common to all such claims.

 

 

As a general rule, “an individual owns the patent rights to the subject matter of which he is an inventor, even though he conceived it or reduced it to practice in the course of his employment.” Banks, 228 F.3d at 1359. But there are exceptions. In the archetypal case involving an inventor’s breach of an implied-in-fact contractual obligation, an employer may be entitled to ownership rights associated with “the inventions of employees hired to direct or to engage in inventive research.” Steranko, 362 N.E.2d at 233 (citations omitted). Also, when an employee is specifically “directed during the course of his employment to develop or perfect new or existing machinery or processes, his employer becomes the owner of resulting inventions and may compel the assignment of patents taken in the employee’s name.” Id. at 233–34. By adhering to this rule, Massachusetts follows the law of many other states. See, e.g., Teets, 83 F.3d at 408 (“Even if hired for a general purpose, an employee with the specific task of developing a device or process may cede ownership of the invention from that task to the employer.”) (applying Florida law); Goodyear Tire & Rubber Co. v. Miller, 22 F.2d 353, 356 (9th Cir. 1927) (applying federal common law).

 

 

The pertinent question is whether the employer “specifically directed” the employee to create the invention at issue. Farmers Edge, 970 F.3d at 1032; Teets, 83 F.3d at 408. “The primary factor courts consider in determining whether an employed to invent agreement exists is the specificity of the task assigned to the employee.” Farmers Edge, 970 F.3d at 1032 (quoting Skycam LLC v. Bennett, 900 F. Supp. 2d 1264, 1276 (N.D. Okla. 2012)). In Skycam, the court correctly reasoned that if the employee was not employed or specifically directed “to invent the entirety” of the system described in a claim of the patent application for which assignment is sought, the employer “is not entitled to ownership of the invention described therein.” 900 F. Supp. 2d at 1277.

 

 

 

(U.S. Court of Appeals for the Seventh Circuit, July 28, 2022, REXA, Inc. v. Mark V. Chester and MEA, Inc., Docket Nos. 20-2953, 20-3213, 21-2033)

 

 

Trade Secrets - Misappropriation of Trade Secrets

Misappropriation of Trade Secrets

 

 

Illinois Law

 

Wisconsin Law

 

 

 

 

Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:17-cv-08716

 

 

REXA brought its claim for misappropriation of trade secrets under the Illinois Trade Secrets Act (“ITSA”), 765 ILL.COMP.STAT.1065/1, et seq. To prevail on such a claim, the plaintiff must demonstrate “that the information at issue was a trade secret, that it was misappropriated and that it was used in the defendant’s business.” Learning Curve Toys, Inc. v. PlayWood Toys, Inc., 342 F.3d 714, 721 (7th Cir. 2003) (citations omitted). The statute defines a trade secret as:

 

Information, including but not limited to, technical or non-technical data, a formula, pattern, compilation, program, device, method, technique, drawing, or process ... that: (1) is sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality. 765 ILL.COMP.STAT. 1065/2(d). There is also a specificity requirement inherent in a claim for misappropriation of trade secrets; a plaintiff must show “concrete secrets” rather than “broad areas of technology.” Life Spine, Inc. v. Aegis Spine, Inc., 8 F.4th 531, 540 (7th Cir. 2021) (quoting Composite Marine Propellers, Inc. v. Van Der Woude, 962 F.2d 1263, 1266 (7th Cir. 1992)). As relevant here, misappropriation under the ITSA involves the “disclosure or use of a trade secret of a person without express or implied consent” by another person who, at the time, knew or had reason to know that knowledge of the trade secret was either “acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use” or “derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use.” 765 ILL.COMP.STAT. 1065/2(b). A misappropriation may also occur when a person produces “modified or even new products that are substantially derived from the trade secret of another.” Mangren Rsch. & Dev. Corp. v. Nat’l Chem. Co., 87 F.3d 937, 944 (7th Cir. 1996) (citations omitted).

 

 

Case law requires a high level of specificity when a plaintiff makes a claim for misappropriation of a trade secret. Life Spine, 8 F.4th at 540; Composite Marine, 962 F.2d at 1266. When a plaintiff presents complex or detailed descriptions of methods and processes but fails to isolate the aspects that are unknown to the trade, no trade secret has been identified. IDX Sys. Corp. v. Epic Sys. Corp., 285 F.3d 581, 583–84 (7th Cir. 2002). Our court has emphasized that “a plaintiff must do more than just identify a kind of technology and then invite the court to hunt through the details in search of items meeting the statutory definition.” Id. at 584 (citing Composite Marine, 962 F.2d at 1266). The key task for a plaintiff is to present a specific element, or combination of elements, that is unknown to the trade and was allegedly misappropriated.

 

 

(Fn. 2: Although IDX involved a claim for misappropriation of a trade secret under Wisconsin law, the statute at issue was materially identical to the ITSA, and federal courts have properly cited IDX in applying Illinois trade secret law. See, e.g., NEXT Payment Sols., Inc. v. CLEA Result Consulting, Inc., 2020 WL 2836778, at *10–11 & n.5, 15 (N.D. Ill. May 31, 2020).)

 

 

Applying that framework, we agree with Chester and MEA that REXA has failed to identify a concrete trade secret, as it must, to defeat summary judgment. IDX considered and rejected an argument similar to the one REXA advances. There, the plaintiff alleged that certain aspects of billing software which the defendants had misappropriated qualified as trade secrets. In support, the plaintiff, IDX, submitted “a 43-page description of the methods and processes underlying and the inter-relationships among various features making up IDX’s software package.” Id. at 583. Our court noted that IDX’s “tender of the complete documentation for the software leaves mysterious exactly which pieces of information are the trade secrets.” Id. at 584. Without information sufficient to separate “the trade secrets from the other information that goes into any software package,” the court could not determine “which aspects are known to the trade, and which are not.” Id. Thus, in IDX this court affirmed the district court’s grant of summary judgment to the defendants on the claims for misappropriation of trade secrets. Id. at 584, 587.

 

 

Alleged Misappropriation:

 

REXA alleges that its trade secrets were misappropriated.

 

Recall that to prove misappropriation, REXA must show the “disclosure or use of a trade secret” by Chester and MEA and that they knew the trade secret had been either “acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use” or “derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use.” 765 ILL.COMP.STAT. 1065/2(b).

 

 

(…) Illinois courts “have read the preemptive language in the ITSA to cover claims that are essentially claims of trade secret misappropriation.” Spitz v. Proven Winners N. Am., LLC, 759 F.3d 724, 733 (7th Cir. 2014) (citation omitted). That is, consistent with the law of other jurisdictions, the ITSA forecloses claims “when they rest on the conduct that is said to misappropriate trade secrets.” Hecny Transp., Inc. v. Chu, 430 F.3d 402, 404–05 (7th Cir. 2005) (citations omitted). In Spitz this court held that the plaintiff’s “quasi-contract” theories of unjust enrichment and quantum meruit were preempted by the ITSA because they were essentially claims of trade secret misappropriation. 759 F.3d at 733.

 

 

 

 

(U.S. Court of Appeals for the Seventh Circuit, July 28, 2022, REXA, Inc. v. Mark V. Chester and MEA, Inc., Docket Nos. 20-2953, 20-3213, 21-2033)

 

Patent (U.S.) - Application

Patent (U.S.)

 

 

(…) Fn. 3: Under the Patent Act, an application for a patent must include “one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.” 35 U.S.C. § 112(b); Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. 898, 901–02 (2014). A limitation delineates and narrows the scope of a claim. See ABS Glob., Inc. v. Inguran, LLC, 914 F.3d 1054, 1075–76 (7th Cir. 2019).)

 

 

 

(U.S. Court of Appeals for the Seventh Circuit, July 28, 2022, REXA, Inc. v. Mark V. Chester and MEA Inc., Docket Nos. 20-2953, 20-3213, 21-2033)

 

 

U.S. Court of Appeals for the Federal Circuit, Aspects Furniture International, Inc. v. United States, Docket No. 21-2060, 21-2061

Customs

 

Import

 

Protest and Other Procedural Steps

 

 

When Entry is Covered by an Antidumping Order:

 

Suspension of Liquidation

 

Liquidation of the Entries

 

Liquidation Instructions from Commerce to Customs

 

Antidumping Duty Rate of 216.01 Percent

 

Reliquidation

 

Harmless Error

 

 

 

 

Appeals from the United States Court of International Trade in Nos. 1:18-cv-00222-MAB, 1:19-cv-00029-MAB

 

 

“Liquidation” is defined as “the final computation or ascertainment of duties on entries for consumption or drawback entries.” 19 C.F.R. § 159.1.

 

 

Appellants challenge the timing and procedure by which the United States Customs and Border Protection provided notice to Appellants of the liquidation of eleven entries of wooden bedroom furniture from China. Appellants contend that the United States Court of International Trade erred in determining that Customs timely liquidated or reliquidated ten entries and that Customs’ mislabeling of the notice of reliquidation for the remaining entry was harmless. We affirm.

 

 

On March 2, 2015, the U.S. Department of Commerce (“Commerce”) initiated the tenth administrative review of the antidumping order covering wooden bedroom furniture imported into the United States from China. See Initiation of Antidumping & Countervailing Duty Admin. Revs., 80 Fed. Reg. 11,166, 11,168 (Dep’t Commerce Mar. 2, 2015). On April 11, 2016, Commerce published the results of the tenth administrative review in the Federal Register, which set a China-wide antidumping duty rate of 216.01 percent ad valorem. See Wooden Bedroom Furniture From the People’s Republic of China: Final Results & Final Determination of No Shipments, In Part: 2014 Admin. Rev., 81 Fed. Reg. 21,319 (Dep’t Commerce Apr. 11, 2016) (“Final Admin Results”). On April 26, 2016, the American Furniture Manufacturers Committee for Legal Trade and Vaughn-Bassett Furniture Company, Inc. (“AFMC”) filed a lawsuit challenging the Final Admin Results before the Court of International Trade. Am. Furniture Mfrs. Comm. for Legal Trade v. United States, No. 16-cv-00070 (Ct. Int’l Trade) (“AFMC Litigation”). On April 27, 2016, the Court of International Trade issued an injunction to enjoin the liquidation (“suspension of liquidation”) of the entries involved in the AFMC Litigation, including the entries at issue in this appeal. J.A. 6. On March 13, 2017, the Court of International Trade dismissed the AFMC Litigation for lack of subject-matter jurisdiction. See Am. Furniture Mfrs. Comm. for Legal Trade v. United States, No. 16-00070 2017 Ct. Intl. Trade LEXIS 24, at *5–12 (Mar. 13, 2017). On May 12, 2017, the dismissal of the AFMC Litigation became final. See J.A. 8. On May 30, 2017, Commerce issued liquidation instructions to Customs for the subject entries, which notified Customs of the end of the injunction. Id. On November 24, 2017, Customs liquidated AFI’s Nine Subject Entries. J.A. 158, 173, 183, 194, 204, 215, 226, 234, 245. On November 30, 2017, AFI’s Tenth Subject Entry was deemed liquidated. J.A. 413. On December 1, 2017, Customs sent a notice of liquidation as to AFI’s Tenth Subject Entry. J.A. 260. AFI’s Subject Entries were assessed a final antidumping duty rate of 216.01 percent. J.A. 9. AFI timely protested the liquidations, and Customs denied the protests. J.A. 286.

 

 

(…) On October 27, 2018, AFI timely filed suit before the Court of International Trade challenging Customs’ denial of its protests. Id. On March 22, 2019, IMSS filed a similar suit. Id. On August 25, 2020, the Court of International Trade consolidated the two actions for purposes of discovery and briefing. J.A. 11.

 

 

On April 9, 2021, the Court of International Trade issued final judgment, granting the government’s motion for summary judgment. J.A. 1. The Court of International Trade determined that the applicable date of notice under 19 U.S.C. § 1504(d) was May 30, 2017, the date on which Commerce sent liquidation instructions to Customs. J.A. 23. The Court of International Trade also determined that its March 13, 2017, decision in the AFCM litigation did not provide unambiguous notice that the relevant injunction was lifted. J.A. 17–18. As such, the Court of International Trade denied Appellants’ request for discovery concerning when Customs received a copy of the Court of International Trade’s decision, reasoning that even if Customs received the decision before May 30, the decision did not provide the requisite notice. J.A. 18–19. The Court of International Trade also concluded that Customs’ error in labeling the notice regarding AFI’s Tenth Subject Entry as a liquidation instead of a reliquidation was harmless because that entry was liquidated or reliquidated within the relevant statutory period, and the effect was the same. J.A. 42. Appellants timely appealed. This court has exclusive jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

 

 

We review a grant of summary judgment by the Court of International Trade de novo. Kahrs Int’l v. United States, 713 F.3d 640, 643–44 (Fed. Cir. 2013). Although we apply a de novo standard of review, we give great weight to the informed opinion of the Court of International Trade. Nan Ya Plastics Corp. v. United States, 810 F.3d 1333, 1341 (Fed. Cir. 2016).

 

 

When importing a good into the United States, a U.S. importer of record is required to use reasonable care in providing Customs with true and correct documentation regarding the value it declares for the imported merchandise. 19 U.S.C. §§ 1484, 1485. Should a dispute arise with Customs as to the actual value of the entry, an interested party may challenge the value asserted by Customs by filing a protest. Allegheny Ludlum Corp. v. United States, 287 F.3d 1365, 1368 (Fed. Cir. 2002) (citing 19 U.S.C. § 1675b).

 

 

When Customs determines that an entry is covered by an antidumping order, it suspends liquidation and notifies the importer of “determined or estimated” duties. 19 U.S.C. § 159.58. When the suspension of liquidation is lifted, either by statute or court-order, 19 U.S.C. § 1504(d) establishes that Customs shall liquidate the relevant entry “within 6 months after receiving notice of the removal from Commerce, another agency, or a court with jurisdiction over the entry.” Otherwise, the entry will be deemed liquidated “at the rate of duty, value, quantity, and amount of duty asserted by the importer of record.” 19 U.S.C. § 1504(d). In order for an entry to be deemed liquidated, the suspension of liquidation must have been removed; Customs must have received notice of the removal of the suspension; and Customs must not have liquidated the entry at issue within six months of receiving notice of the suspension removal. Cemex, S.A. v. United States, 384 F.3d 1314, 1321 (Fed. Cir. 2004) (quoting Fujitsu Gen. Am., Inc. v. United States, 283 F.3d 1364, 1376 (Fed. Cir. 2002)).

 

 

We have interpreted § 1504 to require that a notice of removal of suspension of liquidation must be “unambiguous and public.” See id. at 1320. We have also clarified that the suspension of liquidation under 19 U.S.C. § 1516a(c)(2) cannot be lifted until the time for petitioning the Supreme Court for certiorari expires. Id. (citing Fujitsu, 283 F.3d at 1379). An entry that has been liquidated, or deemed liquidated by operation of law, may be voluntarily reliquidated by Customs pursuant to 19 U.S.C. § 1501 provided it is undertaken within 90 days from the date of the original liquidation. Section 1501 provides: A liquidation made in accordance with section 1500 or 1504 of this title or any reliquidation thereof made in accordance with this section may be reliquidated in any respect by U.S. Customs and Border Protection, notwithstanding the filing of a protest, within ninety days from the date of the original liquidation. Notice of such reliquidation shall be given or transmitted in the manner prescribed with respect to original liquidations under section 1500(e) of this title. 19 U.S.C. § 1501.

 

 

(…) The first unambiguous notice of the removal of the suspension of liquidation was the May 30, 2017 liquidation instructions from Commerce to Customs.

 

 

Despite Appellants’ arguments to the contrary, this court has never held that liquidation instructions cannot provide the statutorily required unambiguous and public notice. See Appellants’ Br. 19–21 (citing Int’l Trading Co. v. United States, 412 F.3d 1303 (Fed. Cir. 2005)). In International Trading, this court held that, under the facts of that case, the first public and unambiguous notice of the removal of the suspension of liquidation was when Commerce published the final results of the relevant administrative review in the Federal Register. Int’l Trading, 412 F.3d at 1313. In so holding, the court rejected the date on which Commerce sent liquidation instructions to Customs as the operative date of notice because Commerce’s earlier publication in the Federal Register had already provided notice to Customs that the suspension of liquidation had lifted. Id. Nothing in that decision, or in our holding today, prevents or requires that notice be provided in the form of liquidation instructions from Commerce to Customs. Instead, the relevant event that triggers the date of notice is the first publication of an unambiguous and public notice that then becomes the starting point for the six-month liquidation period, whatever form that may take. See Int’l Trading, 281 F.3d at 1275.

 

 

(…) § 1501 states explicitly that “notice of such reliquidation shall be given or transmitted in the manner prescribed with respect to original liquidations under section 1500(e) of this title.” 19 U.S.C. § 1501. Here, there are no allegations that the notice was deficient in any manner, except for the missing “re” in “reliquidation.”

 

 

Informed importers are aware that, under the established statutory scheme, Customs has six months from the notice of the removal of the suspension [§ 1504(d)] plus an additional 90 days from any liquidation or reliquidation [§ 1501] to notify an importer of the “the final computation or ascertainment of duties on entries for consumption or drawback entries” [19 C.F.R. § 159.1]. Here, notice was provided within that window.

 

 

We affirm the decision of the Court of International Trade.

 

 

 

(U.S. Court of Appeals for the Federal Circuit, July 28, 2022, Aspects Furniture International, Inc. v. United States, Docket No. 21-2060, 21-2061)

 

 

U.S. Court of Appeals for the Ninth Circuit, Lang Van, Inc. v. VNG Corp., Docket No. 19-56452

Foreign Defendants

 

Personal Jurisdiction

 

Long-Arm Jurisdiction Under Rule 4(k)(2) of the Federal Rules of Civil Procedure

 

Purposeful Availment

 

Google Play Store and Microsoft App Store

 

Geoblocking

 

Forum Non Conveniens

 

 

 

In assessing whether Lang Van established a prima facie case of jurisdiction, the panel analyzed jurisdiction under Federal Rule of Civil Procedure 4(k)(2), which provides for jurisdiction over foreign defendants that have ample contacts with the United States as a whole, but whose contacts are so scattered among states that none of them would have jurisdiction. Under Rule 4(k)(2), the plaintiff must prove: (1) the claim at issue arises from federal law; (2) the defendant is not subject to any state’s courts of general jurisdiction; and (3) invoking jurisdiction upholds due process. The plaintiff has the burden to show the first two prongs, and the burden then shifts to the defendant to show that application of jurisdiction would be unreasonable.

 

 

In 2014, Lang Van, Inc. (“Lang Van”) filed a copyright infringement suit against VNG Corporation (“VNG”). VNG, prior to discovery or answer, moved to dismiss for lack of personal jurisdiction.

 

 

Lang Van contends that personal jurisdiction exists over VNG, either under minimum contacts specifically directed at the State of California and/or under long-arm jurisdiction pursuant to Fed. R. Civ. P. 4(k)(2).

 

 

VNG contends that it is not subject to personal jurisdiction in any state’s courts of general jurisdiction. Accordingly, when assessing whether Lang Van has established a prima facie case of jurisdiction, the Court will analyze jurisdiction under Fed. R. Civ. P. 4(k)(2). See Holland Am. Line, Inc., 485 F.3d at 461 (“If  . . . the defendant contends that he cannot be sued in the forum state and refuses to identify any other where suit is possible, then the federal court is entitled to use Rule 4(k)(2).” (quoting ISI Int’l, Inc. v. Borden Ladner Gervais LLP, 256 F.3d 548, 551 (7th Cir.), as amended (July 2, 2001))).

 

 

A.   Jurisdiction under Rule 4(k)(2)

 

Rule 4(k)(2) was established in “response to the Supreme Court’s suggestion that the rules be extended to cover persons who do not reside in the United States, and have ample contacts with the nation as a whole, but whose contacts are so scattered among states that none of them would have jurisdiction.” ISI Int’l, Inc., 256 F.3d at 551 (citing Omni Cap. Int’l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 111 (1987)); see also Fed. R. Civ. P. 4(k)(2) advisory committee’s note to 1993 amendment.

 

 

Accordingly, Rule 4(k)(2) uses virtually the same analysis as the Calder effects test for traditional state court personal jurisdiction, see 465 U.S. at 788–90, but the Court looks at the nation as a whole when reviewing contacts. Under Rule 4(k)(2), the plaintiff must prove: (1) the claim at issue arises from federal law; (2) the defendants are not subject to any state’s courts of general jurisdiction; and (3) invoking jurisdiction upholds due process (namely, that jurisdiction is not unreasonable). Pebble Beach Co., 453 F.3d at 1159. The plaintiff has the burden to show the first two prongs; the burden then shifts to the defendant to show application of jurisdiction would be unreasonable.

 

 

Prong 3: 

 

Due process

 

“The due process analysis under Rule 4(k)(2) is nearly identical to the traditional personal jurisdiction analysis with one significant difference: rather than considering contacts between the . . . defendants and the forum state, we consider contacts with the nation as a whole.” Holland Am. Line Inc., 485 F.3d at 462 (citing Pebble Beach Co., 453 F.3d at 1159). First, there must be purposeful activities or transactions with the United States, with an act that shows defendant purposefully availing itself of the privileges of doing business in the United States, and thereby invoking the benefits and protections of its laws; second, the claim must arise out of activities that are related to the United States; and third, the exercise of jurisdiction must comport with notions of fair play and substantial justice. Washington Shoe Co., 704 F.3d at 672; Int’l Shoe Co. v. State of Wash., Off. of Unemployment Comp. & Placement, 326 U.S. 310, 316 (1945). There must also be “intentional conduct by the defendant that creates the necessary contacts with the forum.” Walden, 571 U.S. at 286. Walden requires the defendant to have ties to the forum “in a meaningful way,” apart from simply knowing the plaintiff has ties to the forum. Id. at 290.

 

 

(…) VNG chose not to geoblock access to Lang Van’s content on Zing MP3 which would have restricted the use of Zing MP3 in the United States or elsewhere outside of Vietnam. The First Circuit has stated that “if a defendant tries to limit U.S. users’ ability to access its website . . . that is surely relevant to its intent not to serve the United States” and that the “converse is also true,” such that the defendant’s “failure to implement such restrictions, coupled with its substantial U.S. business, provides an objective measure of its intent to serve customers in the U.S. market.” Plixer Int’l, Inc. v. Scrutinizer GmbH, 905 F.3d 1, 9 (1st Cir. 2018). VNG clearly did not attempt to limit U.S. users’ ability to access its website, even though deposition testimony indicates that it had the ability to geoblock users as of 2013, if not earlier.

 

 

Two courts have determined that a defendant “purposefully availed itself of the privilege of conducting business in the United States by distributing the Infringing content on platforms such as the Google Play store and Microsoft App store.” Blizzard Ent., Inc. v. Joyfun Inc Co., Ltd., No. SACV191582JVSDFMX, 2020 WL 1972284, at *6 (C.D. Cal. Feb. 7, 2020); Goes Int’l, AB v. Dodur Ltd., No. 3:14-CV-05666-LB, 2015 WL 5043296, at *9 (N.D. Cal. Aug. 26, 2015). VNG failed to geoblock users in the United States from the Zing MP3 app but did geoblock U.S. users’ access to certain U.S. studios, such as Universal Music. This selective geoblocking indicates purposeful conduct. Further, in 2012, VNG and Lang Van had been involved in negotiations and communications regarding the licensing of Lang Van’s content on Zing MP3.

 

 

B. Venue

 

The Court rejects defendant’s argument regarding forum non conveniens in Vietnam. VNG argues that the more appropriate venue is Vietnam and is an alternative to dismissal of this case. While the district court acknowledged this argument, it did not specifically address it on the merits. This Court has “discretion to reach forum non conveniens even if the district court declined to consider it.” Ranza v. Nike, Inc., 793 F.3d 1059, 1076 (9th Cir. 2015). VNG contends that the majority of witnesses and evidence are in Vietnam, and issues of Vietnamese contracts and copyright law would be better decided in Vietnam.

 

 

The Court finds that venue in this case is not proper in Vietnam. Copyright cases concerning alleged unlawful activities purposely directed toward the United States are more amenable to suit in the United States for the reasons set forth herein. We reverse and remand for further proceedings consistent with this opinion.

 

 

 

 

(U.S. Court of Appeals for the Ninth Circuit, July 21, 2022, Lang Van, Inc. v. VNG Corp., Docket No. 19-56452, for Publication)