By Kevin E. Noonan --
It is often to a patentee plaintiff's strategic advantage to file suit in the district in which it resides, to obtain whatever "home court" advantage may attach to that venue. Myriad's choice of filing its post-Supreme Court opinion patent infringement lawsuits reflects this strategy, as does declaratory judgment plaintiffs Counsyl, Quest, and Invitae in filing their lawsuits challenging Myriad's patents in their respective California district courts.
But a requirement for filing any lawsuit is that the court has personal jurisdiction over the defendant, a standard that is readily satisfied for a defendant engaged in nationwide interstate commerce. Personal jurisdiction is not presumed, however, and can be challenged by a motion to dismiss. Which is precisely what Invitae has done as a defendant in Myriad's lawsuit against it, arguing that the company has taken affirmative steps to avoid the jurisdiction of the Utah district court.
Revisiting Civil Procedure I, there are two types of personal jurisdiction: general jurisdiction and specific jurisdiction, both standards governed by the overriding concerns for compliance with the due process clause of the 14th Amendment, first enunciated by the Supreme Court in the International Shoe case (International Shoe Co. v. Washington, 326 U.S. 310 (1945)) that there must be "minimum contacts" with the forum for a court to exercise personal jurisdiction over a party (almost always a defendant, because the plaintiff submits to the jurisdiction of the court by filing suit). As the term suggests, general jurisdiction requires contacts not necessarily related to the specific cause of action, and includes activities such as being engaged in or licensed to do business in a state; controlling property in the state, by ownership or leasehold; employing salesmen, agents, or other employees in the state; or paying state taxes arising from its activities in the state. Specific jurisdiction relates to each states' "long arm" statute, which sets forth activities that raise jurisdiction. And the Federal due process aspect is subject to a three-part test to establish that the exercise of jurisdiction does not "offend traditional notions of fair play and substantial justice": "(1) whether the defendant purposely directed its activities at residents of the forum; (2) whether the claim arises out of or relates to those activities; and (3) whether the assertion of personal jurisdiction is reasonable and fair." 3D Sys., Inc. v. Aarontech Lab. Inc., 160 F.3d 1371, 1378 (Fed. Cir. 1998).
Invitae in its motion to dismiss argues that the Utah district court, which applies the law of the forum state to determine whether it has personal jurisdiction over a defendant, cannot satisfy general or specific jurisdiction standards. Specifically, the motion contests Myriad's allegations in its complaint that Invitae "regularly conducts business in this district and has committed acts in this judicial district which give rise to this action," specifically that it "sells, offers for sale, and has sold genetic testing products to residents of this jurisdiction," an allegation that Myriad made "[o]n information and belief" without setting forth any facts to support the allegation. According to Invitae, this is because Myriad could not supply such facts: Invitae has expressly and intentionally refused to do business with any doctors or patients in Utah and has, in fact, returned samples and requests for its services coming from Utah. According to the motion:
[O]nly certified healthcare professionals from certain states (not including Utah) can order Invitae's genetic tests. To do so, a healthcare professional must submit one of Invitae's requisition forms, as well as a patient blood sample, to Invitae's San Francisco headquarters, which is where Invitae performs its genetic testing services in the United States. None of Invitae's activities related to its genetic testing services is performed in Utah.
(citations to supporting declaration omitted).
The motion goes on to assert that "[i]f a healthcare professional in Utah were to attempt to order genetic testing services from Invitae, such an attempt would be prevented: It would either be blocked by measures Invitae established to prevent website orders from Utah, or by other preventative measures Invitae established to block the acceptance of tests ordered from Utah by phone or fax." The motion further states that two such requests were received by the company, and both were rejected (although neither of these requests involved the BRCA or MUTYH testing that is the basis of Myriad's complaint). The motion then asserts (supported by affidavit evidence) that is has never performed any of the acts that could create general jurisdiction over Invitae by the Utah court.
In its argument, Invitae uses these asserted facts to establish that the Utah court does not have personal jurisdiction over the company, setting forth the standards for general and specific jurisdiction. (In two related footnotes, the brief sets forth the rather circular standard that the Federal Circuit applies its own law to determine whether a court properly exercised personal jurisdiction over a defendant, but that the court defers to the interpretations of the Federal and state courts in the jurisdiction.") According to the brief, under Utah law the state long-arm statute is construed broadly to be co-extensive with the scope of jurisdiction falling within the ambit of 14th Amendment due process, and due process concerns can be satisfied by showing either general or specific jurisdiction. (The brief notes that the due process at issue here falls under the 5th rather than the 14th amendment, because the cause of action arises under a Federal question rather than diversity of citizenship.) Regarding general jurisdiction, Invitae contends that Myriad has an "insurmountable" burden to establish jurisdiction, because the company has purposefully avoided availing itself of the benefits of the laws of the jurisdiction. Indeed, Invitae claims it has done none of the acts recognized in Utah as raising general jurisdiction over a defendant. And in this regard the brief cites several Federal Circuit cases finding no general jurisdiction under circumstances where the defendant had much more extensive contacts with the state than the absence of contacts Invitae has purposefully maintained here, see, Grober v. Mako Products, Inc., 686 F.3d 1335, 1346 (Fed. Cir. 2012); Campbell Pet Co. v. Miale, 542 F.3d 879, 881-884 (Fed. Cir. 2008), as well as cases where the court did find jurisdiction, see LSI Indus. Inc. v. Hubbell Lighting, Inc., 232 F.3d 1369 (Fed. Cir. 2000).
Turning to the specific jurisdiction question, Invitae asserts Myriad's burden is equally insurmountable because the company has not purposely directed its activities at residents of the forum nor does Myriad's claim arise out of or relate to those (nonexistent, according to Invitae) activities. Citing Xactware, Inc. v. Symbility Solution Inc., 402 F. Supp. 2d 1359 (D. Utah 2005), Inviate argues that the mere existence of its website, which is accessible to Utah residents, is not enough to establish activities that are "purposely directed" at Utah residents, a conclusion Invitae contends is supported by Federal Circuit precedent. See, Trintec Indus., Inc. v. Pedre Promotional Products, Inc., 395 F.3d 1275, 1279 (Fed. Cir. 2005). And the company's active refusal to accept orders from Utah-based physicians is "a roadblock" that negates any nexus between the company and citizens of Utah. Moreover, the acts complained of by Myriad do nor "arise under" Invitae's activities (that are not in any case purposefully directed towards Utah residents).
And finally, Invitae asserts that exercising personal jurisdiction over the company would be "unreasonable and unfair," citing Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102 (1987), for requiring courts to consider "the burden on the defendant, the interests of the forum State, and the plaintiff's interest in obtaining relief." With regard to the first factor (or "prong"), Invitae argues that "Invitae is a small start-up company based in San Francisco, California; it has no contacts to this District; and no Invitae witnesses or documents are here. It would be a substantial disruption to the business of this nascent company to force it to litigate this case in Utah, where it has no contacts." And, thus, that the burden mitigates against the Utah court exercising jurisdiction over the company. The second factor also is against the court hearing Myriad's case, because Utah has no interest in the outcome (except, it should be noted, insofar as Myriad resides in the state). The third factor -- "the plaintiff's interest in obtaining relief" -- can be satisfied elsewhere (in the California declaratory judgment action, where the brief notes Myriad has already made an appearance). Invitae also invokes Federal district court statistics indicating that Myriad is likely to obtain swifter justice in the California court than in Utah "(compare 30.9 month to trial with 38.0 months to trial, for the 12-month period ending June 30, 2013)," a fact even if true not calculated to curry favor in this forum. And Invitae contends that the plurality of other suits brought against other defendants, and its efforts to consolidate them before the Utah court under the Judicial Panel on Multidistrict Litigation is neither relevant nor dispositive to the jurisdictional challenge brought in this motion.
We await Myriad's response, but note that Invitae's affirmative efforts to eschew serving the Utah patient population likely caused it to suffer little reduced business or profit while providing a means at little cost to prevent Myriad from suing in its home court (should the motion be successful). Clever.