Autogenomics, Inc. v. Oxford Gene Technology Ltd. (Fed. Cir. 2009)

    By Donald Zuhn --

Last month, the Federal Circuit affirmed the judgment of the District Court for the Central District of California granting Defendant-Appellee Oxford Gene Technology's motion to dismiss for lack of personal jurisdiction.  Oxford filed the motion to dismiss after Plaintiff-Appellant Autogenomics filed suit against Oxford seeking a declaratory judgment of invalidity, unenforceability, and non-infringement with respect to U.S. Patent No. 6,054,270.

The '270 patent, which is owned by Oxford, relates to oligonucleotide microarrays for the analysis of polynucleotides.  Oxford is a British biotechnology company that is organized under the laws of England and Wales; which is not registered to do business in California; and which has no California facilities, assets, employees, or agents.  Autogenomics, meanwhile, is a biotechnology company that is organized under the laws of California, and which uses microarray technology in its business.

In July 2007, Autogenomics filed a declaratory judgment action against Oxford asking the California District Court to find claims 9 and 10 of the '270 patent invalid or unenforceable, and not infringed.  In support of the District Court having personal jurisdiction over Oxford, Autogenomics alleged that Oxford had several contacts with California, including:

• Licensing negotiations between the parties -- In 2006, Oxford contacted Autogenomics regarding the '270 patent, and Autogenomics expressed an interest in licensing the patent.  Autogenomics, however, believed eleven references raised "serious issues with regard to novelty and obviousness."  Oxford asserted that the '270 patent was valid over the references, and two Oxford representatives subsequently traveled to California to meet with representatives of Autogenomics.  The parties were unable to agree on license terms.

• Licenses -- Oxford entered into non-exclusive licenses with about ten California companies.

• Agilent agreement -- Oxford and Agilent Technologies (a California company) entered into "a collaborative agreement giving [Oxford] access to Agilent's microarray platform, confirming [Oxford] as an Agilent Certified Service Provider, and appointing Agilent as an OEM supplier for [Oxford] designed microarrays."

• Conferences -- Oxford attended three conferences in California between 2003 and 2007.

• Sales -- Oxford sold 20 microarrays to a California company in April 2006.

• Publication -- Oxford published an application note, describing a microarray product, on the Nature.com website.

Oxford responded to Autogenomics' suit by filing a motion to dismiss, contending that the District Court lacked general or specific personal jurisdiction over it.  The District Court granted Oxford's motion, ruling that it lacked general jurisdiction because Oxford's contacts with California were insufficient to be the equivalent of having a physical presence within the state, and that it lacked specific jurisdiction because the declaratory judgment action did not arise from or relate to most of the contacts alleged by Autogenomics.  The District Court also denied Autogenomics' request to conduct jurisdictional discovery.  Autogenomics appealed these determinations to the Federal Circuit.

A divided panel, with Judge Moore writing for the majority, determined that the District Court had correctly ruled that it lacked general or specific personal jurisdiction over Oxford, and that the District Court did not abuse its discretion in denying jurisdictional discovery to Autogenomics.  With regard to general personal jurisdiction, the majority found that Oxford lacked the types of contacts with California that qualify as "continuous and systematic general business contacts."  In particular, the majority noted that Oxford has no actual physical presence or license to do business in California, and that it was not reasonable to infer, as Autogenomics had suggested, that Oxford's conference booths were, in effect, "mobile offices."  The Federal Circuit determined that "ultimately, [Oxford's participation in] four conferences over five years constitute only sporadic and insubstantial contacts."  Stating that "[a]ll of the contacts alleged by Autogenomics, even in combination, are insufficient evidence of continuous and systematic contacts," the majority concluded that the District Court lacked general personal jurisdiction over Oxford.

As for specific personal jurisdiction, the majority began by discussing the Court's 2008 decision in Avocent Huntsville Corp. v. Aten Int'l Co., noting that:

Avocent explained that the contacts material to the specific jurisdiction analysis in a declaratory judgment action are not just any activities related to the patent-at-issue.  Rather, the relevant activities are those that the defendant "purposefully directs . . . at the forum which relate in some material way to the enforcement or the defense of the patent."  Id. at 1336.  Thus, courts must examine the jurisdictional facts for conduct whereby the patentee "may be said to purposefully avail itself of the forum and to engage in activity that relates to the validity and enforceability of the patent."  Id.

Thus, in accord with Avocent, "only enforcement or defense efforts related to the patent rather than the patentee's own commercialization efforts are to be considered for establishing specific personal jurisdiction in a declaratory judgment action against the patentee."  While the majority was also "concerned that foreign patentees like Oxford may engage in significant commercialization and licensing efforts in a state while benefiting from the shelter of the Avocent rule," the Court noted that it was "nonetheless bound by Avocent."  That being said, the majority observed that under 35 U.S.C. § 293, "[j]urisdiction over foreign patentees like Oxford continues to be available in the United States District Court for the District of Columbia."

With respect to the facts of the instant case, the majority disagreed with Autogenomics' contention that the Agilent agreement was sufficient to establish specific jurisdiction over Oxford, stating that "there is nothing in evidence, nor would it be a reasonable inference, to suggest that this agreement involves the '270 patent or is 'analogous to a grant of a patent license.'"  The Federal Circuit also concluded that Autogenomics' argument that Oxford had granted an exclusive license to Incyte Pharmaceutics Inc. (a California company), in view of the numerous non-exclusive licenses that Oxford had granted, "cannot be a reasonable inference."  The majority therefore determined that the District Court also lacked specific personal jurisdiction over Oxford.

In the last portion of the opinion, the majority dispensed with Autogenomics' final argument:  that the District Court abused its discretion in denying Autogenomics's request for jurisdictional discovery.  The Federal Circuit noted that "[i]n this case, there is no denial of a motion for jurisdictional discovery for us to review because there was no formal motion for jurisdictional discovery."  The Court also noted that "Autogenomics did not make . . . a showing that further discovery would elucidate the facts necessary to prove that the court had personal jurisdiction," adding that "[o]nly now, on appeal, does Autogenomics explain how discovery could help establish the court's jurisdiction."  The majority concluded, therefore, that the District Court acted within its discretion by denying Autogenomics' request for jurisdictional discovery.

Judge Newman (at left) begins her dissent by declaring that "[t]he Federal Circuit again restricts United States parties from access to our courts when a United States patent is owned by a foreign entity."  With respect to Oxford's contacts with California, Judge Newman noted that:

Oxford owns several United States patents, including the patent that is the subject of this declaratory action, and is exercising its United States patent rights through approximately ten licensees in California.  Autogenomics states that Oxford has entered into a manufacturing venture with the California company Agilent, whereby Agilent serves as a California-based supplier of microarrays designed by Oxford.  Oxford's employees have personally exhibited the Oxford technology at trade shows in California and publicized the availability of licenses for Oxford's United States patents.  The record shows sale of Oxford microarray products to at least one customer in California.  Oxford employees traveled to California and negotiated with Autogenomics in that forum.  In addition, California is the primary site of Autogenomics' business, the forum in which the accused infringing activities are conducted, and in which Oxford's threatened enforcement of its patent would occur.

Judge Newman also noted that "[n]o other forum has been asserted by Oxford to be more convenient; indeed, the entire relationship between Oxford and Autogenomics has been in the California forum, which is a primary locus of the biotechnology industry in which both parties are engaged."  With regard to the majority's reliance on Avocent (where Judge Newman also dissented) she stated that "if Avocent is read to bar this suit, it is in conflict with precedent of this court and the Supreme Court."  As for the majority's statement that Autogenomics could bring suit in the District of Columbia, Judge Newman stated that:

It is not explained why a California plaintiff should have to resort to a distant forum, which is not alleged to have meaningful contacts with either party, to resolve a dispute that centers upon actions by both the plaintiff and the foreign patentee in the state of California.  I take note that Oxford has not suggested transfer to the District of Columbia; the Oxford position is that it cannot be sued.

Autogenomics, Inc. v. Oxford Gene Technology Ltd. (Fed. Cir. 2009)
Panel: Circuit Judges Newman and Moore and District Judge Gettleman
Opinion by Circuit Judge Moore; dissenting opinion by Circuit Judge Newman

Comments

[6]

As always J newman playing devil's advocate. She knows good and well what the restrictions are which are at play here. If not for those restrictions we'd have people suing people all over who aren't even anywhere near the other people and who aren't having a very big impact on those other people.

[Federally Circuitous]

As always, 6 plays the imbecile. 99% of the time, when Judge Newman dissents, it means the majority got it wrong, as is the case here. Oxford owns a US patent. It licenses that patent to US entities, and in so doing benefits from the patent. If Oxford wants to benefit from a US patent, it should be subject to the same kinds of challenges US-based patentees are subject to. Oxford should be subject to DJ jurisdiction in the USA; it should not be able to escape jurisdiction on the grounds that it is a foreign entity.

[6]

"it should not be able to escape jurisdiction on the grounds that it is a foreign entity. "

It isn't able to escape on those grounds. It escapes on the grounds that it is not a local entity.

Legitimate.

Riddle me this and riddle me that, but why doesn't the Fed. Circ. start paying more attention to her if she "gets it right" so often? She's had more notable dissents in cases than anyone else in recent years. By a factor of like 10.

I'll tell you why, because she goes out of her way to make the law fit the way she feels it "should" fit rather than how it fits. Her dissents are perfect arguments for a public forum, not a court.