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Precor Inc. v. Keys Fitness Products

February 05, 1999

PRECOR INCORPORATED, PLAINTIFF-APPELLANT,
v.
KEYS FITNESS PRODUCTS, L.P. AND SEATTLE ATHLETIC & EXERCISE, INC., DEFENDANTS, AND MACRO PROGRESS DEFENDANT-APPELLEE.



Before Michel, Clevenger, and Gajarsa, Circuit Judges.

The opinion of the court was delivered by: Michel, Circuit Judge,

DECISION

Plaintiff-Appellant Precor Incorporated appeals from the order of the United States District Court for the Western District of Washington dismissing Precor's patent infringement suit against Defendant-Appellee Macro Progress for lack of personal jurisdiction. See Precor Inc. v. Keys Fitness Prods., L.P., No. C97-1608WD (W.D. Wash. Apr. 29, 1998). The district court held that the exercise of personal jurisdiction over Macro Progress, a Taiwanese corporation, would be unreasonable. The court, however, did not address the threshold question of whether the exercise of personal jurisdiction would otherwise comport with due process and the coterminous limits of the Washington long-arm statute. Because we hold that, as a matter of law, the exercise of personal jurisdiction over Macro Progress was not shown to have been unreasonable, we vacate the district court's order and remand for a determination, in accordance with the applicable constitutional and statutory standards, of whether personal jurisdiction may properly be exercised.

DISCUSSION

I.

Precor, a Delaware corporation with its principal place of business in Bothell, Washington, is a manufacturer of fitness equipment for home and commercial use. In 1995, U.S. Patent No. 5,383,829 (the "'829 patent") was issued to Larry Miller for an invention entitled "Stationary Exercise Device." The '829 patent's specification states that it "relates to a stationary exercise device for simulating running and stepping motions." '829 pat., col. 1, ll. 10-12. The abstract explains that the invention "permits the user[']s foot to travel in an inclined, oval path of travel." Precor exclusively licensed the '829 patent and introduced a fitness product covered by the patent. This new product was entitled the "EFX Elliptical Crosstrainer" and utilized a pair of foot supports connected to opposite sides of a wheel in a manner that permits the user's feet to travel in an elliptical path during exercise.

On October 7, 1997, Precor filed suit against Keys Fitness Product, L.P. ("Keys Fitness"), a Texas limited partnership, and Seattle Athletic and Exercise, Inc. ("Seattle Athletic"), a Washington corporation, in the Western District of Washington. Precor asserted infringement of the '829 patent by a product called the "E-Trainer," allegedly manufactured and sold by the defendants. Precor amended its complaint on October 29, 1997, to add as a further defendant Macro Progress, a Taiwanese corporation with its principal place of business in Taiwan. With respect to Macro Progress, Precor alleged:

"Defendant Macro Progress has continuously manufactured and exported, offered for sale, and sold products, especially products offered and sold under the name "E-Trainer", that infringe Precor's patent rights, inter alia, through manufacturing and shipping, directly or indirectly, products to Defendant Keys [Fitness] or other distributors for subsequent distribution or sale in Washington state and other parts of the U.S.A. Included among the Washington retail outlets is Defendant Seattle Athletic. The activities of Defendant Macro Progress constitute offers for sale or sales in the state of Washington and the Western District of Washington. Accordingly, both jurisdiction and venue are proper in this Court under 28 U.S.C. § 1391(c) and 1400(b)." Amended Complaint, ¶ 8. Precor's President additionally alleged, by affidavit, that in excess of 30,000 allegedly infringing devices manufactured by Macro Progress had been shipped to the United States and distributed by Keys Fitness. Decl. of William W. Potts in Supp. of Def. Precor Inc.'s Opp'n to Mot. to Dismiss or Stay, ¶ 6 (Apr. 13, 1998). Moreover, he declared that "[a]lthough I have not been able to confirm the exact nature of the relationship, I believe that the two companies have a common ownership, partnership, or agency relationship." Id.

On March 4, 1998, Precor and Keys Fitness entered into a settlement agreement. Consequently, the parties and the court agreed to dismiss the complaint as to Keys Fitness and Seattle Athletic on March 9, 1998. On March 19, 1998, Macro Progress moved to dismiss Precor's claims for lack of personal jurisdiction or, alternatively, to stay the suit pending reexamination of the '829 patent. The district court granted Macro Progress's motion with respect to dismissal in an order dated April 29, 1998.

The district court reasoned:

"Under Federal Circuit law, specific jurisdiction requires a showing that the defendant "purposefully directed [its] activities at residents of" the forum state and that "the litigation results from alleged injuries that arise out of or relate to those activities." Akro Corp. v. Luker, 45 F.3d 1541, 1545 (Fed. Cir. 1995) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-76 (1985)). Satisfaction of these two conditions alone, however, is insufficient. The exercise of personal jurisdiction must also be reasonable. Id. at 1549. Personal jurisdiction is unreasonable where "the plaintiff's interest and the state's interest in adjudicating the dispute in the forum are so attenuated that they are clearly outweighed by the burden of subjecting the defendant to litigation within the forum." Beverly Hills Fan v. Royal Sovereign Corp., 21 F.3d 1558, 1568 (Fed. Cir. 1994)."

"In the present case, the exercise of personal jurisdiction over Macro would be unreasonable. Macro is based in Taiwan. "The unique burdens placed upon one who must defend itself in a foreign legal system should have significant weight in assessing the reasonableness of stretching the long arm of personal jurisdiction over national borders." Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 114 (1987). The State of Washington has little interest in adjudicating this case. The "E-Trainer" products in question are subject to a settlement agreement with former defendant Keys, and Macro has no other Washington customers. Finally, plaintiff has an adequate remedy in another forum. Suit can be brought in Taiwan or in any state where Precor finds infringing goods manufactured and sold by Macro Progress." Precor, slip op. at 2.

Precor timely appealed from the district court's order of dismissal and we have jurisdiction to hear this appeal pursuant to 28 U.S.C. ยง 1295(a)(1) (1994). Our review of whether the district court had jurisdiction over Macro Progress is de novo. See Viam Corp. v. Iowa ...


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