Last week, the U.S. Court of Appeals for the Federal Circuit issued a decision in Apple, Inc. v. Zipit Wireless, Inc., No. 2021-1760 (Apr. 18, 2022), reversing the dismissal of Apple’s declaratory judgment action against Zipit for lack of personal jurisdiction.
Zipit and Apple communicated about the former’s patent concerns between 2013 and 2016. Zipit’s executives twice travelled to Apple’s California headquarters for detailed discussions about a license or sale, but never reached a deal. Four years later, Zipit filed suit in Georgia for patent infringement but voluntarily dismissed it after two weeks. Apple then filed its own complaint in the Northern District of California seeking a declaratory judgment of noninfringement of Zipit’s patents. Zipit moved to dismiss for lack of personal jurisdiction, and the district court granted the motion. Apple appealed.
The Federal Circuit reversed. The sole issue on appeal was whether Zipit had sufficient minimum contacts with California and, if so, whether the exercise of jurisdiction would be unreasonable. The Court held that Zipit had purposefully directed its activities at the forum by regularly sending Apple letters and claim charts, travelling to Apple’s headquarters to discuss the patents, and ultimately accusing Apple of willful infringement. Because Apple’s claims directly arose out of those activities, minimum contacts were satisfied.
The Court also held that exercising jurisdiction would not be unreasonable under the Burger King factors. As an initial matter, it rejected Zipit’s argument that its prior decisions had created a bright line rule against using demand letters as a basis for personal jurisdiction. Next, assessing the facts of the case at hand, the Court determined that only the fourth Burger King factor supported Zipit, noting the judicial system had an interest in promoting settlement by allowing patentees to communicate with parties in other forums without fear of being haled into court there. The Court explained that all the other factors favored Apple. First, the burden on Zipit of litigating in California was not so great as to raise constitutionality concerns, particularly given Zipit’s travel history. Second, California clearly had an interest in protecting its residents from unwanted infringement claims. Third, Apple’s interests in seeking convenient and effective relief in its home forum was reasonable and foreseeable given Zipit’s prior filing. And fifth, there were no conflicts of interest or law between litigating a patent case in California versus Georgia.