Exclusive Licensor Subject To Personal Jurisdiction

In Breckenridge Pharmaceuticals v. Metabolite Labs. (No. 05-1121, -1428; April 7, 2006), a Federal Circuit panel reverses a trial court's holding that it lacked personal jurisdiction over a non-resident patent holder/ licensor who was sued along with its exclusive licensee in a declaratory judgment action. The Federal Circuit also determines there are genuine disputes of material fact and vacates the trial court's summary judgment in favor of the exclusive licensee. Summarizing its own cases, the Federal Circuit explains that personal jurisdiction over a nonresident licensor is proper where a license agreement contemplates “a relationship beyond royalty or cross-licensing payment, such as granting both parties the right to litigate infringement cases or granting the licensor the right to exercise control over the licensee's sales or marketing activities.”

Because the non-patent issues in the case are intimately linked with the patent issues, the panel determines the personal jurisdiction law of the Federal Circuit, not regional circuit law, applies. In this case, the exclusive license granted the licensee the right to sue for patent infringement. Working with that exclusive licensee, the patent owner also sent letters to Florida businesses informing them of the patents. The panel holds these activities, coupled with the licensee's business in the state, adequate to provide the district court there with personal jurisdiction over the patent owner.