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LORAL FAIRCHILD CORP. v. VICTOR CO. OF JAPAN

October 13, 1992

LORAL FAIRCHILD CORP., Plaintiff, against VICTOR COMPANY OF JAPAN, LTD., et. al., Defendants.


The opinion of the court was delivered by: STERLING JOHNSON, JR.

 Johnson, District Judge:

 INTRODUCTION

 Plaintiff Loral Fairchild Corp. commenced this action against defendants Victor Company of Japan, US JVC Corp., Nikon Corporation, Nikon, Inc., Murata Machinery Ltd., Murata Business Systems, Inc., Oki Electric Industry Co. Ltd., Oki America, Inc., Ricoh Company, Inc., and Ricoh Corporation pursuant to 35 U.S.C. §§ 271 & 284 alleging that the defendants manufactured, marketed and distributed infringing products. Defendant Murata Machinery, Ltd. moves pursuant to Fed. R. Civ. P. 12(b)(2) to dismiss the complaint against it for lack of in personam jurisdiction. *fn1" For the reasons stated below, the motion is denied.

 On November 14, 1991, plaintiff Loral Fairchild Corp. ("Loral Fairchild"), a Delaware corporation with a principal place of Business in New York and a 'presence' in Virginia, commenced this patent infringement suit in the Eastern District of Virginia against Murata Machinery, Ltd. ("Murata-Japan") and several other defendants. Murata-Japan is a Japanese manufacturer of facsimile machines, textile machinery and other products. The complaint alleges that Murata-Japan's facsimile machines utilize 'charge couple devices' or 'CCDs' (semiconductor 'chips' used as a light sensing component) which infringe upon plaintiff's United States Patent No. 3,931,674 (the "674 patent") in violation of 35 U.S.C. §§ 271 & 284 which prohibit the unauthorized manufacture, sale and importation of patented products and technology. Subsequently, on November 26, 1991, plaintiff amended its complaint adding Murata Business Systems, Inc. ("Murata-America"), the United States based distributor of the Murata-Japan facsimile machines, as a co-defendant.

 On January 3, 1992, the Virginia Court entered an 'order', pursuant to 28 U.S.C. § 1404(a), transferring the action to the Eastern District of New York "for purposes of convenience". However, the Order expressly reserved Murata-Japan's right to challenge Personal Jurisdiction in the transferee forum. The action was transferred into the Eastern District on January 13, 1992. Then, on January 21, 1992, Murata-Japan filed a motion to dismiss pursuant to Fed. R. Civ. P. ("Rule") 12(b)(2) challenging Virginia's ability to exercise in personam jurisdiction over it. *fn2" Murata-America, however, makes no such challenge.

 II. Facts

 The Court makes the following findings of fact. Murata-Japan is a Japanese corporation with a principal place of business in Kyoto, Japan. It owns 100% percent of the stock of Murata America, Inc. ("Murata America, Inc.), which in turn owns 100% of the stock of Murata-America, *fn3" a North Carolina Corporation with a principal place of business in Texas. Four of the seven members of Murata-America's board of directors are Murata-Japan representatives.

 Murata-America distributes Murata-Japan facsimile machines to retailers within the United States and, specifically, Virginia. The facsimile machines are accompanied by operation manuals designating Murata-Japan as the source and bearing the "Murata" trademark which is registered with Murata-Japan. In addition, the operation manuals state that their product complies with United States technical requirements.

 Retail dealers in Virginia sell facsimile machines manufactured by Murata-Japan to Virginia residents. The Court takes judicial notice of advertisements taken from the Washington Post from January 24, 1992 to March 1, 1992. Plaintiff's Exhibit ("Pl. Exh.") 1. The advertisements indicate that at least three retail chains sell Murata-Japan facsimile machines. The court finds that Murata-Japan has derived a substantial economic benefit from the sale of these Products.

 III. ANALYSIS

 The issue is whether Murata-Japan had sufficient minimum contacts with Virginia to justify the exercise of 'specific' in personam jurisdiction over it. "The burden of proving jurisdiction rests with the plaintiff." Medeco Sec. Locks, Inc., v. Fichet-Bauche, 568 F. Supp. 405, 407 (D. va. 1983). Plaintiff predicates jurisdiction over Murata-Japan on the Virginia long-arm statute. *fn4" When evaluating the propriety of long-arm jurisdiction, a two-step analysis is normally required. English & Smith v. Metzger, 901 F.2d 36, 38 (4th Cir. 1990). First, the court must determine whether the statutory language applies to the defendant. Id. Then, assuming the answer to the first question is in the affirmative, the court must determine whether the assertion of jurisdiction is consistent with the Due Process Clause of the United States Constitution. Id.; See also Peanut Corp. of America v. Hollywood Brands, Inc., 696 F.2d 311, 313 (4th Cir. 1982). *fn5"

 A. The Statutory Scheme

 The Virginia long-arm provides in pertinent part:

 A. A court may exercise personal jurisdiction over a person (natural or fictitious), who acts directly or by an agent, as to a cause of action arising from the person's:

 . . .

 3. Causing tortious injury by an act or omission in this Commonwealth. . . .

 4. Causing tortious injury in this Commonwealth by an act or omission outside this commonwealth if he . . . derives substantial revenue from goods used or consumed or services rendered in this Commonwealth. . . .

 Va. Code Ann. § 8.01-328.1(A) (Supp. 1992) (emphasis added). Subsection (A)(3) applies to conduct transpiring in Virginia while subsection (A)(4) extends to conduct outside Virginia which causes injury within. Both subsections, however, pertain to conduct causing a tortious injury in Virginia. Each therefore has relevance since "patent infringement is a tort." Carbice Corp. of America v. American Patents Development Corp., 283 U.S. 27, 75 L. Ed. 819, 51 S. Ct. 334 (1931); Marston v. Gant, 351 F. Supp. 1122, 1124 (E.D. Va. 1972). Thus, assuming tortious injury resulted in Virginia, the question remains whether the infringing acts happened within or outside Virginia.

 Plaintiff, in its complaint, alleges that Murata-Japan "actively induced infringement" by Murata-America in violation of 35 U.S.C. § 271(b) *fn6" by manufacturing facsimile machines in Japan which Murata-America subsequently imported and sold within Virginia. *fn7" "To 'actively induce' patent infringement means in essence to aid and abet such infringement by another." Marston v Gant, 351 F. Supp. 1122, 1125 (E.D. Va. 1972). This language requires some 'affirmative' act on the part of a defendant which aided another's infringement. See Marston, 351 F. Supp. at 1125. Thus, Murata-Japan's affirmative acts which made Murata-America's infringement possible, vis-a-vis importation and sales, are at issue in determining whether § (A)(3) or (A)(4) are implicated.


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