was not placed directly in Virginia", by Murata-Japan, but instead was marketed by Murata-America, one whom Murata-Japan could foresee would cause the facsimile machines to enter Virginia. See Weight, 604 F. Supp. at 970-971. In addition, Murata-Japan, like the Japanese defendant in Weight, provides owners manuals with the facsimile machines sold to Murata-America, that are written in English stating that the machines comply with United States technical requirements.
Murata-Japan's majority control of the Murata-America board coupled with the amount and intensity of the subsidiary's Virginia distribution efforts illustrate that Murata-Japan could specifically foresee the product entering Virginia and impacting consumers in that forum. In addition, Murata-Japan derived substantial economic benefit from the Virginia sales and protection of Virginia laws. In total, Murata-Japan knew it had indirectly established contacts with the forum and intended such a result. Stated differently, Murata-Japan could have anticipated this lawsuit from its manufacture of infringing products sold by its distributor in Virginia. This in turn serves as "purposeful availment" and, under World-Wide Volkswagen and Weight, allows Virginia to exercise in personam jurisdiction over Murata-Japan is consistent with Due Process limitations under the 'stream of commerce' theory.
Nevertheless, Murata-Japan opposes application of the 'stream of commerce' theory and the Weight holding on two grounds. It claims that the Fourth Circuit narrowly interprets this basis, and that the Weight holding is distinguishable since it pertains to a products liability action causing physical injury. Murata-Japan contends that an infringing product is not the sort of 'defective' product which the World-Wide Volkswagen language contemplated. However, these contentions fail to detract from the suitability of in personam jurisdiction over Murata-Japan. In fact, the cases cited by Murata-Japan in support of these claims only serve to bolster the conclusion that Virginia may utilize the 'stream of commerce' basis to effect in personam jurisdiction over Murata-Japan.
Murata-Japan cites Sowards v. Switch Energy, Co., Inc., 744 F. Supp. 1399 (W.D.Va. 1990) for the proposition that 'stream of commerce' is narrowly interpreted in the Fourth Circuit. In that case, the court refused to assert jurisdiction under the 'stream of commerce' theory against a Kentucky electrical supplier, Cumberland, which allegedly contributed to a trespass by delivering power to another defendant knowing that it would be conducted across Soward's land without Soward's authority. Id. at 1401. The court however had no evidence that Cumberland knew the power it supplied to the other defendant would be routed across the plaintiff's land. Id. Moreover, Cumberland erected no transmission lines beyond the Kentucky border into Virginia, thus, belying the plaintiff's claim that they 'purposefully directed' activities towards Virginia. Id. In addition, the court did not regard electrical power as a 'defective product' for 'stream of commerce' purposes. Id.
In contrast, Murata-Japan made no attempt to prevent its products from having consequences in Virginia. Furthermore, it cannot be said that Murata-Japan lacked knowledge of Virginia consequences as Cumberland did in Soward.
While the Fourth Circuit has yet to apply the the "stream of commerce" theory outside the defective product context, other circuit and district courts have exercised jurisdiction over foreign manufacturers of patent infringing products pursuant to the 'stream of commerce' logic. For example, in Knoll International, Inc. v. Continental Imports, Inc., 192 U.S.P.Q. 644 (E.D.Pa. 1976) utilized that logic in exercising jurisdiction over the Italian manufacturer of infringing furniture. Continental had neither any offices, employees, bank accounts, nor any other indica of business in the Pennsylvania forum. The defendant, however, manufactured and sold the infringing product in Italy to another defendant in Italy, who in turn, distributed the product in the United States. Continental, like Murata-Japan, did not ship the product directly into the forum and title passed overseas.
Nevertheless, the court upheld jurisdiction over the patent infringing foreign defendant noting that Continental has "indirectly pursued his business interests in this Commonwealth since the indirect shipment of merchandise constitutes 'doing business' within the . . . limits of due process." Id, at 646; See also Honeywell, Inc. v. Metz, 509 F.2d 1137 (7th Cir. 1975) (Court held that German manufacturer of infringing flash units, shipped fob. to United States and sold exclusively by two independent distributors in United States, knew they would be sold in United States and purposefully promoted American sales ensuring infringement would take place; although defendant may not have entered Illinois, it placed its products into the 'stream of commerce' under such circumstances that it should have anticipated that injury through infringement would occur there). Thus, courts have utilized the 'stream of commerce' theory against patent infringing foreign manufacturers, deeming those types of products as defective as those causing other sorts of injuries.
Notwithstanding the above, Murata-Japan contends that under the circumstances, the exercise of jurisdiction would impose an unreasonable burden upon them. This argument stems from the Supreme Court's acknowledging that once it is determined that minimum contacts exist with the forum, the reasonableness of the assertion of personal jurisdiction may be considered in light of other factors to determine whether it would comport with "traditional notions of fair play and substantial justice." Burger King, 471 U.S. at 476, 105 S. Ct. at 2184, quoting International Shoe, 326 U.S. at 320, 66 S. Ct. at 160. These factors include "the burden on the defendant"; "the interests of the forum state in adjudicating the dispute"; "the plaintiff's interest in obtaining the most efficient resolution of controversies"; and "the shared interest of the several states in furthering fundamental substantive social policies." World-Wide Volkswagen, 444 U.S. at 292, 100 S. Ct. at 564.
However, "where a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case" to render jurisdiction unreasonable. Burger King, 471 U.S. at 477, 105 S. Ct. at 2185. Because Murata-Japan has failed to satisfy that burden, the exercise of in personam jurisdiction over them remains reasonable and in harmony with Due Process considerations.
Finally, Murata-Japan maintains that the litigation would impose an extreme burden on the foreign corporation since its employees would be required to travel from Japan to New York. Any inconvenience that Murata-Japan may suffer must be weighed against a public policy which favors providing a forum for an injured resident to bring an action against a non-resident manufacturer. See Weight, 604 F. Supp. at 971. In light of the fact that the depositions of Murata-Japan personnel will likely occur in Japan, the Court finds that any inconvenience to Murata-Japan in defending this lawsuit is outweighed by public policy considerations.
Based upon the foregoing, the motion to dismiss the complaint against Murata Machinery, Ltd. is hereby denied.
Sterling Johnson, Jr.
United States District Judge
Dated: Brooklyn, New York
October 13, 1992