Bally Gaming, Inc. v. Kappos

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

BALLY GAMING, INC.,

Plaintiff,
v. Civil Action No. 10-1906 (JEB)
DAVID KAPPOS, et al.,

Defendants.

MEMORANDUM OPINION AND ORDER

Defendants Betty Ringo and James Pearson, contending that this Court lacks personal

jurisdiction over them, have moved to dismiss this patent infringement suit. Because the Court

finds personal jurisdiction proper under 35 U.S.C. §§ 291 and 146, as well as under the Due

Process Clause of the Fifth Amendment, their effort does not succeed.1

I. Factual Background

Plaintiff Bally Gaming, Inc. owns United States Patent 5,816,918 (the “Kelly ’918

Patent”). Compl., ¶ 6 (Background). Defendants Ringo and Pearson own United States Patent

5,711,715 (the “Ringo ’715 Patent”). Id., ¶¶ 3-4. Defendant David Kappos is the Under

Secretary of Commerce for Intellectual Property and Director of the United States Patent and

Trademark Office. Id., ¶ 2. This case arises from Plaintiff’s efforts to secure a “confirmation of

patentability of all pending claims” relating to the Kelly ’918 Patent. Id., ¶ 21. More

specifically, Plaintiff appeals from a decision of the United States Patent and Trademark Office’s

Board of Patent Appeals and Interferences affirming the USPTO’s denial of Plaintiff’s pending

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The Court has reviewed Defendants Ringo and Pearson’s Motion to Dismiss, Bally’s Opposition, and
Defendants’ Reply.

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patent claims on the ground that “the Kelly ’918 Patent interferes with and is anticipated or

rendered obvious by” the Ringo ’715 Patent. Id., ¶¶ 8-9 (Background), 14-15. Plaintiff contends

that the “claimed invention of the Kelly ’918 Patent was conceived prior to conception of the

alleged invention of the Ringo ’715 Patent,” and that “Director [Kappos] erred in denying

petitions to suspend the rules or to otherwise allow submission of evidence of prior invention by

the inventors of the Kelly ’918 Patent before invention of the Ringo ’715 Patent.” Id., ¶¶ 20, 16.

Plaintiff is a corporation organized under the laws of, and having its principal place of

business in, Nevada. Id., ¶ 1. Defendant Ringo is a Texas resident. Id., ¶ 3; Mot. at 2.

Defendant Pearson is a Florida resident who operates a small business in Tennessee. Compl., ¶

4; Mot. at 2. Ringo and Pearson assert, and Plaintiff does not contest, that they have no contacts

with the District of Columbia beyond the fact of their patent ownership. Mot. at 3.

Plaintiff filed its Complaint on November 5, 2010, seeking issuance of a reexamination

certificate under 35 U.S.C. § 145 and review of agency action under 5 U.S.C. §§ 701-706, and

alleging an interfering patents claim under 35 U.S.C. § 291. On April 12, 2011, Defendants

Ringo and Pearson filed their Motion to Dismiss for Lack of Personal Jurisdiction under Federal

Rule of Civil Procedure 12(b)(2), which the Court now considers.

II. Legal Standard

To survive a motion to dismiss under Rule 12(b)(2), Plaintiff bears the burden of

“establishing a factual basis for the [Court’s] exercise of personal jurisdiction over the

defendant.” Crane v. New York Zoological Society, 894 F.2d 454, 456 (D.C. Cir. 1990) (citing

Reuber v. United States, 750 F.2d 1039, 1052 (D.C. Cir. 1984), overruled on other grounds by

Kauffman v. Anglo-American School of Sofia, 28 F.3d 1223 (D.C. Cir. 1994)). To meet this

burden, Plaintiff “must allege specific facts connecting the defendant with the forum.” Capital

2
Bank Int’l Ltd. v. Cit
tigroup, Inc., 276 F. Sup 2d 72, 74 (D.D.C. 20
pp. 4 003) (citing S
Second

Amendm Foundat
ment tion v. U.S. Conference of Mayors, 2 F.3d 521, 524 (D.C. Cir. 2001)) In
C 274 ).

determin
ning whether a basis for personal juri
r p isdiction exi sts, “factual discrepancies appearing in
g

the recor must be re
rd esolved in fa
avor of the pl
laintiff.” Ne York Zoo
ew ological Soc
ciety, 894 F.2 at
2d

456 (citin Reuber, 750 F.2d at 1052).
ng 7 1

III. Analysis
A

Plaintiff asser that perso jurisdict
rts onal tion over Ri
ingo and Pea
arson is conf
ferred on this
s

Court by the nationw
wide-service-
-of-process provision of 35 U.S.C. § 146, as inco
p orporated in 35

U.S.C. § 291, the stat under which Plaintiff brings its interference claim. Opp at 3.
tute w e p.

Defendan Ringo an Pearson ra two argu
nts nd aise uments in de
enying that p
personal juri
isdiction exists.

First, they maintain that “Section 291’s autho
t n orization of ‘service’ on U.S. citizen or nationw
n ns wide

service is incomplete and ambigu
s e uous at best.” Reply at 4 In the alte
4. ernative, the contend th
ey hat,

“notwithstanding the existence of a statutory basis for the exercise of jurisdiction over the
e y e f n

nts,” id. at 2, to so find in the present case would violate thei Fifth Amendment Due
defendan n t d ir e

Process rights “[b]ecause [they] lack ‘minim
r l mum contacts [with the D
s’ District of Columbia] an did
nd

not ‘purp
posefully ava themselv of the law of the Di strict of Col
ail’ ves ws lumbia.” Mo at 6. The
ot. e

Court add
dresses each in turn.
h

A. 35 U.S.C. § 146
A .

(1)(C) provid “Servin a summon . . . establishes
Federal Rule of Civil Procedure 4(k)( des: ng ns

personal jurisdiction over a defen
ndant . . . wh authorize by a fede statute.” Title 35, se
hen ed eral ection

291 of th U.S. Code gives the ow
he e wner of an in
nterfering pa
atent a priva cause of a
ate action again the
nst

owners of the first pa
o atent and exp
plicitly addre
esses the que risdiction by invoking th
estion of jur he

provision of 35 U.S.C. § 146. Section 146 contains a na
ns S c ationwide-se
ervice-of-pro
ocess provision

3
that, in certain specified circumstances, vests jurisdiction over patent interference claims in this

Court:

If there be adverse parties residing in a plurality of districts not
embraced within the same state, or an adverse party residing in a
foreign country, the United States District Court for the District of
Columbia shall have jurisdiction and may issue summons against
the adverse parties directed to the marshal of any district in which
any adverse party resides.

As the plain language of the statute indicates, § 146 gives this Court jurisdiction over Defendants

in this patent interference case.

Discussing 35 U.S.C. § 72a, the precursor to § 146, the U.S. Court of Appeals for the

District of Columbia Circuit described the origin and purpose of the provision: “The purpose of

the statute is to make possible the adjudication of all issues involved, between all adverse parties,

in one proceeding and in one forum. The District of Columbia was selected by Congress as

being the forum in which this fundamental objective of equity can best be achieved, when

adverse parties reside in a plurality of districts not within the same state.” Robinson v. Wayne,

136 F.2d 767, 769 (D.C. Cir. 1943) (upholding jurisdiction). In 1960, the D.C. Circuit

considered the scope of § 146 and clarified that “adverse parties residing in a plurality of

districts” refers to a plurality of defendants residing in different districts, rather than one plaintiff

and one defendant residing in different districts. Hayes v. Livermont, 279 F.2d 818 (D.C. Cir.

1960).

Section 146 strikes an important balance by ensuring that, in cases involving defendants

residing in different states, plaintiffs have a forum – i.e., the District of Columbia – in which to

seek relief; at the same time, defendants in patent cases are afforded the process they are due. As

the D.C. Circuit has explained, Ҥ 146 permits claims that cannot be enforced elsewhere to be

enforced here, and does not create an option of enforcing here claims that can be enforced

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elsewhere.” Chris Laganas Shoe Co. v. Watson, 221 F.2d 881, 882-83 (D.C. Cir. 1955). The

defendants in that case included one private-party defendant, a New York corporation, and the

Commissioner of Patents. Id. at 882. The D.C. Circuit held that, since the Commissioner was

not a necessary party, jurisdiction was improper because were no defendants residing in different

states. Id. at 882-83. The court reasoned: “‘To hold that the plaintiff by making a mere formal

party a codefendant can compel the real defendant, the real party in interest, to come from any

part of the United States and defend his rights in the District of Columbia would conflict with the

general purpose of Congress as appears from the fact that ordinarily suits in the federal courts

must be brought in the district in which the defendant resides.’” Id. at 883 (quoting Coe v.

Hobart Mfg. Co., 102 F.2d 270, 271 (D.C. Cir. 1939)).

More recently, two courts in this district have applied § 146 in resolving motions to

dismiss for lack of personal jurisdiction in the way the D.C. Circuit envisioned. The plaintiffs in

both cases relied solely on § 146 as the basis of the court’s personal jurisdiction over the

defendants, and the courts in each considered the purpose and scope of § 146 in deciding the

motions to dismiss. In Shell Research Ltd. v. Matthewson, No. 89-0160, 1990 WL 198646

(D.D.C. Nov. 21, 1990), the court explained: “The purpose of the special jurisdictional

provisions of 35 U.S.C. § 146 is to provide plaintiffs with a last resort in the District Court for

the District of Columbia if they cannot otherwise join all necessary parties in another federal

district court.” Id. at *1 (citing Chris Laganas, 221 F.2d at 882). That case turned on a factual

question relating to the identity and number of entities with legal rights or interests in the patent

at issue. Id. The court found Coopers, Inc., a Delaware corporation, to be the only adverse party

to the action for purposes of § 146. Id. at *2. Because there were not adverse parties residing in

a plurality of states and the plaintiff’s claim could properly be brought in the district of

5
Delaware the court found Ҥ 146 does not em
e, f 6 mpower this Court to assert persona jurisdiction
s al n

over defe
endants” and dismissed the action. Id.
d t I

In Eastman Kodak Co. v. Duracell In 48 U.S.P
n K nc., P.Q. 2d 1061 (D.D.C. 1998), the cour
rt

found personal jurisd
diction under § 146 in fa
r actual circum
mstances sim resent case. In
milar to the pr

that paten interferen case, the plaintiff, a New Jersey c
nt nce N company wi its princip place of
ith pal

business in New Yor challenge a decision of the Boar of Patent A
rk, ed n rd Appeals and Interferenc
d ces.

Id. at 106 The case involved th private defendants: Strategic El
62. e hree lectronics LL a Nevad
LC, da

LLC with its principa place of business in Nevada; Dura
h al N acell Inc., a D
Delaware co
orporation w
with

its principal place of business in Connecticut and Everea Battery Co. Inc., a D
t; ady Delaware

corporati with its principal pla of busine in Ohio. Id. In deny
ion p ace ess ying Strategic Electronics’s
c

motion to dismiss, th court foun “It is und
o he nd, disputed that this is the ty of paten interferenc
t ype nt ce

case to which Section 146 would apply . . . .” Id. at 1063 “Because the adverse parties in th
w n d ” 3. e e his

case all hail from dif
h fferent distric the Cour can exerci se personal j
cts, rt jurisdiction over all the

parties . . . .” Id.

As this is prec
A cisely the ca here, whe Plaintiff Bally and D
ase ere Defendants R
Ringo and

Pearson all reside in different sta
a ates, § 146 cl
learly applie
es.

B. Due Proce
B ess

While Plaintiff would hav the Court end its anal
W ve t lysis here, R
Ringo and Pearson respon
nd

that the “provision fo ‘nationwid service of process’ in Section 291 must comp with the Due
“ or de f n 1 port e

Process [Clause] of the Fifth Am
[ mendment,” and attempt t distinguis prior cases in this circ
a to sh cuit

finding ju
urisdiction under § 146 on the groun that those courts “did not consider the . . .
u o nds d

constituti
ional issue raised by Def
fendants.” Reply at 2-3. This argum does n yield them
R . ument not m

success.

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 Prior opinions of the D.C. Circuit make clear that, when this Court derives its personal

jurisdiction over a defendant from a federal statute’s nationwide-service-of-process provision,

the Due Process Clause of the Fifth Amendment does not require that the defendant also have

minimum contacts with this district. The D.C. Circuit directly addressed the due process

question in Briggs v. Goodwin, 569 F.2d 1 (D.C. Cir. 1977), rev’d on other grounds sub nom.

Stafford v. Briggs, 444 U.S. 527 (1980). Briggs involved allegations that four federal officials,

one of whom resided in the District of Columbia, had violated plaintiffs’ constitutional rights.

Id. at 2-3. The other three defendants, all Florida residents, were served by certified mail in

accordance with 28 U.S.C. § 1391(e), the statute authorizing suits against federal employees in

their official capacities to be filed in any judicial district in which a defendant to the action

resides, and providing for service by certified mail outside the jurisdiction where the action is

brought. Id. at 3-4. The D.C. Circuit reversed the district court’s grant of the Florida

defendants’ motion to dismiss for improper venue and insufficiency of service. Upholding §

1391(e)’s nationwide-service-of-process provision, the court wrote:

Nor do we perceive any constitutional problem in the statute as
applied to this case. Appellees pitch their constitutional argument
on their supposed lack of minimum contacts with the District of
Columbia, resting on cases holding “that the Due Process Clause
of the Fourteenth Amendment places some limit on the power of
state courts to enter binding judgments against persons not served
with process within their boundaries.” To the extent that this
position presupposes that Congress’ constitutional authority to
provide for the sound operation of the federal judicial system is
limited by the same constraints that apply to extraterritorial service
by state tribunals, it builds on sandy soil indeed. Whether or not
Article III mandated the creation of any inferior federal courts at
all, it is a matter of general agreement that the discretion of
Congress “as to the number, the character, (and) the territorial
limits” of the inferior federal courts is not limited by the
Constitution. Congress might have established only one such
court, or a mere handful; in that event, nationwide service would
have been a practical necessity clearly consonant with the

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 Constitution. That it was considered expedient to establish federal
judicial districts in harmony with state boundaries did not alter the
scope of legislative discretion in this regard, and in fact Congress
has, on occasion, provided for nationwide service. While several
cases have asserted apodictically that service outside a federal
judicial district is governed by the same sort of “fairness standard”
as is extraterritorial service by state courts, this imputes a
constitutional magic to lines that Congress can at any time redraw.
As tradition alone works no such necromancy, we must reject
appellees’ constitutional argument as well.

Id. at 8-10 (internal quotations and citations omitted).

The D.C. Circuit reaffirmed its reasoning in 2004 in S.E.C. v. Bilzerian, 378 F.3d 1100

(D.C. Cir. 2004). In Bilzerian, a case ancillary to an SEC enforcement action in which a receiver

had been appointed, the court denied the motion to dismiss for lack of personal jurisdiction filed

by Haire, a debtor of the receivership estate. Id. at 1101. The court rejected “Haire’s contention

that, even if § 1692 authorizes the exercise of personal jurisdiction over him, to do so would

violate the Due Process Clause because he lacks ‘minimum contacts’ with the District of

Columbia.” Id. at 1106 n.8 (quoting International Shoe Co. v. Washington, 326 U.S. 310

(1945)). The court found: “This circuit has held that the requirement of ‘minimum contacts’

with a forum state is inapplicable where the court exercises personal jurisdiction by virtue of a

federal statute authorizing nationwide service of process. . . . In such circumstances, minimum

contacts with the United States suffice.” Id. (citing Briggs, 569 F.2d at 8-10; 4 WRIGHT &

MILLER § 1068.1, at 605-06).

Several cases decided by other courts in this district – at times citing Briggs and at times

not – have found that jurisdiction over a defendant served pursuant to a federal statute with a

nationwide-service-of-process provision is proper as long as the defendant has minimum

contacts with the United States as a whole. See, e.g., Combs v. Adkins & Adkins Coal Co., Inc.,

597 F. Supp. 122, 125 (D.D.C. 1984) (“Where Congress has authorized nationwide service of

8
process, a federal court may exercise personal jurisdiction over any United States resident,

without regard to whether its sister state court could assert jurisdiction under minimum contacts

principles.”); S.E.C. v. Lines Overseas Management, Ltd., No. 04-302, 2007 WL 581909, at *3

(D.D.C. Feb. 21, 2007) (“Specifically with respect to 15 U.S.C. § 78u(c), ‘[w]hen the personal

jurisdiction of a federal court is invoked based upon a federal statute providing for nationwide or

worldwide service, the relevant inquiry is whether the respondent has had sufficient minimum

contacts with the United States. . . . Specific contacts with the district in which enforcement is

sought . . . are unnecessary.’”) (quoting In re Application to Enforce Admin. Subpoenas Duces

Tecum of the S.E.C. v. Knowles, 87 F.3d 413, 417 (10th Cir. 1996)); Reese Brothers, Inc. v.

U.S.P.S., 477 F. Supp. 2d 31, 39 (D.D.C. 2007) (“[A]bsent an explicit limitation to the

applicability of the nationwide service of process provision, cases are legion concluding that a

nationwide service of process provision confers national jurisdiction. . . . The court sees no

reason to depart from these cases given the [Federal Debt Collection Procedures Act’s]

‘nationwide enforcement’ provision. . . . Having so concluded, the court must determine

whether the third-party defendant has sufficient minimum contacts with the United States so as

not to violate ‘traditional notions of fair play and substantial justice.’”) (internal citations

omitted); Flynn v. R. D. Masonry, Inc., 736 F. Supp. 2d 54, 60 (D.D.C. 2010) (“Because the

defendants are all companies registered to do business in Florida, the RDM defendants have the

‘national contacts’ necessary to give rise to personal jurisdiction by virtue of ERISA’s

nationwide service of process provision.”) (citing Flynn v. Ohio Bldg. Restoration, Inc., 260 F.

Supp. 2d 156, 173 (D.D.C. 2003)).

In the face of this wealth of caselaw that supports Plaintiff, Defendants’ authorities are

readily distinguishable. For instance, Defendants erroneously cite I.A.M. Nat’l Pension Fund v.

9
Wakefield Industries, Inc., 699 F.2d 1254 (D.C. Cir. 1983), as evidence that the D.C. Circuit’s

“treatment of this issue has not always been consistent.” Reply at 4. Quoting from I.A.M. Nat’l

Pension Fund, Defendants write: “[T]he court suggested that contact with the forum must

comply with due process considerations noting that for ‘service of process on a corporation to be

valid under Section 1132(e)(2) a corporation’s contacts with the district of service must meet the

International Shoe test.’” Reply at 4 (quoting 699 F.2d at 1257-58). The issue in that case,

however, was critically distinct from the issue here. I.A.M. Nat’l Pension Fund, an ERISA case,

was brought in the district in which the plan was administered, as authorized by 29 U.S.C. §

1132(e)(2). See 699 F.2d at 1256. There was “no dispute as to the propriety of venue in the

District of Columbia.” Id. at 1257. Rather, the question was whether service of Defendant

Wakefield Industries and its President, Marvin Margolis, was proper in New York. Id. at 1256-

58. In the present case, Defendants Ringo and Pearson do not contest that they are subject to

service in Texas and Tennessee, respectively. I.A.M. Nat’l Pension Fund is thus of no assistance

to them.

The cases Defendants cite in which courts in this district have interpreted nationwide-

service-of-process provisions to require a showing of minimum contacts with the District of

Columbia turned on the language of the statutes conferring jurisdiction – e.g., the Clayton Act,

15 U.S.C. § 22, and the RICO statute, 18 U.S.C. § 1965 – not on a constitutional due process

requirement. See, e.g., World Wide Minerals Ltd. v. Republic of Kazakhstahn, 116 F. Supp. 2d

98, 107-08 (D.D.C. 2000) (declining to apply national-minimum-contacts standard: “the Clayton

Act required proper venue in order to satisfy jurisdictional requirements” and “the RICO statute

does not allow this court to assert jurisdiction”) (emphasis added) (citing GTE New Media

Services, Inc. v. BellSouth Corp., 199 F.3d 1343 (D.C. Cir. 2000)); ASG Int’l Services S.A. v.

10
Newmont USA Ltd., 346 F. Supp. 2d 64, 87 (D.D.C. 2004) (Ҥ 1965 requires . . . that at least one

defendant have minimum contacts with the District of Columbia”) (emphasis added). These

cases are thus inapposite here.

Finally, Defendants’ citation to Republic of Panama v. BCCI Holdings (Luxembourg)

S.A., 119 F.3d 935 (11th Cir. 1997), and other cases suggesting the existence of a “split of

authority among the circuits,” Reply at 7, is irrelevant. The only circuit that matters for this

Court is the D.C. Circuit, which has clearly addressed the issue. That other courts in this district

may not have been aware of the clear authority of Briggs, Bilzerian, and their progeny, see Reese

Brothers, 477 F. Supp. 2d at 37, does not diminish their force.

This Court, therefore, will apply a nationwide-minimum-contacts standard in the present

case. Because Defendants Ringo and Pearson are indisputably residents of the United States,

they are subject to personal jurisdiction in this district pursuant to 35 U.S.C. § 146 and in

accordance with the Fifth Amendment’s Due Process Clause.

Such an application of personal jurisdiction does not violate traditional notions of fair

play and substantial justice. As recognized by the D.C. Circuit in Chris Laganas, 221 F.2d at

882-83, §§ 291 and 146 are narrowly crafted to provide plaintiffs access to judicial relief in

patent infringement cases that could not be brought in any other jurisdiction. As Plaintiff

correctly observes, “[I]f Ringo and Pearson had each assigned their interest to a single entity,

such as a corporation or LLC, the multiple defendants would not be present, and jurisdiction

where the single entity could be found would be appropriate.” Opp. at 4 n.2; see Hayes, 279

F.2d at 818. Ringo and Pearson, therefore, were not without control over the jurisdiction in

which this case might be brought. Finally, Plaintiff, who hails from even farther away than

Defendants, gains no unfair advantage over them by bringing its suit here.

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IV. Conclusion

The Court, therefore, ORDERS that:

1. Defendants’ Motion to Dismiss for Lack of Personal Jurisdiction is DENIED; and

2. Defendants shall file their Answer by June 17, 2011.

SO ORDERED.

/s/ James E. Boasberg
JAMES E. BOASBERG
United States District Judge
Date: June 3, 2011

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