Display of Medical Device at Trade Show Can't Establish PJ in Patent Suit, Federal Circuit Rules

Holding:

The U.S. Court of Appeals for the Federal Circuit held that merely displaying an allegedly infringing medical device at a trade show did not constitute a "use" under patent laws sufficient to establish personal jurisdiction. Medical Solutions, Inc. ("MSI") had earlier sued C Change Surgical LL ("CCS") for patent infringement in the U.S. District Court for the District of Columbia, asserting that CCS "used” its patented medical device by displaying and actively demonstrating it to a visitor at a trade show. The district court ruled in favor of CCS, dismissing the patent suit for lack of personal jurisdiction. On appeal, the Federal Circuit affirmed. Specifically, it held that even if MSI's assertion was taken to be true, that alone would not establish that the accused device was put into service so as to constitute an infringing use. It added that it did not even need to decide whether the demonstration of a product at a trade show could ever be sufficient to establish an infringing use. It could simply conclude that the facts as alleged in this case did not establish a prima facie case.

Detailed Summary:

MSI appealed from a final judgment of the district court dismissing MSI’s patent suit for lack of personal jurisdiction over C Change Surgical LLC (“CCS”). Opinion, p. 1, citing Medical Solutions, Inc. v. C Change Surgical LLC, 468 F. Supp. 2d 130 (D.D.C. Dec. 29, 2006).

By way of background, MSI is a Virginia corporation that develops, manufactures, and distributes medical technology for controlled heating and temperature maintenance of medical fluids and related equipment. MSI has obtained several patents to protect its technology related to devices that control the temperature of medical and surgical fluids in the operating room. Id., p. 2.

On the other hand, CCS is a North Carolina Limited Liability Company with its only place of business in Winston Salem, North Carolina. CCS develops and commercializes technologies that improve operating room efficiency and patient safety. To date, the only technology that has been developed by CCS is IntraTemp, a mobile workspace that controls the temperature of surgical fluids. Id. According to MSI, IntraTemp infringed two of MSI’s patents, of which CCS had notice. Id.

CCS moved to dismiss MSI’s complaint pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. MSI asserted that personal jurisdiction existed in the District of Columbia because CCS promoted, showed, and used the allegedly infringing IntraTemp product at an industry trade show hosted by the Association of periOperative Registered Nurses (“AORN”), which was held in Washington, D.C.  in March 2006. CCS was one of approximately 600 exhibitors at the AORN trade show. CCS had its own booth, which displayed a “large and visible” sign advertising the allegedly infringing product. Id. CCS representatives working at the booth discussed the IntraTemp product with potential customers and showed how parts of the device functioned. Id.

In response, CCS asserted that it is not registered to do business in the District of Columbia, nor did it have sales agents, employees, offices, manufacturing facilities, bank accounts, or telephone listings there. It owned or controlled nothing of value in the District nor does it manufacture, use or sell any products in the District. Id., p. 3.

Given these contending positions, the district court ruled in favor of CCS.  Specifically, it rejected the argument that CCS “used” MSI’s patented invention when CCS displayed and demonstrated its IntraTemp product at the trade show. Id., pp. 3-4, citing Medical Solutions, 468 F. Supp. 2d at 133-34. The district court similarly rejected MSI’s argument that CCS “offered to sell” the allegedly infringing IntraTemp product at the trade show. Id. , citing Medical Solutions, at 134-35. Applying traditional contract principles, the district court reasoned that in order to constitute an “offer to sell,” such an offer must include price terms. Id.

On appeal, the Federal Circuit affirmed. Citing Van Well Nursery, Inc. v. Mony Life Ins. Co., 362 F. Supp. 2d 1223, 1229 (E.D. Wash. 2005), the Federal Circuit wrote that the inquiry as to what constitutes a “use” of a patented item is highly case-specific. Here, it found that the district court correctly considered and interpreted all of the facts with regard to CCS’s “use” of the allegedly infringing IntraTemp product at the trade show. Id., p. 7.

In Gerber Garment Technology, Inc. v. Lectra Systems, Inc., 699 F. Supp. 1576, 1580-81 (N.D. Ga. 1988), the court found that the plaintiff established a prima facie case for the exercise of personal jurisdiction where the defendant demonstrated the allegedly infringing knife-cutting machines at a trade show, but the defendant in that case also purposefully engaged in other activities related to the litigation in that forum. Id. Here, MSI asserts nothing other than CCS’s activities, which appear to fall short of practicing all of the elements of any one claim, at the trade show as evidence to confer personal jurisdiction over CCS. Id.

The closest evidence that MSI points to on appeal in support of its claim that CCS “actively demonstrated” IntraTemp at the trade show appeared to be the declaration of a witness stating that the CCS representative showed at least one attendee how to take the basin off the device when the basin still had fluid in it. Even if this statement was to be taken as true, that alone would not establish that the accused device was put into service so as to constitute an infringing use. Id., p. 8.

Much more would be needed to qualify as an infringing use, including that the device was used to heat medical items at the show. According to the Federal Circuit, it did not need to decide whether the demonstration of a product at a trade show could ever be sufficient to establish an infringing use. Id. It could simply conclude that the facts as alleged in this case did not establish a prima facie case. For these reasons, the Federal Circuit agreed with the district court’s conclusion that CCS’s display and demonstration of IntraTemp at the trade show did not constitute a “use” of the allegedly infringing product. Id., pp. 8-9.

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