declaratory judgement action

Federal Circuit Bases Personal Jurisdiction on Enforcement Letter

A patent owner sends a cease and desist letter to a would be infringer in a remote location.  The recipient of the letter files a declaratory judgment claim of non-infringement in its home district; the patent owner’s only contact to the district is the enforcement letter.  Is that sufficient for jurisdiction? 

Since Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355 (Fed. Cir. 1998), the Federal Circuit has held that such letters, as a matter of policy, do not suffice to give rise to jurisdiction.

But in December, the Federal Circuit upheld jurisdiction in just such a situation.  Jack Henry & Assocs. v. Plano Encryption Techs. LLC, 910 F.3d 1199 (Fed. Cir. 2018).  Although it did attempt to distinguish Red Wing Shoe on the facts of the case, it is now unclear when an enforcement letter could lead to jurisdiction in a distant forum.

Patent owners for now must be more careful when sending out such letters and understand that they may be risking litigation in a distant forum.  Conversely, recipients of such letters, especially from non-practicing entities (often referred to as trolls) may have greater leverage to sue in their own forum.