United States District Court, D. Nebraska
MEMORANDUM AND ORDER
M. Gerrard United States District Judge.
matter is before the Court on defendants Oxygen Frog, LLC,
Stillwater Glass, LLC, and Scott D. Fleischman's motion
to dismiss for lack of personal jurisdiction (filing
18). For the reasons explained below, the Court will
grant the motion and dismiss this case.
plaintiff's allegations are, briefly summarized, as
follows. The plaintiff HVLPO2, LLC is a Nebraska limited
liability company with its principal place of business in
Nebraska. Filing 1 at 1. It alleges that it is the
assignee of two patents that "cover methods for managing
an oxygen generating system." Filing 1 at 4.
Oxygen Frog is a Florida limited liability company. Filing
1 at 1. Fleischman is a Florida resident and is an
owner, officer, agent, or employee of Oxygen Frog. Filing
1 at 2. Stillwater Glass is a now-inactive Florida
limited liability company, of which Fleischman was also an
owner, officer, agent, or employee. Filing 1 at 2.
The plaintiff alleges that all three defendants have directly
and indirectly infringed its patents. Filing 1 at 4.
Additionally, the plaintiff alleges that the defendants have
made false statements about the plaintiff amounting to
defamation, commercial disparagement, and deceptive trade
practices. Filing 1 at 5, 71-80.
plaintiff alleges specific facts that, it contends, support
asserting personal jurisdiction over the defendants in this
case. See filing 23 at 11-17. It has
submitted affidavits in support of these allegations.
See filing 25. To begin with, the plaintiff
alleges that Oxygen Frog has engaged a national distributor,
ABR Imagery, Inc. or ABR Images, Inc., to sell allegedly
infringing products to customers across the nation on its
website. Filing 23 at 14; filing 25-1
¶ 82. In addition, the plaintiff alleges that Oxygen
Frog has a website, which contains information about
"Oxygen Frog's products, price details, contact
information, and information on how to order infringing
products from Oxygen Frog." Filing 23 at 14;
see filing 25-1 ¶¶ 68-74.
the plaintiff alleges that the defendants have taken various
actions on Facebook. Filing 23 at 14. First, the
plaintiff alleges that Fleischman has a personal Facebook
profile. See, filing 23 at 12-13; filing
25-1 ¶¶ 44, 57. A Facebook user with a
personal profile may "friend" other users with
personal profiles. See, filing 23 at 12;
filing 25-1 ¶ 31. A user can make posts on his
own profile, can view posts that his Facebook-friends have
made on their profiles, can make posts on the profiles of his
friends, can comment on posts friends have made, and can
exchange messages with friends. See, filing
23 at 12; filing 25-1 ¶ 36. The
plaintiff alleges that Fleischman-at times using the screen
name "Scott Fleischman (Oxygen Frog)"-attempted to
friend four Nebraska residents on Facebook. See,
filing 23 at 12-13; filing 25-1
¶¶ 59-63. Three of those individuals became
Facebook friends with Fleischman. See, filing
23 at 12-13; filing 25-1 ¶ 59; filing
25-2 at 2; filing 25-3, filing
25-4. The plaintiff alleges that Fleischman made
posts on his profile advertising Oxygen Frog's allegedly
infringing products. See, filing 23 at 13;
filing 25-1 ¶¶ 57-58. And at least two of
the Nebraska residents he friended viewed the advertisements.
See, filing 23 at 13; filing 25-3;
the plaintiff alleges that Oxygen Frog and Stillwater Glass
both maintain business pages on Facebook. See,
filing 23 at 14; filing 25-1 ¶¶
45, 52. A business can make posts on its business page.
See, filing 23 at 12; filing 25-1
¶ 37. A business page cannot friend users on Facebook.
See, filing 23 at 12; filing 25-1
¶ 31. However, users may "like" a business
page. See, filing 23 at 12; filing
25-1 ¶ 32. And the plaintiff has produced
evidence that Oxygen Frog invited at least one Nebraska
resident to like the Oxygen Frog business page on April 12,
2016. Filing 32. The plaintiff alleges that Oxygen
Frog and Stillwater Glass have both made posts advertising
allegedly infringing products. Filing 23 at 14;
filing 25-1 ¶ 51, 52.
the plaintiff alleges that on or about March 31, 2015, it
sent cease-and-desist letters to Oxygen Frog and ABR Imagery.
Filing 23 at 14; filing 25-1 ¶ 75. In
response, the plaintiff alleges, Fleischman and Oxygen Frog
posted statements about the dispute on Oxygen Frog's
website, on Oxygen Frog's Facebook business page, and on
a Facebook group page titled ">Glassifieds< Tools
and Equipment, New and Used." Filing 23 at 14;
filing 25-1 ¶¶ 76-80. A group page on
Facebook is a page where any member of the group may make
posts and view and comment on the posts of others. Filing
23 at 12; filing 25-1 ¶¶ 38-40.
Some members of the group commented on the post, including at
least one Nebraska resident, Matthew Losee. Filing
23 at 14-15; filing 25-1 ¶ 79.
Fleischman responded to some of these comments, including
Losee's. Filing 23 at 14; filing 25-1
plaintiff alleges that certain assertions in the
defendants' posts constitute defamation, commercial
disparagement, and deceptive trade practices. Filing
23 at 15-17. Specifically, the plaintiff points to
each of the following sentences in the statement allegedly
posted by Fleischman and Oxygen Frog:
. . . . [HVLPO2] claim[s] to be the original inventor of the
concept of storing oxygen generated by oxygen concentrators
in a storage tank and delivering that oxygen to a torch. High
Volume Oxygen holds several patents regarding this
technology, and has demanded that OxygenFrog shut down all
business operations related to oxygen. High Volume’s
attorney also threatened our national distributor, and forced
them to discontinue any association with OxygenFrog.
The concept of on-site, on-demand, oxygen generation has been
around for decades, long before High Volume Oxygen filed its
patents. There are dozens of companies that offer both larger
and smaller versions of the systems that High Volume Oxygen
claims as their own original technology.
Filing 23 at 15-17; filing 25-1 at 118.
defendants have moved to dismiss the plaintiff's
complaint, arguing that they are not subject to personal
jurisdiction in Nebraska. Filing 18. The plaintiff,
on the other hand, argues that this Court can assert specific
personal jurisdiction over the defendants for each of the
claims. Filing 23 at 21, 33. For the reasons
explained below, the Court concludes that the defendants are
not subject to personal jurisdiction in Nebraska.
beginning its personal jurisdiction analysis, the Court must
first determine what law controls. An assertion of personal
jurisdiction over an out-of-state defendant is proper
"if authorized by the forum state's long-arm statute
and permitted by the Due Process Clause of the Fourteenth
Amendment." Dairy Farmers of Am., Inc. v. Bassett
& Walker Int'l, Inc., 702 F.3d 472, 475 (8th Cir.
2012) (quoting Viasystems, Inc. v. EBM-Papst St.
Georgen GmbH & Co., KG, 646 F.3d 589, 593 (8th Cir.
2011)). Nebraska's Supreme Court has interpreted its
state's long-arm statute as coextensive with the limits
of due process. See Crystal Clear Optical, Inc. v.
Silver, 531 N.W.2d 535, 539 (Neb. 1995). Thus, this
Court's inquiry is whether the assertion of personal
jurisdiction over the defendants comports with due process
under the United States Constitution.
when analyzing whether an assertion of personal jurisdiction
would comply with the requirements of due process, a district
court is bound by the precedent of its regional circuit-in
this case, the Eighth Circuit. But in a patent case, Federal
Circuit precedent applies to "substantive and procedural
issues 'intimately involved in the substance of
enforcement of the patent right.'" Amana
Refrigeration, Inc. v. Quadlux, Inc., 172 F.3d 852, 856
(Fed. Cir. 1999) (quoting Viam Corp. v. Iowa
Export-Import Trading Co., 84 F.3d 424, 428 (Fed. Cir.
plaintiff has brought various claims of patent infringement
(counts 1-24 of its complaint), as well as state law tort
claims of defamation (counts 25-26), commercial disparagement
(counts 27-28), and deceptive trade practices (counts 29-30).
Filing 1. For the patent infringement claims, the
plaintiff argues that the Court should apply Federal Circuit
precedent in determining whether it has personal jurisdiction
over the defendants. Filing 23 at 1. With respect to
the state law tort claims, the plaintiff argues that Federal
Circuit precedent should apply to some, and Eighth Circuit
precedent to others. Filing 23 at 1.
Court agrees that Federal Circuit precedent applies to the
patent infringement claims. But the Court need not
definitively resolve which circuit's precedent should
apply to each state law claim, because under either
circuit's precedent, the outcome is the same, and the
Court lacks jurisdiction.
Jurisdiction under Federal Circuit Precedent
Federal Circuit law, at the motion stage, a plaintiff need
only make a prima facie showing that personal jurisdiction
over the defendants exists. Deprenyl Animal Health, Inc.
v. Univ. of Toronto Innovations Found., 297 F.3d 1343, 1347
(Fed. Cir. 2002). When a motion to dismiss for lack of
jurisdiction is decided on the basis of affidavits or other
documentary evidence, all factual disputes are resolved in
the plaintiff's favor. Id.
process requires only that in order to subject a defendant to
a judgment in personam, if he be not present within the
territory of the forum, he have certain minimum contacts with
it such that the maintenance of the suit does not offend
'traditional notions of fair play and substantial
justice.'" Internat'l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945) (quoting
Milliken v. Meyer, 311 U.S. 457, 463 (1940)). The
"minimum contacts" necessary may be the basis for
either general or specific jurisdiction. See
Akro Corp. v. Luker, 45 F.3d 1541, 1545 (Fed. Cir.
1995) (citing Burger King Corp. v. Rudzewicz, 471
U.S. 462, 471-76 (1985)). In this case, the plaintiff argues
that this Court can assert specific jurisdiction over the
defendants. Filing 23 at 21, 33.
Federal Circuit has outlined a three-pronged test for
determining whether specific jurisdiction exists: "(1)
whether the defendant purposefully directs activities at the
forum's residents; (2) whether the claim arises out of or
relates to those activities; and (3) whether assertion of
personal jurisdiction is reasonable and fair."
AFTG-TG, LLC v. Nuvoton Tech. Corp., 689 F.3d 1358,
1361 (Fed. Cir. 2012). "The first two factors correspond
to the 'minimum contacts' prong of the
International Shoe analysis, and the third factor
with the 'fair play and substantial justice'
prong." Elecs. For Imaging, Inc. v. Coyle, 340
F.3d 1344, 1350 (Fed. Cir. 2003).
Purposefully directed activities
first prong of the three-part test is whether the defendant
purposefully directed its activities at residents of the
forum state. AFTG-TG, 689 F.3d at 1361. The
plaintiff contends that the defendants purposefully directed
their activities toward Nebraska in several ways. Filing
23 at 21-25. First, it alleges that Oxygen Frog used
a third-party national distributor, maintains a nationally
accessible website, maintains a Facebook business page,
invited a Nebraska resident to like its business page, and
posted advertisements on its business page for products that
allegedly infringe the plaintiff's patents. Filing
23 at 24-25; filing 32. Second, it alleges
that Fleischman-using at times the screen name "Scott
Fleischman (Oxygen Frog)"-Facebook-friended Nebraska
residents and posted advertisements for Oxygen Frog's
allegedly infringing products on his Facebook profile. Filing
23 at 22-23. Third, the plaintiff alleges,
Stillwater Glass allegedly posted advertisements for
infringing products on its Facebook business page. Filing
23 at 24. Finally, Oxygen Frog and Fleischman
allegedly posted defamatory statements on the Oxygen Frog
website, the Oxygen Frog Facebook business page, and the
Glassifieds Facebook group page. Filing 23 at 14,
23. The Court shall consider each of these activities in
the plaintiff contends that Oxygen Frog's use of a
national distributor amounts to activity purposefully
directed at Nebraska. Filing 23 at 25. There is an
unresolved question as to when placing a product in the
stream of commerce can be sufficient to establish personal
jurisdiction. Celgard, LLC v. SK Innovation Co., 792
F.3d 1373, 1381 (Fed. Cir. 2015). The question dates back to
Asahi Metal Industry Co. v. Superior Court of California,
Solano County, 480 U.S. 102 (1987). In that case,
Justice O'Connor, joined by another three justices,
concluded that personal jurisdiction does not exist over a
defendant where that defendant merely places a product in the
stream of commerce, even when it is foreseeable that the
product will reach the forum state. Id. at 111-12.
Rather, the defendant must take some action
"indicat[ing] an intent or purpose to serve the market
in the forum State" for jurisdiction to be appropriate.
Id. at 112. Conversely, Justice Brennan, joined by
three other justices, concluded that a defendant is
subject to personal jurisdiction when the defendant places a
product in the stream of commerce and it is foreseeable that
the product will end up in the forum state-for instance,
because the defendant is "aware that the final product
is being marketed in the forum State." Id. at
Supreme Court revisited the issue in J. McIntyre
Machinery, Ltd. v. Nicastro, 564 U.S. 873 (2011), but
again failed to reach a consensus. Justice Kennedy, joined by
three other justices, concluded that jurisdiction may be
asserted over a defendant "only where the defendant can
be said to have targeted the forum; as a general rule, it is
not enough that the defendant might have predicted that its
goods will reach the forum State." Nicastro,
564 U.S. at 882. Justice Breyer, joined by Justice Alito,
concurred in the judgment, but on the grounds that the
defendant in the case made only one sale in the forum state
through its national distributor. Id. at 888-89. The
concurrence suggested that either some activity specifically
targeting the forum state, or a "regular flow" of
sales in the forum state, is necessary to establish personal
Federal Circuit has concluded that McIntyre did not
alter its existing precedent with respect to the
stream-of-commerce theory in personal jurisdiction.
AFTG-TG, LLC, 689 F.3d at 1363. The Federal Circuit
has not taken a position on whether foreseeability or intent
is the proper test. Id. at 1364-65. But it has
concluded that, at the very least, personal jurisdiction is
lacking where the plaintiff ...