1. Whether the Federal Circuit applies its own personal jurisdiction law rather than the law of the district court from which the appeal arose.
2. Whether Aaroflex's promotional materials and price quotations that stipulated to not be an offer for sale until executed by recipient were offers for sale under 35 U.S.C. §271(a) (1994).
1. Yes. While the Federal Circuit defers to the interpretation of a state's long-arm statute given by that state's highest court, when analyzing personal jurisdiction for purposes of compliance with federal due process, Federal Circuit law, rather than regional circuit law, applies.
2. Yes. Based on the substance of the letters, and using federal conceptualization of the term "offer for sale" Aaroflex's actions were §271(a) offers for sale.
3D Systems, a California corporation, brought a patent infringement suit in the U.S. District Court of California against Aarotech Inc., Aaroflex Inc., and Albert C. Young. Aarotech is incorporated in Oklahoma and has its principle place of business in Virginia. Aaroflex, a subsidiary of Aarotech, is incorporated in West Virginia and has its principle place of business in Virginia. Aaroflex sent price quotations and descriptions of merchandise to certain California residents with the stipulation that they were not "offers for sale" until they are executed by recipient and returned to Aaroflex. Aaroflex also sent promotional materials to certain California residents. Defendant Young, the CEO of those corporations, resided in the Washington, D.C. area. In the district court, all Defendants successfully moved to have the suit dismissed for lack of personal jurisdiction.
On appeal to the Federal Circuit, the court reviewed the personal jurisdiction issue de novo. Straying from the district court's analysis, it applied the Federal Circuit's Akro test for minimum contacts. See Akro Corp. v. Luker, 45 F.3d 1541, 1545-46, 33 U.S.P.Q.2d 1505, 1508-09 (Fed. Cir. 1995). The Akro test has three prongs which must be satisfied: (1) whether the defendant purposefully directed its activities at residents of the forum, (2) whether the claim arises out of or relates to those activities, and (3) whether assertion of personal jurisdiction is reasonable and fair.
As part of the second prong, the court analyzed whether the materials sent by Aaroflex were actually offers to sell. The court decided that the price quotation letters were offers to sell under §271 and that the statute was created, "to prevent exactly the type of activity Aaroflex has engaged in, i.e., generating interest in a potential infringing product to the commercial detriment of the rightful patentee." Based on the Akro test, Defendant Aaroflex was found to have established minimum contacts with California as a result of Aaroflex's actions which were purposefully directed toward the residents of California.
The district court's rulings that it did not have personal jurisdiction over CEO Young and parent company Aarotech were affirmed, and its ruling that it did not have personal jurisdiction over Aaroflex was reversed.