United States District Court, W.D. Pennsylvania
MEMORANDUM & ORDER
Bissoon United States District Judge.
reasons that follow, Defendants Headway Technologies, Inc.,
SAE Magnetics H.K. Ltd. and TDK Corporation's Motions to
Dismiss (Docs. 103 and 127) will be GRANTED.
Magnetic Structures, LLC, (“Plaintiff” or
“Lambeth”), an entity created to license patents
invented by Dr. David N. Lambeth, a retired Carnegie Mellon
professor, is the current owner of U.S. Design Patent No. 7,
128, 988 (“the ‘988 patent”), entitled
“Magnetic Material Structures, Devices and
Methods.” (Third Am.Compl. (Doc. 82) at ¶¶
23-24). Plaintiff alleges that “[i]n connection with
the ‘988 patent, Dr. Lambeth invented a new magnetic
structure for Hard Disk Drive Devices comprised of the
following elements: a substrate; at least one bcc-d layer
which is magnetic, forming a uniaxial symmetry broken
structure; and at least one layer providing a (111) textured
hexagonal atomic template disposed between said substrate and
said bcc-d layer” and that “[i]ndependent claims
1 and 27 of the ‘988 patent claim a magnetic material
and a magnetic device, respectively, comprising the
[referenced] structure.” (Id. at ¶¶
November 14, 2016, Plaintiff instituted this patent
infringement action against Toshiba Corporation. (Compl.
(Doc. 1)). Plaintiff alleges that many of Toshiba
Corporation's hard disk drives (“HDDs”)
incorporate the magnetic structure described in the
‘988 patent and thus infringe on at least claims 1 and
27. (Id. at ¶¶ 36-37). Plaintiff thrice
amended its complaint, filing the currently-operative Third
Amended Complaint on June 24, 2016. (Doc. 82). With the Third
Amended Complaint, Plaintiff added, inter alia,
Defendants SAE Magnetics H.K. Ltd. (“SAE”),
Headway Technologies, Inc. (“Headway”) and TDK
Corporation (“TDK”). (Id.) Defendants
SAE, Headway and TDK (“the moving Defendants”)
all move to dismiss the Third Amended Complaint for lack of
personal jurisdiction pursuant to Federal Rule of Civil
Procedure 12(b)(2). See (Docs. 103 and 107).
Headway is a California corporation with its sole business
location in California. Headway designs and manufactures
wafer chips for use in recording heads used in hard disk
drives. (Chen Decl. (Doc. 104-1) at ¶¶ 3, 4, 10).
Headway supplies its wafer chips to Defendant SAE in Hong
Kong - and nowhere else. (Id. at ¶¶ 4,
10). SAE incorporates Headway's wafer chips into head
gimbal assemblies (“HGAs”). SAE sells the head
gimbal assemblies in Hong Kong and China. The head gimbal
assemblies are subsequently incorporated into hard disk drive
products by companies such as Defendant Toshiba Corporation.
Headway “designs and optimizes recording heads
specifically for [Defendant] Toshiba products.” (Doc.
119 at 9; Docs. 119-1-119-8). Headway denies making, using,
offering for sale or selling wafer chips to customers located
in Pennsylvania, either directly or through distributors or
retailers. (Doc 104-1 at ¶ 16). Headway contends it does
not know whether any of its wafer chips have ever reached
Pennsylvania as a component of a third party product.
(Id. at ¶ 17). Headway claims it has no
expectation that its wafer chips, as stand-alone chips or as
components of third party products, would be sold to
consumers in Pennsylvania. (Id. at ¶ 18).
Plaintiffs have provided evidence that Toshiba hard disk
drives incorporating Headway components are offered for sale
in Pennsylvania. (Docs. 119 at 12, 119-15, 119-16, 119-17 at
a Japanese corporation with its principal place of business
in Tokyo, Japan. (Nagata Decl. (Doc. 128-1) at ¶ 3). TDK
has no place of business, office or other location in the
United States. (Id. at ¶ 4). TDK subsidiary
Headway is its only subsidiary with any U.S. connection.
(Id.) “TDK does not exercise control over
when, where or to whom Headway sells or ships its wafer
chips.” (Id.) TDK manufactures a variety of
items, including wafer chips used in hard drives.
(Id. at ¶ 5). TDK sells its wafer chips to SAE,
a TDK subsidiary. (Id.) SAE incorporates them into
head gimbal assemblies. (Id.) SAE sells its head
gimbal assemblies to third parties in Asia for commercial
production of hard disk drives. (Id. at ¶ 6).
“TDK does not control, participate in, track or monitor
the further sale of its wafer chips after they are
incorporated into HGAs and sold by SAE to SAE's
customers.” (Id. at ¶ 11). TDK claims no
actual knowledge or information that any of its wafer chips
has reached Pennsylvania as a component of a third party
product. (Id. at ¶ 19). TDK has never had a
distributor for Pennsylvania, or otherwise had an established
distribution channel for bringing its wafer chips to
Pennsylvania. (Id. at ¶ 20).
a Hong Kong corporation, with its principal place of business
in Hong Kong. (Han Decl. (Doc. 128-2) at ¶ 3). SAE
manufactures head gimbal assemblies. (Id. at ¶
5). SAE purchases wafer chips from Headway and TDK for
integration into head gimbal assemblies. (Id.) SAE
sells the head gimbal assemblies to customers who incorporate
them into hard disk drives. (Id. at ¶ 6). In
some cases, SAE acts as a contractor for the customer and
incorporates the head gimbal assemblies into the hard drives.
(Id.) When acting as a contractor, all of the head
gimbal assemblies are owned by the customer and SAE merely
performs contract manufacturing/assembly services at its
manufacturing facility in Dongguan, China. (Id.) SAE
sells to Toshiba Corporation hard disk drives that it
manufactures that incorporate Headway wafer chips.
(Id. at ¶ 7). SAE ships the finished hard disk
drives to locations globally, as directed by Toshiba.
(Id.) None of the shipment locations are in
Pennsylvania. (Id.) SAE has no role or control over
any sales or shipments of hard disk drives subsequent to its
initial supply shipment. (Id. at ¶ 8).
SAE's distribution channel for HGAs that incorporate
Headway or TDK wafer chips, as components for commercial
production of HDDs, ends with HGA shipments in Asia to
SAE's customers. (Id. at ¶ 9). SAE's
distribution channel for HDDs that incorporate Headway wafer
chips ends with SAE's shipments to locations designated
by Toshiba, with the majority of the shipments to Asia, and
none of them to Pennsylvania. (Id.) SAE has not
made, used, offered for sale, or sold an HGA or HDD to a
customer located in Pennsylvania, either directly or through
distributors or retailers. (Id. at ¶ 17). SAE
has no actual knowledge or information that any of its HGAs
or HDDs has ever reached Pennsylvania as a component of a
third party product. (Id. at ¶ 18). SAE does
not have a distributor for Pennsylvania, or otherwise have an
established distribution channel for bringing SAE's HGAs
or HDDs to Pennsylvania. (Id. at ¶ 19).
argues SAE, TDK and Headway's manufactured component
parts are critical to Toshiba's finished hard disk drive
devices. (Doc. 119 at 8).
Circuit law governs questions of personal jurisdiction over
claims of patent infringement. Autogenomics, Inc. v.
Oxford Gene Technology, Ltd., 566 F.3d 1012, 1016
(Fed.Cir. 2009) (“[T]he jurisdictional issue is
intimately involved with the substance of patent
law.”). There are two types of personal jurisdiction -
general and specific. Plaintiff does not contend any moving
Defendant is subject to general jurisdiction. Thus, the
question turns on whether the Court has specific jurisdiction
over any of the non-resident moving Defendants.
determination as to whether a defendant is subject to
specific personal jurisdiction involves two questions:
“first, whether the forum state's long arm statue
permits service of process and, second, whether the assertion
of jurisdiction is consistent with the due process
clause.” Celgard LLC v. SK Innovation Co.,
Ltd., 792 F.3d 1373, 1377 (Fed.Cir. 2015) (internal
citations omitted). Pennsylvania's long-arm statute
provides for jurisdiction “to the fullest extent”
permitted under the Due Process Clause of the Fourteenth