Zamora Radio, LLC v. Last.Fm Ltd.

ZAMORA RADIO, LLC, Plaintiff, v. LAST.FM LTD.; CBS RADIO INC.; CBS CORP.; SLACKER, INC.; PANDORA MEDIA, INC.; RHAPSODY AMERICA LLC; REALNETWORKS, INC.; DKCM INC. d/b/a JANGO, SOUNDPEDIA INC.; AOL, LLC; ACCURADIO, LLC and YAHOO!, INC., Defendants.

CASE NO. 09-20940-CIV-TORRES

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

DONE AND ORDERED June 28, 2011

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

This matter is before the Court on Defendant AccuRadio, LLC's ("AccuRadio") Motion to Dismiss Plaintiff Zamora Radio, LLC's ("Zamora") Original Complaint for patent infringement [D.E. 1], pursuant to Fed. R. Civ. P. 12(b)(2), for lack of personal jurisdiction over defendant AccuRadio [D. E. 226]. We have considered the motion, response, and reply thereto, and the record in this case. The Court hereby grants AccuRadio's Motion to Dismiss for the following reasons.

I. BACKGROUND

A. Procedural Background

On April 9, 2009, Zamora filed a Complaint against twelve defendants,including AccuRadio, for infringement of United States patent No. 6,349,339 ("the patent") in the Southern District of Florida [D.E. 1]. The patent was issued on February 19, 2002 and features a system and method for utilizing data packets, including audio, video, and text. According to the patent, the patent invention is:

A server arrangement of the system provides the data packets to a user computing arrangement of the system. A storage device of the user computing arrangement stores the data packets. The data packets are arranged in a predetermined order using the server arrangement and/or the user computing arrangement. The user computing arrangement executes a set of instructions to utilize the data packets in the predetermined order. A user of the user computing arrangement is prevented from modifying the predetermined order.

After the Court vacated default judgment previously entered against Accuradio, AccuRadio filed on October 20, 2010 a motion to dismiss the complaint because AccuRadio did not have sufficient minimum contacts with Florida for the Court to exercise personal jurisdiction under the Due Process clause [D.E. 226]. On November 8, 2010, Zamora filed a response and argued that: (1) the Court has personal jurisdiction over AccuRadio under a Fed. R. Civ. P. 4(k)(1) analysis; (2) the Court has personal jurisdiction over AccuRadio under a Fed. R. Civ. P. 4(k)(2) analysis; and (3) the Court should order expedited discovery on the jurisdictional issues raised [D.E. 230]. AccuRadio then filed a reply on November 19, 2010, reiterating that: (1) Zamora has failed to carry its burden to establish jurisdictional face; (2) Zamora has not shown that jurisdictional discovery is warranted; and (3) the balance of hardships supports granting AccuRadio's Motion to Dismiss.

B. Facts Material to the Motion

The facts here are based upon the allegation included in the Plaintiff's Original Complaint for patent infringement ("Compl.") and the documents attached thereto [D.E. 1]. Plaintiff Zamora is a limited liability company organized and existing under the laws of the State of Delaware, with its principal place of business in Delaware. Compl. at ¶ 2. Zamora states in its Complaint that it is the owner of all rights, title, and interest in and to the patent, including the right to sue. Compl. at ¶ 2.

Defendant AccuRadio is a limited liability company organized and existing under the laws of the State of Delaware, with its principle place of business located at 400 North Wells Street, Suite 408, Chicago, Illinois 60610. Compl. at ¶ 13. AccuRadio owns, operates, or otherwise controls Internet media websites, including, for example, http://www.accudradio.com/. Compl. at ¶ 30. AccuRadio.com operates as a multichannel Internet radio station that offers multiple, genre-specific channels of music programming via its website [D.E. 226-1 at ¶ 3]. Zamora argues that this Court has personal jurisdiction over AccuRadio because AccuRadio "has conducted and done business within the State of Florida" in that it "ships, distributed, offers for sale, sells, advertises, and utilizes its products and services in the United States, the State of Florida, and the Souther District of Florida." Compl. at ¶ 17. Further, Zamora alleges that AccuRadio has "purposefully and voluntarily placed one or more of its infringing products and services . . . into the stream of commerce with the expectation that the infringing products and services will be utilized in the Southern District of Florida," and "has committed the tort of patent infringement within the State of Florida, andmore particularly, within the Southern District of Florida." Compl. at ¶ 17. AccuRadio has also, allegedly, contributed to the infringement of one or more claims of the patent, and/or actively induced others to infringe one or more claims of the patent, in this District and elsewhere in the United States. Compl. at ¶ 44.

AccuRadio responds in its Motion to Dismiss that "Zamora does not . . . allege a single fact to show that the Court may exercise personal jurisdiction over AccuRadio," and that "AccuRadio does not have sufficient minimum contacts with Florida for an exercise of personal jurisdiction to comport with Due Process." [D.E. 226]. AccuRadio further argues that "AccuRadio's sole contact with Florida is its website" and that "AccuRadio does not direct any advertising or marketing efforts for its services to Florida." Id. Accordingly, AccuRadio concludes that "Zamora cannot establish that AccuRadio has purposefully directed its activities to Florida based on its website and Internet radio service." Id.

II. ANALYSIS

A. Applicable Principles

Defendant AccuRadio contends that this Court lacks personal jurisdiction over it because AccuRadio does not have sufficient minimum contacts with Florida. In doing so, AccuRadio does not challenge jurisdiction under Florida's long-arm statute and focuses exclusively on its argument that exercising personal jurisdiction does not satisfy the requirements of Fifth Amendment Due Process. [D.E. 234].

Federal Circuit law governs the issue of whether a court has personal jurisdiction over a defendant in a patent infringement claim. Roblor Marketing Group,Inc. v. GPS Industries, Inc., 645 F. Supp. 2d 1130, 1137 (S.D. Fla. 2009) (citing Elecs. For Imaging, Inc. v. Coyle, 340 F.3d 1344, 1348 (Fed. Cir. 2003)). Federal Rule of Civil Procedure 12(b)(2) allows a dismissal of a complaint for lack of personal jurisdiction. Fed. R. Civ. P. 12(b)(2). However, "in the absence of an evidentiary hearing, a plaintiff need only to make a prima facie showing that defendants are subject to personal jurisdiction." Roblor Mktg. Group. Inc., 645 F. Supp. 2d. at 1137 (citing Elecs. For Imaging, Inc., 340 F.3d at 1349).

"Once the plaintiff pleads sufficient material facts to form the basis for in personam jurisdiction, the burden shifts to the defendant to challenge plaintiff's allegations by affidavits or other pleadings." Structural Panels, Inc. v. Texas Aluminum Indus., Inc., 814 F. Supp. 1058, 1064 (M.D. Fla. 1993) (stating the burden of proof in a patent infringement action) (citation omitted). "If the defendant sufficiently challenges plaintiff's assertions, then the plaintiff must affirmatively support its jurisdiction allegations and may not merely rely upon the factual allegations set forth in its complaint." Id.

1. The Florida Long-Arm Statute

"When jurisdiction is based on a federal question arising under a statute that is silent regarding service of process, Rule 4(e) of the Federal Rules of Civil Procedure directs us to look to the state long-arm statute in order to determine the existence of personal jurisdiction." Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 626-627 (11th Cir. 1996) (citing Cable/Home Commc'n v. Network Prod's, 902 F.2d 829, 855 (11th Cir. 1990)). The Florida "long-arm" statute permits the courts to exercisejurisdiction over nonresident defendants who commit certain specific acts. Fla. Stat. § 48.193. For example, § (1)(b) of the statute permits a Florida court to assert jurisdiction over any person who "commit[s] a tortious act within this state." Fla. Stat. § 48.193(1)(b). Jurisdiction is available over AccuRadio under this section of the Florida statute because patent infringement is a tortious act within the meaning of the Florida long-arm statute. In re Farmland Industries, Inc. v. Potash Corp., No. 3:05- cv-587-J-32MCR, 2007 WL 1018367, at *2 (M.D. Fla. Mar. 20, 2007) (citing Elite Aluminum Corp. v. Trout, 451 F. Supp. 2d 1311, 1314 (S.D. Fla. 2006)). Additionally, patent infringement occurs wherever an allegedly infringing product is sold, offered for sale, and/or used. 35 U.S.C. § 271(a). Further, under Federal Circuit law, the tort of patent infringement causes injuries wherever infringement occurs. See MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1377 (Fed. Cir. 2005).

In this case, although AccuRadio does not challenge jurisdiction under the long-arm statute, presumably because the alleged infringement occurred in Florida by virtue of the website's widespread accessibility in this state. See Licciardello v. Lovelady, 544 F.3d 1280, 1283-1284 (11th Cir. 2008). Assuming therefore that the Complaint has sufficiently pled jurisdiction under the long-arm statute, the Court must address whether the Due Process Clause of the Fifth Amendment to the United States Constitution allows for jurisdiction in this case. See, e.g., Kemin Foods, L.C. v. Omniactive Health Tech., Inc., 654 F. Supp. 2d 1328, 1334 (M.D. Fla. 2009) (explaining that where a defendant's conduct falls within the forum's long-arm statute, theexistence of personal jurisdiction over the defendant is not proper unless it comports with Due Process).

2. Due Process

"The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful 'contacts, ties, or...