Merial v. Cipla: Finding Jurisdiction Over Foreign Patent Infringers

In Merial Ltd. v. Cipla Ltd., the Federal Circuit recently reviewed an appeal from the Middle District of Georgia that found defendant Cipla (an Indian company) in contempt for violating an earlier injunction and finding co-defendant Velcera in contempt for acting in concert with Cipla to violate that injunction. The case arose from Cipla’s alleged infringement of Merial’s patents directed to flea and tick protection compositions, and Cipla’s underlying challenges to the District Court’s exercise of personal jurisdiction over it.

Notably, the Federal Circuit addressed the jurisdictional reach of the District Court over a foreign defendant in a patent infringement case. Judge Lourie, writing for a split panel that included Judges Reyna and Schall (who wrote a dissenting opinion), discussed the applicability of Federal Rule of Civil Procedure 4(k)(2) to the case. That rule, the Court observed “was adopted to provide a forum for federal claims . . . where a foreign defendant lacks substantial contacts with any single state, but has sufficient contacts with the United States as a whole to satisfy due process standards and justify the application of federal law.” The Court described Rule 4(k)(2) as a kind of “federal long-arm statute,” allowing a District Court to exercise jurisdiction, provided: (1) the claim arises under federal law, (2) the defendant is not subject to personal jurisdiction in another state, and (3) the exercise of jurisdiction satisfies due process.

Significantly, the ruling pointed out that while the burden of establishing personal jurisdiction typically rests with the plaintiff, Rule 4(k)(2) shifts this burden, whereby “if the defendant contends that he cannot be sued in the forum state and refuses to identify any other where suit is possible, then the Federal Court is entitled to use Rule 4(k)(2).”

Practitioners need to be aware of this decision, as well as Rule 4(k)(2)’s applicability, whether or not it is raised by the parties. Indeed, Rule 4(k)(2) is an important factor in the calculus of determining personal jurisdiction over a foreign defendant accused of patent infringement.

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