The lawsuit on appeal was a declaratory judgment action brought by Apple in the Northern District of California, but the dispute predated the filing of Apple's complaint by several years.  As described in the Federal Circuit's opinion, Zipit approached Apple in 2013 regarding its assigned patents, U.S. Patent Nos. 7,292,870 and 7,894,837, which claimed "wireless instant messaging devices that use Wi-Fi to send and receive instant messages."  For the next three years, there were "several rounds of correspondence" between them as well as an in-person meeting in Cupertino, home of Apple corporate headquarters (and in the Northern District).  This correspondence and these communications involved whether Apple was willing to purchase the patents outright or license them, inter partes review proceedings involving the patents, and whether Apple was infringing based on technical details of its products (as well as the possibility of willful infringement).  These discussions were fruitless and Zipit filed a patent infringement lawsuit in the Northern District of Georgia on June 11, 2020, which Zipit two weeks later voluntarily dismissed without prejudice; this was followed by Apple filing the declaratory judgment suit that was the basis for this appeal nine days after Zipit voluntarily dismissed its Georgia action.

Because it is relevant to the personal jurisdiction question, the opinion set forth in some detail the history of the negotiations between the parties:

The record before the district court indicates that Zipit first traveled to Apple's Cupertino headquarters on December 3, 2013.  Following this in-person meeting, the parties had "at least" four "detailed calls" in December 2013, February 2014, and March 2014.  During these meetings and calls, Apple and Zipit discussed licensing the patents-in-suit and Apple's contentions that it "does not practice any Zipit patent claims" and that the "patents[-in-suit] are invalid."  Indeed, the parties went so far as to exchange competing drafts of a license agreement in August and September 2014 but ultimately did not reach any agreement.  Zipit traveled to Apple's Cupertino offices for a second in-person meeting to continue discussions on January 13, 2015.

Following the January 2015 meeting, Apple and Zipit exchanged numerous letters and emails throughout 2015 and 2016.  The first email, dated July 18, 2015, was sent by Mr. Stephen Risley (Zipit's outside counsel) regarding "Apple's Ongoing Infringement" of the patents-in-suit.  This email, directed to Apple's in-house counsel (Mr. Rudhir Patel) sought a "definitive response" from Apple regarding the parties' ongoing discussion of Apple's "purchase and/or license" of the patents-in-suit.  Referencing a discussion that had taken place the day prior, Mr. Risley also attached for Apple's review Zipit's opposition brief to a petition for IPR of the '837 patent.  He also noted that additional briefs as to other patents were forthcoming.  Mr. Risley concluded:  "I understand that Apple will review Zipit's IPR briefs and respond to Zipit in 1-2 weeks."

Apple responded two months later.  On September 25, 2015, Mr. Patel sent Mr. Risley a letter reiterating Apple's view that it "does not need a license" to the patents-in-suit "because Apple does not practice any" claims of the patents-in-suit and the claims are invalid.  In describing its grounds for noninfringement, Apple referred specifically to deficiencies in claim charts it had received from Zipit.  Apple also stated that its view that the claims were invalid was "confirmed by [its] review of the materials before the [Patent Trial and Appeal Board], and additional prior art not being considered" in the pending IPRs.

The discussions escalated.  On October 14, 2015, Mr. Risley sent a responsive letter addressed to Mr. Patel (with Apple's Cupertino office listed on the address line) regarding "Apple's Ongoing Willful Infringement" of the patents-in-suit.  In the letter, Mr. Risley conveyed Zipit's "continue[d]" belief that "Apple has and continues to willfully infringe" the patents-in-suit.  He concluded the letter by referencing willful infringement a second time:  "Zipit is confident that if it becomes necessary a Court will view your September 25, 2015 [letter] as nothing more than a transparent attempt by Apple to justify Apple's past, present, and future willful infringement of Zipit's patents."  Apple responded to this letter on December 8, 2015.  Mr. Risley sent another email to Mr. Patel five months later on April 7, 2016.  In this email, Mr. Risley informed Apple that the Board had "confirmed the patentability of all claims" of the patents-in-suit.  He concluded the letter by once again stating Zipit's belief "that Apple has and continues to infringe" the patents-in-suit.

The parties thereafter had another phone call on April 26, 2016, after which Mr. Patel, on May 2, 2016, responded in writing to Zipit's latest letter.  Mr. Patel reiterated Apple's belief that the patents-in-suit are invalid notwithstanding the Board's patentability determination in the IPR proceedings.  In response to Zipit's continued allegations of infringement, Apple explained that it had "repeatedly refuted those allegations" and that Zipit had failed to substantively respond to Apple's positions in this regard.  The letter concluded:  "Should Zipit substantively respond to Apple's explanation of why Apple's products do not fall within the scope of [the patents-in-suit] Apple will further consider Zipit's positions [citations to the record deleted throughout].

The District Court granted Zipit's motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2).  Although the District Court found that Apple had established "minimum contacts" that satisfied the California long-arm statute and were consistent with constitutional due process limitations on jurisdiction (and that Zipit had not rebutted Apple's "presumptively reasonable" showing thereof), the District Court held that the Federal Circuit had set forth a bright-line rule that "the exercise of personal jurisdiction . . . would be unconstitutional when '[a]ll of the contacts were for the purpose of warning against infringement or negotiating license agreements, and [the defendant] lacked a binding obligation in the forum,'" under Levita Magnetics Int'l Corp. v. Attractive Surgical, LLC, Case No. 19-cv-04065-JSW, 2020 WL 4580504, at *6 (N.D. Cal. Apr. 1, 2020), and Breckenridge Pharm., Inc. v. Metabolite Lab'ys, Inc., 444 F.3d 1356, 1364 (Fed. Cir. 2006).  This appeal followed.

The Federal Circuit reversed and remanded, in an opinion by Judge Stoll, joined by Judges Hughes and Mayer.  The Court began by acknowledging that the California long-arm statute extended "to the full extent allowed by the due process clauses of the United States Constitution" and thus limited its analysis accordingly.  Citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980), the opinion asserts that the issue in determining the appropriateness of finding due process arising in personal jurisdiction situations was whether a defendant's "conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there."  The three factors set forth in Supreme Court opinions involving personal jurisdiction set out in the opinion are (1) whether a defendant has "purposefully directed" activities at forum residents; (2) whether the claim to be adjudicated "arises out of or relates to" defendant's activities in the forum; and (3) whether asserting personal jurisdiction over the defendant would comport with "'traditional notions of fair play and substantial justice" under the World-Wide Volkswagen decision.  As the opinion sets out, "[t]he first two factors comprise the 'minimum contacts' portion of the jurisdictional framework . . . .," citing Jack Henry & Assocs., Inc. v. Plano Encryption Techs. LLC, 910 F.3d 1199, 1204 (Fed. Cir. 2018).  Under circumstances where minimum contacts are satisfied, the Court says, assertion of personal jurisdiction is presumptively reasonable except where the presumption is successfully rebutted by the defendant.

Here, the Federal Circuit, considering the litany of contacts Zipit had with Apple, a resident of the forum, agreed with the District Court that the minimum contacts standard had been satisfied.  This conclusion was supported by the Federal Circuit's finding of personal jurisdiction in Xilinx, Inc. v. Papst Licensing GmbH & Co., 848 F.3d 1346, 1356 (Fed. Cir. 2017), where defendant's activities consistent of two notice letters and a single visit with the accused infringer; the panel found "Xilinx [to be] virtually indistinguishable from the facts of this case, where Zipit likewise sent multiple communications to Apple in California and traveled twice to California to discuss allegations of infringement and the prospect of Apple licensing or purchasing the patents-in-suit."  (The opinion sets forth several other decisions supporting personal jurisdiction under analogous circumstances.)  The Federal Circuit rejected Zipit's argument that its conduct was not sufficient to raise a reasonable presumption that the minimum contacts standard had been satisfied based on the Court's decision in Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1016 (Fed. Cir. 2009).  The panel found significant differences ("material factual distinctions") in the facts here and in Autogenomics (which are set forth in a footnote).

The opinion traced back the District Court's error in finding a bright-line rule against asserting personal jurisdiction based on notice letters to Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc, 148 F.3d 1355, 1360 (Fed. Cir. 1998), where the Federal Circuit said that "[p]rinciples of fair play and substantial justice afford a patentee sufficient latitude to inform others of its patent rights without subjecting itself to jurisdiction in a foreign forum."  But while this sentiment and the policy arising from it are "no doubt relevant," according to the opinion, particularly to the extent it is directed towards settlement of incipient lawsuits, the panel rejected the argument by Zipit and the District Court's opinion that it reflects or establishes a patent-specific, bright-line rule, citing for example Trimble Inc. v. PerDiemCo LLC, 997 F.3d 1147, 1156–57 (Fed. Cir. 2021), and setting out several analogous personal jurisdiction decisions in other circuits over controversies in other areas of law.

But such a policy does not overcome the constitutional considerations set forth by the Supreme Court in Burger King and other personal jurisdiction cases, the panel opined.  To be perfectly clear, the opinion states that:

[T]he district court erred in reading our precedent as creating a bright-line rule that communications directed to "the attempted resolution" of the parties' dispute regarding the patents-in-suit trumps all other considerations of fairness and reasonableness.  Although some of our earlier precedent relying on Red Wing Shoe suggests that there is such a bright-line rule . . ., Supreme Court precedent (both pre- and post-Red Wing Shoe) has made clear that jurisdictional inquiries cannot rest on such bright-line rules—there are no "talismanic jurisdictional formulas."  Rather, "'the facts of each case must [always] be weighed' in determining whether personal jurisdiction would comport with 'fair play and substantial justice'" [citations omitted].

Having dispensed with this ground of error, the opinion then assessed whether Zipit satisfied the Supreme Court's counter rubric regarding whether a defendant could overcome the reasonable presumption of personal jurisdiction on the basis of:

[1] "the burden on the defendant," [2] "the forum State's interest in adjudicating the dispute," [3] "the plaintiff's interest in obtaining convenient and effective relief," [4] "the interstate judicial system's interest in obtaining the most efficient resolution of controversies," and [5] the "shared interest of the several States in furthering fundamental substantive social policies."

While recognizing that Zipit had asserted some evidence relating to some of these factors (e.g., that there would be some burden in litigating in California because the company, its officers, and employees including inventors resided in South Carolina), on balance Zipit did not assert sufficient facts to convince the Federal Circuit that it had rebutted the reasonable presumption that the District Court could properly exercise personal jurisdiction over Zipit.  (It didn't help Zipit's argument that their executives had travelled to the district twice to meet with Apple during licensing negotiations.)  Even Zipit's filing its Georgia lawsuit was evidence that it should have "reasonably foreseen" that Apple would respond with a declaratory judgment suit according to the Federal Circuit.

While acknowledging that "we have no doubt that Zipit's initial contacts with California can be fairly viewed as attempting to settle its dispute with Apple out of court, e.g., by way of a patent license," which was "an important fact we consider and weigh in Zipit's favor," the opinion noted that "Zipit's communications with Apple arguably went further, extending over the course of several years and reaching beyond license negotiations to include the sale of its patents."  While this attempt at settlement was on Zipit's side of the scales under the Burger King test, the panel held that, on balance, these considerations did not counterbalance their opinion that Zipit had not rebutted the reasonable presumption that the minimum contacts standard had been satisfied and that the District Court could exercise personal jurisdiction over Zipit within the bounds of constitutional due process.

Apple Inc. v. Zipit Wireless, Inc. (Fed. Cir. 2022)
Panel: Circuit Judges Hughes, Mayer, and Stoll
Opinion by Circuit Judge Stoll