Personal Jurisdiction: Eastman Kodak Company v. Kyocera Corporation

U.S. District Court, WDNY

Personal Jurisdiction

Patent License — Transaction of Business in New York

Eastman Kodak Company v. Kyocera Corporation

10-CV-6334

Judge Siragusa

Background: This is an action for breach of contract, involving a patent licensing agreement between the parties. The defendant filed a motion to dismiss for lack of personal jurisdiction. More recently, the defendant filed a motion to stay discovery pending the outcome of the motion to dismiss.

The plaintiff is a New Jersey corporation with a principal place of business in Rochester. The defendant is a Japanese corporation with its principal place of business in Japan. On Aug. 21, 2002, the plaintiff and the defendant entered into a licensing agreement, granting the defendant the right to make products utilizing the plaintiff’s patented digital camera technology, in exchange for royalty payments. The agreement acknowledges that the plaintiff’s principal place of business is in New York. The agreement is governed by New York law and the defendant’s products are sold in retail stores in New York by companies related to the defendant. The agreement requires the defendant to send quarterly royalty statements to the plaintiff in New York, and the defendant has done so for years. The agreement also requires the defendant to make royalty payments to the plaintiff in New York, and the defendant has done so for years.

The defendant disagrees, since the agreement was negotiated in Japan, and since most of the meetings between the two companies occurred in Japan. The defendant admits, though, that at least one meeting concerning the agreement was held in New York. The defendant denies that it sells its products in New York, but admits that its subsidiaries sell licensed products in New York. The defendant further indicates that the agreement does not contain a forum-selection clause. The defendant maintains that on these facts, it is not subject to personal jurisdiction.

Ruling: The motion to dismiss is denied. The long-arm statute gives New York personal jurisdiction over a nondomiciliary if two conditions are met: first, the nondomiciliary must ‘transact business’ within the state; second, the claim against the nondomiciliary must arise out of that business activity. Here, the defendant has an ongoing contractual relationship with the plaintiff, a New York company, the agreement has a New York choice-of-law clause, and the agreement requires the defendant to send notices and payments to the plaintiff in New York. Moreover, the defendant has in fact sent such notices and payments to New York for years. Additionally, although the contract was not negotiated in New York, the defendant’s representatives met with the plaintiff in New York concerning the agreement on at least one occasion. For purposes of due process, that the defendant has sufficient minimum contacts with New York. Additionally, the exercise of jurisdiction is reasonable and comports with traditional notions of fair play and substantial justice.

Jonathan W. Woodard of Wilmer Cutler Pickering Hale and Dorr LLP and Paul J. Yesawich III of Harris Beach LLP for the plaintiff; and Charles L. Kerr of Morrison & Foerster for the defendant