Vegas Trade Show Satisfies Minimum Contacts Test

PatentLawPic986Patent Rights Protection Group v. Video Gaming Technologies (VGT), (Fed. Cir. 2010)

Patent Rights holds patent rights to several slot-machine patents and sued a host of companies for infringement. The Nevada-based district court dismissed the suits against VGT and SPEC for lack of personal jurisdiction. In particular, the district court held that personal jurisdiction would be “unreasonable.”

Although patent law is nationalized and litigation is handled in federal courts, the courts are only empowered to take action against defendant have sufficient contacts with the state where the court is located. This analysis of minimum contacts falls under the rubric of “personal jurisdiction” and has been well developed by the US Supreme Court in cases such as Burger King (1985) and International Shoe (1945). Here, the personal jurisdiction question is whether the defendants’ contacts with the Nevada are sufficient such that exertion of power by a Nevada-based court “would comport with ‘fair play and substantial justice.’ i.e., whether exercising jurisdiction would be reasonable.” (Nevada’s long-arm statute extends to the Constitutional limits.)

VGT and SPEC had only de minimis sales of their products in Nevada. However, both companies had attended several Las Vegas trade shows.

Writing for the unanimous court, Judge LINN [updated to correct typo] held that it would not be “prohibitively burdensome” for either defendant to defend this suit in Nevada. “Indeed, their admitted presence at numerous trade shows in Nevada indicates that, despite their arguments to the contrary, neither company faces a particularly onerous burden in defending itself in Nevada.” Here, the court concluded that exhibiting products at a Vegas trade show (“one of the world’s larger gaming markets”) was likely done with the prospect of commercial benefit and that use of a Nevada business opportunity satisfies the minimum contacts test.

On remand, the district court will likely consider further elements of the personal jurisdiction test (specific vs general jurisdiction) as well as venue.

31 thoughts on “Vegas Trade Show Satisfies Minimum Contacts Test

  1. Phew, if PJ was going to be found anywhere for anyone where there were only de minimis sales, it’s a good thing that it was proper for a gaming company and Nevada.

  2. A motion for “dismissal” under the “common law”

    Who here was talking about a motion for dismissal under the common law? I’m still trying to figure out why you brought it up in the first place.

  3. A motion for “dismissal” under the “common law” is not the same as a motion for “transfer” under the “statute.” I understand that you want to use “forum non conveniens” as shorthand for motions to transfer pursuant to 1404(a), but that would be incorrect.

  4. Hey thanks for proving my point by showing a case about transfer under the statute 28 USC 1404.

    Hey, no problem.

    You’ll notice that 1404 actually is an exception to the “perfectly good venue statute” of 1391, and actually does invoke the usual test for forum non conveniens.

    Statutory authority to bring a motion for forum non conveniens does not make it any less a motion for forum non conveniens.

  5. why would you use the common law FNC doctrine when there is a perfectly good venue statute available?

    Because forum non conveniens is an exception to the perfectly good venue statute.

    everyone is an american corp…

    Which would be completely relevant to the question of venue if the suit were brought before the District Court for the District of America.

    America has a lot of venues, with each one foreign to all the others.

  6. @An anti-civ pro:

    why would you use the common law FNC doctrine when there is a perfectly good venue statute available?

    besides, what foreign venue is more appropriate? everyone is an american corp…

  7. June 28th to be precise, as that is the very last day the court meets. Maybe the 24th, since that’s the last “conference day.”

    Almost certainly a Stevens opinion then, no?

  8. June 28th to be precise, as that is the very last day the court meets. Maybe the 24th, since that’s the last “conference day.”

  9. I believe this has been posed repeatedly in other threads, but Bilski is expected in June.

  10. They’re being physically taken to Las Vegas and offered for sale whether a license has already been obtained for that specific installation site or not.

    They’re selling in Vegas, with a physical presence even, regardless of the technical BS forms they need to properly complete a sale for use in Vegas.

  11. Interesting. Thanks John. I would think that every slot manufacturer would have a license in Nevada given the importance of the market.

  12. Wonder what Mooney’s head is shaped like? A large t w i n k i e? We do know that it is filled mostly with cream and other junk, and air.

  13. @Another Junior Examiner:

    Unlike the sale of shoes or burgers, slot machine manufacturers cannot sell slot machines “to be used in Nevada” without a gaming license from the State of Nevada. The slot machines must undergo state testing and receive approval.

    So there are many companies that exhibit at the Las Vegas trade shows that cannot place their slot machines into the Nevada “stream of commerce.”

  14. It’s interesting. Kappos’ head is shaped almost perfectly like a very large chicken egg.

  15. Looks like patent holding companies would be best advised to set up shop in Vegas, the home of so many conventions. It appears they just may be able to resist dismissal or transfer to a defendant’s home district.

  16. I’d be shocked not to see a forum non conveniens motion if it hasn’t been made already.

    How do slot machine makers have only de minimis contacts in Vegas? That’s like lobbyists having only de minimis contacts with D.C. They really don’t have any slot machines in the “stream of commerce” in Vegas?

  17. The best line in the opinion is, “To the extent that either SPEC or VGT contends that they attended these trade shows without a commercial purpose, we find that this contention strains credulity.” So true. Who goes to a trade show for a non-commercial purpose?

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