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New World International, Inc. v. Ford Global Technologies, LLC

United States Court of Appeals, Federal Circuit

June 8, 2017

NEW WORLD INTERNATIONAL, INC., NATIONAL AUTO PARTS, INC., Plaintiffs-Appellants
v.
FORD GLOBAL TECHNOLOGIES, LLC, Defendant-Appellee

         Appeal from the United States District Court for the Northern District of Texas in No. 3:15-cv-01121-M, Judge Barbara M.G. Lynn.

          Robert G. Oake, Jr., Oake Law Office, Allen, TX, argued for plaintiffs-appellants.

          Sean Marotta, Hogan Lovells U.S. LLP, Washington, DC, argued for defendant-appellee. Also represented by Jessica L. Ellsworth; Frank A. Angileri, Marc Lorelli, Linda D. Mettes, Brooks Kushman P.C., South-field, MI.

          Before Prost, Chief Judge, Bryson and Wallach, Circuit Judges.

          Bryson, Circuit Judge.

         New World International, Inc., and National Auto Parts, Inc., (collectively, "New World") appeal from a final decision by the United States District Court for the Northern District of Texas dismissing New World's declaratory judgment complaint for lack of personal jurisdiction over defendant-appellee Ford Global Technologies, LLC ("FGTL"). We affirm.

         I

         A

         FGTL is a wholly owned subsidiary of the automaker Ford Motor Company. Both FGTL and the Ford Motor Company are incorporated in Delaware and headquartered in Michigan. FGTL does no business in Texas and neither maintains an office nor has any employees in Texas.

         FGTL does not make or sell automobiles or automotive products; it owns, manages, and licenses intellectual property for the Ford Motor Company. FGTL's portfolio includes several design patents, including U.S. Design Patent No. D489, 299 ("the '299 patent"), which claims the design of a vehicle hood exterior, and Design Patent No. D501, 685 ("the '685 patent"), which claims the design of a vehicle head lamp.

         FGTL licensed the '299 and '685 patents to LKQ Corp. ("LKQ"), an entity incorporated in Delaware and headquartered in Illinois. The license agreement between FGTL and LKQ designates LKQ as the exclusive licensee for the importation and sale of non-original equipment aftermarket products in the United States.[1] LKQ does business in all 50 states, including Texas.

         The license agreement states that "LKQ has no right, title or interest in or to the FGTL Design Patents" beyond selling the aftermarket products as provided in the agreement, and that LKQ does not have the right to grant sublicenses. The agreement further provides that FGTL and LKQ each operate as "an independent contractor in the performance of each and every part of the license, " and that neither "has the power or authority to act as agent, employee or in any other capacity to represent, act for, bind or otherwise create or assume any obligation on behalf of the other party for any purpose whatsoever." In addition, the agreement provides that LKQ may not reference its relationship to Ford or FGTL in any of LKQ's marketing materials regarding the royalty products, and that LKQ must attach to each of those products a label that reads "Non Original Equipment Aftermarket Part." The agreement does not otherwise control LKQ's marketing of the royalty products.

         The license agreement details the relationship between FGTL and LKQ regarding infringement claims against third parties. If LKQ learns of potentially infringing conduct by a third party, LKQ must notify FGTL in writing. The agreement then provides:

FGTL will have the right to determine what action, if any, is to be taken in each such instance, but shall not unreasonably refuse a request by LKQ to enforce the Ford Design Patents against allegedly-infringing use in conflict with LKQ's rights under th[e] [License] Agreement. If FGTL decides to take any action at LKQ's request, LKQ agrees . . . to become a party to such action if necessary, and to cooperate with FGTL, in the prosecution of any such action or proceeding involving any alleged infringement respecting FGTL's rights in the Ford Design Patents.

         The license agreement also addresses potential third-party claims of design patent infringement against LKQ based on LKQ's sales of the aftermarket products. For such claims, the agreement provides that FGTL will indemnify LKQ for any design patent suits against LKQ initiated by third parties.

         B

         New World is a Texas company with headquarters in Texas. In September 2011, FGTL sent New World a cease and desist letter accusing New World of infringing the '299 and '685 patents by selling various parts meant for use on Ford vehicles. The letter informed New World that LKQ had been granted an exclusive license to import and sell those products, and that New World had not obtained the accused products from LKQ in an authorized manner.

         On May 21, 2013, FGTL sent another letter to New World, providing New World with a "partial list" of Ford design patents and again requesting that New World cease and desist selling various parts for Ford vehicles. FGTL also informed New World that LKQ "may be able to assist" with New World's "disposal" of the accused products, and stated that "LKQ will contact you directly."

         New World requested a license to sell the accused products. On June 11, 2013, FGTL responded that a license option was not available; that FGTL had contacted its litigation counsel, who would contact New World; and that FGTL had asked LKQ to contact New World about the disposal of the accused products in New World's possession.

         In June 2013, LKQ contacted New World "regarding the recent 'cease and desist' letter" from FGTL. LKQ asked that New World call LKQ "to review the details of [New World's] inventory" in order to "determine ...


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