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Magpul Industries, Corp. v. Big Rock Sports, LLC

United States District Court, D. Colorado

April 11, 2014

MAGPUL INDUSTRIES, CORP., Plaintiff,
v.
BIG ROCK SPORTS, LLC, dba SWAMP FOX COMBAT GEAR, Defendant.

ORDER

R. BROOKE JACKSON, District Judge.

This case concerns alleged patent infringement on the part of Defendant Big Rock Sports, LLC, dba Swamp Fox Combat Gear ("Big Rock"). Subject matter jurisdiction is proper under 28 U.S.C. § 1331 and 28 U.S.C. § 1338(a). Defendant moves to dismiss this action for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2) and for improper venue pursuant to Fed.R.Civ.P. 12(b)(3) [Doc. #23]. For the reasons set forth below, the motion is denied.

FACTS

The background of this case is rather simple and straightforward. Since we are at the pleading stage, the Court considers true the plaintiff's factual assertions that are plausible on their face.

Plaintiff Magpul is a Delaware corporation with its principal place of business in Erie, Colorado. Its business consists primarily of the design, manufacture, and sale of products used as accessories to firearms. Second Amended Complaint [ECF No. 21] at ¶ 1. Defendant Big Rock is a Delaware corporation with its principal place of business in North Carolina. [ECF No. 23-1 at ¶ 5].

According to Magpul, Big Rock has been selling and offering to sell infringing ammunition magazines ("accused products") within Colorado and the greater United States without its consent. Big Rock has sold the accused products to Colorado residents under its name and/or the name "Swamp Fox" and has operated an interactive website used to conduct commercial activity, including the sale of the accused products to Colorado residents. Second Amended Complaint at ¶ 5.[1]

In 2011 a representative of Big Rock contacted Magpul to schedule a visit to Magpul's corporate offices and manufacturing facility. Id. at ¶ 6. Soon thereafter, representatives of Big Rock, including its Vice President of Merchandising and its Senior Vice President, traveled to Magpul's facilities in Colorado. Id. They met with a Magpul representative and discussed, among other things, the Magpul ammunition magazine whose patented technology is at issue in this case. Id. The Big Rock representatives also extensively toured Magpul's facilities, including its manufacturing plant, Research & Development department, and corporate offices. Id. Subsequently, Big Rock purchased thousands of the Magpul ammunition magazines embodying the patented technology at issue here, which were marked in conformance with the patent marking statute 3 U.S.C. § 287. Id. at ¶ 7.

After touring Magpul's facilities and ordering a large quantity of its ammunition magazines, Big Rock allegedly set out to obtain a competing ammunition magazine. Id. at ¶ 8. Magpul contends that Big Rock infringed U.S. Patent No. 8, 069, 601 ("the '601 Patent"), entitled Ammunition Magazine, on December 6, 2011. Id. at ¶ 12. Then, on May 2, 2012, Big Rock allegedly infringed U.S. Patent 8, 166, 692 ("the 692 Patent"), entitled Self-Leveling Follower for Ammunition Magazine. Id. at ¶ 15. Big Rock uses a manufacturer in South Korea to create the accused products and then imports them into the United States. Id. at ¶ 8. It sells the products under the "Swamp Fox Combat Gear" name throughout the United States, including to residents of Colorado. Id.

According to Magpul, these actions amounted to intentionally tortious conduct expressly aimed at Magpul in Colorado and with knowledge that the main effect of the tortious actions would be felt by Magpul in Colorado. Id. at ¶ 9. Magpul seeks treble damages; an injunction; delivery of all infringing products for purposes of destruction, or in the alternative, royalties for the sale of those products; reasonable attorney's fees; and costs of suit. Id. at 4-5.

Big Rock contends that it is not subject to personal jurisdiction in the courts of Colorado, and that Colorado would be an improper forum to hear this case. However, Big Rock admits that it has shipped the accused products into Colorado. [Doc. #23-1 at ¶ 22]. To counterbalance this admission, Big Rock argues that because its shipments to Colorado have not been substantial- constituting approximately 0.065% of the total accused products it has sold, with a total of $531 in revenue-its contacts with the state are too minimal for the Court to exercise jurisdiction. In addition, it argues that defending an action in Colorado would constitute a substantial and unreasonable burden.

ANALYSIS

I. PERSONAL JURISDICTION

To establish personal jurisdiction over an out-of-state defendant, "a plaintiff must show that jurisdiction is legitimate under the laws of the forum state and that the exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment." Employers Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1159 (10th Cir. 2010). With respect to such issues as patent infringement, it is appropriate to look to the law of the Federal Circuit, "because the jurisdictional issue is intimately involved with the substance of the patent laws.'" Autogenomics, Inc. v. Oxford Gene Tech. Ltd, 566 F.3d 1012, 1016 (Fed. Cir. 2009).

Colorado's "long-arm" statute, C.R.S. § 13-1-124, has been interpreted to confer the maximum jurisdiction permitted by constitutional due process. Archangel Diamond Corp. v. Lukoil, 123 P.3d 1187, 1193 (Colo. 2005). Therefore, the Court need only determine whether ...


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