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

United States Court of Appeals
for the Federal Circuit
______________________
NEW WORLD INTERNATIONAL, INC., NATIONAL
AUTO PARTS, INC.,
Plaintiffs-Appellants
v.
FORD GLOBAL TECHNOLOGIES, LLC,
Defendant-Appellee
______________________
2016-2097
______________________
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.
______________________
Decided: June 8, 2017
______________________
ROBERT G. OAKE, JR., Oake Law Office, Allen, TX, ar-
gued for plaintiffs-appellants.
SEAN MAROTTA, Hogan Lovells US 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.
______________________
2 NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC
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 de-
claratory judgment complaint for lack of personal jurisdic-
tion 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 headquar-
tered 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 automo-
tive 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 head-
quartered in Illinois. The license agreement between
FGTL and LKQ designates LKQ as the exclusive licensee
for the importation and sale of non-original equipment
NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC 3
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 market-
ing of the royalty products.
The license agreement details the relationship be-
tween FGTL and LKQ regarding infringement claims
against third parties. If LKQ learns of potentially infring-
1 The parties disputed below whether the license
was exclusive, as the license expressly states that it does
not “prohibit FGTL and Ford Associated Companies from
making, having made, importing, exporting, selling,
offering for sale[,] distributing or licensing any products.”
On appeal, FGTL maintains that “Ford and its affiliates
can compete—and do compete—with LKQ in the U.S.
market for repair and aftermarket products.” FGTL Br.
at 19. We do not resolve that dispute but conclude that
personal jurisdiction is lacking even assuming, as the
district court did, that the license is exclusive.
4 NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC
ing conduct by a third party, LKQ must notify FGTL in
writing. The agreement then provides:
FGTL will have the right to determine what ac-
tion, 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 nec-
essary, and to cooperate with FGTL, in the prose-
cution 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
NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC 5
assist” with New World’s “disposal” of the accused prod-
ucts, 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 the most
prudent disposal method.”
Litigation counsel for FGTL sent New World another
cease and desist letter on November 13, 2013.
On January 29, 2015, FGTL sued New World and its
Internet retailer, Auto Lighthouse Plus, LLC, in the
United States District Court for the Eastern District of
Michigan, charging them with willful infringement of nine
patents, including the ’299 and ’685 design patents. Ford
Global Techs., LLC v. New World Int’l, Inc., No. 2:15-cv-
10394 (E.D. Mich.). FGTL later filed an amended com-
plaint that dropped the claims under the ’299 and ’685
design patents.
C
On April 14, 2015, New World filed the present suit in
the Northern District of Texas seeking a declaratory
judgment of noninfringement and invalidity with regard
to the ’299 and ’685 design patents. FGTL moved to
dismiss the complaint for lack of personal jurisdiction.
Relevant to this appeal, New World asserted that the
district court had specific personal jurisdiction over
FGTL.
6 NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC
As to that theory, the district court noted that, under
controlling Federal Circuit law, FGTL’s cease and desist
letters sent to New World in Texas were not sufficient to
establish jurisdiction over FGTL. The court then assessed
FGTL’s license agreement with LKQ. The court deter-
mined that the license did “not impose continuing obliga-
tions on FGTL to enforce or defend the patents in Texas
nor give LKQ an independent right to enforce those
patents, and it does not give FGTL control over LKQ’s
business operations.” Therefore, the court concluded, the
license agreement did not provide the court with specific
personal jurisdiction over FGTL in the declaratory judg-
ment suit, and the court accordingly dismissed the com-
plaint.
After the dismissal, New World filed a motion for re-
consideration and a motion for leave to file an amended
complaint to add further allegations in support of specific
jurisdiction. Regarding the motion for reconsideration,
the court acknowledged a factual error in its previous
dismissal order but concluded that, even with the error
corrected, the court still lacked specific personal jurisdic-
tion over FGTL. The court denied New World’s motion for
leave to file an amended complaint as untimely.
II
A
“Personal jurisdiction is a question of law that we re-
view de novo.” Autogenomics, Inc. v. Oxford Gene Tech.
Ltd., 566 F.3d 1012, 1016 (Fed. Cir. 2009). We review the
pleadings and other submitted evidence in the light most
favorable to New World. Id. at 1017. Because the com-
plaint involves issues of patent infringement and validity,
we apply Federal Circuit law to the jurisdictional issue.
Id. at 1016.
A court has personal jurisdiction over a nonresident
defendant if the forum state’s long-arm statute permits
NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC 7
service of process and the assertion of personal jurisdic-
tion comports with due process. Xilinx, Inc. v. Papst
Licensing GmbH & Co. KG, 848 F.3d 1346, 1352 (Fed. Cir.
2017). “Because Texas’s long-arm statute extends to the
limits of federal constitutional due process, only [the
latter] inquiry is required.” Companion Prop. & Cas. Ins.
Co. v. Palermo, 723 F.3d 557, 559 (5th Cir. 2013).
For personal jurisdiction, the nonresident defendant
must have “certain minimum contacts with [the forum]
such that the maintenance of the suit does not offend
‘traditional notions of fair play and substantial justice.’”
Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).
For minimum contacts in the context of specific jurisdic-
tion, the plaintiff must show that the defendant “has
purposefully directed his activities at residents of the
forum, and [that] the litigation results from alleged
injuries that arise out of or relate to those activities.”
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985);
see also id. at 475 & n.18. If those minimum contacts are
sufficient, the defendant may point to other factors “to
determine whether the assertion of personal jurisdiction
would comport with ‘fair play and substantial justice.’”
Id. at 476. This court has articulated those requirements
in the form of a three-part test: “(1) whether the defend-
ant ‘purposefully directed’ its activities at residents of the
forum; (2) whether the claim ‘arises out of or relates to’
the defendant’s activities with the forum; and (3) whether
assertion of personal jurisdiction is ‘reasonable and fair.’”
Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1360 (Fed. Cir.
2001).
Under the first two parts of the test, as applied in the
patent context, the question is what minimum contacts
are necessary to establish personal jurisdiction over a
nonresident defendant for a declaratory judgment of
noninfringement or invalidity of a patent. This court has
acknowledged that the defendant purposefully directs his
activities at residents of the forum when the defendant
8 NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC
sends a cease and desist letter to a potential plaintiff in
that particular forum. And a subsequent declaratory
judgment action by that potential plaintiff “arises out of
or relates to” the defendant’s activity—namely, the cease
and desist letter. Under the third part of the test, howev-
er, this court has held that it is improper to predicate
personal jurisdiction on the act of sending ordinary cease
and desist letters into a forum, without more. Red Wing
Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355,
1360-61 (Fed. Cir. 1998) (concluding that “[p]rinciples of
fair play and substantial justice afford a patentee suffi-
cient latitude to inform others of its patent rights without
subjecting itself to jurisdiction in a foreign forum”); see
also, e.g., Radio Sys. Corp. v. Accession, Inc., 638 F.3d
785, 789 (Fed. Cir. 2011); Breckenridge Pharm., Inc. v.
Metabolite Labs., Inc., 444 F.3d 1356, 1363 (Fed. Cir.
2006); Genetic Implant Sys., Inc. v. Core-Vent Corp., 123
F.3d 1455, 1458 (Fed. Cir. 1997).
While the act of sending cease and desist letters is in-
sufficient by itself to trigger a finding of personal jurisdic-
tion, other activities by the defendant, in conjunction with
cease and desist letters, may be sufficient. One such
activity that this court has recognized may meet the
minimum contacts requirement is the grant of an exclu-
sive license to a licensee that resides or regularly does
business in the forum. Avocent Huntsville Corp. v. Aten
Int’l Co., 552 F.3d 1324, 1334 (Fed. Cir. 2008); see also,
e.g., Breckenridge, 444 F.3d at 1366.
To be sure, the mere existence of an exclusive license
does not support a finding of specific jurisdiction. For
example, a license that establishes no relationship be-
tween a patent holder and a licensee beyond the payment
and receipt of royalty income is not sufficient, because a
declaratory judgment action does not typically “arise from
or relate to” a patent holder’s efforts to license or commer-
cialize its patent. Avocent, 552 F.3d at 1336; see also
Radio Sys. Corp., 638 F.3d at 789-90.
NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC 9
On the other hand, a license that obligates the patent
holder to defend or enforce the patent may be sufficient to
establish specific personal jurisdiction, because a declara-
tory judgment action typically arises from the patent
holder’s actions to enforce or defend its patent in the
forum. Avocent, 552 F.3d at 1336; see also Autogenomics,
566 F.3d at 1020 (“[O]nly enforcement or defense efforts
related to the patent rather than the patentee’s own
commercialization efforts are to be considered for estab-
lishing specific personal jurisdiction in a declaratory
judgment action against the patentee.”).
Several earlier decisions of this court speak to what is
necessary to establish specific jurisdiction over a nonresi-
dent patent holder that has sent a cease and desist letter
into the forum and entered into an exclusive license
agreement with a licensee that does business in the
forum. In Akro Corp. v. Luker, 45 F.3d 1541 (Fed. Cir.
1995), the nonresident patent holder (1) granted a resi-
dent licensee, an Ohio corporation, the right to sue alleged
infringers on the patent holder’s behalf and (2) agreed to
“defend and pursue any infringement against [the] pa-
tent.” Id. at 1543. The patent holder therefore incurred
continuing obligations in the forum related to the en-
forcement or defense of the licensed patent: The resident
licensee was free to sue third parties for infringement,
which the patent holder was then obligated to “defend and
pursue”; the patent holder assumed a complementary
obligation to affirmatively pursue potential infringers of
the patent; and the patent holder was obligated to defend
any action challenging the patent. Even though the
patent holder had “never been in Ohio and no one is or
has ever been his agent or personal representative in
Ohio,” id. at 1542, the patent holder’s continuing obliga-
tion to pursue any infringement clearly contemplated
enforcement against any infringers in Ohio, where the
licensee was based and competed with others.
10 NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC
Subsequently, in Genetic Implant Systems, Inc. v.
Core-Vent Corp., 123 F.3d 1455 (Fed. Cir. 1997), the court
held that a nonresident patent holder was subject to
personal jurisdiction based both on direct marketing and
sales activities in the forum before the nonresident’s
patent issued, and on the nonresident’s execution, after
the patent issued, of an exclusive agreement with a
distributor whose activities were directed at the forum
state. Id. at 1458 (nonresident patent holder “engaged in
substantial activities” in Washington through its “pro-
gram to develop a market in Washington, including
founding teaching centers in Seattle . . . , developing
Washington customer lists through the teaching centers,
and advertising in publications distributed to potential
Washington customers”; it then entered a worldwide
exclusive distributorship agreement with a distributor
that maintained sales representatives in Washington and
continued to make “substantial sales” of the patent hold-
er’s product there). The court detailed the particulars of
the distributorship agreement—e.g., granting the distrib-
utor the exclusive right to distribute the patented prod-
ucts, the authority to use the patent holder’s trademark,
and indemnification for liability arising from third-party
infringement actions—and determined that the distribu-
torship agreement was effectively an exclusive license.
Id. at 1458-59. The court held that the patent holder’s
execution of such an exclusive arrangement, in conjunc-
tion with the cease and desist letters and the patent
holder’s previous activities in the forum, satisfied the
requirements of due process as applied to the issue of
personal jurisdiction. Id. at 1459.
A decade later, in Breckenridge Pharmaceutical, Inc.
v. Metabolite Laboratories, Inc., 444 F.3d 1356 (Fed. Cir.
2006), the court clarified that the question of specific
jurisdiction over a nonresident patent holder in a case
involving an exclusive license “requires close examination
of the license agreement.” Id. at 1366. Under the exclu-
NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC 11
sive license agreement in Breckenridge, the patent holder
gave the licensee significant rights regarding the en-
forcement and defense of the patents. Specifically, the
patent holder “granted [the licensee] the right to sue for
patent infringement with [the patent holder’s] written
consent, and the parties agreed to ‘discuss in good faith
the appropriate action, if any, with respect to third-party
infringers . . . and to cooperate reasonably in any en-
forcement actions.’” Id. at 1366-67. Despite retaining
some discretion regarding enforcement, the patent holder
assumed a continuing obligation to at least discuss any
enforcement action with its licensee in good faith—
including upon the licensee’s request for written permis-
sion to bring a suit on behalf of the patent holder—and
then to cooperate in any subsequent action.
Those were not empty obligations; as the court ex-
plained, the “exclusive license agreement not only con-
templated an ongoing relationship . . . beyond royalty
payments but has actually resulted in such a relationship”
to enforce the patent. Id. at 1367. As seen in practice,
both parties coordinated “in sending cease and desist
letters and in litigating infringement claims in Florida
[the forum] and elsewhere,” and both “are often repre-
sented jointly by counsel.” Id.
What matters, then, is whether the agreement be-
tween the patent holder and the exclusive licensee impos-
es an obligation on the patent holder to enforce or defend
the patent on behalf of the licensee that is engaged in
exploiting the patent rights in the forum state. That
question is important because a patent holder’s undertak-
ing of such continuing enforcement obligations to a party
that does business in the forum may qualify as purposeful
availment by the defendant of the privilege of conducting
activities within the forum state. See Burger King, 471
U.S. at 479-80; Perdue Foods LLC v. BRF S.A., 814 F.3d
185, 191 (4th Cir. 2016) (“[I]mplicit in the Supreme
Court’s distinction between a contract—which cannot, by
12 NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC
itself, establish purposeful availment—and a contract
with continuing obligations—which ‘manifestly’ consti-
tutes purposeful availment—is the assumption that the
continuing obligations strengthen a defendant’s contacts
with the plaintiff’s forum.”) (quoting Burger King, 471
U.S. at 476).
This court made that point clear in Avocent Huntsville
Corp. v. Aten International Co., 552 F.3d 1324 (Fed. Cir.
2008). The court explained that in a declaratory judg-
ment action against a nonresident patent holder, “we
have consistently required the defendant to have engaged
in ‘other activities’ that relate to the enforcement or the
defense of the validity of the relevant patents.” Id. at
1334. One example of such an “other activity” is “entering
into an exclusive license agreement or other undertaking
which imposes enforcement obligations with a party
residing or regularly doing business in the forum.” Id.
Exclusive license agreements and other undertakings that
impose enforcement obligations on a patentee or its
licensee “reflect the kind of ‘other activities’ that support
specific personal jurisdiction in a declaratory judgment
action.” Id. at 1335. Summarizing this court’s prece-
dents, the Avocent court noted that “if the defendant
patentee purposefully directs activities at the forum
which relate in some material way to the enforcement or
the defense of the patent, those activities may suffice to
support specific jurisdiction.” Id. at 1336. In particular,
the court concluded (id.):
[W]hen the patentee enters into an exclusive li-
cense or other obligation relating to the exploita-
tion of the patent by such licensee or contracting
party in the forum, the patentee’s contractual un-
dertaking may impose certain obligations to en-
force the patent against infringers. By such
conduct, the patentee may be said to purposefully
avail itself of the forum and to engage in activity
NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC 13
that relates to the validity and enforceability of
the patent.
B
New World argues that under the precedents dis-
cussed above, FGTL’s license with LKQ creates the basis
for a finding of specific personal jurisdiction because it
imposes continuing obligations on FGTL by virtue of its
character as an exclusive license—i.e., by preventing
FGTL from granting a license to New World. New World
also points to the indemnification and enforcement provi-
sions as independently sufficient bases for specific juris-
diction. Those arguments are not persuasive.
1. We have already rejected the idea that the mere
existence of an exclusive license, regardless of its content,
establishes specific jurisdiction over the licensor. Instead,
“the inquiry requires close examination of the [exclusive]
license agreement,” because “our case law requires that
the license agreement contemplate a relationship beyond
royalty or cross-licensing payment, such as granting both
parties the right to litigate infringement cases.” Brecken-
ridge, 444 F.3d at 1366.
2. Contrary to New World’s contention, we have not
held that an indemnity provision is a sufficient basis for
specific jurisdiction. New World points to Genetic Im-
plant, where the court noted that the exclusive distribu-
torship agreement contained a provision that required the
patent holder to indemnify the distributor “for liability
arising from any third-party infringement action related
to [the distributor’s] sale, use, or making of the [patented]
products.” 123 F.3d at 1459. That language appears in
the court’s discussion of why the exclusive distributorship
agreement is, in effect, an exclusive license. The discus-
sion begins with the statement that “[t]he appointment of
a distributor to sell a product covered by a patent is
analogous to a grant of a patent license” because “[s]uch
an action conveys an implied license to the distributor,
14 NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC
thereby surrendering the [patent holder’s] right to exclude
the distributor under the patent.” Id. at 1458. The court
supported its conclusion by noting that “[t]he agreement
contained other provisions similar to those typically found
in a patent license agreement,” including the indemnity
clause. Id. at 1459. But nothing in the opinion indicates
that it was the indemnity clause that established jurisdic-
tion over the nonresident patent holder. Instead, the
court expressly stated that it was the nonresident’s direct
“program to develop a market in Washington” before the
patent issued, plus the execution of what was in effect an
exclusive license agreement, that satisfied the due process
component of specific personal jurisdiction. Id. at 1458.
New World has not alleged any comparable activity by
FGTL in Texas. 2
Nor would it make sense to hold that an indemnity
provision like the one in the FGTL-LKQ license agree-
ment independently satisfies due process. That provision
requires FGTL to indemnify LKQ for design patent suits
2 New World notes that the court in Breckenridge
referred to the indemnity agreement in Genetic Implant
when discussing that case. See Breckenridge, 444 F.3d at
1365 (citing Genetic Implant, 123 F.3d at 1459). The
Breckenridge court made clear, however, that it did not
regard the decision in Genetic Implant as turning on the
indemnity clause, as the court also referred to the fact
that the patentee in that case authorized the distributor
to use its trademarks and the fact that the defendant had
conducted business in the forum state prior to entering
into the exclusive distributorship agreement, “and had
developed a valuable customer base and generated good-
will through advertising and educational initiatives that
potentially enhanced the future sales of its exclusive
distributor.” Breckenridge, 444 F.3d at 1365 (citing
Genetic Implant, 123 F.3d at 1458).
NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC 15
initiated by third parties—e.g., a suit alleging infringe-
ment of a third party’s patent by LKQ’s products. But
insuring LKQ against those third-party claims of in-
fringement does not arise out of or relate to the “enforce-
ment or the defense of the [Ford design] patent[s],” as
required for specific jurisdiction in a declaratory judgment
action. Avocent, 552 F.3d at 1336; see also id. (patent
holder’s efforts to license or commercialize its patent does
not “relate in any material way to the patent right that is
at the center of any declaratory judgment claim for non-
infringement, invalidity, and/or unenforceability”). Thus,
while other indemnity clauses could involve the enforce-
ment or defense of the licensor’s patents, the clause at
issue in this case does not.
3. New World also has not demonstrated that FGTL
has assumed a meaningful obligation to enforce or defend
the Ford design patents under the license provisions
regarding infringement suits brought against third par-
ties. FGTL retains “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] Agreement.” There is no
question that FGTL retains control over how to handle
enforcement of the patent against infringing third parties.
New World’s argument turns on whether FGTL has ceded
control over whether to initiate enforcement actions,
given its obligation to “not unreasonably refuse a request
by LKQ to enforce the Ford Design Patents.”
We must therefore determine the nature and scope of
that obligation. New World points to the “reasonable-
ness” language in the license in Breckenridge, in which
the parties agreed to “discuss in good faith the appropri-
ate action, if any, with respect to third party infringers of
the Licensed Patents, and to cooperate reasonably in any
enforcement actions.” 444 F.3d at 1366-67. But the court
in Breckenridge did not base its decision merely on the
16 NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC
text of the agreement in that case; rather, the court
determined that the patent holder recognized that provi-
sion as a binding obligation in practice. Id. at 1367 (The
“exclusive license agreement not only contemplated an
ongoing relationship . . . beyond royalty payments but has
actually resulted in such a relationship” to enforce the
patent.). The court pointed out that the parties coordi-
nated “in sending cease and desist letters and in litigating
infringement claims in Florida [the forum] and else-
where,” and that both “are often represented jointly by
counsel.” Id.
New World has not alleged anything close to the facts
in Breckenbridge in its effort to show that FGTL’s obliga-
tion operates similarly. FGTL sent the cease and desist
letters on its own behalf or through its own litigation
counsel. While FGTL copied LKQ on two of the cease and
desist letters—those of May 21 and June 11, 2013—those
were letters that advised New World that it could dispose
of its allegedly infringing products by turning those
products over to LKQ. LKQ’s role was that of another
recipient of the letters, not a co-sender requesting that
New World cease and desist infringing the Ford design
patents. LKQ’s follow-up letter to New World makes that
clear, as the only topic of that letter was the potential
disposal of New World’s infringing products. In addition,
the related infringement litigation brought by FGTL in
Michigan concerning New World’s activities in Texas
involves only FGTL, not LKQ.
That is not to say that a plaintiff must always provide
evidence of how an obligation operates in practice. But
according to FGTL, the text imposes only a minimal
obligation, as FGTL has “the ability to decline enforce-
ment on any commercially reasonable basis,” which
includes “any reasonable business, practical, or legal
reason,” such as “a desire not to subject itself to jurisdic-
tion in a particular forum.” FGTL Br. at 22-23 & n.4.
NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC 17
New World has not provided a persuasive reason to
interpret the provision differently. Its only argument,
made in a footnote, is that “reasonableness” is an enforce-
able standard under Michigan law, which governs the
interpretation of the license agreement. But New World
does not explain how the interpretation of the agreement
under Michigan law would conflict with FGTL’s interpre-
tation.
The only pertinent Michigan case cited by New World
is Lichnovsky v. Ziebart International Corp., 324 N.W.2d
732 (Mich. 1982), in which the court construed a contract
as not permitting termination at will and addressed, as
further support, a clause that barred the licensee from
assigning or transferring the agreement without the
written consent of the licensor, who could not “unreasona-
bly refuse to consent to the sale or transfer of the license
agreement by the licensee.” Id. at 737-38. That case
supports the proposition that a prohibition on “unreason-
able” conduct bars rejections that are wholly arbitrary or
lack any justification whatsoever. That proposition,
however, is not inconsistent with FGTL’s argument that
the “shall not unreasonably refuse” clause in the license
agreement imposes only the most minimal restriction on
FGTL’s freedom of action with respect to its patent en-
forcement decisions, allowing it to pursue any course of
action that it regards as being to its commercial ad-
vantage.
FGTL’s reading is also supported by the language in
the license agreement regarding enforcement against
third parties. The license states that FGTL has “the right
to determine what action, if any, is to be taken in each
such instance.” FGTL therefore is free to decide how to
enforce the patent, or whether to enforce it at all. If LKQ
requests enforcement and FGTL has no reason to refuse,
then “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
18 NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC
infringement respecting FGTL’s rights in the Ford Design
Patents.” Therefore, in the event that FGTL grants
LKQ’s request to enforce FGTL’s patent rights, FGTL still
has control over the action and can require LKQ to coop-
erate. And because the license is silent about the situa-
tion in which LKQ does not request enforcement, it is
clear that FGTL retains total discretion whether to pur-
sue enforcement in that setting. 3
In sum, under the license agreement, FGTL retains
nearly complete control over the patent enforcement
decision. New World has not shown that the obligations
contemplated in the license have resulted in an undertak-
ing by FGTL to enforce or defend the patents with LKQ.
Therefore, although the license to the licensee doing
business in the forum is exclusive, the license does not
impose a sufficient obligation on the patent holder regard-
ing the enforcement of the patent rights to subject the
patent holder to specific jurisdiction there. Nor has New
World pointed to any additional activities in the forum
beyond the license that would give rise to specific jurisdic-
tion. See Burger King, 471 U.S. at 480 (finding specific
jurisdiction in Florida because “the ‘quality and nature’ of
[the defendant’s] relationship to the company in Florida
can in no sense be viewed as ‘random,’ ‘fortuitous,’ or
‘attenuated’”). Accordingly, FGTL’s pertinent contacts
3 New World points to two other provisions of the
license as “evidenc[e] [of] continuing obligations between
FGTL and LKQ regarding patent enforcement.” New
World is incorrect as to both. The first requires FGTL to
notify LKQ of relevant pending and issued Ford design
patents. That provision is directed to LKQ’s awareness of
what patented products it may produce, not to the en-
forcement or defense of the patents. The second deals
with the source of LKQ’s products and imposes an obliga-
tion on LKQ, not FGTL.
NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC 19
with Texas are limited to the cease and desist letters.
While those letters may be sufficient to constitute mini-
mum contacts with the forum, they are not sufficient to
satisfy the fairness part of the test for specific personal
jurisdiction. See Xilinx, 848 F.3d at 1357.
III
New World argues that the district court’s denial of
its motion to amend the complaint to add new allegations
in support of personal jurisdiction was an abuse of discre-
tion under Rule 15(a), Fed. R. Civ. P. In response, FGTL
argues that the court’s earlier dismissal of the case was
effectively an entry of judgment, see Whitaker v. City of
Hous., 963 F.2d 831, 833 (5th Cir. 1992) (order dismissing
all claims is a final judgment in the absence of an objec-
tion, even if the order does not expressly state as much
and the court does not enter judgment on a separate
document), and that the district court’s discretion to allow
the amended complaint was therefore restricted, see
Vielma v. Eureka Co., 218 F.3d 458, 468 (5th Cir. 2000)
(although court has “virtually unlimited discretion to
allow amendments before the entry of judgment, that
discretion narrows considerably after entry of judgment”).
Without addressing whether the district court’s
dismissal order constituted the entry of a final judgment,
we conclude that the court did not abuse its discretion by
denying the motion as untimely. New World’s explana-
tion for seeking leave to amend was not the discovery of
new evidence or anything similar. Rather, it believed its
initial complaint was sufficient to establish jurisdiction,
but that following the dismissal it wanted an opportunity
to buttress its jurisdictional presentation.
That rationale does not provide a basis for concluding
that the district court abused its discretion. The amend-
ment was untimely, and New World offered no good
reason for its untimeliness. See Vielma, 218 F.3d at 468
(“[W]e have consistently upheld the denial of leave to
20 NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC
amend where the party seeking to amend has not clearly
established that [it] could not reasonably have raised the
new matter prior to the trial court’s merits ruling.”).
New World relies exclusively on Dussouy v. Gulf Coast
Investment Corp., 660 F.2d 594 (5th Cir. 1981), in which
the Fifth Circuit held that a trial court abused its discre-
tion by denying leave to amend, which was requested
after dismissal of the case. But the court’s rationale in
that case is not applicable here. In Dussouy, discovery
revealed that the plaintiff’s theory of the case—conspiracy
between an insurance company and an investment com-
pany to restrain trade—was incorrect because the insur-
ance company was not involved. Id. at 596-97. Upon
learning that the insurance company was not involved,
the plaintiff dismissed the insurance company and moved
to amend the complaint to add different co-conspirators, a
motion that the district court denied. Id. at 597. Thus, in
Dussouy there was good reason for the belated motion to
amend, in light of evidence that was revealed during
discovery. Here, New World has not alleged the discovery
of any new evidence that requires leave to amend.
After a case has been dismissed, a district court’s de-
nial of a motion to amend is not an abuse of discretion
where the motion is based on the plaintiff’s assertion that
it thought it had done enough previously to avoid dismis-
sal. As the district court astutely observed: “The only
explanation [New World] offer[s] [in support of its motion
for leave to amend] is that [it] thought [it] had adequately
demonstrated jurisdiction. If this were sufficient, matters
would never be final.” 4
4 New World also complains that the district court
should have granted its motion for reconsideration of the
dismissal order. The district court, however, explained in
its corrected opinion that the material in the motion
NEW WORLD INT’L, INC. v. FORD GLOBAL TECHS., LLC 21
AFFIRMED
would not have affected the dismissal. We find no error in
that ruling and therefore uphold the district court’s denial
of the motion.