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Element Payment Services v. Protegrity

Element Payment Services v. Protegrity

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Published by PatentBlast
Element Payment Services v. Protegrity
Element Payment Services v. Protegrity

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Published by: PatentBlast on Apr 09, 2013
Copyright:Attribution Non-commercial


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12345678910111213141516171819202122232425262728Sid Leach (#019519)Brian J. Foster (#012143)R. Lee Fraley (#018355)David G. Barker (#024657)SNELL & WILMER
 One Arizona Center400 E. Van Buren, Suite 1900Phoenix, Arizona 85004-2202 Telephone: 602.382.6000sleach@swlaw.combfoster@swlaw.comlfraley@swlaw.comdbarker@swlaw.comAttorneys for Plaintiff Element Payment Services, Inc.IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF ARIZONAElement Payment Services, Inc., anArizona corporation,
.Protegrity Corporation, a Cayman Islandscompany,
.Civil Action No.
Plaintiff Element Payment Services, Inc., for its complaint against DefendantProtegrity Corporation, alleges as follows:
Element Payment Services, Inc. (“EPS”) is a corporation organized underthe laws of the State of Arizona with its principal place of business at 500 N. Juniper Dr.,Suite 100, Chandler, Arizona 85226.2.
Defendant Protegrity Corporation is a Cayman Islands corporation, with aprincipal address of P.O. Box 309, Ugland House, South Church Street, Grand Cayman,Cayman Islands.
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 This is a civil action is brought pursuant to the Declaratory Judgment Act,28 U.S.C. §§ 2201 & 2202, and arises under the patent laws of the United States, codifiedat 35 U.S.C. §§ 1
et seq
. This Court has subject matter jurisdiction over the claim fordeclaratory judgment pursuant to 28 U.S.C. §§ 1331 & 1338(a).4.
Protegrity Corporation is subject to personal jurisdiction in this judicialdistrict pursuant to Rule 4(k)(2) of the Federal Rules of Civil Procedure. ProtegrityCorporation is a Cayman Islands corporation, and is not subject to jurisdiction in anystates courts of general jurisdiction. Exercising jurisdiction over Protegrity Corporationin this case is consistent with the United States Constitution and laws.5.
Protegrity Corporation is also subject to personal jurisdiction pursuant to,and may alternatively be served in accordance with, Rule 4.2(a) and Rule 4.2(k) of theArizona Rules of Civil Procedure.6.
Protegrity Corporation is an alien, and venue is proper in this judicialdistrict pursuant to 28 U.S.C. § 1391(d).7.
On March 19, 2013, Protegrity Corporation filed a complaint in the UnitedStates District Court for the District of Connecticut alleging that EPS infringes U.S. PatentNo. 8,402,281 and U.S. Patent No. 6,321,201. Accordingly, an actual, concrete, and justiciable controversy exists between EPS and Protegrity Corporation concerning thevalidity and infringement of these two patents.8.
 The United States District Court for the District of Connecticut does nothave personal jurisdiction over EPS, and venue is improper in that district. Consequently,this declaratory judgment action is the first-filed action that has been filed in a court of competent jurisdiction. In the complaint that Protegrity Corporation filed in the District of Connecticut, venue is predicated solely upon 28 U.S.C. § 1391(c). Under that statute,venue is only proper if the defendant corporation was subject to personal jurisdiction atthe time the action is commenced. This would require,
inter alia
, that EPS had minimum
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12345678910111213141516171819202122232425262728contacts with the forum state from which the patent infringement claims arose,
., thatEPS committed acts of infringement in the State of Connecticut.9.
 The District Court in Connecticut does not have personal jurisdiction overEPS for the patent infringement claim based upon U.S. Patent No. 8,402,281. There aretwo reasons why the district court in Connecticut does not have personal jurisdiction withrespect to that claim. First, U.S. Patent No. 8,402,281 did not issue until March 19, 2013,the same day that Protegrity Corporation filed the civil action in Connecticut accusingEPS of infringing that patent. In order for the Connecticut court to have personal jurisdiction over EPS, the patent infringement claim must arise out of contacts that EPSallegedly has with the forum state. U.S. Patent No. 8,402,281 could not be infringed priorto March 19, 2013, because the patent did not issue until that date. But no acts of allegedinfringement occurred in Connecticut between the time that the patent issued, and the timethat the civil action was commenced (assuming Protegrity Corporation waited until thepatent issued that day before filing the lawsuit). Second, in order to infringe U.S. PatentNo. 8,402,281, the patent claims (a) require that specified steps of a method be performed,including the step of maintaining a database having certain characteristics, or else (b)require that the accused infringer use a computer system in Connecticut that, among otherthings, includes a database meeting certain limitations and a processor configured toperform certain functions. Any database allegedly maintained by EPS would have beenmaintained in Arizona, not Connecticut. Any computer system of EPS alleged to infringethe patent would have been located and used by EPS in Arizona, and not Connecticut. Thus, putting aside the fact that the patent infringement action was filed the same day thatthe patent issued, no acts of alleged infringement could have occurred in Connecticutbased upon the manner in which the patent claims are drafted and the acts required to haveoccurred in Connecticut upon which a claim of alleged infringement might arise.10.
Similarly, the District Court in Connecticut does not have personal jurisdiction over EPS for the patent infringement claim based upon U.S. Patent No.6,321,201. In order for the Connecticut court to have personal jurisdiction over EPS in

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