## Facts

- Beverly Hills Fan Company, a Delaware corporation with its principal place of business in California, owned U.S. Design Patent No. 304,229 covering a ceiling-fan design.
- Royal Sovereign Corp., a New Jersey corporation, imported and distributed the accused ceiling fans in the United States.
- Ultec Enterprises Co., Ltd., a foreign corporation, manufactured the accused fans abroad.
- Beverly sued Royal and Ultec in the Eastern District of Virginia for patent infringement and inducing infringement, alleging sales to U.S. customers including customers in Virginia, including sales through intermediaries.
- Defendants moved to dismiss under Rule 12(b)(2) for lack of personal jurisdiction, asserting no physical presence or direct shipments into Virginia and no offices, employees, property, or advertising in Virginia.
- Beverly submitted purchase orders, shipping documents, and invoices indicating that accused fans were shipped into Virginia for retail sale through an established distribution channel.
- Evidence showed at least one accused fan was present and purchased in Virginia.

## Issues

1. Whether Virginia’s long-arm statute permitted exercising personal jurisdiction over an out-of-state distributor and foreign manufacturer whose accused products entered Virginia through intermediaries and were sold there.
2. Whether asserting specific personal jurisdiction satisfied due process where defendants placed the accused products into an established distribution channel that resulted in sales in Virginia.

## Decision

- The Federal Circuit reversed the district court’s dismissal for lack of personal jurisdiction and remanded.
- The court held Beverly made a prima facie showing of specific personal jurisdiction over both Royal and Ultec in Virginia.
- The court concluded defendants purposefully placed the accused fans into the stream of commerce through an established distribution channel with the expectation that the fans would be sold in Virginia, and sales in Virginia occurred.
- The court found exercising jurisdiction consistent with fair play and substantial justice despite defendants’ lack of physical presence in Virginia.

## Legal Principles

- In a patent case, personal jurisdiction requires authorization under the forum’s long-arm statute and compliance with federal due process; where the long-arm statute extends to due process limits, the analysis centers on minimum contacts and reasonableness.
- Specific personal jurisdiction may be based on a defendant’s use of an established distribution channel that predictably delivers the accused product into the forum and results in actual sales there; physical entry into the forum is not required.
- When a product is sold through a regular distribution system, the defendant may be charged with knowledge that the product will be sold in the forum state, supporting purposeful availment.
- Once minimum contacts are shown, jurisdiction is proper unless the defendant demonstrates litigation in the forum would be so gravely difficult and inconvenient as to be constitutionally unreasonable, considering burdens on defendants, the forum’s interest, the plaintiff’s interest in effective relief, and efficiency.

## Conclusion

The Federal Circuit held that Virginia could exercise specific personal jurisdiction over an out-of-state distributor and foreign manufacturer in a patent infringement action where the accused products entered Virginia through an established distribution network and were actually sold there, making dismissal for lack of personal jurisdiction improper.


Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994)