Evonik Energy Services GmbH v. Ebinger (Lawyers Weekly No. 11-07-0553, 14 pp.) (Linda Stephens, J.) Appealed from Mecklenburg County Superior Court. (W. Robert Bell, J.) N.C. App. Click here for the full-text opinion.
Holding: The European defendants’ contacts with North Carolina are sporadic and do not form the basis for plaintiff’s claims against them. Moreover, litigation here would be inconvenient for defendants, and N.C. courts have limited interest in making declaratory judgments as to German contract law as it relates to European and U.S. patent laws.
We reverse the trial court’s denial of defendants’ motion to dismiss for lack of personal jurisdiction.
In support of its contention that N.C. courts have personal jurisdiction over defendants, plaintiff offered evidence of defendant Frank Ebinger’s participation as a third-party witness in litigation involving the Charlotte company, SCR Tech; Frank Ebinger’s 2008 meeting in North Carolina with the president of SCR Tech, from which no “business transaction” resulted; two letters to a co-inventor, asserting ownership of U.S. patent applications; and
defendants’ contractual obligations under a 2005 settlement agreement following the sale of SCR Tech. We find this evidence, and the presumed findings logically supported by this evidence, insufficient to support the trial court’s conclusion that North Carolina’s exercise of personal jurisdiction over defendants satisfies due process.
The five contacts alleged by plaintiff are sporadic rather than continuous, and none of the contacts shows defendants purposefully availing themselves of the privilege of conducting activities within the forum state or invoking the benefits and protections of its laws.
Participation in an unrelated litigation in the forum state is insufficient to support a finding that a defendant’s contacts properly subject that defendant to personal jurisdiction in our courts.
While defendant ENVICA Kat GmbH’s signature on a settlement agreement involving N.C. parties may subject ENVICA Kat to a “continuing obligation” to N.C. residents, a single contract between a nonparty state resident and nonresident defendant does not automatically confer jurisdiction where that contract does not have a substantial connection with the state.
Moreover, the “continuing obligation” referred to by plaintiff is the contract provision stating that ENVICA Kat will not use certain licensed intellectual property in “NAFTA Territories.” Such an obligation to refrain from operating in North America can hardly be seen as a contractual obligation with a “substantial connection” to North Carolina.
The quantity and quality of defendants’ contacts with North Carolina do not support a finding that the due process requirement of minimum contacts has been satisfied.
Furthermore, defendants’ contacts are not the source of plaintiff’s cause of action. While Frank Ebinger’s participation in the SCR Tech litigation and the letters to the co-inventor may have prompted plaintiff to initiate this litigation, these actions are not the source of the cause of action and did not give rise to the litigation.
Plaintiff is seeking a declaration that it is the owner of certain U.S. patent applications. There have been no direct challenges to plaintiff’s ownership based on the assignment of the U.S. applications. The only challenge to plaintiff’s ownership is the “cloud” placed on that ownership by a series of hypothetical circumstances rooted initially in Frank Ebinger’s and defendant Ebinger Katalysatorservice GmbH’s assertion that the co-inventor’s application for the European patent was a violation of an employment agreement between the co-inventor and Katalysatorservice GmbH/ENVICA Kat GmbH.
As such, the sources of plaintiff’s declaratory judgment claim are the employment contracts, which were signed by the parties in Germany and are governed by German law.
Accordingly, we conclude that defendants’ contacts are only tangentially connected to the cause of action and are certainly not the source of plaintiff’s declaratory judgment claim.
While our courts may have an interest in providing a forum for plaintiff to address its grievances, we clearly have no interest in pronouncing on the effects of a breach of contract under German law on matters of European and U.S. patent law. Our courts have little interest in resolving this matter.
Finally, it would be inconvenient for defendants to defend this matter in North Carolina based on their location in Germany.