WILMINGTON (LN) — U.S. District Judge Gregory M. Murphy on Monday denied a motion to dismiss by WT Microelectronics Co., Ltd. and its subsidiary NuVision Technology, Inc., in a patent infringement suit brought by Monolithic Power Systems, Inc., granting the plaintiff jurisdictional discovery to test a stream-of-commerce theory.
Monolithic, a designer of power management solutions, sued five defendants for infringing U.S. Patent No. 10,075,078. WT Microelectronics and NuVision, both organized in Taiwan, moved to dismiss, arguing they lacked sufficient contacts with Delaware to be subject to the court’s personal jurisdiction and that the complaint failed to state a claim.
Murphy found that while the defendants’ connection to Delaware was tenuous, Monolithic’s allegations were sufficient to warrant discovery. The judge noted that under Delaware’s dual-jurisdiction approach to the stream-of-commerce theory, the pleadings “do just enough” to allow the case to proceed to fact-finding.
The court expressed skepticism regarding affidavits submitted by WT Microelectronics denying any business activity in Delaware. Murphy wrote that the affidavits contained “preposterously broad denials,” including claims that the defendants’ products are never used or consumed in Delaware.
“That claim strikes us as facially speculative and hyperbolic,” Murphy wrote. He noted that at a hearing, WT Microelectronics conceded it has no ability to track where its products are used and therefore cannot affirmatively say they are never used in Delaware.
Monolithic alleged that WT Microelectronics participates in a “design-in” process with U.S.-based end-users, such as HPE Aruba, and coordinates with contract manufacturers in Asia. The complaint claimed these interactions lead to the “reasonably foreseeable result” that infringing products are incorporated into end products sold in the U.S., including Delaware.
Murphy rejected WT Microelectronics’ argument that the stream-of-commerce theory was inapplicable, citing precedent that the “touchstone” of the analysis is an “intent and purpose to serve the Delaware market.”
On the merits, Murphy found Monolithic sufficiently pled direct, induced, and contributory infringement. The judge noted that the complaint alleged WT Microelectronics sells the accused products and provides technical materials that encourage customers to implement them in an infringing manner.
Murphy also denied the motion to dismiss the willful infringement claim, ruling that knowledge of the patent is sufficient to survive a motion to dismiss, even without allegations of pre-suit knowledge.
WT Microelectronics is a channel partner for Reed Semiconductor, one of the non-moving defendants in the case. Monolithic alleges that WT Microelectronics leverages its relationship with Reed to benefit from Reed’s activities in the United States and Delaware.