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The Federal Circuit affirmed the district court’s decision to dismiss the action for lack of personal jurisdiction.  The defendant is a South Korean company who manufactured separators used in lithium-ion batteries sold to OEM manufacturers outside of the U.S. who used the separators in batteries for electronic vehicles and for consumer electronic products.  The plaintiff argued that jurisdiction exists under two theories: (1) purposeful direction; and (2) stream of commerce.  With respect to the “purposeful direction” theory, the plaintiff contended that SKI had purposefully directed its activities towards North Carolina residents through a joint venture with Kia to batteries for the 2015 Kia Soul EV which was consummated with advertisements in North Carolina for the vehicle.  The court rejected the “purposeful direction” theory, because there was no evidence that SKI directed any activities to North Carolina and the acts of others who did advertise in the state could not be imputed to SKI as they were unilateral actions taken by third parties unrelated to SKI.  With respect to the stream of commerce theory, the plaintiff contended that SKI sold its separators to third parties whom it knew would sell those separators to consumer electronics companies who would distribute those products into North Carolina.  Although the court acknowledged that the law is unsettled here, it did state that due process is satisfied when the defendant is aware that the product is being marketed in the forum state.  Here, the plaintiff has not provided any evidence that SKI was aware that its accused separators were marketed in North Carolina and there was no actual evidence that any of SKI’s products were actually sold in North Carolina. 

Celgard, LLC v. SK Innovation Co., Ltd., Case No. 2014-1807 (July 6, 2015); Opinion by: Reyna, joined by Newman and Wallach; Appealed From: District Court for the Western District of North Carolina, Cogburn, J. Read the full opinion here.

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