JinkoSolar dealt blow in solar panel patent infringement dispute: U.S. district court clarifies standard for suing foreign companies

This is the court’s order:

In her decision, Judge Corley notes that to exercise personal jurisdiction over a nonresident defendant, a court must establish that the defendant had at least “minimum contacts” with the forum.

Personal jurisdiction can be either general or specific:

• General: exists when a defendant is ‘essentially at home’ in the State
• Specific: a defendant takes some act by which it purposefully avails itself of the privilege of conducting activities within the forum State

The court must consider the following three things:

1. whether the defendant purposefully directed its activities at residents of the forum state;
2. whether the claim arises out of or relates to the defendant’s activities with the forum state; and
3. whether assertion of personal jurisdiction is reasonable and fair.

The plaintiff bears the burden of establishing the first two elements. If those are met, the burden then shifts to the defendant to prove that personal jurisdiction is “unreasonable”.

In this case, JinkoSolar had to prove the agency theory, the stream of commerce theory, or whether limited jurisdiction discovery was warranted.

The decision defined agency theory as the following:

“The nature of the control exercised by the parent over the subsidiary necessary to put the subsidiary in an agency relationship with the parent must be over and above that to be expected as an incident of the parent’s ownership of the subsidiary and must reflect the parent’s purposeful disregard of the subsidiary’s independent corporate existence.”

But, the decision found, JinkoSolar did not make a prima facie showing that an agency relationship exists sufficient for the court to exercise specific personal jurisdiction over WWB.

The stream of commerce theory has yet to be properly articulated by the Supreme Court, so it is decided on a case-by-case basis, the decision noted. In WBB’s case, the company’s President stated:

“WWB sells solar panels under the Maxar brand, solely to the Japanese market. WWB does not sell its Maxar solar panels, or other products, to the U.S., does not advertise in the U.S., and does not solicit business from the U.S. market. WWB does not provide engineering, design, or research and development support for the VSUN Group, the TOYO Group or for the Accused Products. WWB does not provide technical support for manufacturing or otherwise for the Accused Products, the VSUN Group, or the TOYO Group. WWB does not sell its products to the VSUN Group or the TOYO Group.”

VSUN Group’s global Executive Vice President has also asserted that some of the accused products have not been sold in the U.S, and none are sold by WWB. Since February 2023, the Executive VP said, WWB has not purchased VSUN solar modules from VSUN or asked VSUN to provide it with solar modules to ship to the U.S.

JinkoSolar failed to disprove these statements and provided no evidence tying WWB to the accused products or any product sold in the U.S. beyond its speculation that because accused products were “engineered in Japan”, WWB engineered the products, Judge Corley wrote.

Limited jurisdictional discovery is usually granted “where pertinent facts bearing on the question of jurisdiction are controverted or where a more satisfactory showing of the facts is necessary”.

However, in this case, JinkoSolar did not meet this burden. So the court also denied jurisdictional discovery.

The patents-in-suit (entitled “Solar cell, manufacturing method thereof, and photovoltaic module”) include:

• U.S. Patent No. 11,581,454
• U.S. Patent No. 11,824,136

Counsel

JinkoSolar is represented by Louise Lu, Miguel Bombach, and Abigail Gardner at Perkins Coie.The defendants are represented by Sidley Austin LLP’s Irene Yang and Tung T. Nguyen.