Thursday, January 16, 2003

Nothing Personal

CEM is a North Carolina corporation with its principal place of business in that state. Personal Chemistry is a Swedish corporation with its principal place of business in Sweden. Personal Chemistry has never registered to do business in North Carolina and, apparently, does not actively conduct operations there.

In late 2000, CEM brought a lawsuit against Personal Chemistry in Sweden, alleging that Personal Chemistry had infringed a patent belonging to CEM. Settlement negotiations ensued, including a meeting in North Carolina attended by several employees of Personal Chemistry and their U.S. affiliate. As a result of that meeting, the two sides negotiated an "agreement-in-principle" to settle their dispute. However, Personal Chemistry's board of directors subsequently refused to approve the agreement.

CEM then filed suit in North Carolina alleging a breach of the agreement-in-principle, intentional and negligent misrepresentation, and unfair and deceptive trade practices. Personal Chemistry moved to dismiss the complaint due to lack of personal jurisdiction over that company and the motion was granted by the district court.

The Fourth Circuit, in an unpublished opinion, affirmed the district court's dismissal. Most significantly, the Court held that the single meeting of the Swedish company's officials in North Carolina did not constitute "purposeful acts directed. . .to the State of North Carolina sufficient to establish personal jurisdiction" over the company in that state.

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