source: Caselaw Access Project

author: PROCTOR, District Judge:

license: Public Domain

text:
    SECURITIES AND EXCHANGE COMMISSION, Plaintiff-Appellee, v. WELLS FARGO BANK, N.A., Creditor, Interested Party-Appellant.
    No. 16-10942
    United States Court of Appeals, Eleventh Circuit.
    (February 22, 2017)

      Robert K. Levenson, Scott Andrew Ma-sel, Andre J. Zamorano, U.S. Securities & Exchange Commission, Miami, FL, for Plaintiff-Appellee.
    Sean P. Keefe, James Hoyer Newcomer & Smiljanich, PA, Tampa, FL, for Interested Party-Appellee.
    Katherine E. Giddings, Kristen Marie Fiore, Tallahassee, FL, L. Joseph Sha-heen, Jr., Steven R. Wirth, Tampa, FL, Akerman, LLP, for Interested Party-Appellant.
    Before JORDAN and JILL PRYOR, Circuit Judges, and PROCTOR, District Judge.

       Honorable R. David Proctor, United States District Judge for the Northern District of Alabama, sitting by designation.

   PROCTOR, District Judge:

I. BACKGROUND

Following the collapse of a Ponzi scheme, the district court appointed a receiver to administer the affairs, funds, and property of parties who perpetrated that failed scheme. The district court also established a claims administration process by which those who had claims to property administered by the equity receivership could file proofs of claim. In this appeal, we are called upon to decide whether in such a circumstance a district court may extinguish a non-party’s preexisting rights to property under the administration of the equity receivership if that non-party fails to comply with the court’s orders regarding filing of proofs of claim. We conclude a district court may not. And, we look to bankruptcy law to aid us in addressing this question of first impression.

On January 21, 2009, the SEC initiated an action (the “Nadel action”) following the collapse of a Ponzi scheme perpetrated by Arthur Nadel. As a result, the district court appointed a Receiver over the Nadel action Defendants. The district court directed the Receiver to “administer and manage the business affairs, funds, assets, choses in action and any other property of the Defendants and Relief Defendants; marshal and safeguard all of the assets of the Defendants and Relief Defendants; and take whatever actions are necessary for the protection of the investors.” Accordingly, the receivership exercised authority not only over claims from victimized investors, but also entities and businesses which were funded with, and properties purchased with, proceeds of Nadel’s Ponzi scheme. While Wells Fargo is not a party in the Nadel action, it has secured interests in three properties which the Receiver took possession of pursuant to the district court’s orders.

On April 21, 2010, the district court entered an order establishing a claims administration process by which potential claimants (both investors and creditors) could file proof of their claims against the receivership. As part of the claims administration process, the Receiver would mail a claims packet, which contained a Proof of Claim form, to investors and creditors whose property was implicated in the Pon-zi scheme. Under authority of the district court order, the packet required that non-investors (including non-party creditors such as' Wells Fargo) provide to the Receiver any amount claimed due, together with supporting documents, by the claim bar date. The district court’s order required that all creditors submit their claims before the claim bar date, and did not distinguish between secured and unsecured creditors with respect to- this' requirement. The district court (1) established a deadline of September 2, 2010 for filing a Proof of Claim form and (2) barred any claims asserted after that date.

Consistent with this process, the Receiver mailed a single claims packet to Wells Fargo at its Atlanta, Georgia address. After receiving this packet, Wells Fargo submitted a Proof of Claim as to its loan that secured one receivership property within the set claim bar date, but did not submit a Proof of Claim detailing its secured interest in the other two receivership properties.

II. PROCEDURAL HISTORY

On February 8, 2012, well after the September 2, 2010 claim bar date, Wells Fargo submitted a motion seeking a determination that the filing of Proofs of Claim was unnecessary to preserve its security interests in, and claims against, collateral in the Receiver’s possession (including the two properties for which it failed to submit Proofs of Claim). Alternatively, Wells Fargo’s motion sought leave to file belated claims pursuant to Rule 60(b) based on excusable neglect. The district court deferred ruling on the motion.

On December 7, 2015, the Receiver filed a motion seeking two forms of relief. First, the Receiver’s motion sought a determination that Wells Fargo’s failure to submit Proofs of Claim for the loans secured by two properties extinguished its interests in those properties. Second, the motion requested the release of the proceeds from the sale of one of the properties for which Wells Fargo did not file a Proof of Claim. Wells Fargo objected to the motion. Nevertheless, the district court granted the Receiver’s motion, finding that Wells Fargo’s security interests in the two properties were not preserved due to its failure to submit Proofs of Claim. The district court further held that Wells Fargo’s Rule 60(b) request was untimely and insufficient. The district court specifically determined that Wells Fargo bore the burden to protect its rights pursuant to the framework set forth in the court’s prior order. The district court reasoned that secured creditors such as Wells Fargo, despite their secured interest, were obliged to follow court orders in order to protect their rights to collateral in the receivership proceedings. Wells Fargo appeals the district court’s order. After careful review, and with the benefit of oral argument, we agree with Wells Fargo, and reverse and remand this matter to the district court for further proceedings consistent with this opinion.

III. STANDARD OF REVIEW

The sole issue in this appeal is whether the district court correctly determined that Wells Fargo’s failure to file certain proofs of claim in accordance with the district court’s procedures extinguished Wells Fargo’s secured interest in the receivership properties. This is a question of “pure law,” which we review de novo. See Young v. New Process Steel, LP, 419 F.3d 1201, 1203 (11th Cir. 2005) (holding that “[w]e decide ‘pure law1 issues de novo, which is another way of saying that a ruling based on an error of law is an abuse of discretion.”) (internal citations omitted).

IV. DISCUSSION

We first address the Receiver’s argument that Wells Fargo’s appeal is untimely. After finding that argument is without merit, we address whether Wells Fargo’s security interests were properly terminated by the district court.

A. Wells Fargo’s Appeal is Timely.

As an initial matter, the Receiver argues that Wells Fargo untimely noticed its appeal, and accordingly is procedurally barred from bringing the appeal. Specifically, the Receiver contends that Wells Fargo’s security interest in the two properties for which it did not file Proofs of Claim was extinguished at the point that it failed to submit those Proofs of Claim in compliance with the district court’s order. Accordingly, the Receiver argues, Wells Fargo’s “Motion for Determination” was effectively a motion for reconsideration, which was untimely, because it was filed more than a year after the entry of the relevant district court order. Similarly, then, the Receiver argues, Wells Fargo had until only September 21, 2010 to appeal the district court’s order establishing the claims filing procedure. But the Receiver’s argument is without merit. The district court’s order establishing the claims filing procedure cannot be characterized as a “final trial court judgment that ‘ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.’ ” Fla. Wildlife Fed’n, Inc. v. Adm’r, U.S. EPA, 737 F.3d 689, 692 (11th Cir. 2013) (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 2457, 57 L.Ed.2d 351 (1978)). And, as the order was not final, it did not put Wells Fargo on notice that the district court would extinguish its secured interests by later order or that its security interests would be automatically terminated upon non-filing of a Proof of Claim. Accordingly, the first order from which Wells Fargo could take an appeal was the district court’s February 2, 2016 order. Wells Fargo’s appeal is timely. Fed. R. App. P. 4(a)(1)(A).

B. The District Court Erred When it Terminated Wells Fargo’s Security Interest in the Properties at Issue.

As we have observed, a “district court has broad powers and wide discretion to determine relief in an equity receivership.” SEC v. Elliott, 953 F.2d 1560, 1566 (11th Cir. 1992). This discretion derives from the inherent powers granted an equity court to fashion relief. Id. (citing SEC v. Safety Finance Service, Inc., 674 F.2d 368, 372 (5th Cir. 1982)). To be sure, among these broad powers is the power to establish proof of claim procedures and set an effective claims bar date. See SEC v. Tipco, Inc., 554 F.2d 710, 711 (5th Cir. 1977). However, while a federal district court has wide-ranging authority to supervise a receivership, we hold it does not have the authority to extinguish a creditor’s pre-existing state law security interest, as the district court purported to do here.

It is axiomatic that security interests in property are determined by state law, Butner v. United States, 440 U.S. 48, 55, 99 S.Ct. 914, 918, 59 L.Ed.2d 136 (1979), and that “a receiver appointed by a federal court takes property subject to all liens, priorities, or privileges existing or accruing under the laws of the state,” Marshall v. New York, 254 U.S. 380, 385, 41 S.Ct. 143, 145, 65 L.Ed. 315 (1920). But beyond these well-established rules, there is minimal authority with respect to a district court’s authority, in the context of a receivership, to extinguish a secured creditor’s preexisting state law security interest by operation of its own claims administration process. We note, however, that our Circuit’s bankruptcy law has fielded and answered questions similar to those presented here and specifically addressed what limits are imposed upon a district court under similar circumstances. We conclude bankruptcy law is both analogous and instructive here. After all, a primary purpose of both receivership and bankruptcy proceedings is to promote the efficient and orderly administration of estates for the benefit of creditors. See, e.g., Elliott, 953 F.2d at 1572-73 (analyzing bankruptcy law in the receivership context). Accordingly, we analyze the question before us through the lens of our bankruptcy decisions.

In the bankruptcy context, a secured creditor’s lien remains intact through the bankruptcy, regardless of whether the creditor files a proof of claim. In re Bateman, 331 F.3d 821, 827 (11th Cir. 2003) (“An unsecured creditor is required to file a proof [of] claim for its claim to be allowed, but filing is not mandatory for a secured creditor. In fact, a secured creditor need not do anything during the course of the bankruptcy proceeding because it will always be able to look to the underlying collateral to satisfy its lien.”) (citations omitted); In re Thomas, 883 F.2d 991, 997 (11th Cir. 1989) (finding that a creditor’s lien was not voided in bankruptcy proceeding, and a proof of claim must only be filed in a Chapter 13 proceeding to preserve a deficiency claim).

This reasoning is also consistent with treatises that have addressed the issue in the receivership context. For example, one such treatise states that:

The appointment of a receiver does not invalidate liens existing at the time the receiver is appointed, although it may affect or change the remedy or remedies which the lienholder may use to enforce his lien. Generally speaking the person who has a specific lien on property is entitled by following proper procedure to pay himself out of the property and if it be insufficient, then to prove his claim for the deficiency. In the case of receivership such claim must come out of the proceeds of property not covered by the specific lien and such claim for deficiency must prorate with the unsecured creditors. Generally speaking no other creditor except the lienholder is entitled to any part of the proceeds of property covered by a lien until the lienor is first paid.

Ralph Ewing Clark, A Treatise on the Law and Practice of Receivers, § 646 (3d ed. 1959). A secured creditor certainly may file a proof of claim in a receivership action, in turn submitting itself to the jurisdiction of the receivership, and entitling itself to access of the general pool of receivership assets for any unsecured portion of its debt. In fact, this may often be advisable where a secured creditor is un-dersecured or anticipates having a claim for deficiency beyond what may be paid out of the collateral. However, a federal district court cannot order a secured creditor to either file a proof of claim and submit its claim for determination by the receivership court, or lose its secured state-law property right that existed prior to the receivership.

V. CONCLUSION

For the reasons stated above, we reverse the district court’s order granting the Receiver’s Motion for Determination that Wells Fargo’s Failure to Comply with this Court’s Claims Administration Process Extinguished its Purported Interests in Receivership Properties, and for Release of Proceeds of Sale of Sarasota Property. Wells Fargo’s security interests remain intact as to the two properties for which it did not file a Proof of Claim in the district court. This case is remanded for further proceedings consistent with this opinion.

REVERSED AND REMANDED.

      . The Claim Bar Date Notice explained that:
      If you were not an investor, but believe you are or may be a creditor of one o[r] more of the Receivership Entities, you must provide to the Receiver by the Claim Bar Date (1) the amount you contend you are owed from any Receivership Entity; (2) any amounts received from any Receivership Entity; and (3) legible copies of all documents on which you base your claim (i.e., all invoices for services or goods provided, loan documents, etc.) or, if any such documents are not available, a detailed explanation as to why such documents are not available.
      The Claim Bar Date Notice further stated:
      4. CONSEQUENCES OF FAILURE TO FILE A PROOF OF CLAIM BY THE BAR DATE
      ANY HOLDER OF A CLAIM OR POTENTIAL CLAIM THAT FAILS TO FILE A PROOF OF CLAIM (1) THAT FULLY COMPLIES WITH ALL REQUIREMENTS SET FORTH IN THIS NOTICE AND (2) BY THE CLAIM BAR DATE WILL BE FOREVER BARRED, ESTOPPED, AND ENJOINED FROM ASSERTING SUCH CLAIM AGAINST RECEIVERSHIP ENTITIES ... THEIR RESPECTIVE PROPERTY, THE RECEIVER, OR THE RECEIVERSHIP ESTATE, AND FROM PARTICIPATING IN ANY DISTRIBUTION FROM THIS RECEIVERSHIP.

      . Moreover, Wells Fargo clearly contests the abolition of its security interests in the properties at issue, not the creation of a claims procedure..

      . A number of other circuits have also looked to bankruptcy law to aid in addressing issues raised in the receivership context. See e.g., Marion v. TDI Inc., 591 F.3d 137, 148 (3d Cir. 2010) (analyzing bankruptcy law in a receivership context); Fidelity Bank, Nat’l Ass’n v. M.M. Grp., Inc., 77 F.3d 880, 882 (6th Cir. 1996) (finding it "appropriate and helpful to refer to the rules governing appellate standing in bankruptcy proceedings” when no case law existed regarding the rules in a receivership action); Unisys Fin. Corp. v. Resolution Trust Corp., 979 F.2d 609, 611 (7th Cir. 1992) (reasoning that bankruptcy law is "parallel" and “instructive” in the receivership context).

      . The Receiver argues that the cases cited by Wells Fargo "are a creature of, and unique to, the federal bankruptcy code itself.” Response Br. at 27. But that argument is simply off the mark. Secured creditors’ liens ride through bankruptcy for reasons beyond 11 U.S.C. § 506(d). In fact, well before section 506(d) was added to the modern Bankruptcy Code, courts held that creditors’ secured interests were preserved throughout bankruptcy. Long v. Bullard, 117 U.S. 617, 620-21, 6 S.Ct. 917, 29 L.Ed. 1004 (1886); see also White v. FIA Card Servs., N.A., 494 B.R. 227, 230 (Bankr. W.D. Va. 2012) ("A longstanding pre-Code rule allowed secured creditors to choose not to participate in a debtor’s bankruptcy proceeding and still retain valid, enforceable liens once the debtor was discharged from bankruptcy.”).

      . As the district court correctly noted, there is a distinction between a secured creditor’s in rem rights to the collateral and its right to receive a distribution for the general pool of receivership assets. Nevertheless, the district court erred when it then determined that Wells Fargo’s failure to file Proofs of Claim for two of its properties extinguished its in rem rights to the collateral as well as its right to receive a distribution from the pool of receivership assets.


author: DYK, Circuit Judge.

text:
    XILINX, INC., Plaintiff-Appellant, v. PAPST LICENSING GMBH & CO. KG, Defendant-Appellee.
    2015-1919
    United States Court of Appeals, Federal Circuit.
    Decided: February 15, 2017

      Matthew J. Silveira, Jones Day, San Francisco, CA, argued for plaintiff-appellant. Also represented by Patrick Thomas Michael.
    Nicole E. Glauser, DiNovo, Price, Ell-wanger & Hardy LLP, Austin, TX, argued for defendant-appellee. Also represented by Andrew Dinovo, Jay D. Ellwanger.
    Charles Duan, Public Knowledge, Washington, DC, for amici curiae Public Knowledge, Electronic Frontier Foundation. Also represented by Vera Ranieri, Electronic Frontier Foundation, San Francisco, CA..
    Steven Moore, Kilpatrick Townsend & Stockton LLP, San Francisco, CA, for am-ici curiae for AO Kaspersky Lab, Limelight Networks, Inc., QVC, Inc., SAS Institute Inc., Symmetry LLC, Vizio, Inc.
    Harrison J. Frahn, IV, Simpson Thacher & Bartlett, LLP, Palo Alto, CA, for amici curiae Thirty-Four Law Professors.
    Before PROST, Chief Judge, NEWMAN, and DYK, Circuit Judges.
   DYK, Circuit Judge.

Xilinx, Inc., (“Xilinx”) appeals from a judgment of the United States District Court for the Northern District of California dismissing Xilinx’s declaratory judgment action against Papst Licensing GmbH & Co. KG (“Papst”) for lack of personal jurisdiction. Because we hold that the district court has specific personal jurisdiction over Papst with respect to Xi-linx’s declaratory judgment action, we reverse and remand.

Background

Xilinx is a Delaware corporation that is headquartered in San Jose, California. Xi-linx designs, develops, and markets programmable logic devices for use in electronics systems. Papst is the assignee of U.S. Patent Nos. 6,574,759 and 6,704,891 (collectively, “the patents-in-suit”), which are directed to methods for generating and verifying memory tests in electronics.

Papst is organized under the laws of Germany and has its principal place of business there. Papst is a nonpracticing entity that is solely in the business of monetizing and licensing intellectual property rights. According to Papst, it “has always been in the business of obtaining and licensing patents, it does not manufacture or sell any consumer products, and it has always had fewer than 30 employees.” J.A. 1133. Xilinx points to various Papst marketing materials and its website in which Papst describes itself as “a global patent licensing and monetization firm specialized in enforcing infringed patents with the goal to conclude a license agreement with the infringer.” Exhibit 9 at 1, Declaration of Jason M. Gonder, Xilinx, Inc. v. Papst Licensing GmbH & Co. KG, No. 5:14-cv-04963-LHK, 2015 WL 3400564 (N.D. Cal. Apr. 15, 2015), ECF No. 53-9 (“Exhibit 9”).

These materials explain the business model by which Papst acquires and then asserts patent rights. “Before agreeing to purchase a patent,” Papst performs “due diligence” to “identify patent infringement by comparing the patent claims against the potentially infringing products.” J.A. 1733. Papst’s due diligence involves “identifying] the companies potentially involved in infringements, and the markets they are selling their product in — where they are located, and how large they are, including where the product is made as well as where it is sold.” Id.

When Papst identifies infringers, it “notifies] them that [Papst] believe[s] they are infringing.” Id. Papst “then travel[s] extensively to visit the infringers.” Id. “After technical discussions confirming the infringement, the conversation moves towards licensing the patents through an agreement.” Id. “If negotiations fail, [Papst] is prepared to effectively enforce the respective patents in courts. Especially in the United States, Germany, and the Netherlands [Papst has] years and years of experience in patent litigation.” Exhibit 9 at 1. Papst’s marketing materials explain that Papst has “been very successful with legal actions. With [Papst’s] outside partners including attorneys, [Papst has] been very successful and won many high-profile patent cases.” J.A. 1733.

Papst has repeatedly filed patent infringement suits in California federal courts. The record shows that Papst has filed patent infringement lawsuits in California at least seven times between 1994 and 2007 based on other patents in Papst’s portfolio.

Papst’s actions leading up to the filing of this declaratory judgment action are consistent with Papst’s business model. Before acquiring the patents-in-suit in October 2012, Papst performed its due diligence by investigating potential infringers and targets for licensing of those patents. Xilinx describes the investigation as involving twenty-nine target companies, twenty-eight of which are based, or have significant presence, in California. One of the companies that Papst investigated was Xi-linx.

In January 2014, Papst sent a patent-infringement notice letter to Xilinx. In the letter, Papst identified several of Xilinx’s products that allegedly infringed the patents-in-suit, and stated that “Papst proposes commencing discussions with Xilinx so that Xilinx can consider taking a license to the Papst Patents.” J.A. 1053. After Xilinx did not respond to Papst’s first set of letters, in April 2014, Papst sent a second letter, “again encouraging] Xilinx to participate in a dialogue regarding taking a license to the” patents-in-suit. J.A. 1056. On October 16, 2014, three representatives of Papst, including Papst’s managing director, its senior counsel, and its Texas-based outside counsel, traveled to California to meet with Xilinx. The purpose of the meeting was to discuss Papst’s allegations of infringement of the patents-in-suit and Xilimfs potential licensing of these patents. No agreement resulted from these contacts.

On November 7, 2014, Xilinx filed this declaratory judgment action in the Northern District of California seeking a declaration that Xilinx’s products do not infringe the patents-in-suit and that the patents are invalid. On the same day that Xilinx filed its declaratory judgment action in California, Papst filed an infringement suit against Xilinx in the District of Delaware asserting the same patents-in-suit. Papst moved to dismiss the California declaratory judgment action for lack of personal jurisdiction, or in the alternative, transfer the action to the District of Delaware.

On July 9, 2015, the court granted Papst’s motion and dismissed the declaratory judgment action for lack of personal jurisdiction. The court first determined that it lacked general jurisdiction over Papst because it “is not at home in California,” recognizing that “Papst is not incorporated in California, nor does it have its principal place of business” there. J.A. 8-10.

The court also held that it lacked specific personal jurisdiction over Papst. The court observed that “Papst certainly has many connections to the state of California.” J.A. 22-23. However, relying principally on our decisions in Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355 (Fed. Cir. 1998), and its progeny, the court recognized that “even if the ‘purposefully directed’ and ‘arises out of prongs are satisfied by the defendant’s enforcement activities” in the forum, “[n]ot all assertions of jurisdiction based on enforcement activities comport with ‘fair play and substantial justice.’” J.A. 11 (citing Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324, 1333 (Fed. Cir. 2008)). The court determined that Papst’s California contacts were “either related solely to Papst’s attempts to license the patents, which the Federal Circuit has held insufficient, or according to Federal Circuit law are irrelevant to the parties’ instant dispute.” J.A. 23. With respect to Papst’s prior litigation in California, the court explained that these “enforcement activities regarding other patents are irrelevant to the question at hand: whether this Court can assert specific jurisdiction over Papst based on its efforts to enforce the patents-in-suit.” J.A. 22. “The Federal Circuit has ‘consistently’ made clear that the ‘other activities’ for purposes of personal jurisdiction must relate to ‘the relevant patents.’ ” Id. (quoting Avocent, 552 F.3d at 1334). The court concluded that “even when considered as a whole these connections are insufficient to vest this Court with specific jurisdiction over Papst.” J.A. 23.

The court declined to allow additional discovery related to Papst’s prior enforcement activities in California. The court noted that Papst had already provided some discovery and concluded that additional discovery would be a waste of resources.

Xilinx appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

Discussion

I. Mootness

Papst first argues that events post-dating Xilinx’s filing of this appeal render the appeal moot. We disagree. “A case becomes moot ... ‘only when it is impossible for a court to grant any effectual relief whatever to the prevailing party.’ ” Campbell-Ewald Co. v. Gomez, — U.S. -, 136 S.Ct. 663, 669, 193 L.Ed.2d 671 (2016), as revised (Feb. 9, 2016) (quoting Knox v. Serv. Emps., 567 U.S. 298, 132 S.Ct. 2277, 2287, 183 L.Ed.2d 281 (2012)). Following dismissal of Xilinx’s California declaratory judgment action involved in this appeal, on February 23, 2016, the District of Delaware transferred Papst’s infringement suit to the Northern District of California — the same court that had dismissed the declaratory judgment action. Papst argues that the transferred action has provided Xilinx another opportunity to bring its declaratory judgment action as a counterclaim in its desired forum, rendering this appeal moot.

However, Xilinx has not asserted declaratory judgment counterclaims in the transferred action. The mere availability of this unpursued alternative route to relief does not render moot Xilinx’s action seeking the same relief. See Campbell-Ewald Co., 136 S.Ct. at 672 (“[A]n unaccepted settlement offer or offer of judgment does not moot a plaintiffs case.... ”). Accordingly, Xilinx’s appeal is not moot.

II. Personal Jurisdiction

The central issue in this case is whether the exercise of specific personal jurisdiction over Papst in California is fair and reasonable. “Personal jurisdiction is a question of law that we review de novo.” Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1016 (Fed. Cir. 2009). Because Xilinx’s declaratory judgment appeal involves only claims of patent nonin-fringement, “we apply Federal Circuit law because the jurisdictional issue is intimately involved with the substance of the patent laws.” Id. (internal quotation marks omitted) (quoting Avocent, 552 F.3d at 1328). Where, as here, “the district court’s disposition as to the personal jurisdictional question is based on affidavits and other written materials in the absence of an evidentiary hearing, a plaintiff need only to make a prima facie showing that defendants are subject to personal jurisdiction.” Avocent, 552 F.3d at 1329 (quoting Elecs. for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1349 (Fed. Cir. 2003)). We, like the district court, “accept the uncontroverted allegations in the plaintiffs complaint as true and resolve any factual conflicts in the affidavits in the plaintiffs favor.” Id.

A

“Determining whether jurisdiction exists over an out-of-state defendant involves two inquiries: whether a forum state’s long-arm statute permits service of process and whether assertion of personal jurisdiction violates due process.” Autoge- nomics, 566 F.3d at 1017 (quoting Genetic Implant Sys., Inc. v. Core-Vent Corp., 123 F.3d 1455, 1458 (Fed. Cir. 1997)). California’s long-arm statute permits service of process to the full extent allowed by the due process clauses of the United States Constitution. Elecs. for Imaging, 340 F.3d at 1349; see also Cal. Civ. Proc. Code § 410.10 (West). Accordingly, “the two inquiries collapse into a single inquiry: whether jurisdiction comports with due process.” Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1360 (Fed. Cir. 2001).

In the case of specific, as opposed to general jurisdiction, we have summarized the Supreme Court’s due process jurisprudence in a three-factor test: “(1) whether the defendant ‘purposefully directed’ its activities at residents of the forum; (2) whether the claim ‘arises out of or relates to’ the defendant’s activities with the forum; and (3) whether assertion of personal jurisdiction is ‘reasonable and fair.’” Inamed, 249 F.3d at 1360. “The first' two factors correspond with the ‘minimum contacts’ prong of the [International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) ] analysis, and the third factor corresponds with the ‘fair play and substantial justice’ prong of the analysis.” Inamed, 249 F.3d at 1360.

With respect to the first factor of the minimum contacts portion of specific personal jurisdiction analysis, “it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). As to the second factor, also part of the minimum contacts analysis, the court must determine whether “the suit ‘aris[es] out of or relate[s] to the defendant’s contacts with the forum.’ ” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 923-24, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011) (alterations in original) (quoting Helicopteros Nacionales de Colom., S.A. v. Hall, 466 U.S. 408, 414 n.8, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)).

Many of our recent cases have been concerned with the two minimum contacts factors of the analysis. We have considered forum-related activities of the patentee with respect to the patents in suit that do not necessarily relate to the particular controversy, such as exclusive licensing, though at the same time we have (appropriately) rejected the existence, of contacts concerning other patents as being pertinent to the minimum contacts analysis. See Avocent, 552 F.3d at 1336 (explaining relevant contacts are those that the “defendant patentee purposefully directs ... at the forum which relate in some material way to the enforcement or the defense of the patent”); see also Campbell Pet Co. v. Miale, 542 F.3d 879, 886 (Fed. Cir. 2008) (extra-judicial patent enforcement); Breckenridge Pharm., Inc. v. Metabolite Labs., Inc., 444 F.3d 1356, 1366 (Fed. Cir. 2006) (exclusive license); Elecs. for Imaging, 340 F.3d at 1351 (hiring of in-forum attorney to communicate with plaintiff); Inamed, 249 F.3d at 1361 (exclusive license); Akro, 45 F.3d at 1548-49 (exclusive license).

Papst makes no argument that its activities directed to Xilinx in California do not satisfy the minimum contacts prong of the specific jurisdiction test. See Papst Br. at 21 (“A cease-and-desist letter to a forum resident may give rise to a declaratory judgment cause of action and satisfy[] the minimum contacts portion of the specific jurisdiction test.” (emphasis added)). Indeed, there is no question that Papst has the required minimum contacts with California. Papst purposefully directed its activities to California when it sent multiple notice letters to Xilinx and traveled there to discuss Xilinx’s alleged patent infringement and potential licensing arrangements.

Xilinx’s declaratory judgment action of noninfringement certainly relates to these contacts. In the context of declaratory judgment actions involving assertions of patent noninfringement or invalidity, we have concluded that cease-and-desist letters sent by the patentee defendant into the forum are relevant contacts in the personal jurisdiction analysis. Red Wing, 148 F.3d at 1360. Minimum contacts may be established by “the threat of an infringement suit, as communicated in a cease-and-desist letter.” Id.; see also id. (explaining that “cease-and-desist letters alone are often substantially related to the cause of action (thus providing minimum contacts)”).

Even more significant than the notice letters is Papst’s visit to Xilinx in California, another activity that certainly “relate[s] in some material way to the enforcement or the defense of the patent.” Avocent, 552 F.3d at 1336. As the Supreme Court has explained, “physical entry into the State — either by the defendant in person or through an agent, goods, mail, or some other means — is certainly a relevant contact.” Walden v. Fiore, — U.S. -, 134 S.Ct. 1115, 1122, 188 L.Ed.2d 12 (2014). This court has previously recognized that in-person visits to the forum are significant contacts in the declaratory judgment context. See Elecs. for Imaging, 340 F.3d at 1351; Deprenyl Animal Health, Inc. v. Univ. of Toronto Innovations Found., 297 F.3d 1343, 1352 (Fed. Cir. 2002). Therefore, the minimum contacts prong is satisfied here.

B

In arguing against personal jurisdiction, Papst focuses entirely on the “reasonable and fair” prong and argues that “exercising specific jurisdiction over a pat-entee based solely on cease-and-desist letters, which contain notice of the sender’s patent rights, accusations of infringement, and/or licensing offers, does not comport with fair play or substantial justice.” Papst Br. at 21-22 (citing Red Wing, 148 F.3d at 1360-61).

As the Supreme Court has made clear, the specific jurisdiction analysis is a two-step process, and the reasonableness prong is separate from the minimum contacts prong. The Court noted in Daimler AG v. Bauman, — U.S. -, 134 S.Ct. 746, 762 n.20, 187 L.Ed.2d 624 (2014), “[fjirst, a court is to determine whether the connection between the forum and the episode-in-suit could justify the exercise of specific jurisdiction. Then, in a second step, the court is to consider several additional factors to assess the reasonableness of entertaining the case.” See also id. at 764 (Sotomayor, J., concurring) (“Our personal jurisdiction precedents call for a two-part analysis. The contacts prong asks whether the defendant has sufficient contacts with the forum State to support personal jurisdiction; the reasonableness prong asks whether the exercise of jurisdiction would be unreasonable under the circumstances.”); 4 Charles Alan Wright, Arthur R. Miller & Adam N. Steinman, Federal Practice and Procedure § 1067.2 (4th ed. 2015) (explaining that the Supreme Court “case law reflects a two-step approach that requires both (1) that the defendant establish minimum contacts with the forum State, and (2) that the assertion of personal jurisdiction is reasonable and comports with fair play and substantial justice”).

The inquiry under the reasonableness prong (step two) is not limited to the specific facts giving rise to, or relating to, the particular litigation. “Once it has been decided that a defendant purposefully established minimum contacts within the forum State, these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with ‘fair play and substantial justice.’ ” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (emphasis added) (quoting Int’l Shoe, 326 U.S. at 320, 66 S.Ct. 154). These other factors — the burden on the defendant, the plaintiffs interest in obtaining convenient and effective relief, etc., id. at 477, 105 S.Ct. 2174—often cannot be analyzed without looking to circumstances beyond those that give rise or relate to the specific lawsuit.

In Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty., 480 U.S. 102, 116, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987), the one case where the Supreme Court held that the reasonableness requirement was not satisfied, the Court looked beyond minimum contacts to consider other factors. For instance, the Court explained that the distance between Asahi’s headquarters in Japan and the California forum, as well as subjecting a foreign company to United States law, would impose a heavy burden on Asahi. Id. at 114, 107 S.Ct. 1026. The Court also explained that the plaintiff, another foreign entity, did not demonstrate that litigating in California would be more convenient than litigating in Taiwan or Japan. Id.

While the reasonableness inquiry is not limited to considering the minimum contacts, the Supreme Court has made clear that the reasonableness prong is typically satisfied by a showing of minimum contacts. “Where a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.” Burger King, 471 U.S. at 477, 105 S.Ct. 2174; see also id. at 476, 105 S.Ct. 2174 (explaining that where a defendant’s “acj tivities are shielded by the benefits and protections of the forum’s laws it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well” (quotation marks omitted)). The Court identified five considerations relevant to the reasonableness analysis:

[C]ourts in “appropriate case[s]” may evaluate [1] “the burden on the defendant,” [2] “the forum State’s interest in adjudicating the dispute,” [3] “the plaintiffs interest in obtaining convenient and effective relief,” [4] “the interstate judicial system’s interest in obtaining the most efficient resolution of controversies,” and [5] the “shared interest of the several States in furthering fundamental substantive social policies.”

Id. at 477 (second alteration in original) (quoting World-Wide Volkswagen, 444 U.S. at 292, 100 S.Ct. 580).

Here, as discussed in Part II.A above, Papst has the required minimum contacts with California to make the exercise of personal jurisdiction presumptively reasonable. For the reasons that follow, Papst has failed to meet its burden to show a “compelling case” under Burger King that jurisdiction is unreasonable. 471 U.S. at 477, 105 S.Ct. 2174.

Papst makes no argument that factors 2-5 weigh against a finding of personal jurisdiction, see id,., nor could it. Xilinx, which is headquartered in California, indisputably has an interest in protecting itself from patent infringement by obtaining relief “from a nearby federal court” in its home forum. Breckenridge, 444 F.3d at 1367-68 (explaining that one reasonableness factor “requires the court to focus on the convenience and effectiveness of relief from the plaintiffs perspective”). The Supreme Court has recognized the importance of declaratory judgment actions in patent cases for allowing accused infring-ers to secure a determination that their products do not infringe the patent or that the patent is invalid. See Medtronic, Inc. v. Mirowski Family Ventures, LLC, — U.S. -, 134 S.Ct. 843, 849, 187 L.Ed.2d 703 (2014); MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 137, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007). Likewise, California has “definite and well-defined interests in commerce and scientific development,” Viam Corp. v. Iowa Exp.-Imp. Trading Co., 84 F.3d 424, 430 (Fed. Cir. 1996), and “California has a substantial interest in protecting its residents from unwarranted claims of patent infringement,” Elecs. for Imaging, 340 F.3d at 1352. Jurisdiction over Xilinx’s declaratory judgment claims in California would also result in an efficient resolution of the controversy. Finally, there does not appear to be any conflict between the interests of California and any other state, because “the same body of federal patent law would govern the patent invalidity claim irrespective of the forum.” Id.

This leaves for our consideration the burden on the defendant. With respect to this factor, the Supreme Court has explained, “[w]hen minimum contacts have been established, often the interests of the plaintiff and the forum in the exercise of jurisdiction will justify even the serious burdens placed on the alien defendant.” Asahi, 480 U.S. at 114, 107 S.Ct. 1026. Thus, instances in which the fairness analysis will defeat “otherwise constitutional personal jurisdiction are limited to the rare situation in which the plaintiffs interest and the state’s interest in adjudicating the dispute in the forum are so attenuated that they are clearly outweighed by the burden of subjecting the defendant to litigation within the forum.” Akro, 45 F.3d at 1549 (quotation marks omitted).

Papst argues that its contacts with Xi-linx in California are insufficient to justify the burden of litigating in that forum. Papst focuses on our prior cases holding that because of “policy considerations unique to the patent context,” Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1206 (Fed. Cir. 2003), a patentee’s sending of warning letters and offers to license, “without more, ... are not sufficient to satisfy the requirements of Due Process in declaratory judgment actions.” Red Wing, 148 F.3d at 1360.

In Red Wing, we explained that although warning letters satisfy the requirement of minimum contacts, “such letters cannot satisfy the [fairness] prong of the Due Process inquiry.” Id. at 1361. We explained the rationale for this rule: “[p]rinciples of fair play and substantial justice afford a patentee sufficient latitude to inform others of its patent rights without subjecting itself to jurisdiction in a foreign forum.” Id. at 1360-61. To require a defendant to answer “in a distant foreign forum when its only contacts with that forum were efforts to give proper notice of its patent rights” would place an undue burden on the defendant. Id. at 1361.

We disagree with Papst that this case is controlled by Red Wing and its holding that certain types of contacts, by themselves, are not sufficient to establish the reasonableness of jurisdiction. As we have discussed in the minimum contacts analysis, Papst has done more than just send letters to Xilinx. Representatives from Papst traveled to California to meet with Xilinx in person to discuss Papst’s infringement contentions and licensing offer with respect to the patents-in-suit. The Supreme Court noted in Burger King that “territorial presence frequently will enhance a potential defendant’s affiliation with a State and reinforce the reasonable foreseeability of suit there.” 471 U.S. at 476, 105 S.Ct. 2174.

Moreover, there are other facts that, under the Burger King analysis, confirm the view that the burden on the defendant is not undue. For instance, the burden on Papst is mitigated by Papst’s status as a non-practicing patent holder residing outside the United States. This is not a case like Red Wing, where the defendant conducts its affairs in one state and is called to litigate in a distant state rather than its own residence. See 148 F.3d at 1357. By the very nature of its business, Papst must litigate its patents in the United States in fora far from its home office. In this context the burden on Papst to litigate in California appears not undue.

The lack of significant burden on Papst is also evidenced by Papst’s prior litiga-tions in California itself. Papst has repeatedly availed itself of the California federal court system — at least seven times — by filing patent infringement lawsuits there. In this respect, this case is similar to Fiara. In Fiara, we held that requiring an Italian patent owner and its Iowa exclusive agent to litigate a declaratory judgment action in California was not unduly burdensome where those entities had initiated a suit enforcing the same patent in the same district in California against other parties. 84 F.3d at 430. Our reasoning that personal jurisdiction was fair rested in relevant part on the fact that the suit demonstrated that the patent owner “has found a way to shoulder successfully the burden of litigating in California.” Id.

Our decision in Acorda Therapeutics Inc. v. Mylan Pharmaceuticals Inc., 817 F.3d 755, 764 (Fed. Cir. 2016), makes clear the relevance of a defendant’s litigations in the forum. There we explained that the burden on an accused infringer answering an infringement lawsuit “will be at most modest, as [the accused infringer], a large generic manufacturer, has litigated many ... lawsuits in [the forum], including some that it initiated.” Id.

Finally, Papst has not made any demonstration that it would be unduly burdensome to litigate in California. For all of these reasons, therefore, we hold that Papst would not be subject to undue burdens if forced to defend its patents in California.

In light of the totality of circumstances present in this case, this, is not “one of the ‘rare’ situations in which sufficient minimum contacts exist but where the exercise of jurisdiction would be unreasonable.” Elecs. for Imaging, 340 F.3d at 1352. In other words, there is simply no “compelling case” here that personal jurisdiction over Papst is unreasonable. Burger King, 471 U.S. at 477, 105 S.Ct. 2174.

Conclusion

We hold that Xilinx has established that personal jurisdiction over Papst is proper in California. We need not address Xilinx’s additional arguments regarding the district court s denial of jurisdictional discovery. Accordingly, we reverse the district court’s dismissal of Xilinx’s declaratory judgment complaint with respect to its noninfringement claims and remand for further proceedings consistent with this opinion.

REVERSED AND REMANDED

Costs

Costs to Xilinx.

      . Altera Corporation ("Altera”) was also a party to this appeal. Like Xilinx, it filed a declaratory judgment action in the Northern District of California, and Papst filed an infringement suit in the District of Delaware. The Northern District of California also dismissed Altera's declaratory judgment action for lack of personal jurisdiction. We subsequently granted Altera's unopposed motion for a determination that its appeal was moot based on Altera’s filing of declaratory judgment counterclaims in Papst’s California patent infringement action after it was transferred from Delaware.

      . As we explained in Akro Corp. v. Luker, 45 F.3d 1541 (Fed. Cir. 1995), the due process inquiry implicates the Due Process Clause of the Fifth Amendment, not the Fourteenth Amendment, because subject matter jurisdiction over a patent action exists by virtue of a federal question, not the diversity of the parties. Id. at 1544-45. Nonetheless, we have applied the Supreme Court’s jurisprudence of personal jurisdiction regarding the demands of the Fourteenth Amendment’s Due Process Clause to this context. Id.

      . Absent an ability to litigate its declaratory judgment action in California, Xilinx would be remitted to litigating on the opposite side of the country in the United States District Court for the Eastern District of Virginia, the statutory venue for actions agaiijst patentees not residing in the United States. See 35 U.S.C. § 293.

      .The court further held that the inclusion of offers to license the patents "within a cease- and-desist letter does not somehow convert that letter into something more than it was already.” Id. The court explained that "[a]n offer to license is more closely akin to an offer for settlement of a disputed claim rather than an arms-length negotiation in anticipation of a long-term continuing business relationship” and that the policy favoring settlement "squarely invokes one of the considerations enumerated by the Supreme Court for the second prong of a proper Due Process analysis, namely, ‘the interstate judicial system’s interest in obtaining the most efficient resolution of controversies.’ ” Id. (quoting WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 580, 62 L.Ed.2d 490 (1980)).

      . We note that Papst also traveled twice to California to meet with Altera for the same purpose.

      . We do not suggest that the foreign location of a defendant itself supports personal jurisdiction. See Avocent, 552 F.3d at 1339. Rather, we note that Papst, as a non-practicing patent owner, necessarily must litigate its patents somewhere in the United States.


author: MOORE, Circuit Judge.

text:
    METALCRAFT OF MAYVILLE, INC., dba Scag Power Equipment, Plaintiff-Appellee v. THE TORO COMPANY, Exmark Manufacturing Co., Inc., Defendants-Appellants
    2016-2433
    2016-2514
    United States Court of Appeals, Federal Circuit.
    Decided: February 16, 2017

      Michael T. Griggs, Boyle Fredrickson, S.C., Milwaukee, WI, argued for plaintiff-appellee. Also represented by Adam Brook-man, Sarah M. Wong.
    Rachel C. Hughey, Merchant & Gould P.C., Minneapolis, MN, argued for defendants-appellants. Also represented by Anthony Richard Zeuli.
    Before MOORE, HUGHES, and STOLL, Circuit Judges.
   MOORE, Circuit Judge.

The United States District Court for the Eastern District of Wisconsin granted Metalcraft of Mayville, Inc.’s motion for a preliminary injunction precluding The Toro Company and Exmark Manufacturing Co., Inc. from making, using, selling, and offering to sell lawnmowers equipped with platform suspension systems that infringe U.S. Patent No. 8,186,475 (“the ’475 patent”). We affirm.

Background

Metalcraft of Mayville, Inc., d/b/a Scag Power Equipment (“Scag”), manufactures commercial riding lawnmowers. To improve its mowers, Scag developed a suspended operator platform, which is disclosed and claimed in the ’475 patent. The ’475 patent discloses a suspended operator platform for a ride-on lawnmower or other riding light utility vehicle connected to a rigid chassis by a suspension system. ’475 patent at Abstract, 2:33-34. The operator platform supports the entire body of the operator. Id. at 2:51-52. The suspension system suspends the operator platform from the chassis in a manner that isolates an operator from vibrations, or shock loads, generated by the mower during use or when driven over uneven terrain. Id. at 4:1-6. The operator platform can suspend or isolate some controls from the rigid chassis. Id. at 2:37-39. For example, the patent teaches that the steering controls may be mounted on the suspended platform. Id. at 2:39-41.

Scag commercialized the system disclosed in the ’475 patent in its Cheetah line of lawnmowers. In 2015, both The Toro Company and its wholly owned subsidiary, Exmark Manufacturing Co., Inc., (collectively “Toro”), introduced riding lawnmowers with suspended operator platforms to compete with Scag’s Cheetah line. Toro introduced the platform as part of its new MyRIDETM suspension system, and Ex-mark introduced the platform as an upgrade to its Lazer Z Series lawnmowers. It is undisputed that the steering controls in Toro and Exmark’s riding lawnmowers are connected to the chassis, not the operator platform. Appellants’ Br. 24, Appellee’s Br. 13.

On May 5, 2016, Scag filed an infringement action against Toro in the Eastern District of Wisconsin and simultaneously filed a motion for a preliminary injunction to enjoin Toro from making, using, selling, and offering to sell lawnmowers with platform suspension systems that infringe its ’475 patent. On August 1, the district court granted Scag’s motion for a preliminary injunction. On August 4, Toro filed a notice of appeal and a motion to stay entry of the preliminary injunction. The district court denied Toro’s motion to stay entry of the injunction and granted Scag’s motion to set bond and enter the injunction order.

Toro appeals the district court’s grant of a preliminary injunction. We have jurisdiction pursuant to 28 U.S.C. § 1292(a)(1) and (c)(1).

Discussion

In general, we review the grant or denial of a preliminary injunction using the law of the regional circuit, here the Seventh Circuit. Murata Mach. USA v. Daifuku Co., 830 F.3d 1357, 1363 (Fed. Cir. 2016) (citing Trebro Mfg., Inc. v. Firefly Equip., LLC, 748 F.3d 1159, 1165 (Fed. Cir. 2014)). “However, the Federal Circuit has itself built a body of precedent applying the general preliminary injunction considerations to a large number of factually variant patent cases, and gives dominant effect to Federal Circuit precedent insofar as it reflects considerations specific to patent issues.” Id. (quoting Trebro, 748 F.3d at 1165). Both the Seventh Circuit and the Federal Circuit review the grant or denial of a preliminary injunction for an abuse of discretion. See Lawson Prods., Inc. v. Avnet, Inc., 782 F.2d 1429, 1437 (7th Cir. 1986); Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1345 (Fed. Cir. 2008). “An abuse of discretion may be established by showing that the court made a clear error of judgment in weighing relevant factors or exercised its discretion based upon an error of law or clearly erroneous factual findings.” Novo Nordisk of North Am., Inc. v. Genentech, Inc., 77 F.3d 1364, 1367 (Fed. Cir. 1996).

The grant or denial of a preliminary injunction is within the sound discretion of the district court. Id. To obtain a preliminary injunction, a party must establish “that [it] is likely to succeed on the merits, that [it] is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in [its] favor, and that an injunction is in the public interest.” Luminara Worldwide, LLC v. Liown Elecs. Co., 814 F.3d 1343, 1352 (Fed. Cir. 2016) (quoting Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008)). To establish a likelihood of success on the merits, a patentee must show that it will likely prove infringement of the asserted claims and that its infringement claim will likely withstand the alleged infringer’s challenges to patent validity and enforceability. Sciele Pharma, Inc. v. Lupin Ltd., 684 F.3d 1253, 1259 (Fed. Cir. 2012) (citing Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001)). A preliminary injunction should not issue if the accused infringer “raises a substantial question concerning either infringement or validity.’-’ Amazon.com, 239 F.3d at 1350.

A. Likelihood of Success '

1. Likelihood of Infringement

Infringement is a question of fact we review for clear error. AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1056 (Fed. Cir. 2010). We review claim construction de novo except for subsidiary fact findings, which we review for clear error. Teva Pharm. USA Inc. v. Sandoz, Inc., — U.S. -, 135 S.Ct. 831, 841-42, — L.Ed.2d - (2015). The factual components of claim construction include the background science or the meaning of a term to a skilled artisan during the relevant time period. Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034, 1039 (Fed. Cir. 2016) (en banc) (quoting Teva, 135 S.Ct. at 841).

Asserted independent claims 11, 14, and 21 all claim “an operator platform that supports the seat and an entire body of an operator during use of the utility vehicle.” ’475 patent at 12:4-5, 12:27-28, 13:10-11. In opposing Scag’s motion for a preliminary injunction, Toro did not dispute that its accused mowers meet the asserted patent claims, except with respect to one limitation. J.A. 374. Toro argued its accused mowers do not infringe because the accused devices do not meet the limitation “an entire body of an operator.” Id. It argued its mowers lack this limitation because the steering controls of the accused mowers are mounted to the chassis, not the operator platform, and therefore the operator’s hands and arms are not supported by the platform. J.A. 375-77.

The district court concluded that Metal-craft was likely to succeed on the infringement issue. J.A. 14. It acknowledged Toro’s argument but concluded that “the fact that the defendants’ lawnmowers have steering controls attached to the chassis, as opposed to the operator platform, is not a defense to infringement.” J.A. 12. It construed “an operator platform that supports ... an entire body of an operator” “in reference to how a person sits in an ordinary chair.” Id.

On appeal, Toro argues the district court erroneously rejected Toro’s noninfringement defense because the court’s construction of “an entire body of an operator” excludes the operator’s hands and arms. We disagree. Nowhere did the district court conclude that “an entire body of an operator” excluded the operator’s arms and hands.

The district court correctly determined that the claims at issue do not require that the steering controls be mounted on the suspended operator platform. A review of the claims at issue demonstrates that none of them contain such a limitation. Unas-serted dependent claims, in contrast, contain limitations that require the steering controls be connected to the operator platform. See, e.g., dependent claim 12. The claims also delineate between two structurally separate elements: the operator platform that supports the seat and the entire body of the operator and the steering controls. See id. (requiring that the steering controls be connected to and move in unison with the operator platform). The steering controls are not claimed as a component of the operator platform. Moreover, the specification makes clear that the operator platform supports the entire body and that steering controls are connected to, but not part of, the operator platform. The specification consistently distinguishes the operator platform from components that may be attached to it, such as the steering controls. ’475 patent at 2:39-40 (“steering controls may be mounted on the suspended platform”); Id. at 2:51-55; id. at 5:3-5 (“[s]teering controls 55 include a pair of levers 58A, 58B that are pivotally attached to the operator platform 70”); id. at 6:9-10 (“the components attached to the operator platform 70 such as steering controls 55”). The ’475 patent makes clear that it is the suspended operator platform that supports “an entire body of an operator” and that the operator platform is a separate and distinct element from the steering controls. In light of the claims and the specification, we reject Toro’s claim construction argument.

Toro also argues that the “entire body of an operator” limitation requires the steering controls be mounted on the operator platform or else the operator’s hands will not be isolated from shock loads. It argues that since its accused mowers have steering controls connected to the chassis, its mowers do not isolate ,the operator’s entire body from shock loads and therefore do not meet the “entire body of an operator” limitation. Toro improperly equates supporting the entire body of an operator with isolating every aspect of an operator’s body from shock loads.

No doubt, the ’475 patent discusses the advantages of isolating an operator’s body from shock loads. However, the ’475 patent treats supporting the entire body of an operator and isolating the operator from shock loads as two distinct aspects' of the claimed invention. Referring to Figures 1 and 2, the specification states that the mower includes a suspension system that “suspends the operator platform 70 from the chassis in a manner that isolates an operator from vibrations, or shock-type or other loads.” ’475 patent at 4:1-4 (emphasis added). This is different from when it refers again to Figures 1 and 2 and states, “suspension system 100 is configured to support an entire body of the operator, the operator platform 70, and the components attached to the operator platform 70 such as steering controls 55.” Id. at 6:7-10 (emphasis added). The ’475 patent uses precise language to differentiate between the distinct concepts of supporting and isolating with respect to other elements as. well. The specification states, “with yet another aspect of the invention, an operator’s seat is vibrationally isolated from a suspended operator platform,” and “[isolating the mower deck 20 from the suspension system 100 prevents scalping.” Id. at 3:1-3, 6:22-23 (emphases added). In contrast, the specification states, “[a] drive train is supported in a generally rigid manner in chassis 10” and “[mjower deck 20 is supported by frame 12.” Id. at 4:9-10, 4:14-15 (emphases added).

Finally, the claim language itself keeps these concepts separate. In contrast to asserted claims 11, 14, and 21, which claim “an operator platform that supports the seat and an entire body of an operator,” claim 5 requires “a seat and at least one elastomeric isolation mount connecting the seat to the operator platform to reduce transmission of vibrations there-between.” Since the ’475 patent discerns between the invention’s functionality of supporting versus isolating from vibrations, we may not import into the entire body of an operator limitation a functional requirement that every part of the body be isolated from shock loads. It would be improper to import the isolation feature into the separate entire body limitation as Toro asks us to do. As a result, we conclude that the district court did not abuse its discretion in rejecting Toro’s nonin-fringement defense and determining that Metalcraft had established a likelihood of success on infringement.

2. Substantial Question of Validity .

Obviousness is a question of law based upon underlying factual determinations, which we review for clear error. Senju Pharm. Co. v. Lupin Ltd., 780 F.3d 1337, 1341 (Fed. Cir. 2015). A claim is invalid for obviousness “if the differences between the claimed invention and the pri- or art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.” 35 U.S.C. § 103. In determining whether there would have been a motivation to combine prior art references to arrive at the claimed invention, it is insufficient to simply conclude the combination would have been obvious without identifying any reason why a person of skill in the art would have made the combination. See In re Van Os, 844 F.3d 1359, 1361 (Fed. Cir. 2017). Whether a skilled artisan would have been motivated to combine the references is a question of fact. Apple Inc., 839 F.3d at 1051.

Toro argued that claim 21 would have been obvious in light of U.S. Patent No. 3,420,568 (“Henriksson”) and Japanese Patent Application No. JP55-69340 (“Sa-saki”). Henriksson discloses a device for resilient support of a driver’s compartment mounted on a vehicle frame to provide vertical movement to cushion the driver from shocks absorbed by the vehicle from the earth or road. Henriksson at 1:15-25. Sasaki discloses a device for adjusting an initial load of a spring in a damper used in a rear-wheel suspension system of a motorcycle or the like. Sasaki at 2.

Toro argued that a person of ordinary skill in the art would have been motivated to combine Henriksson and Sasaki. It argued that while Henriksson does not disclose dual (fine and course) adjusters, as claimed by claim 21, dual shock adjusters were well-known in the prior art. J.A. 379. It presented Sasaki as prior art that discloses shock absorbers with both fine and course adjustment. Id.

The district court rejected Toro’s motivation to combine argument. It recognized that “a patent ‘composed of several elements is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art’ ”■ and that “it can be important to identify a reason that would have prompted a person of ordinary skill in the relevant field to combine the elements in the way the claimed new invention does.” J.A. 13-14 (quoting KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418-19, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007)). It concluded that Toro failed to raise a substantial question of validity, stating Toro offered “no reason, and the Court cannot imagine one, that a person of ordinary skill in this field would combine a motorcycle shock with a suspended truck cab and come up with a suspended operator platform.” J.A. 13-14.

On appeal, Toro argues the district court’s analysis is inconsistent with KSR, 550 U.S. at 420-21, 127 S.Ct. 1727, which stated: “The idea that a designer hoping to make an adjustable electronic pedal would ignore Asano because Asano was designed to solve the constant ratio problem makes little sense. A person of ordinary skill is also a person of ordinary creativity, not an automaton.” Toro argues it would have been obvious to a person of skill in the art to combine Henriksson and Sasaki because Henriksson sought to solve the problem of transmission of shock loads to the operator and specified conventional and telescope-type shock absorbers as methods of reducing shock loads.

We hold that the district court’s finding that there would not have been a motivation to combine is not clearly erroneous. The district court correctly acknowledged that it is not enough for Toro to merely demonstrate that elements of .the claimed invention were independently known in the prior art. Often, every element of a claimed invention can be found in the prior art. In re Kotzab, 217 F.3d 1365, 1370 (Fed. Cir. 2000). Moreover, Toro merely identifies a problem that Hen-riksson sought to solve. However, “knowledge of a problem and motivation to solve it are entirely different from motivation to combine particular references.” Innogenetics, N.V. v. Abbott Labs., 512 F.3d 1363, 1373 (Fed. Cir. 2008).

We agree with the district court that Toro provides no explanation or reasoning for concluding that one of skill in the art would have combined these particular references ■ to produce the claimed invention. Without any explanation as to how or why the references would be combined to arrive at the claimed invention, we are left with only hindsight bias that KSR warns against. See KSR, 550 U.S. at 421, 127 S.Ct. 1727. And while we understand that “[t]he obviousness analysis cannot be confined by a formalistic conception of the words teaching, suggestion, and motivation,” we also recognize that we cannot allow hindsight bias to be the thread that stitches together prior art patches into something that is the claimed invention. See KSR, 550 U.S. at 419, 421, 127 S.Ct. 1727. For these reasons, we conclude that the district court did not abuse its discretion in rejecting Toro’s obviousness defense and determining that Toro did not raise a substantial question of validity.

, Toro also argued below that Henriksson anticipates claims 11 and 14. The district court found that Henriksson “discloses a heavy-duty truck with a driver’s compartment, not an operator platform as described by claims 11 and 14” and therefore is not .an anticipatory reference. J.A. 13. Toro challenges the district court’s finding.

We decline to address the anticipation issue. A party may establish a likelihood of success by showing that at least one valid and enforceable patent claim is likely to be infringed. Abbott Labs. v. Andrx Pharm., Inc., 473 F.3d 1196, 1201 (Fed. Cir. 2007). Because asserted claim 21 covers the accused products and because we conclude that the district court did not abuse its discretion in determining that Metalcraft established a likelihood of success as to infringement arid validity with respect to claim 21, we need not reach the 'anticipation arguments regarding claims 11 and 14 to sustain the injunction as to claim 21 which reaches all of the accused products.

B. Irreparable Harm

A party seeking a preliminary injunction must establish that it is likely to suffer irreparable harm if the preliminary injunction is not granted and there is a causal nexus between the alleged infringement and the alleged harm. Apple Inc. v. Samsung Elecs. Co., 735 F.3d 1352, 1360 (Fed. Cir. 2013). Evidence of potential lost sales alone does not demonstrate irreparable harm. See Abbott Labs. v. Andrx Pharm., Inc., 452 F.3d 1331, 1348 (Fed. Cir. 2006). Evidence showing that no amount of monetary damages, however great, could address the harm tends to show it is an irreparable harm. See Celsis in Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922, 930 (Fed. Cir. 2012). Where the injury cannot be quantified, no amount of money damages is calculable, and therefore the harm cannot be adequately compensated and is irreparable.

The district court determined that Scag is likely to suffer irreparable harm in the absence of a preliminary injunction because “it is impossible to quantify the damages caused by the loss of a potentially lifelong customer.” J.A. 15. Toro argues the district court abused its discretion by ignoring evidence it presented of at least twelve other companies that sell mowers designed to decrease shock loads to the operator. It also argues the court erred in accepting Scag’s argument that brand loyalty resulted in the loss of “a potentially lifelong customer,” and there are no facts to support this finding. We do not find Toro’s arguments persuasive.

There is no requirement that the district court discuss every fact alleged by Toro. See Fresenius USA, Inc. v. Baxter Int’l, Inc., 582 F.3d 1288, 1303 (Fed. Cir. 2009). Even if Toro means to allege that these twelve other companies have infringing lawnmowers that compete with Scag’s, “[t]he fact that other infringers may be in the marketplace does not negate irreparable harm.” Pfizer, Inc. v. Teva Pharm. USA Inc., 429 F.3d 1364, 1381 (Fed. Cir. 2005). Furthermore, the district court determined “the damage to Scag is irreparable because it is impossible to quantify the damages caused by the loss of a potentially lifelong customer.” J.A. 15. The fact that Toro’s own Senior Marketing Manager declared that some customers “prefer to purchase an entire line of products from the same manufacturer for consistency” supports the court’s determination. J.A. 15 (citing J.A. 432, ¶ 7). The district court did not clearly err on this record; the loss by Scag of customers may have far-reaching, long-term impact on its future revenues, and the sales lost by Scag are difficult to quantify due to “ ‘ecosystem’ effects, where one company’s customers will continue to buy that company’s products and recommend them to others.” Apple Inc. v. Samsung Elecs. Co., 809 F.3d 633, 641, 645 (Fed. Cir. 2015). “Because of its variable and uncertain nature, this loss is very difficult to calculate.” Id. Therefore, -the district court did not abuse its discretion in holding that Scag is likely to suffer irreparable harm in the absence of an injunction.

C. Balance of Equities and the Public Interest

A party seeking a preliminary injunction must establish that “the balance of equities tips in [its] favor, and that an injunction is in the public interest.” Luminara, 814 F.3d at 1352. The district court must weigh the harm to the moving party if the injunction is not granted against the harm to the non-moving party if the injunction is granted. Hybritech Inc. v. Abbott Labs., 849 F.2d 1446, 1457 (Fed. Cir. 1988). It is within the court’s discretion to balance the equities. Atlas Powder Co. v. Ireco Chems., 773 F.2d 1230, 1234 (Fed. Cir. 1985). In considering whether the public interest favors the grant of an injunction, the district court should focus on whether a critical public interest would be injured by the grant of injunctive relief. Hybritech, 849 F.2d at 1458.

The district court identified the harms that Toro asserted it would suffer if enjoined as those associated with losing a patent infringement lawsuit. J.A. 17. It recognized that in the absence of an injunction, Scag would face substantial hardship in being forced “to compete against its own patented invention.” J.A. 16-17. It concluded that Scag’s harm in the absence of an injunction outweighs Toro’s harm if enjoined. J.A. 17. It also concluded that in light of the importance of encouraging innovation and in light of the fact that the public can continue to obtain the patented suspension system from Scag or other non-infringing mowers from Toro, the public interest favors the issuance of an injunction. Id.

Toro argues that its harm outweighs Scag’s and the injunction harms the public because it disrupts the status quo by removing from the public lawnmowers that had been available for over a year.

We are not persuaded that the district court’s contrary determination was an abuse of discretion and decline to disturb the grant of the preliminary injunction on these bases.

D. Content and Scope of the Injunction

Pursuant to Rule 65(d)(1) of the Federal Rules of Civil Procedure, every order granting an injunction must “state the reasons why it issued; state its terms specifically; and describe in reasonable detail — and not by referring to the complaint or other document — the act or acts restrained or required.” “[Wjhether the terms of an injunction fulfill the mandates of Rule 65(d) is a question of law that we review without deference.” Int’l Rectifier Corp. v. IXYS Corp., 383 F.3d 1312, 1315 (Fed. Cir. 2004). We do not uphold vague or overly broad injunctions because “those against whom an injunction is issued should receive fair and precisely drawn notice of what the injunction actually prohibits.” Granny Goose Foods, Inc. v. Bhd. of Teamsters & Auto Truck Drivers, 415 U.S. 423, 444, 94 S.Ct. 1113, 39 L.Ed.2d 435 (1974). In the patent infringement context, we have found as overly broad an injunction that “simply prohibits future infringement of a patent.” Int’l Rectifier Corp., 383 F.3d at 1316.

The district court’s order enjoins Toro from “making, using, selling, and offering to sell lawnmowers equipped with platform suspension systems that infringe Scag’s patent, U.S. Patent No. 8,186,457.” J.A. 6. Toro argues the district court’s preliminary injunction is overly broad. We do not agree. The Decision and Order in which the district court grants the motion for the preliminary injunction discusses both the claims at issue as well as the defendants’ accused products which it enjoins. J.A. 6-18.

Claim 21 was argued to cover all the accused products, and Toro has made no meaningful arguments which delineated among the accused products. We have affirmed the district court’s conclusion that the patentee has established a likelihood of success that the accused products infringe claim 21 and that there is not a substantial question of validity as to claim 21. In such a case, we affirm the preliminary injunction as to the accused products.

Conclusion

For the foregoing reasons, we hold that the district court did not abuse its discretion in granting Scag’s motion for a preliminary injunction. Accordingly, we affirm the district court’s grant of injunctive relief on claim 21 as to the accused products.

AFFIRMED

Costs

Costs to Appellee.

      . Toro relies for its claim that the district court held that an operator’s entire body does not include an operator's arms or hands on one sentence in the district court’s opinion that states “[a]ll of the accused mowers have steering controls connected to the chassis, not the suspended operator platform, which means that the platform does not support the rider’s arms and hands,” to understand that the district court made such a finding. We decline to interpret this single sentence, located in the middle of the court’s discussion of the parties' arguments, as a fact-finding. J.A. 10. We agree with Scag that this sentence is merely part of the court's summary of the positions taken by each party and refers to Toro’s position.

      . Claim 21 claims “a suspension system connecting the operator platform to the chassis and including (i) a course-stiffness adjuster ... and (ii) a fine-stiffness adjuster.” '475 patent at 13:12-17.