The case of the day is Blue Spike, LLC v. ASUS Computer International, Inc. (E.D. Tex. 2018). Blue Spike brought a patent infringement action against ASUSTeK Computer, Inc., a Taiwanese company. Blue Spike served process “C/O ASUS Computer International via ASUS’s registered agent, CT Corporation System in Dallas, Texas.” ASUS was AUSTeK’s US subsidiary. When AUSTeK did not answer, Blue Spike sought a default judgment. AUSTeK then moved to dismiss for insufficient service of process.
The judge correctly recognized that service would be valid if the parent had authorized the subsidiary to accept service on its behalf. Indeed, FRCP 4(h)(1)(B) authorizes service on a corporation by serving an agent appointed by the principal to accept service. On the facts, the judge found that there was no such authority here.
The judge then cited some Fifth Circuit cases for the proposition that service would also be proper if the subsidiary was the alter ego of the parent, and then cited Texas precedents on what one must show to prove that two entities are alter egos. This is a proper approach, since FRCP 4(h)(1), the rule on service in the United States on corporations, provides that service can be made using a method prescribed for service on individuals in FRCP 4(e), and Rule 4(e), in turn, incorporates state law methods of service. But again, on the facts, the court found that the US company was not the alter ego of its Taiwanese parent.
Thus the court denied the motion for a default and quashed the service, though it did not dismiss the action.
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