A District of Columbia federal court has dismissed, without prejudice, GlycoBioSciences, Inc.’s patent infringement suit against L’Oréal, S.A for lack of jurisdiction. Judge Beryl Howell ruled that L’Oréal, S.A. is sufficiently distinct from L’Oréal USA, its American subsidiary, and thus it does not have sufficient contacts within the United States.
GlycoBioSciences is a Canadian cosmetics and pharmaceuticals company. As is relevant to this case, they own two U.S. patents for a gel containing specific chemicals and the quantities thereof and a specific polymer matrix. They argue that L’Oréal, S.A. and its subsidiary manufacture and sell cosmetics that infringe on these patents.
The court did not examine whether the products in question infringe on GlycoBioSciences’ patent; it merely examined whether L’Oréal, S.A. contains significant contacts in the US for the court to have jurisdiction. GlycoBioSciences argues simply that since L’Oréal, S.A. wholly owns L’Oréal USA, they have sufficient minimum contacts. L’Oréal, S.A., however, argues that they only have minimal contact with L’Oréal USA and that the subsidiary has its own separate licensing and distribution contracts, [manufacturing], board of directors, financial statements and “its own departments in areas such as finance, human resources, legal, corporate communications, customer relations, Research and Innovation, and marketing and advertising.”
As such, Judge Howell ruled that the parent and the subsidiary were sufficiently distinct to rule out an alter ego arrangement. Thus the complaint is dismissed without prejudice.