Rates Technology Inc. (RTI) owns patents respecting automatic routing of telephone calls. It sued Broadvox Holding Co. LLC, subsidiary Cypress Communications Operating Co. LLC, and unnamed subsidiaries for infringement. Through its subsidiaries, Broadvox operates a voice over Internet protocol (VoIP) network in New York, which is among its top 10 markets. The court denied Broadvox (and Cypress’) motions seeking dismissal for lack of personal jurisdiction, and sanctions on the ground that RTI’s amended complaint violated Rule 11. Jurisdiction over Broadvox was premised on an agency theory grounded on the New York activities of its subsidiaries, including Cypress. The record showed that Cypress and Broadvox’s other subsidiaries “carry on business on [Broadvox's] behalf” by maintaining and operating its telecommunications equipment and serving Broadvox customers in New York. Thus RTI established a prima facie case that Broadvox’s subsidiaries are doing business in New York as its agents. Defendants had to serve RTI with their sanctions motion 21 days before July 11, 2013. Neither their informal communications with RTI nor their pre-motion letter to the court substituted for serving the motion as required by Rule 11.
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