Judge Bucklo denied defendant Life+Gear’s Fed. R. Civ. P. 12(b)(2) and (3) motion to dismiss for lack of personal jurisdiction and improper venue in this patent dispute. While Life+Gear did not have Illinois offices, it did have an interactive website and at least one Illinois sale. Life+Gear also sold product to two distributors that sold that product in Illinois and Life+Gear was reasonably aware of those channels of sale.
Venue was proper because venue in a patent case exists wherever there is personal jurisdiction.

Continue Reading Limited Contracts and Distributor Sales in Illinois Create Jurisdiction

Fasteners for Retail, Inc. v. Andersen, No. 11 C 2164 Slip. Op. (N.D. Ill. Aug. 30, 2011) (Kennelly, J.).
Judge Kennelly denied defendant Andersen’s motion to dismiss this patent and trade secret case. The Court had personal jurisdiction over Andersen because he worked for defendant K International, an Illinois entity, and Andersen had solicited his former customers in Illinois.
Venue was also proper in the Northern District. A substantial part of the facts at issue occurred in Illinois. The parties’ prior agreement did not release plaintiff’s trade secret claims because they were not contemplated when plaintiff signed the agreement.

Continue Reading Soliciting Illinois Customers Creates Jurisdiction

Modern Trade Comms., Inc. v. PSMJ Resources, Inc., No. 10 C 5380, Slip Op. (N.D. Ill. Aug. 19, 2011) (Pallmeyer, J.).
Judge Pallmeyer granted defendants PSMJ Resources’ (“PSMJ”) and Oser Communications’ (“Oser”) motion to dismiss for lack of personal jurisdiction in this Lanham Act case involving plaintiff Modern Trade Communications’ (“MTC”) rights in its Metal Construction News mark for a metal industry trade publication. At the Metalcon tradeshow in 2010, Oser distributed a daily publication entitled Metal Daily News at PSMJ’s direction. MTC alleged that the Metal Daily News title infringed its Metal Construction News mark, which MTC used to publish an official show guide at the same conference.
PSMJ was a Massachusetts company without offices or personnel in Illinois. It approximated that 3% of its revenue at the 2009 Metalcon show in Florida was from Illinois residents. PSMJ’s website was not interactive. PSMJ did produce six training seminars unrelated to Metalcon in Illinois. PSMJ’s small revenues from Illinois residents did not create general jurisdiction. While related to Metalcon, PSMJ’s contract with a third party in Illinois did not create specific jurisdiction. And PSMJ’s production of the 2002 Metalcon in Illinois did not create specific jurisdiction because the accused Metal Daily News was only distributed at the 2010 Metalcon in Las Vegas. The Court, therefore, had neither general nor specific jurisdiction over PSMJ.
Oser was an Arizona company without offices or personnel in Illinois, although Oser did distribute publications at two to three trade shows per year in Chicago. Oser’s website was passive, except that the 2010 Metal Daily News was available on the site for downloading. Attendance at two to three trade shows each year in Chicago did not create the systematic contacts necessary for general jurisdiction. Oser’s website was not sufficient to create specific jurisdiction. MTC made no allegation that the website was targeted at Illinois, and the availability of the publication as a free download was not sufficient either. And MTC did not allege how Oser’s alleged infringement in Las Vegas was tied to Oser’s Illinois activities. Furthermore, the sale of an advertisement in the Metal Daily News to an Illinois resident, even combined with the website allegations, was not sufficient to create specific jurisdiction.
The Court also denied MTC’s motion to amend because it did not allege any new facts that might create personal jurisdiction.

Continue Reading No Personal Jurisdiction Based Upon a Passive Website and a Single Advertisement

Simonian v. Allergan, Inc., No. 10 C 2414, Slip Op. (N.D. Ill. Apr. 28, 2011) (St. Eve, J.).
Judge St. Eve denied defendant Allergan’s motion to dismiss plaintiff Simonian’s false patent marking suit holding that the false marking statute was constitutional pursuant to the Take Care Clause. The government retained little control over false marking actions, but that was less of a concern because false marking cases were civil not criminal. And, in fact, the government retained sufficient control. The executive branch was notified of each suit because the district court clerk was required to give the Director of the Patent Office (a member of the executive branch) notice of every patent suit. Furthermore, the government may intervene in every case. And when the government intervenes, plaintiff cannot dismiss a case without the government’s agreement.

Continue Reading False Patent Marking is Constitutional

Triteq v. HMC Holdings LLC, No 11 C 843, Slip Op. (N.D. Ill. Jul. 5, 2011) (Leinenweber, J.).
Judge Leinenweber granted in part and denied in part defendant HMC Holdings’ (“HMC”) motion to dismiss this patent and false marking complaint involving pistol boxes. Plaintiff Triteq had standing to bring its declaratory judgment claim based upon HMC’s letter to Triteq alleging Triteq’s products were direct copies of HMC’s patented product and seeking the names of Triteq’s customers. The Court dismissed Triteq’s false marking claim – alleging that the marked pistol boxes were not covered by the marked design patent – with leave to replead. Triteq’s claim lacked specific facts showing intent as required by BP Lubricants.

Continue Reading Letter Demanding Customers Created Standing to Sue

Culligan Int’l Co. v. Water Sys. of Birmingham, Inc., No. 10 C 8199, Slip Op. (N.D. Ill. Apr. 27, 2011) (Bucklo, J.).

The Court granted defendants’ Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction in this trademark dispute regarding plaintiff’s CULLIGAN marks. Defendants were Alabama entities without offices, employees

Heathcote Holdings Corp. v. L’Oreal USA, Inc., No. 11 C 1921, Slip Op. (N.D. Ill. Aug. 9, 2011) (Lefkow, J.).
Judge Lefkow granted defendant L’Oreal’s motion to transfer plaintiff’s false patent marking case involving boxes of hair dye to the S.D. New York, L’Oreal’s home district. Generally, plaintiff’s Heathcote’s choice of forum would be given deference, but in false marking cases the United States is the real party in interest. So, the qui tam plaintiff’s chosen forum is given little deference. The situs of material events was New York, where the accused packaging was designed and where the relevant employees reside. L’Oreal’s witnesses and documents were more likely in New York than Illinois.
The convenience of the parties also weighed in favor of New York. Heathcote did not identify any employees that would have to travel to New York for the case, whereas L’Oreal’s relevant employees were in New York. Furthermore, Heathcote’s only business was litigation and therefore the travel would not distract Heathcote from its business.
The interests of justice weighed in favor of transfer. There were already four false marking cases against L’Oreal or its subsidiaries that had been transferred to the S.D. New York. And the potential consolidation of those cases would benefit the parties and judicial economy.

Continue Reading False Marking Case Transferred to District Where Defendant Already Faces Four False Marking Cases

ArrivalStar S.A. v. Geo-Comm, Inc., No. 11 C 5016, Slip Op. (N.D. Ill. Jul. 27, 2011) (Shadur, Sen. J.).
Judge Shadur sua sponte challenged the sufficiency of plaintiff ArrivalStar’s venue allegations. Venue is proper in patent cares: 1) where the defendant resides; or 2) where the defendant allegedly committed the accused acts and had a regular place of business. Geo-Comm resided in Minnesota. So, only the second option was possible. ArrivalStar did plead that Geo-Comm sold accused products in the district. But ArrivalStar failed to plead that Geo-Comm had a regular and established place of business in the district. Instead of requiring immediate repleading or briefing, the Court set a status conference to discuss the issue.

Continue Reading Venue Questioned Sua Sponte

TechnoLines, LP v. GST Autoleather, Inc., No. 11 C 965, Slip Op. (N.D. Ill. Jun. 30, 2011) (Grady, J.).
Judge Grady granted defendant GST’s motion to dismiss plaintiffs’ patent claims for improper revenue and lack of production and dismissed the remaining state law claims without prejudice to be refiled pursuant to diversity jurisdiction, if possible.
The Court’s key rulings were:
GST’s failed license negotiations with plaintiff Echelon in Illinois alone could not create personal jurisdiction.
Echelon residing in Illinois and, therefore, having been allegedly harmed in Illinois does not create personal jurisdiction. GST’s conduct must have been specifically directed at Illinois. And there was no evidence that GST sold product into Illinois.
GST’s phone calls and emails to Echelon in Illinois did not create personal jurisdiction.
The Court refused supplemental jurisdiction over the remaining state law claims, and gave plaintiff a deadline for repleading based upon diversity jurisdiction, if it could.

Continue Reading Letters and Emails to State Cannot Alone Create Jurisdiction

Revenue Realization LLC v. H&R Block, Inc., No. 11 C 85, Slip Op. (N.D. Ill. Apr. 11, 2011) (Shadur, Sen. J.).
Judge Shadur granted defendant H&R Block’s motion to dismiss, after granting plaintiff Revenue Realization leave to file its response to the motion and fully considering it. Revenue Realization accused H&R Block of patent infringement. H&R Block moved to dismiss because it was a passive holding company for a variety of subsidiaries and, therefore, was not the proper H&R Block defendant.
H&R Block offered to identify the proper entities for Revenue Realization. But Revenue Realization refused the offer, as well as the Court’s suggestion that it file against all possible subsidiaries and narrow the defendants based upon the entities’ subsequent motions to dismiss. Instead Revenue Realization argued that the Federal Circuit’s decision in Nuance Commc’ns, Inc. v. Abbyy Software House, 626 F.3d 1222 (Fed. Cir. 2010) confirmed that the Court had jurisdiction over a passive parent entity in patent cases. The Court, however, held that the opinion stood for quite a different proposition and was a “weak reed to lean on.” In fact, Nuance dealt with a subsidiary entity that had direct contacts with the forum. In contrast, H&R Block was a true holding company. And the fact that H&R Block defined itself as including its subsidiaries in certain SEC filings was irrelevant to the Court’s analysis.
The Court finished the opinion referring to the New Yorker’s old practice of filling the final page of an article that otherwise would have left a portion blank with a section captioned “Department of Clotted Nonsense” containing amusing quotations and reprinted errors from other publications. The Court then granted plaintiff leave to file its response brief, and noted that the Court had already fully considered it.

Continue Reading Department of Clotted Nonsense: Court Rejects Jurisdiction Over Holding Company