TechnoLines, LP et al v. GST AutoLeather, Inc.

Filing 30

MEMORANDUM Opinion signed by the Honorable John F. Grady on 6/30/2011. Mailed notice(cdh, )

11-965.111-RSK

June 30, 2011

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TECHNOLINES, LP and ECHELON LASER
SYSTEMS, LP,
Plaintiffs,
v.
GST AUTOLEATHER, INC.,
Defendant.

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No. 11 C 965

MEMORANDUM OPINION
Before the court is defendant GST AutoLeather, Inc.’s (“GST”)
motion to dismiss plaintiffs’ complaint or, in the alternative,
transfer this case to the Eastern District of Michigan.

For the

reasons

dismiss

explained

below,

we

grant

GST’s

motion

and

plaintiffs’ complaint without prejudice.
BACKGROUND
Plaintiff Echelon Laser Systems, LP (“Echelon”), a Delaware
limited

partnership,

TechnoLines,

LP

and

is

a

joint

Masonite

venture

Corporation.

between

plaintiff

(Compl.

¶

5.)

TechnoLines is a Delaware limited partnership with its principal
place of

business

in

Westlake,

Ohio;

Masonite

is

a

Delaware

corporation with its principal place of business in Tampa, Florida,
and its “principal research and development facility” in West
Chicago, Illinois.

(Id.)

TechnoLines and Masonite formed Echelon

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“to find ways to further develop, promote, and commercialize”
TechnoLines’ laser-etching technology, (Coghlan Decl. ¶ 2.), which
is used to etch “patterns and effects onto a wide range of
materials, including fabrics and leather.”

(Compl. at ¶ 6.)

This

technology is covered by four patents, which the USPTO issued to
TechnoLines’ CEO, Darryl Costin.

(Compl. ¶¶ 9, 30, 40, and 45.)

Costin assigned the patents to TechnoLines, and TechnoLines has
granted Echelon the right to sue for their infringement.

(Id. at

¶¶ 30, 40, and 45.)
Defendant GST, a Delaware corporation with its principal place
of business in Southfield, Michigan, “sells leather for use in
automotive interiors for distribution throughout the United States,
including this District.”

(Id. at ¶ 7.)

TechnoLines and GST began

working together in 2004, with the goal of selling leather etched
with TechnoLines’ technology to automotive companies.
11.)

(Id. at ¶

The parties memorialized their relationship in a Mutual Non-

Disclosure Agreement, dated July 5, 2005.

(Id. at ¶ 13.)

Among

other things, this agreement required GST to use TechnoLines’
confidential and proprietary information solely in connection with
the parties’ joint business relationship.

(Id.)

In mid-2009, GST

sent TechnoLines proposed images for a new Dodge Ram “Laramie
Longhorn” truck interior.

(Id. at ¶ 15.)

TechnoLines converted

“these image files to an electronic format that could be used with
a laser scribing system,” suggested modifications and improvements,

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and prepared “samples.” (Id. at ¶¶ 15-16.)

TechnoLines alleges

“[o]n information and belief” that GST used these samples “to
secure an order from Dodge for leather interiors containing the
laser-scribed designs.”

(Id. at ¶¶ 15-17.)

TechnoLines charged

GST a fee for its services that only “partially” covered its costs,
expecting to eventually license its technology to GST to use GST’s
own plant.

(Id. at ¶ 18.)

To that end, the parties began to negotiate a licensing
agreement in or around December 2009.
Decl. ¶ 5.)

(Id. at ¶¶ 19, 21; Coghlan

On December 14, 2009, Costin sent an email to a GST

representative, which stated in pertinent part: “Per your request,
please call Henry Coghlan, VP of R&D at Masonite, to initiate
discussions regarding license agreements and royalties.”

(Email

from D. Costin to P. Chvatal, dated Dec. 14, 2009, attached as Ex.
A

to Pls.’

President,
Coghlan’s

Resp.)

At

Technology,
office,

that
for

which

time

Coghlan

Echelon.

also

served

was

(Coghlan
as

also
Decl.

Echelon’s

office,” was located in West Chicago, Illinois.

the Vice
¶

1.)

“principal

(Id. at ¶¶ 1-2.)

As far as the complaint and the parties’ affidavits indicate, this
is the first time that GST dealt with Echelon.

GST and Echelon

negotiated for several months by telephone and email.
6; Compl. ¶ 21.)

(Id. at ¶ 5-

During that time Coghlan prepared, and submitted

to GST, drafts of a Letter of Intent and a Non-Binding Term Sheet
to serve as the basis for their negotiations.

(Coghlan Decl. ¶ 5;

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see also Letter of Intent and Non-Binding Term Sheet, attached to
Coghlan Decl.)

These documents, which the parties never executed,

generally described the terms of a proposed agreement between
Echelon and GST. (Id.) TechnoLines was not a party to the proposed
agreement, and it did not directly participate in the negotiations.
(Compl.

¶

21

(“Throughout

these

negotiations,

Defendant

communicated solely with Echelon representatives in West Chicago,
Illinois.”).)

But

TechnoLines

did,

in

early May

2010,

host

“technical visits” during which it demonstrated the laser-etching
technology for GST personnel.

(Id. at ¶ 22.)

Later that same

month GST stopped discussing the Laramie Longhorn project with
Echelon and Technolines, even as it continued to work with
TechnoLines on other projects.

(Id. at ¶ 23.)

TechnoLines

subsequently learned that Dodge was marketing a Laramie Longhorn
truck “bearing the exact same laser-etched designs that TechnoLines
had developed for [GST], and which were the subject of the parties’
negotiations.”
Plaintiffs

(Id. at ¶¶ 25-27.)
have

asserted

claims

for

patent

infringement

(Counts I-IV), trade-secret misappropriation (Count V), breach of
the

Mutual

Non-Disclosure

Agreement

(Count

VI),

and

unjust

enrichment (Count VII). GST has moved to dismiss the complaint for
improper venue, or in the alternative, transfer the case to the
Eastern District of Michigan.

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DISCUSSION
A.

Legal Standard
28 U.S.C. § 1400(b) provides that “[a]ny civil action for

patent infringement may be brought in the judicial district where
the defendant resides, or where the defendant has committed acts of
infringement and has a regular and established place of business.”
The patent venue statute is exclusive. See Stonite Products Co. v.
Melvin Lloyd Co., 315 U.S. 561, 565-66 (1942).

Even after more

recent amendments, “[t]he Stonite rule remains in part, and to this
day Section 1400(b) cannot be supplemented . . . by the statute
permitting a claim to be brought in any district in which a
substantial part of the events or omissions giving rise to the
claim occurred.”

Charles A. Wright & Arthur R. Miller, Federal

Practice and Procedure § 3823 (3d Ed.); (cf. Pls.’ Reply at 5-6
(arguing that they may establish venue under either the patent
venue statute or the general venue statute, 28 U.S.C. § 1391.).
However, the 1988 amendment to the general venue statute revised
the definition of the term “resides” “[f]or purposes of venue under
this chapter,” which includes § 1400.

See 28 U.S.C. § 1391(c); VE

Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1584
(Fed. Cir. 1990) (concluding that, by its plain terms, the 1988
amendment to § 1391(c) redefined “resides” as it is used in §
1400).

A corporation “resides” for purposes of the patent venue

statute “in any judicial district in which it is subject to

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personal jurisdiction at the time the action is commenced.”

28

U.S.C. § 1391(c).
Whether we have personal jurisdiction over GST with respect to
plaintiffs’
Circuit law.

patent-infringement

claims

is

governed

by

Federal

See Silent Drive, Inc. v. Strong Indus., Inc., 326

F.3d 1194, 1201 (Fed. Cir. 2003); see also U.S. Gypsum Co. v.
LaFarge North America, Inc., 508 F.Supp.2d 601, 641 (N.D. Ill.
2007). Seventh Circuit law applies to the remaining counts because
they are not “intimately linked to patent law.”
F.3d at 1201.1

Silent Drive, 326

The parties have not requested an evidentiary

hearing, nor have they cited any material fact disputes that would
require one.

Cf. Hyatt Intern. Corp. v. Coco, 302 F.3d 707, 713

(7th Cir. 2002) (if the parties dispute material facts, then the
court “must

hold

an evidentiary

hearing

to

resolve

them”).

Accordingly, a prima facie showing that GST is subject to personal
jurisdiction will suffice.

See Electronics For Imaging, Inc. v.

Coyle, 340 F.3d 1344, 1349 (Fed. Cir. 2003); Tamburo v. Dworkin,
601 F.3d 693, 700 (7th Cir. 2010).

We accept all well-pleaded

allegations as true, and resolve any factual disputes in the
parties’ affidavits in plaintiffs’ favor. Electronics For Imaging,
340 F.3d at 1349; Tamburo, 601 F.3d at 700.
B.

Plaintiffs’ Patent Infringement Claims (Counts I-IV)

1/
Neither side has acknowledged the distinction,
purposes, between patent and non-patent claims.

for

choice-of-law

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Plaintiffs must show that GST is amenable to service process
in this district and that exercising personal jurisdiction over it
comports with due process.

Patent Rights Protection Group, LLC v.

Video Gaming Technologies, Inc., 603 F.3d 1364, 1368-69 (Fed. Cir.
2010).

The Patent Act does not authorize nationwide service of

process, see Fitzsimmons v. Barton, 589 F.2d 330, 333 n.2 (7th Cir.
1979), therefore we turn to Illinois’ long-arm statute.

See Fed.

R. Civ. P. 4(k)(1)(A) (“Serving a summons or filing a waiver of
service establishes personal jurisdiction over a defendant . . .
who

is

subject

to

the

jurisdiction

of

a

court

of

general

jurisdiction in the state where the district court is located.”).
Illinois’ long-arm statute authorizes personal jurisdiction over a
defendant who has committed a “tortious act” in Illinois. 735 ILCS
5/2-209(a)(2).

It also permits “jurisdiction on any other basis

now or hereafter permitted by the Illinois Constitution and the
Constitution of the United States.”

Id. at 5/2-209(c); see also

Mobile Anesthesiologists Chicago, LLC v. Anesthesia Associates of
Houston Metroplex, P.A., 623 F.3d 440, 443 (7th Cir. 2010) (there
is “no operative difference” between the jurisdictional limits
imposed by the Illinois and United States Constitutions).

The

analysis under this catch-all provision merges with the familiar
“minimum contacts” due process analysis.

See N. A. Philips Corp.

v. American Vending Sales, Inc., 35 F.3d 1576, 1580 (Fed. Cir.
1994); see also Int’l Shoe Co. v. State of Wash., Office of
Unemployment Compensation and Placement, 326 U.S. 310, 316 (1945).

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Plaintiffs effectively concede that GST’s limited contacts with
Illinois

are

jurisdiction.
Hall,

466

insufficient

establish

general

personal

See Helicopteros Nacionales de Colombia, S.A. v.

U.S.

systematic”

to

408,

contacts

416

(1984)

with

the

(requiring

forum

state

to

“continuous
confer

and

general

personal jurisdiction); see also Silent Drive, 326 F.3d at 1200.
Turning to specific personal jurisdiction, the Federal Circuit
applies

a

three-factor

test:

“(1)

whether

the

defendant

purposefully directed activities at residents of the forum; (2)
whether the claim arises out of or relates to those activities; and
(3) whether assertion of personal jurisdiction is reasonable and
fair.”

Nuance Communications, Inc. v. Abbyy Software House, 626

F.3d 1222, 1231 (Fed. Cir. 2010).
1.

Personal Jurisdiction Based Upon GST’s Telephone Calls
and Emails to Echelon

GST’s
parties’

telephone

contract

calls

and

negotiations

emails
were

to

Echelon

purposefully

during

the

directed

at

Echelon in Illinois. But plaintiffs’ patent infringement claims do
not “arise out of” or “relate to” those contacts.

The Supreme

Court has not defined “arise out of” or “relate to” in this
context, and no consensus has emerged in the circuit courts.

See

Tamburo, 601 F.3d at 708-09 (discussing the different approaches
adopted by other circuits).

As far as we can tell, the Federal

Circuit has not announced a formal test along the lines that other
circuits have adopted.

Cf. Mass. Sch. of Law at Andover, Inc. v.

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Am. Bar. Ass’n, 142 F.3d 26, 35 (1st Cir. 1998) (requiring that the
defendant’s contacts proximately cause the plaintiff’s injury); Doe
v. Am. Nat’l Red Cross, 112 F.3d 1048, 1051 n.7 (9th Cir. 1997)
(requiring only “but for” causation).

GST’s allegedly infringing

acts are loosely “related” to its negotiations with Echelon: GST
sought to license the patents it is now accused of infringing.

But

a

not

defendant’s

contacts

and

the

plaintiff’s

claims

are

“related,” for jurisdictional purposes, simply because they involve
the same or similar subject matter.
Federal

Circuit

cases

This point is illustrated in

discussing

personal

jurisdiction

declaratory judgment suits against out-of-state patentees.

in
The

Federal Circuit has held that it would not comport with fair play
and

substantial

justice

to

subject

a

patentee

to

personal

jurisdiction based solely on cease-and-desist letters sent to
accused infringers in the forum.

See Red Wing Shoe Co., Inc. v.

Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1360-61 (Fed. Cir.
1998).

Besides the letters, the accused infringer must show that

the patentee engaged in “other activities” related to patent
enforcement in the forum.

See Avocent Huntsville Corp. v. Aten

Int’l Co., Ltd., 552 F.3d 1324, 1334 (Fed. Cir. 2008).

An

exclusive license agreement with a third party in the forum state
might be sufficient, depending on the nature of the agreement.
Breckenridge Pharmaceutical, Inc. v. Metabolite Laboratories, Inc.,
444 F.3d 1356, 1366 (Fed. Cir. 2006). Merely attempting to license
patents to someone in the forum is insufficient.

Id. (“[A]

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defendant may not be subjected to personal jurisdiction if its only
additional activities in the forum state involve unsuccessful
attempts to license the patent there.”) (citing Hildebrand v. Steck
Mfg. Company, Inc., 279 F.3d 1351, 1356 (Fed. Cir. 2002)).

The

court has also held that a patentee’s sales of its own patented
products in the forum are insufficient: “What the patentee makes,
uses, offers to sell, or imports is of no real relevance to the
enforcement or defense of a patent, because ‘the federal patent
laws do not create any affirmative right to make, use, or sell
anything.’”

Avocent, 552 F.3d at 1335 (quoting Leatherman Tool

Group, Inc. v. Cooper Indus., Inc., 131 F.3d 1011, 1015 (Fed. Cir.
1997)).

Failed attempts to license the relevant patents in the

forum, and a patentee’s sales of its own products there, are
“related” to the declaratory judgment action in the same informal
sense that the parties’ failed license negotiations in this case
are “related” to GST’s alleged infringement.

The Federal Circuit

authorities we have just discussed require more than that.

See

also RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1278 (7th
Cir. 1997) (rejecting a “hybrid” approach to general and specific
jurisdiction aggregating all of the defendant’s contacts with a
specific

plaintiff

jurisdiction).

for

purposes

of

establishing

specific

We conclude that plaintiffs’ patent infringement

claims do not “arise out of” or “relate to” GST’s failed license
negotiations with Echelon.
2.

Personal Jurisdiction Under Calder v. Jones, 465 U.S. 783
(1984).

- 11 -

Plaintiffs argue that personal jurisdiction is appropriate in
Illinois because that is where Echelon was injured by GST’s patent
infringement. (Pls.’ Resp. at 7 (citing Janmark v. Reidy, 132 F.3d
1200 (7th Cir. 1997)).)

In Janmark, a defendant located in

California threatened to sue the plaintiff’s customer in New Jersey
for contributory copyright infringement.

Id. at 1202.

When the

customer stopped doing business with the plaintiff, the plaintiff
sued the defendant in Illinois (the plaintiff’s home State) for
tortious interference with prospective economic advantage.

Id.

The district court concluded that it lacked personal jurisdiction
over the defendant, and our Court of Appeals reversed.
1203.

Id. at

The Janmark Court reasoned that the plaintiff’s injury

occurred in Illinois, where it was located, and therefore the tort
occurred there, too.

Id. at 1202 (The “tort was not complete

(because no injury occurred) until Janmark’s customer canceled the
order; the injury and thus the tort occurred in Illinois.”).

The

Janmark Court’s analysis under § 2-209(a)(2) — the “tortious act”
provision — is incompatible with Federal Circuit cases holding that
patent infringement occurs where the infringing act takes place.
See Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558,
1571 (Fed. Cir. 1994); see also N. A. Philips, 35 F.3d at 1579
(“[T]he ‘tort’ of patent infringement occurs where the offending
act is committed and not where the injury is felt.”). But the
Janmark Court went on to conclude that § 2-209(c) provided an
independent basis for personal jurisdiction, citing the “express

- 12 -

aiming” test announced by the Supreme Court in Calder v. Jones, 465
U.S. 783 (1984).

See Janmark, 132 F.3d at 1202-03; see also N. A.

Phillips Corp., 35 F.3d at 1580 (analyzing personal jurisdiction
under both § 2-209(a)(2) and (c)).
The plaintiff in Calder alleged that she was libeled by a
newspaper article written and edited by the defendants in Florida.
Calder, 465 U.S. at 1484.

She sued the defendants in California,

where she lived and worked, and where the article was circulated
(among other places). Id. Although the defendants’ other contacts
with California were negligible, the Supreme Court concluded that
they were subject to personal jurisdiction in California:
[Petitioners’] intentional, and allegedly tortious,
actions were expressly aimed at California. Petitioner
South wrote and petitioner Calder edited an article that
they knew would have a potentially devastating impact
upon respondent. And they knew that the brunt of the
injury would be felt by respondent in the State in which
she lives and works and in which the National Enquirer
has its largest circulation. Under the circumstances,
petitioners must “reasonably anticipate being haled into
court there” to answer for the truth of the statements
made in their article.
Id. at 789-90 (quoting World-Wide Volkswagen Corp. v. Woodson, 444
U.S.

286,

297

(1980)).

The

Janmark

Court

also

relied

on

Indianapolis Colts, Inc. v. Metropolitan Baltimore Football Ltd.
P’ship, 34 F.3d 410 (7th Cir. 1994).

In that case the owners of a

new Canadian Football League franchise in Baltimore sought to name
their

team

the

“Baltimore

CFL

Colts.”

Id.

at

411.

The

Indianapolis Colts and the National Football League sued the new
team and the Canadian Football League for trademark infringement in

- 13 -

Indiana.

Id.

Applying Calder, the Court concluded that the

plaintiffs’ injury in Indiana, plus the fact that the defendants
had “entered” (or planned to “enter”) Indiana via nationally
televised games, sufficed to establish personal jurisdiction in
that forum.

Id. at 412.

Plaintiffs have not cited, nor are we aware of, any Federal
Circuit case applying Calder’s “express aiming” test to establish
personal jurisdiction over an out-of-state defendant accused of
patent infringement.

But in light of Beverly Hills and N.A.

Phillips, see supra, we do not believe that the Federal Circuit
would construe Calder as broadly authorizing personal jurisdiction
wherever the patentee is located.

And despite language in Janmark

and Indianapolis Colts that arguably supports such an expansive
interpretation, our own Court of Appeals has recently construed
those cases (and Calder itself) more narrowly.

See Tamburo, 601

F.3d at 705; uBid, Inc. v. The GoDaddy Group, Inc., 623 F.3d 421,
427 n.1 (7th Cir. 2010) (“Calder can be read as authorizing
personal jurisdiction in the home state of the victim of almost any
alleged intentional tort, but it need not and should not be read
quite so broadly.”); see also Wallace v. Herron, 778 F.2d 391, 394
(7th Cir. 1985) (“We do not believe that the Supreme Court, in
Calder, was saying that any plaintiff may hale any defendant into
court in the plaintiff’s home state, where the defendant has no
contacts, merely by asserting that the defendant has committed a
tort against the plaintiff.”). There must be “something more” than

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an injury in the forum to support personal jurisdiction: the
plaintiff

must

also

establish

“tortious

conduct

specifically

directed at the forum, making the forum the focal point of the
tort.” Tamburo, 601 F.3d 706 (emphasis added).

The “focal point”

of the libelous article in Calder was the location where the
subject lived and worked.

Calder, 465 U.S. at 789-90. In Janmark,

the Tamburo Court noted, the defendant called the plaintiffs’
customer in New Jersey “with the purpose of interfering with sales
originating in Illinois.”

Tamburo, 601 F.3d at 706; see also

Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1075
(10th Cir. 2008) (likening an analogous fact pattern to a bank shot
in basketball: aimed at the backboard, but intended for the hoop).
In

Tamburo

itself,

the

plaintiff

accused

the

defendants

of

publishing false and defamatory statements on public websites and
“blast emails.”

Id.

“[A]lthough they acted from points outside

the forum state, these defendants specifically aimed their tortious
conduct at Tamburo and his business in Illinois with the knowledge
that he lived, worked, and would suffer the ‘brunt of the injury’
there.”
concluded

Id. (quoting Calder, 465 U.S. at 789-90).
that

this

was

sufficient

to

establish

The Court
personal

jurisdiction.
The Federal Circuit’s analysis in Silent Drive is consistent
with this view of Calder.

Silent Drive, Inc. collaborated with a

third party to create a “trailing axle” (a truck suspension system
designed to increase payload capacity).

Id. at 1197-98.

The

- 15 -

Silent Drive defendants sued the third party (but not Silent Drive)
in Texas state court alleging that it had used the defendants’
trade secrets to develop the axle.

Id. at 1198.

After finding for

the Silent Drive defendants, the Texas state court entered a broad
injunction prohibiting the state-court defendants and Silent Drive,
which the court identified by name in its order, from using,
manufacturing, and/or selling the product.

Id.

The Silent Drive

defendants sent copies of the injunction order to Silent Drive in
Iowa and to Silent Drive’s customers outside the State.

Id. at

1198-99. Applying Calder and Eighth Circuit authority, the Federal
Circuit concluded that the district court had personal jurisdiction
over the defendants with respect to Silent Drive’s claim that it
was not bound by the Texas court’s injunction:
Silent Drive has specifically pled that the defendants’
activities with respect to the enforcement of the Texas
injunction were all “expressly aimed” at Iowa, and that
[the defendants] “knew” that the activities “would have
[the] potentially devastating effect[s]” of inhibiting
Silent Drive from producing the MAXLE and its customers
from buying it.
Id. at 1204 (quoting Calder, 465 U.S. at 789).

The Silent Drive

court cited Janmark and Indianapolis Colts for the proposition that
personal

jurisdiction

plaintiff is injured.

is

appropriate

in

the

forum

where

See Silent Drive, 326 F.3d at 1206.

the

But the

facts in Silent Drive clearly established “something more” than
injury in the forum.

The defendants’ letters threatening legal

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action against Silent Drive and its customers were specifically
directed at Silent Drive in Iowa.
Returning to our own facts, Mexico is the only location
specifically

identified

in

the

complaint

as

the situs

of

an

infringing act. (Compl. ¶¶ 31, 36, 41, 46 (alleging on information
and

belief

that

GST

is

“practicing”

manufacturing facility in Mexico).
that

GST

sells,

offers

for

the

invention

at

a

The complaint further alleges

sale,

imports,

infringing product “in the United States.”

and/or

(Id.)

uses

the

GST denies that

it “sells products” in Illinois, (Jeske Aff. ¶ 4), and plaintiffs
have not cited any contrary evidence.

GST allegedly violated

Echelon’s right to exclude others from making and selling products
covered by the patents, but both the “tort” and the “economic loss”
occurred outside the State.

See Beverly Hills, 21 F.3d at 1571

(“Economic loss occurs to the patent holder at the place where the
infringing sale is made because the patent owner loses business
there.”).

GST knew that Echelon was located in Illinois, and that

it had obtained the right from TechnoLines to license the relevant
patents. But this knowledge does not establish that the sales were
“aimed”

at

Illinois

rather

infringing acts occurred.

than

the

location(s)

where

the

“There is an important distinction

between intentional activity which foreseeably causes injury in the
forum and intentional acts specifically targeted at the forum.”
Narco Avionics, Inc. v. Sportsman’s Market, Inc., 792 F.Supp. 398,
408 (E.D.

Pa.

1992)

(concluding

that

Calder

did

not

support

- 17 -

personal

jurisdiction

over

patentee’s home state).

a

foreign

defendant

sued

in

the

Our Court of Appeals’ decision in Wallace

is instructive here. In Wallace, the plaintiff sued the defendants
in Indiana, his home State, for malicious prosecution based on a
lawsuit that the defendants had previously filed against him in
California.

Wallace, 778 F.2d at 394.

The plaintiff argued that

Calder supported personal jurisdiction because the defendants had
served interrogatories and document requests, and had caused the
plaintiff to respond to complaints, in Indiana.

See id. at 394.

Our Court of Appeals disagreed, concluding that the defendants
“took no action that created the necessary connection with Indiana
for them to reasonably anticipate being haled into court there.”
Id. at 395.

The defendants in Wallace knew that the victim of

their malicious prosecution was located in Indiana, but that did
not make Indiana “the focal point” of the tort.
Finally, GST’s emails and telephone calls to Echelon do not
constitute

“entry”

into

Illinois

in

the

relevant

sense.

In

Indianapolis Colts, television broadcasts in Indiana threatened to
cause, or exacerbate, the injury the plaintiffs hoped to prevent by
seeking an injunction.

Indianapolis Colts, 34 F.3d at 412 (noting

that Indiana had “the largest concentration of consumers likely to
be confused by broadcasts implying some affiliation between the
Indianapolis Colts and the Baltimore team . . . .”); see also Nerds
on Call, 598 F.Supp.2d at 920-21.

As we discussed earlier, GST’s

emails and telephone calls are only superficially related to GST’s

- 18 -

alleged infringement.

In this sense, too, this case is similar to

Wallace. The Wallace defendants’ attenuated contacts with Illinois
were “related,” in an informal sense, to the lawsuit that formed
the basis for the plaintiff’s malicious prosecution claim.

But

that did

was

not

mean

that the defendant’s

tortious

conduct

“specifically directed” at the plaintiff in Illinois. Tamburo, 601
F.3d at 706.
In sum, we conclude that plaintiffs have not made a prima
facie showing that GST is subject to personal jurisdiction in
Illinois with respect to plaintiffs’ patent infringement claims.2
C.

Plaintiffs’ Remaining Claims
In Silent Drive, after concluding that the district court had

personal jurisdiction over the plaintiff’s due-process claim, the
court exercised pendent personal jurisdiction over the plaintiff’s
declaratory

judgment

claim

for

non-infringement

invalidity.

Silent Drive, 326 F.3d at 1206.

and

patent

Pendent personal

jurisdiction would appropriate in this case if: (1) we had personal
jurisdiction over a non-patent, state-law claim under Seventh
Circuit law; and (2) the patent and non-patent claims arose out of
a

common

nucleus

of operative

fact.

Id.3

Our

analysis

of

2/

Because we conclude that plaintiffs have not established contacts
sufficient to support specific personal jurisdiction, it is unnecessary to
address whether exercising jurisdiction would comply with fair play and
substantial justice.
3/
Silent Drive did not specifically address venue, but as we understand
that case, pendant personal jurisdiction over a patent law claim would suffice
for 28 U.S.C. § 1400(b)’s purposes.

- 19 -

plaintiffs’

patent-infringement

claims

does

finding that these elements are satisfied.

not

foreclose our

However, we must have

an independent basis for exercising subject matter jurisdiction
over the non-patent claims. See id. at 1202-03 (requiring that the
plaintiff allege “independent subject matter jurisdiction” over the
non-patent claims); Avocent, 552 F.3d at 1340-41 (“[B]ecause the
district

court

did

not

have

personal

jurisdiction

over

Aten

International with respect to the patent and Lanham Act claims, it
correctly dismissed Avocent’s state law claim for intentional
interference with business or contractual relations.”); see also
Leister v. Dovetail, Inc., 546 F.3d 875, 882 (7th Cir. 2008) (“When
the federal claim in a case drops out before trial, the presumption
is that the district judge will relinquish jurisdiction over any
supplemental claim to the state courts.”).
we

have subject

matter

jurisdiction

Plaintiffs allege that

under

28

U.S.C.

§§

1331

(federal-question jurisdiction) and 1338 (patent jurisdiction).
(Compl. ¶ 3.)

They have not alleged diversity jurisdiction under

28 U.S.C. § 1332, and there is not enough information in the
complaint

to

conclude

that

appropriate under that statute.

subject

matter

jurisdiction

is

On the other hand, they have not

alleged facts clearly indicating that diversity jurisdiction is not
available.

It

seems

likely

that

more

than

$75,000

is

in

controversy, and the parties may be diverse, depending on the
citizenship of the plaintiffs’ limited partners.

Because we are

dismissing plaintiffs’ only federal claims, we will dismiss the

- 20 -

remaining counts without prejudice. See Leister, 546 F.3d at 882.
But we will give the plaintiffs an opportunity to amend their
complaint to allege diversity jurisdiction.

If they choose to

amend their complaint, GST may then decide whether to renew its
personal jurisdiction and venue objections.
CONCLUSION
Defendant’s motion to dismiss plaintiffs’ complaint (17) is
granted and plaintiffs’ complaint is dismissed without prejudice.
By July 20, 2011, the plaintiffs may file an amended complaint
asserting diversity jurisdiction.
filed,

we

will

dismiss

this

If no amended complaint is

case

without

prejudice

plaintiffs refiling in a proper forum.

DATE:

June 30, 2011

ENTER:

___________________________________________
John F. Grady, United States District Judge

to

the