The Chamberlain Group, Inc. v. Techtronic Industries Co., Ltd. et al
Filing
517
Memorandum Opinion and Order Signed by the Honorable Harry D. Leinenweber on 8/8/2017:Mailed notice(wp, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
THE CHAMBERLAIN GROUP, INC.,
Plaintiff,
v.
TECHTRONIC INDUSTRIES CO.,
LTD., TECHTRONIC INDUSTRIES
NORTH AMERICA, INC., ONE
WORLD TECHNOLOGIES, INC.,
OWT INDUSTRIES, INC., ET
TECHNOLOGY (WUXI) CO. LTD.,
and RYOBI TECHNOLOGIES, INC.,
Case No.
16 C 6097
Judge Harry D. Leinenweber
Defendants.
MEMORANDUM OPINION AND ORDER
Plaintiff
brings
certain
this
The
Chamberlain
action
models
of
for
patent
Ryobi-branded
Group,
Inc.
(“Chamberlain”)
infringement,
garage
door
alleging
openers
infringe two patents it holds on the same technology.
that
(“GDOs”)
Before
the Court is Defendant Techtronic Industries Co. Ltd.’s (“TTI
HK”) Motion to Dismiss under Rule 12(b)(2) for lack of personal
jurisdiction [ECF No. 379].
For the reasons stated herein, the
Court denies the Motion.
I.
BACKGROUND
Defendant TTI HK is an investment holding company based in
Hong Kong.
Its products include power tools, outdoor goods, and
floor care products sold under several household brand names,
including Milwaukee, Hoover, Oreck, and Ryobi.
number
of
subsidiaries
based
in
Asia
and
the
TTI HK has a
United
States.
Defendant Techtronic Industries North America, Inc. (“TTI NA”)
is
one
such
subsidiary,
administrative.
but
its
activities
are
strictly
Defendant One World Technologies, Inc. (“One
World”) is a wholly-owned subsidiary of TTI NA that does much of
the heavy lifting in North America for TTI HK’s Ryobi products.
(Confusingly, One World previously conducted its business under
the TTI NA name.)
Techtronic Trading Limited (“TTI Trading”) is
another wholly-owned subsidiary of TTI HK, and it ships TTI HK
products from Asia to the United States.
TTI HK and TTI Trading
share a logo, address, and an office at Kowloon Commerce Center,
Tower 2, floor 29/F, Kwai Chung, Hong Kong.
In a concurrent proceeding before the International Trade
Commission (the “ITC”) between the parties to this lawsuit, One
World’s
president,
Michael
Farrah
(“Farrah”),
testified
on
behalf of One World, TTI NA, and TTI HK as follows:
“Q. You’re
not
Industries
sure
which
legal
entity
Company Limited falls under?
–
entity
A. No.
Techtronic
They’re partners – our co-
development partners, really, part of our company.
them as our company.
We treat
And I’m not sure what – you know, who pays
them, for instance, which legal entity.” (ECF No. 410 (“Pl.’s
Resp.”), Ex. P at 486:1-9.)
Recounting a visit to the “Hong
Kong office,” Farrah also could not distinguish between TTI HK
- 2 -
and TTI Trading.
He recanted a prior sworn statement in which
he denied that TTI HK imported the accused Ryobi GDOs, averring
instead that TTI HK “facilitated” importation of the Ryobi GDOs
into the U.S.
(See, generally, Pl.’s Resp. at Ex. P.)
TTI HK’s CEO, Joseph Galli (“Galli”), is Farrah’s direct
report.
In an email to Galli captioned “New Business Category
Approval Request,” Farrah first introduced the Ryobi GDO project
as “a very exciting opportunity with The Home Depot” that “will
deliver TTI $36M in net sales @ 28%GGM and 8.7% EBIT in year 1
and then grow to $45M at and 33% GGM and an 13.2% EBIT in
year 3.” (Pl.’s Resp. at Ex. G.)
approval
so
we
can
move
this
Farrah “look[ed] forward to
program
ahead.”
(Ibid.)
Once
development was approved, Galli asked to be kept abreast of “any
Home
Depot
meetings/decisions
(Id. at Ex. H.)
on”
the
Ryobi
GDO
opportunity.
Galli, TTI HK’s Chief Financial Officer, and
TTI HK’s Deputy Chief Financial Officer approved line-by-line
capital expenditures relating to the project – including $90,925
for a testing facility, $135,395 for an “environmental chamber,”
$138,408 for certain Ryobi GDO modules, and $815,697 for the
program itself.
(Pl.’s Resp. at Exs. I-O.)
As relevant, TTI Trading purchases the Ryobi GDOs from a
Chinese manufacturer, Defendant ET Technology (WUXI) Co. Ltd.
(“ET Door”) – with whom TTI HK presumably has an agreement - and
imports them to various ports in California and South Carolina.
- 3 -
Once there, title to the GDOs passes to One World, who sells
them to The Home Depot – the exclusive retailer of all Ryobi
GDOs in the U.S. – for sale at its stores to end users.
Around
50 percent of TTI HK’s total sales (and approximately 90 percent
of One World’s sales) are to The Home Depot.
(Of TTI HK’s
roughly $5.5 billion in revenue in 2016, sales at The Home Depot
accounted for more than $2.7 billion.)
Galli tracks the sales
of One World’s products to The Home Depot on a weekly basis, and
has requested sales information for just the Ryobi GDOs.
A visitor to TTI HK’s website can click on the Ryobi USA
brand
Tools.
link,
which
navigates
them
to
the
homepage
for
Ryobi
From there, a user can select “Garage Door Openers,” and
the first item presented is the allegedly infringing Ryobi GDO.
From the landing page for that product, the user can choose to
“Buy at The Home Depot,” and he or she is then redirected to The
Home Depot’s online store where they can purchase it.
- 4 -
The Home Depot has a total of 76 stores in Illinois; only
five States have more.
In 2016, gross U.S. sales revenue of the
accused Ryobi GDO totaled approximately $9.5 million.
One World
sells the GDOs not just to The Home Depot’s headquarters but
directly to certain store locations, including over 750 GDOs to
a Joliet, Illinois location.
In addition, One World has held
training seminars and advertised in Illinois Home Depot stores.
The Home Depot has honored TTI HK’s Ryobi-branded products with
various awards for innovation and marketing, recognizing TTI HK
as both a “top partner” and “the 2016 Home Depot US Partner of
the Year.”
Commenting on these awards, Galli on behalf of TTI
HK
that
stated
continuous
flow
“[t]he
of
TTI
compelling
organization
and
(Pl.’s Resp. at Exs. X-Z.)
- 5 -
is
innovative
delivering
new
a
products.”
II.
DISCUSSION
TTI HK seeks dismissal of all claims against it for lack of
personal jurisdiction under Rule 12(b)(2).
There is no dispute
that TTI HK has no direct or advertising presence in Illinois;
has never employed anyone in Illinois, maintained a registered
agent in Illinois, or paid taxes in Illinois; has never owned,
leased, possessed, or maintained any real or personal property
in
Illinois;
marketed,
has
imported,
itself
or
sold
is
whether
that
TTI
showing
jurisdiction
never
judice
question sub
facie
and
in
Illinois
HK
any
is
manufactured,
products
in
produced,
Illinois.
Chamberlain
has
subject
specific
based
on
to
its
role
made
in
a
The
prima
personal
approving,
monitoring, and overseeing both the development of the allegedly
infringing Ryobi GDOs and their sale to an exclusive distributor
with a heavy Illinois presence.
Because the Court answers this
question in the affirmative, it stops short of considering the
alternative ground for jurisdiction - imputation to TTI HK of
its subsidiaries’ Illinois contacts.
A.
Legal Standard
Federal Circuit law controls whether personal jurisdiction
exists over an out-of-state defendant in a patent infringement
case.
See, Hildebrand v. Steck Mfg. Co., Inc., 279 F.3d 1351,
1354 (Fed. Cir. 2002).
under
Fed.
R.
Civ.
When personal jurisdiction is challenged
P.
12(b)(2)
- 6 -
without
the
benefit
of
an
evidentiary
hearing,
the
plaintiff
must
“make
a
prima
facie
showing that defendants are subject to personal jurisdiction.”
Elecs. For Imaging, Inc. v. Coyle, 340 F.3d 1344, 1349 (Fed.
Cir.
2003);
accord,
Purdue
Res.
Found.
S.A., 338 F.3d 773, 782 (7th Cir. 2003).
v.
Sanofi-Synthelabo,
In such circumstances,
courts are not limited to consideration of facts alleged in the
complaint, but may also consider affidavits and other written
materials.
See, Autogenomics, Inc. v. Oxford Gene Tech. Ltd.,
566 F.3d 1012, 1017 (Fed. Cir. 2009).
The law of the Federal and Seventh Circuits is in harmony
on
the
here:
question
whether
the
Court
may
exercise
jurisdiction
the forum State’s long-arm statute must permit service of
process, and exercise of personal jurisdiction must comport with
due process.
Compare, Grober v. Mako Prods., Inc., 686 F.3d
1335 (Fed. Cir. 2012); with, e.g., Felland v. Clifton, 682 F.3d
665,
672
(7th
Cir.
2012).
The
Illinois
long-arm
statute
authorizes personal jurisdiction to the full extent permitted by
either the Illinois Constitution or the federal Constitution,
735
Ill.
Comp.
Stat.
5/2-209(c),
meaning
that
the
state
statutory and federal constitutional requirements merge.
uBID,
Inc. v. The GoDaddy Group, Inc., 623 F.3d 421, 425 (7th Cir.
2010).
Specific personal jurisdiction is a more limited assertion
of
state
power
than
general
personal
- 7 -
jurisdiction,
which
Chamberlain does not advance as a basis for jurisdiction over
TTI HK in this case.
controversies
that
Specific jurisdiction exists only for
arise
out
of
or
are
related
defendant’s purposeful availment of the forum.
to
the
See, Hyatt Int’l
Corp. v. Coco, 302 F.3d at 707, 713 (7th Cir. 2002).
Exercise
of specific personal jurisdiction in a patent infringement case
comports with due process where:
(1) the defendant purposefully
directed activities at forum residents; (2) the claim arises out
of or relates to those activities; and (3) asserting personal
jurisdiction is reasonable and fair.
Tech.
Corp.,
omitted).
689
1358,
1361
(Fed.
Cir.
2012)
(citation
The specific jurisdiction inquiry centers “on the
relationship
litigation.”
F.3d
AFTG-TG, LLC v. Nuvoton
among
the
defendant,
the
forum,
and
the
Walden v. Fiore, 134 S.Ct. 1115, 1121 (2014).
B.
Specific Personal Jurisdiction
1.
Purposeful Availment
Chamberlain argues that specific jurisdiction over TTI HK
in
Illinois
is
proper
on
the
basis
that
it
directed
the
development of the accused Ryobi GDO, relies on and monitors GDO
sales in populated states like Illinois through The Home Depot’s
retail
stores,
and
ultimately
benefits
immensely
therefrom.
According to Chamberlain’s evidence, development and financial
feasibility
of
the
Ryobi
GDO
project
were
premised
from
the
outset on TTI HK’s exclusivity arrangement with The Home Depot
- 8 -
and on the retailer’s distribution network; Galli and other TTI
HK personnel approved line-by-line capital expenditures for One
World to develop and bring the Ryobi GDO to market; and Galli,
by
requesting
updates
and
continuously
monitoring
both
One
World’s sales to The Home Depot and the retailer’s sales to
consumers, expects and knows that the GDOs are being sold to
Illinois
consumers.
Chamberlain
also
notes
that
TTI
HK’s
website (indirectly through the Ryobi regional website) links to
The
Home
Depot’s
online
store,
where
purchase the infringing product.
activities,
Chamberlain
points
Illinois
customers
can
Apart from these sales-based
to
Farrah’s
ITC
testimony
and
charges TTI HK with “facilitating” importation of the Ryobi GDOs
into the U.S., a significant percentage of which are inexorably
sold in Illinois thanks to The Home Depot’s 76 stores in the
state.
TTI HK responds that it has no role in the manufacture,
importation, or sale of the Ryobi GDOs – but that ET Door, TTI
Trading, and One World are the entities responsible for these
allegedly infringing activities.
TTI HK argues that, without a
more robust nexus, its knowledge of eventual sales of Ryobi GDOs
to Illinois residents is legally insufficient to subject it to
jurisdiction. Further, it maintains that it merely operates a
“passive” (as opposed to an “interactive”) website that does not
allow any Illinois resident to purchase a Ryobi GDO.
- 9 -
The
specific
stream-of-commerce
personal
theory
jurisdiction
is
governing
set
forth
exercise
in
Asahi
of
Metal
Indus. Co. v. Superior Court of Cal., Solano Cnty., 480 U.S. 102
(1987), and J. McIntyre Mach., Ltd. v. Nicastro, 131 S.Ct. 2780
(2011).
In both cases, the Supreme Court struggled to coalesce
around a framework for purposeful availment.
Under one theory,
“placement of a product into the stream of commerce, without
more,
is
not
an
act
of
the
defendant
purposefully
directed
toward the forum State,” and the defendant instead must engage
in “additional conduct” showing an intent to serve the forum
state’s market.
Asahi, 480 U.S. at 112.
The second theory
requires only knowledge that the final product is being marketed
and sold in the forum state and that such sales were part of the
“regular and anticipated flow” of manufacture, distribution, and
sale in the forum.
Seventh and Federal Circuit precedent “leave
open the possibility that a foreign manufacturer, who places its
product into the stream of commerce in the United States, may be
subject to jurisdiction in a state where that product causes an
injury and where there is a regular flow of its product or
regular course of sales in that state.”
In re Testosterone
Replacement Therapy Prods. Liab. Litig., No. 14 C 1748, 2016 WL
5890022, at *3 (N.D. Ill. Oct. 10, 2016); see also, AFTG-TG, 689
F.3d
at
1363
applying
the
(noting
that
“the
stream-of-commerce
- 10 -
Supreme
theory
Court’s
–
framework
including
the
conflicting
articulations
of
that
theory
in
Asahi
–
had
not
changed” in Nicastro).
Even
under
the
more
stringent
test,
however,
TTI
HK
subject to specific personal jurisdiction in this action.
is
Two
Federal Circuit guideposts help delineate the crucial “something
more” required:
controls
the
whether the defendant to some degree selects or
distribution
process
accounting
product’s presence in the forum state.
for
the
accused
First, in Beverly Hills
Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994),
the
plaintiff
named
as
defendants
the
manufacturer
and
distributor of an allegedly infringing fan that turned up for
sale in the local outlet of a chain store.
The plaintiffs
adduced
“purchased
evidence
that
a
private
investigator
the
allegedly infringing fan at a chain store with about six outlets
in the forum state and that the fans were available for purchase
at the other outlets as well.” Id. at 1560-61.
Ruling that the
defendants placed the accused fans in the stream of commerce
with knowledge of their likely destination, the court reasoned
that
the
“presence
of
an
established
distribution
channel”
suggested an “expectation” that the fans “will be purchased by
consumers in the forum state.”
Ibid. (quotation and internal
quotation marks omitted).
Then, in Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc.,
148
F.3d
1355
(Fed.
Cir.
1998),
- 11 -
the
court
found
personal
jurisdiction lacking where the defendant patent holder entered
into licensing agreements with companies that manufactured or
marketed certain athletic shoes. Id. at 1357.
The court held
that the defendant had no control over its licensees and their
products,
and
therefore
personal
jurisdiction
could
not
be
premised on a stream-of-commerce theory – notwithstanding that
the defendant received royalty income from sales made in the
forum state by its licensees.
Moreover, the defendant’s product
was merely “a covenant not to sue, not a shoe incorporating the
patented technology,” and so it never placed a product into the
stream of commerce of the forum state. Id. at 1362.
Applying
these
infringement
precedents,
disputes
in
this
courts
District
have
hearing
patent
found
specific
personal jurisdiction over a foreign manufacturer who “sold the
allegedly infringing products to two distributors with multiple
stores in Illinois.”
Original Creations, Inc. v. Ready America,
Inc., 836 F.Supp.2d 711, 716-18 (N.D. Ill. 2011) (noting that
the
foreign
Illinois
defendant
such
that
it
“established
‘knew
the
distribution
likely
channels
destination’
of
in
its
products and established ‘connections with the forum state’”)
(quoting Beverly Hills Fan, 21 F.3d at 1566).
More recently,
another sister court applied a corollary articulated by the D.C.
Circuit
to
the
more
stringent
“something
more”
standard,
reposing its finding of personal jurisdiction in the foreign
- 12 -
corporation’s opting for – and knowledge that it was enjoying a
“‘regular
state.
In
flow
re
or
regular
Testosterone,
course
2016
of
WL
sales’”
5890022,
in
at
the
*3
forum
(quoting
Williams v. Romarm, S.A., 756 F.3d 777, 785 (D.C. Cir. 2014)).
While the defendant drug manufacturer did not itself “engage in
any marketing or sale of the drug within the United States,” it
retained
a
distributor
remitted
royalty
who
payments
sold
to
the
the
drug
tune
of
in
the
over
U.S.
$600
and
million.
See, In re Testosterone, 2016 WL 5890022 at *3 (“From these
figures,
as
well
as
from
plaintiffs’
evidence
that
Besins
employees received regular updates on the United States market
and
sales
of
AndroGel,
the
Court
can
reasonably
infer
that
Besins knew that a regular and significant flow of the AndroGel
it manufactured would end up in each of the forum states.”)
(emphasis added).
Unlike Red Wing, this case involves a foreign company who
approved and allocated capital necessary to develop and bring to
market the allegedly infringing product, and it had at least
some say in the decision to continue exploiting a longstanding
distribution
channel
that
inexorably
deposits
number of the products at issue in Illinois.
a
significant
As in Original
Creations, TTI HK takes advantage of a retail network – one
whose exclusivity is mandated for all its Ryobi products – that
has
obvious
(not
merely
random
- 13 -
or
fortuitous)
Illinois
consequences.
Similar to In re Testosterone, TTI HK’s knowledge
of the regular flow of products into Illinois cannot seriously
be questioned, given Galli’s requests for and receipt of regular
sales updates.
Regardless of whether an Illinois resident can
purchase a Ryobi GDO “from” TTI HK by virtue of its website’s
indirect links to The Home Depot’s online store – or whether, as
TTI HK contends, its website is merely “passive” - it is further
proof
of
TTI
HK’s
purposeful
and
exclusive
availment
of
the
retailer’s Illinois-heavy distribution network.
Cases declining to find personal jurisdiction where sales
by a foreign manufacturer’s subsidiary led to the fortuitous
presence of the defendant’s products in the forum state, are not
dispositive.
In
F.Supp.3d
(N.D.
750
manufacturer’s
distributors,
state.
USA
Tile
Unlimited,
Ill.
2014),
one
of
v.
Blanke
for
example,
contracted
subsidiary
only
Inc.
equally
whom
sold
products
Corp.,
the
defendant
with
into
47
several
the
forum
See, id. at 755-56 (“Once the Uni-Mat reached the Blanke
warehouse
in
Georgia
[from
the
foreign
defendant’s
subsidiary], Blanke USA would sell the product to Virginia Tile
and
other
throughout
distributors
the
United
who
would
States.
Tile
distribute
Unlimited,
the
product
an
Illinois
corporation with its principal place of business in Illinois,
claims that it purchased Uni-Mat from Virginia Tile. . . .”)
On
the contrary, conceptualization, development, importation, and
- 14 -
sales of TTI HK’s Ryobi GDOs were and are tied to an exclusive
distribution arrangement contemplating thousands of sales in the
forum state.
What is more, the number of Home Depot stores in
Illinois (76), in both an absolute sense and relative to other
states, allows the Court to draw the reasonable inference that
the sales in Illinois of Ryobi GDOs as a percentage of TTI HK’s
GDO revenues is vastly more substantial than the few thousand
dollars
Cf.,
in
uBID,
Tile
Unlimited
Inc.,
purposefully
623
availed
or
F.3d
the
at
itself
four
428-29
of
the
machines
(holding
Illinois
in
Nicastro.
that
“GoDaddy
market
for
its
services through its deliberate and continuous exploitation of
that market”).
Seeking to distinguish this case law, TTI HK argues that it
does not manufacture the accused Ryobi GDOs, import them into
the U.S., or contract with The Home Depot for their sale.
But
“Nicastro does not stand for the proposition that if a defendant
places
goods
into
the
stream
of
commerce
via
a
third-party
distributor who causes those goods to be sold in [the forum
state,] it can never be subject to personal jurisdiction in [the
forum state].” Appjigger GmbH v. Blu Prod., Inc., No. 14 C 9650,
2015 WL 3463413, at *5 (N.D. Ill. May 29, 2015).
law
of
personal
jurisdiction
–
notoriously
Doubtless, the
thorny
and
fact-
specific – would be more lucid if the seminal cases recognized
the sort of formal distinction TTI HK advocates.
- 15 -
Alas, it is
not so facile as to hale into federal court only those foreign
companies
that
instrumentalities
operate
of
the
machines
importation.
of
manufacture
See,
e.g.,
or
the
World-Wide
Volkswagen, 444 U.S. at 297-98 (“The forum State does not exceed
its powers under the Due Process Clause if it asserts personal
jurisdiction over a corporation that delivers its products into
the stream of commerce with the expectation that they will be
purchased by consumers in the forum State.”) (emphasis added).
While TTI HK may not physically manufacture, import, or sell its
Ryobi products to The Home Depot, there is no question that it
has at least some control over their deliverance into the stream
of commerce that inexorably deposits them in Illinois.
Recall
that Galli, acknowledging TTI HK’s receipt of The Home Depot’s
awards, poignantly pronounced that “[t]he TTI organization is
delivering a continuous flow of compelling and innovative new
products.”
TTI HK banked on their regular flow into Illinois
when it approved and allocated expenses for One World to develop
the Ryobi GDOs for exclusive sale to The Home Depot; its CEO,
Galli,
monitors
confirming
that
their
the
distribution
GDOs
indeed
and
reach
reviews
sale
Illinois;
and
reports,
TTI
HK
ultimately benefits from the entire arrangement, which was the
impetus for Farrah’s initial overture to Galli.
Absent some indication contrary to all the evidence that
its subsidiaries act unilaterally in availing themselves of the
- 16 -
forum, see,
Purdue,
338
F.3d
at
780,
or
that
it
is
a
mere
licensor of the Ryobi name with no opportunity to control the
GDOs’ distribution, see, Red Wing, 148 F.3d at 1362, TTI HK
purposefully avails itself of the privilege of doing business in
Illinois.
2.
Relatedness
Rehashing its earlier argument, TTI HK contends that it is
not subject to personal jurisdiction because Chamberlain has not
shown the relatedness of any purposeful availment to this patent
infringement
action.
TTI
HK
notes
that
patent
infringement
occurs when a party “without authority makes, uses, offers to
sell or sells any patented invention, within the United States
or imports into the United States any patented invention during
the
term
of
the
patent.”
35
U.S.C.
§ 271(a).
Thus,
its
argument goes, for there to be specific personal jurisdiction
over TTI HK in Illinois, Chamberlain “would have to allege that
[TTI
HK]
did
one
of
these
listed
activities
in”
Illinois.
HollyAnne Corp. v. TFT, Inc., 199 F.3d 1304, 1308 (Fed. Cir.
1999).
However, the Patent Act sweeps more broadly than TTI HK
suggests, applying to “[w]hoever actively induces infringement
of a patent” and rendering such a person or entity “liable as an
infringer.”
35 U.S.C. § 271(b).
For its part, Chamberlain
claims that TTI HK “facilitated” importation into the U.S. of
- 17 -
the
allegedly
induced
its
infringing
Ryobi
subsidiaries
–
GDOs
and
otherwise
particularly,
TTI
actively
Trading
and
Defendant One World - to engage in the activities prohibited by
the statute.
greater
While its burden to show liability will require
proof
that
TTI
HK
in
fact
did
so,
Chamberlain’s
allegations and jurisdictional evidence suffice to defeat TTI
HK’s Motion to Dismiss.
premised
on
the
idea
To the extent TTI HK’s argument is
that
actions
in
Illinois
must
exclusive ground of the complaint, this is incorrect.
reasoning
would
activities
in
allow
defendants
multiple
states
with
to
allegedly
argue
that
be
the
“Such
infringing
personal
jurisdiction did not lie in any state because the activities in
the plaintiff’s chosen forum were not necessary to the cause of
action.”
HollyAnne, 199 F.3d at 1308 n.4 (noting also that the
proper test is whether the activity in the forum state “is a
basis for the cause of action”).
Therefore,
TTI
HK’s
targeting
of
Illinois
consumers
and
purposeful availment of the forum with respect to its Ryobi GDO
products is sufficiently related to Chamberlain’s claim that,
for example, importation and sale of those products infringes
its patents.
C. Fair and Reasonable
After a plaintiff has shown that the cause of action is
related to or arises out of the defendant’s purposeful availment
- 18 -
of
the
forum,
“it
becomes
defendants’
burden
to
present
a
‘compelling case that the presence of some other considerations
would render jurisdiction unreasonable.’”
Coyle, 340 F.3d at
1351-52 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462,
477 (1985)).
inquiry
Factors that are relevant to the reasonableness
include:
“‘the
burden
on
the
defendant,
the
forum
State’s interest in adjudicating the dispute, the plaintiff’s
interest
in
interstate
obtaining
judicial
convenient
system’s
and
interest
effective
in
relief,
obtaining
the
the
most
efficient resolution of controversies, and the shared interest
of
the
several
policies.’”
Techs.,
States
in
furthering
603
F.3d
1364,
1369
(Fed.
Burger King, 471 U.S. at 476-77).
is
defendant
claim.”
The
social
Patent Rights Protection Group, LLC v. Video Gaming
Inc.,
lodestar
fundamental
whether
into
the
it
is
state’s
“fair
Cir.
2010)
(quoting
The ultimate constitutional
and
courts
reasonable
to
answer
a
foreign
to
the
call
the
plaintiff’s
uBID, 623 F.3d at 426.
burden
par
excellence
on
defendant
is
a
travel burden, and it is certainly a long flight from Hong Kong
to Chicago.
Worth keeping in mind, however, is the fact that
“out-of-state defendants always face such a burden,” Felland v.
Clifton,
original),
682
F.3d
and
the
665,
677
extent
(7th
to
Cir.
which
2012)
“modern
(emphasis
in
methods
of
transportation and communication have significantly ameliorated
- 19 -
[the] burden” of defending suit in a forum other than one’s
residence.
Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d
623, 632 (11th Cir. 1996) (citation omitted); see, Menken v.
Emm, 503 F.3d 1050, 1060 (9th Cir. 2007) (“[W]ith the advances
in
transportation
and
telecommunications
and
the
increasing
interstate practice of law, any burden [of litigation in a forum
other than one’s residence] is substantially less than in days
past.”); see also, Synthes (U.S.A.) v. G.M. Dos. Reis Jr. Ind.
Com
de
Equip.
(same).
Also
Medico,
563
warranting
F.3d
a
1285,
mention
1299
is
(Fed.
the
Cir.
burden
2009)
on
an
international defendant inherent in navigating a foreign legal
system.
See, Asahi, 480 U.S. at 114.
Yet these concerns too
are somewhat mitigated here; TTI HK has retained U.S. counsel
based in Illinois to litigate this case and the parallel ITC
proceeding, and counsel appears to have ably represented its
interests.
Therefore, the first factor weighs against a finding
of fairness, but only slightly; traveling to Illinois from Hong
Kong – to the extent such travel is necessary in this patent
infringement action - does burden TTI HK.
However, the other applicable factors militate in favor of
exercising
specific
personal
jurisdiction
over
TTI
HK
in
Illinois.
The second factor – the forum state’s interest in
adjudicating the dispute – weighs significantly in favor of a
finding
of
fairness.
Illinois’s
- 20 -
interest
in
this
patent
infringement action, which involves the rights of an Illinois
company
and
allegedly
infringing
products
sold
to
Illinois
consumers, is compelling.
“Illinois has a strong interest in
adjudicating
that
occur
to
patent
interest
injuries
extends
within
the
state,
and
infringement
this
actions.”
CoolSavings.Com, Inc. v. IQ.Commerce Corp., 53 F.Supp.2d 1000,
1005
(N.D.
Ill.
1999)
(citation
omitted).
In
addition,
the
third factor concerning the plaintiff’s interest in obtaining
convenient and effective relief weighs slightly in favor of a
fairness finding.
Illinois is the most convenient forum for
Illinois-based Chamberlain to pursue its claims.
The
fourth
and
fifth
factors
–
the
interstate
judicial
system’s interest in obtaining the most efficient resolution of
controversies,
and
the
shared
interests
of
the
States
in
furthering fundamental social policies – have little purchase
here, as the case involves the application of uniform federal
patent law, not state law.
See, e.g., Litmer v. PDQUSA.com, 326
F.Supp.2d 952, 959-60 n.8 (N.D. Ind. 2004).
As
such,
balancing
the
relevant
factors
in
this
case
supports the exercise of specific personal jurisdiction over TTI
HK in Illinois.
“[L]ike the Chinese defendant in Beverly,” TTI
HK’s “mere foreign status does not outweigh these interests.”
Worldtronics Int’l, Inc. v. Ever Splendor Enter. Co., Inc., 969
F.Supp. 1136, 1142 (N.D. Ill. 1997) (citing Beverly Hills Fan,
- 21 -
21 F.3d at 1569); see also, Original Creations, 836 F.Supp.2d at
719 (“The burdens on [the foreign defendant] are not enough to
overcome the interests of the state and [the plaintiff].
travel
is
a
burden,
it
is
not
generally
a
reason
Though
to
find
jurisdiction unreasonable.”) (citation omitted).
III.
CONCLUSION
For the reasons stated herein, Defendant TTI HK’s Motion
to Dismiss [ECF No. 379] is denied.
IT IS SO ORDERED.
Harry D. Leinenweber, Judge
United States District Court
Dated: August 8, 2017
- 22 -
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