Kraemer v. WhizCut America et al

Filing 49

Opinion & Order signed by Judge James S. Gwin on 5/16/17. The Court, for the reasons set forth in this order, grants the motion to dismiss the complaint as to defendant WhizCut Sweden for lack of personal jurisdiction. (Related Doc. 42 ) (D,MA)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
------------------------------------------------------:
ROLF H. KRAEMER,
:
:
Plaintiff,
:
:
v.
:
:
WHIZCUT AMERICA INC., et al.,
:
:
Defendants.
:
:
-------------------------------------------------------

Case No. 1:16-CV-2364

OPINION & ORDER
[Resolving Doc. 42]

JAMES S. GWIN, UNITED STATES DISTRICT JUDGE:
On September 23, 2016, Plaintiff Rolf H. Kraemer filed a patent infringement claim
against Defendants WhizCut America Incorporated (“WhizCut America”) and WhizCut of
Sweden AB (“WhizCut Sweden”).1
On April 17, 2017, Defendant WhizCut Sweden filed a motion to dismiss for lack of
personal jurisdiction.2
For the reasons below, the Court GRANTS WhizCut Sweden’s motion to dismiss.
I.

BACKGROUND

Plaintiff Kraemer brings a patent infringement claim for U.S. Patent No. 6,652,200
(“’200 Patent”) against Defendant WhizCut America and WhizCut Sweden. The ‘200 Patent
protects a tool holder device with an internal coolant system.
Defendant WhizCut Sweden is a corporation organized under Swedish laws3 with its
principal place of business in Helsinborg, Sweden.4

1

Doc. 1. Defendant WhizCut America answered, Doc. 10, and WhizCut Sweden filed a special and limited answer
without waiving its personal jurisdiction defense, Doc. 31.
2
Doc. 41. Defendant filed an unredacted version of the motion. Doc. 42. Plaintiff Kraemer opposes. Doc. 46.
Defendant WhizCut Sweden replies. Doc. 47.
3
Specifically, WhizCut Sweden is an aktiebolag, a foreign company limited by shares. Doc. 41 at 2 n.3.
4
Doc. 1 at 1; Doc. 41 at 2.

Case No. 1:16-CV-2364
Gwin, J.
Plaintiff alleges that WhizCut Sweden weekly exports tool holders from Sweden to
Wisconsin—where its “American affiliate” WhizCut America is located—for sale.5 Plaintiff also
alleges that Defendants have jointly offered the tool holders for sale at a trade show in
Columbus, Ohio and sold the products in Cleveland, Ohio.6
Plaintiff also asserts that Defendant WhizCut Sweden’s internet presence is so extensive
that jurisdiction is proper here in Ohio.7
Defendant WhizCut Sweden argues that it does not export or directly sell any allegedly
infringing products in the United States.8 Rather, WhizCut Sweden completes its transfer of its
products to WhizCut America in Sweden. Thus, when WhizCut America transports products to
America, WhizCut Sweden is no longer responsible for them.9
Defendant WhizCut Sweden further argues that its affiliate, WhizCut America, transacts
business in Columbus or Cleveland, Ohio, but Defendant WhizCut Sweden does not.10
II.

LEGAL STANDARD

A challenge to this Court’s personal jurisdiction triggers a two-part inquiry.
First, a plaintiff “must demonstrate that . . . Ohio’s long-arm statute [is] satisfied.”11 In relevant
part, Ohio’s long-arm statute provides
[a] court may exercise personal jurisdiction over a person who acts directly or by
an agent, as to a cause of action arising from the person’s
(1) Transacting any business in this state;
(2) Contracting to supply services or goods in this state;

5

Doc. 1 at 2-3; Doc. 46 at 5 (citing id. at 20) (packing slip for sale of allegedly patent-infringing product from
WhizCut America in Wisconsin to Highland Products in Mentor, Ohio).
6
Doc. 1 at 3.
7
Doc. 46 at 3-4.
8
Doc. 41 at 2.
9
Id. at 5-6; Doc. 41-1 (declaration of Managing Director of WhizCut Sweden Christopher Schmidt).
10
Id. at 2-3.
11
Schneider v. Hardesty, 669 F.3d 693, 699 (6th Cir. 2012).

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Case No. 1:16-CV-2364
Gwin, J.
(3) Causing tortious injury by an act or omission in this state;
(4) Causing tortious injury in this state by an act or omission outside this
state if he regularly does or solicits business, or engages in any other
persistent course of conduct, or derives substantial revenue from goods
used or consumed or services rendered in this state; . . .
(6) Causing tortious injury in this state to any person by an act outside this
state committed with the purpose of injuring persons, when he might
reasonably have expected that some person would be injured thereby in
this state;
(9) Contracting to insure any person, property, or risk located within this
state at the time of contracting. . . . 12
Second, if the plaintiff makes a prima facie showing of personal jurisdiction under the
forum state long-arm statute, the Court considers whether the exercise of jurisdiction comports
with constitutional due process.13
To exercise personal jurisdiction based on a defendant’s actions in this state, the Court
must find
(1) purposeful availment of the privilege of acting in the forum state or causing a
consequence in the forum state, (2) a cause of action . . . aris[ing] from activities
in the state, and (3) a substantial enough connection with the forum state to make
the exercise of jurisdiction over the defendant reasonable.14
The plaintiff bears the burden of establishing jurisdiction.15 The court “must consider the
pleadings and affidavits in the light most favorable to the plaintiff.”16

12

Ohio Rev. Code § 2307.382(A)(1-4, 6, 9). The Court selects these subsections of Ohio Rev. Code § 2307(A)
because Plaintiff alleges that jurisdiction may be proper under any of them. Doc. 46 at 2.
13
Air Prods. & Controls, Inc. v. Safetech Int’l, Inc., 503 F.3d 544, 549 (6th Cir. 2007).
14
Schneider, 669 F.3d at 701 (quoting S. Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968))
(internal quotations omitted).
15
Am. Greetings Corp. v. Cohn, 839 F.2d 1164, 1164 (6th Cir. 1988).
16
Welsh v. Gibbs, 631 F.2d 436, 439 (6th Cir. 1980).

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Case No. 1:16-CV-2364
Gwin, J.
III.

Analysis

The parties argue over multiple theories of personal jurisdiction.17 The Court addresses
each in turn.
Product Delivery Theory
Defendant WhizCut Sweden argues that it conducts no business in the United States, let
alone Ohio. Defendant states that it delivers the allegedly infringing products to WhizCut
America “FCA” or “free carrier,” which means the products are “considered to be fully delivered
to WhizCut America in Helsinborg, Sweden.”18
Thereafter, WhizCut Sweden is not responsible for the products. Instead, WhizCut
America imports the products through United States Customs and Border Protection.19
Plaintiff responds that these shipping terms dictate where “risk of loss transfers from
buyer to seller” but has no “impact on liability for patent infringement” or jurisdiction.20
In support, Plaintiff cites a Southern District of New York case which states that shipping
terms govern risk of loss but do not dictate whether title is transferred.21

Defendant WhizCut Sweden argues that various exhibits attached to Plaintiff’s opposition must be stricken. Doc.
47 at 1-2. Specifically, Defendant argues that the Court cannot consider the Affidavit of Matt Nolan, Plaintiff’s
Declaration, and Exs. 2-8 because (1) the affidavit is not notarized properly, (2) the declaration does not adhere with
28 U.S.C. § 1746, and (3) the exhibits are unauthenticated. Id. Specifically, Defendant complains that the affidavit
and declaration lack proper signatures and execution dates and do not purport to stem from personal knowledge. Id.
at 2. Because the Court grants Defendant WhizCut Sweden’s motion to dismiss, it does not address this issue in
detail.
18
Doc. 41 at 5-6 (citing Doc. 41-1, Managing Director of WhizCut Sweden Christopher Schmidt stating deliveries
to WhizCut America are FCA).
19
Id. at 6.
20
Doc. 46 at 5. Plaintiff also argues that certain invoices support jurisdiction, but the Court disagrees. Plaintiff
points to a packing slip for sale of an allegedly patent-infringing product from WhizCut America in Wisconsin to
Highland Products in Mentor, Ohio. Id. at 20. It is clear from the face of this invoice that WhizCut America—rather
than WhizCut Sweden—participated in that transaction.
21
Id. (citing Bristol-Myers Squibb Co. v. Matrix Labs. Ltd., No. 12 CIV.5846 PAE, 2015 WL 2257705, at *6
(S.D.N.Y. May 13, 2015), vacated and remanded on other grounds, Bristol–Myers Squibb Co. v. Matrix Labs. Ltd.,
655 F. App’x 9 (2d Cir. 2016)). Plaintiff also cites two other cases in support, neither of which concern personal
jurisdiction. Id. at 6 (citing LightCubes v. Northern Light Prods., 523 F.3d 1353, 1365 (Fed. Cir. 2008) (noting that
“personal jurisdiction . . . [] is not contested here”); SEB S.A. v. Montgomery Ward, 594 F. 3d 1360 (Fed. Cir. 2010),
aff’d at Global-Tech Appliances, Inc. v. SEB, 131 S. Ct. 2060 (2011)).
17

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Case No. 1:16-CV-2364
Gwin, J.
Defendant responds with a Fifth Circuit case finding the opposite.22
While courts disagree whether shipping terms like “FCA” or “FOB” transfers both risk of
loss and title, this Court notes that freight terms likely go to when the risk of loss shifts during
transport.23 For patent-law purposes, the risk of loss underlying a sales contract has little or no
bearing on the situs of an allegedly infringing sale or offer to sell.24
Regardless, Plaintiff must still show that Defendant has some specific contact with Ohio.
Defendant states that it has no contacts with Ohio. Instead, Defendant physically delivers
products to its American affiliate in Sweden, and the affiliate takes control over the products
before they reach the United States.
Plaintiff says nothing to suggest otherwise. The only specific alleged contact between
Defendant WhizCut Sweden and Ohio is the Managing Director’s presence at a Columbus trade
show. As discussed further below, that allegation is insufficient to support jurisdiction.
Internet Contacts
Plaintiff next argues that Defendant WhizCut Sweden’s internet presence is so pervasive
that jurisdiction is proper. Where the Defendant’s contact with the forum is via a website, the
Sixth Circuit has adopted the “Zippo sliding scale” test to determine whether operation of a
website constitutes purposeful availment.25

22

BP Oil Intern., Ltd. v. Empresa Estatal Petroleos de Ecuador, 332 F.3d 333, 337-38 (5th Cir. 2003) (finding the
shipping term “CFR” constituted transfer of title and risk of loss at the “port of shipment”).
23
SEB, S.A. v. Montgomery Ward & Co., 412 F. Supp. 2d 336, 340–41 (S.D.N.Y. 2006) (citing MEMC Electronic
Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1375 (Fed.Cir. 2005); N. Am. Philips Corp. v.
Am. Vending Sales, Inc., 35 F.3d 1576, 1579 (Fed. Cir. 1994)) (“Moreover, that a product is sold F.O.B. China or
F.O.B. United States, does not, by itself, determine where a product is sold for the purposes of [patent law].
According to the Federal Circuit, ‘simply because an article is delivered ‘free on board’ outside of the forum, a
‘sale’ is not necessarily precluded from occurring in the forum.’”) (internal quotations omitted).
24
N. Am. Philips, 35 F.3d at 1579 (holding that the sale of an allegedly infringing article occurred in the state where
the buyer was located, although not necessarily only there, even if the F.O.B. freight terms indicated another
location).
25
Cadle Co. v. Schlichtmann, 123 F. App’x 675, 678 (6th Cir. 2005).

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Case No. 1:16-CV-2364
Gwin, J.
This test “distinguishes between interactive websites, where the defendant establishes
repeated online contacts with residents of the forum state, and passive websites, where the
defendant merely posts information on the site.”26 Under this analysis, the operation of an
interactive website will often be purposeful availment, while the operation of a more passive
website more likely will not.27
Plaintiff says Defendant WhizCut Sweden “solicit[s] business from all 50 states” on its
website.28 Further, the website “is interactive, in that it allows users to download product
catalogues and submit questions, solicitations, and other communications directly to WhizCut, as
well as its representatives, including those in the U.S.”29 Plaintiff says “[t]he web site has also
been used to solicit applicants for job openings.”30
Defendant responds that the case law Plaintiff cites in support actually defeats its
argument.31 Defendant states that its website is passive—no one can purchase products on the
website.32
After reviewing Defendant WhizCut Sweden’s website,33 the Court finds the website to
be “semi-interactive.” The website serves mainly to inform visitors about WhizCut and its
products. The only interactive components are (1) the “Contact” page and (2) the “Jobs” page.
The Contact page34 allows visitors to complete a form that presumably results in an email to

26

Id.
Id. (citing Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 890 (6th Cir. 2002)).
28
Doc. 46 at 4.
29
Id.
30
Id.
31
Doc. 47 at 4 (citing CompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996); Zippo Mfg. Co. v. Zippo Dot
Com, Inc., 952 F.Supp. 1119 (W.D. Pa. 1997)).
32
Id.
33
http://www.whizcut.com/.
34
http://www.whizcut.com/contact/.
27

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Case No. 1:16-CV-2364
Gwin, J.
WhizCut’s headquarters with the visitor’s contact information and inquiry. The Jobs page35
allows potential employees to submit a resume via email.
“If the website is semi-interactive, the exercise of jurisdiction is determined by
examining the level of interactivity and commercial nature of the exchange of information that
occurs.”36 Here, Defendant does not sell products via its website and Plaintiff does not allege that
any Ohio residents used the interactive features of Defendant’s website.37 Accordingly, personal
jurisdiction over Defendant WhizCut Sweden does not exist based on its website.
Physical Contacts
As to contacts with Ohio, WhizCut Sweden admits that its Managing Director
Christopher Schmidt attended a 2013 Columbus trade show, but argues he was present as
Chairman of the WhizCut America Board of Directors.38 Responding, the Plaintiff claims that
WhizCut Sweden has been present at the Columbus trade show “for several years.”39
The Court finds no evidence supports Plaintiff’s assertion.40
Alter-Ego/Agency Theory
Finally, Plaintiff argues Defendant WhizCut Sweden is liable for WhizCut America’s
actions under agency law.41 Plaintiff states that WhizCut Sweden owns 51% of WhizCut

35

http://www.whizcut.com/jobs/
Cadle, 123 F. App’x at 678 (quoting Zippo, 952 F.Supp. at 1124) (internal quotations omitted).
37
Id. (“Because Cadle has not alleged that any interaction or exchange of information occurred between
Schlichtmann and Ohio residents via the website, personal jurisdiction over Schlichtmann does not exist based on
the nature of the website.”).
38
Doc. 41 at 11 n.7; Doc. 41-1.
39
Doc. 46 at 7.
40
Specifically, Plaintiff points to “Exhibit 4” in support of its claim that WhizCut Sweden attends the Columbus
tradeshows. Id. at 7. But the Court is unable to find Exhibit 4 anywhere on the docket or within document number
46—thus, it is not properly before the Court. Furthermore, Defendant describes the document as an unsigned
contract between a company and WhizCut America. Doc. 47 at 10. If that characterization is accurate, the document
would not support that WhizCut Sweden was at the Columbus trade show.
41
Doc. 46 at 8.
36

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Case No. 1:16-CV-2364
Gwin, J.
America and has “full control over its U.S. representative.”42 Further, WhizCut America lists
WhizCut Sweden’s Managing Director Christopher Schmidt as its incorporator and director.43
Defendant argues that Plaintiff has not pled sufficient information to support an alter-ego
finding.44 The Court agrees.
The above allegations are insufficient to show that WhizCut Sweden “exerts so much
control over [WhizCut America] that the two do not exist as separate entities but are one and the
same for purposes of jurisdiction.”45 Majority ownership and overlap of one corporate employee
are not “sufficient facts to overcome the general presumption that one company operates
independently from another.”46
Because Plaintiff cannot satisfy Ohio’s long-arm statute, due process analysis is
unnecessary.
IV.

CONCLUSION

For the reasons above, the Court GRANTS the motion to dismiss the complaint as to
Defendant WhizCut Sweden for lack of personal jurisdiction.
IT IS SO ORDERED.

Dated: May 16, 2017

s/
James S. Gwin
JAMES S. GWIN
UNITED STATES DISTRICT JUDGE

42

Id. at 8-9.
Id.
44
Doc. 47 at 13.
45
Ohio Edison Co. v. Frontier N. Inc., No. 5:14CV321, 2014 WL 6389564, at *9 (N.D. Ohio Nov. 14, 2014) (citing
Estate of Thomson ex rel. Estate of Rakestraw v. Toyota Motor Corp. Worldwide, 545 F.3d 357, 362 (6th Cir.
2008)).
46
Ohio Edison, 2014 WL 6389564, at *9 (quoting Microsys Computing, Inc. v. Dynamic Data Sys., LLC, 2006 WL
2225821, at *7 (N.D. Ohio Aug.2, 2006)); see also Dupee v. Monica, No. 1:15CV1021, 2016 WL 795857, at *3
(N.D. Ohio Mar. 1, 2016) (“CIE does not purposefully avail itself of the privilege of conducting activities in the
forum state merely by owning all or some of a corporation that is subject to jurisdiction.”).
43

8