Koss Corporation v. Max Sound Corporation
ORDER signed by Judge Lynn Adelman on 4/28/13 granting 12 Motion to Dismiss for Lack of Jurisdiction; denying as moot 12 Motion to Change Venue. Further ordering that this case is dismissed without prejudice. (cc: all counsel) (dm)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
Case No. 12-CV-00854
MAX SOUND CORPORATION,
DECISION AND ORDER
Plaintiff Koss Corporation sues defendant Max Sound Corporation for trademark
infringement and unfair competition under the Lanham Act, 15 U.S.C. § 1051, et seq., and
Wisconsin common law. Before me now is defendant’s motion to dismiss for lack of
personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2) or, alternatively, for an order
transferring venue to the Central District of California pursuant to Fed. R. Civ. P. 12(b)(3).
Plaintiff is a Delaware corporation headquartered in Wisconsin that sells stereo
headphones and related accessories to customers throughout the United States using its
federally registered HEARING IS BELIEVING trademark. Defendant is a Delaware
corporation headquartered in California that, at the time plaintiff commenced this suit, was
in the process of developing audio software to improve the quality of digital audio files.
Defendant had begun to promote the product it was developing but had not offered any
software for sale.1 At the time plaintiff brought this suit, defendant was using the slogan
“Hearing is Believing” to promote its software on its website at maxsound.com and on
Apparently, as of today, defendant still has not offered any software for sale.
social media websites including YouTube, Facebook and Twitter. These websites were
accessible in Wisconsin, and maxsound.com informed consumers that a free early version
of defendant’s software for use on their mobile phones was available on the “Google Play”
website at https://play.google.com/store/apps. However, no Wisconsin consumers had
downloaded the software.2
On November 22, 2011 and February 10, 2012, defendant sought to register the
marks HEARING IS BELIEVING and MAXD MUSIC HEARING IS BELIEVING with the
United States Patent and Trademark Office (“USPTO”). On March 10 2012, the USPTO
rejected defendant’s applications advising defendant of plaintiff’s trademark and its
address in Wisconsin. Nevertheless, defendant continued to use the HEARING IS
Because defendant raises the issue of personal jurisdiction in a motion to dismiss
to be decided on the basis of written materials without an evidentiary hearing, plaintiff need
only make a prima facie showing of jurisdiction. Tamburo v. Dworkin, 601 F.3d 693, 700
(7th Cir. 2010). I take all well-pleaded facts as true and draw all reasonable inferences in
plaintiff’s favor. Id. Since the Lanham Act does not authorize nationwide service, be2 LLC
v. Ivanov, 642 F.3d 555, 558 (7th Cir. 2011), personal jurisdiction in the present case is
governed by the law of the forum state, Wisconsin. See Tamburo, 601 F.3d at 700. Under
Wisconsin law, I must first determine whether defendant is subject to personal jurisdiction
under Wisconsin’s long-arm statute. See Wis. Stat. § 801.05. If so, I must decide whether
As of October 24, 2012, only 20 people had downloaded the software of whom
sixteen work with or for defendant and four are software developers in states other than
Wisconsin. (Greg Halpern Aff. ¶ 8, ECF No. 14.)
the exercise of jurisdiction would violate due process. Logan Prods., Inc. v. Optibase, Inc.,
103 F.3d 49, 52 (7th Cir. 1996).
Plaintiff argues that I have jurisdiction over defendant under § 801.05(4)(a), the
“Local injury; Foreign Act” provision, which authorizes the exercise of jurisdiction over a
defendant who has committed an act outside the state that caused an injury within the
state so long as, at the time of the injury, “[s]olicitation or service activities were carried on
within this state by or on behalf of the defendant.” A defendant engages in “solicitation
activities” under § 801.05(4)(a) when it solicits business in Wisconsin with the expectation
of financial benefit. See Federated Rural Elec. Ins. Corp. v. Inland Power & Light Co., 18
F.3d 389, 393 (7th Cir.1994); Pavlic v. Woodrum, 169 Wis. 2d 585, 592 (Ct. App. 1992);
Fields v. Peyer, 75 Wis. 2d 644, 653 (1977). A “solicitation” is “[t]he act or an instance of
requesting or seeking to obtain something; a request or petition.” Black’s Law Dictionary
(9th ed. 2009); see also Oxford English Dictionary, www.oed.com (last visited April 26,
2013) (defining the verb “solicit” as “[t]o entreat or petition (a person) for, or to do,
Assuming arguendo that defendant committed a foreign act that caused a local
injury, plaintiff fails to show defendant was carrying out solicitation or service activities in
Wisconsin at the time of the injury. Plaintiff argues that defendant was soliciting business
in Wisconsin because its website was accessible here. However, it fails to allege facts that
show defendant was using its website to solicit business. It is undisputed that defendant
was not selling anything at the time of the alleged injury. Thus, while defendant may have
been using its website to promote its software, it was not asking anyone for anything and
so was not engaging in solicitation. Therefore, plaintiff does not establish a prima facie
case of jurisdiction under § 801.05(4)(a). Cf. Marvel Manufacturing Co., Inc. v. Koba
Internet Sales, LLC, No. 11-C-961, 2012 WL 2466772, *4 (E.D. Wis. June 27, 2012)
(finding jurisdiction under § 801.05(4)(a) where defendant had sold several thousand
dollars worth of goods in Wisconsin).3
Even if the requirements of § 801.05(4)(a) were met, I conclude that exercising
jurisdiction would violate due process. Due process requires that a defendant have “certain
minimum contacts with [the forum state] such that the maintenance of the suit does not
offend ‘traditional notions of fair play and substantial justice.’” Int’l Shoe Co. v. Wash., 326
U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). Plaintiff
contends that this requirement is met based on the “express aiming test” announced in
Calder v. Jones, 465 U.S. 783 (1984), which authorizes a court to exercise jurisdiction over
a nonresident defendant if the defendant committed an intentional act expressly aimed at
the forum state with the knowledge that the effects of the act would be felt in that state.
Tamburo, 601 F.3d at 703. To satisfy the Calder standard, plaintiff must establish both “a
forum-state injury and ‘something more,’” something showing specifically that defendant
expressly aimed its activities at Wisconsin. Id. at 705–06; see also Wallace v. Herron, 778
F.2d 391, 394 (7th Cir. 1985) (noting that after Calder “‘the constitutional touchstone
Plaintiff argues that defendant waived any objection to jurisdiction under the statute
by not discussing it in its briefs. I disagree. While defendant does not directly address the
statute, it does argue that it never solicited business in Wisconsin. (Def.’s Br. in Support
2, ECF No. 13; Halpern Aff. ¶ 11.) This raises questions about the applicability of
§ 801.05(4)(a). I also have discretion to consider waived arguments. See, e.g., U.S. v.
Wilson, 962 F.2d 621, 627 (7th Cir. 1992).
remains whether the defendant purposefully established ‘minimum contacts’ in the forum
state’”) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985)).
Plaintiff argues that defendant’s continued infringement after learning from the
USPTO that plaintiff owned the mark and was located in Wisconsin satisfies this test. I
disagree. The fact that defendant learned it was using the mark of a Wisconsin-based
company is not sufficient to prove that defendant intentionally directed its activities at
Wisconsin. This case resembles Mobile Anesthesiologists Chicago v. Anesthesia
Associates of Houston Metroplex, P.A., in which an Illinois plaintiff sent a Texas defendant
a cease-and-desist letter demanding that it stop using the plaintiff’s trademark on its
website. 623 F.3d 440, 446–47 (7th Cir. 2010). When the defendant refused, the plaintiff
brought an infringement action in Illinois arguing that the defendant’s decision to continue
using the mark knowing that it would injure plaintiff in Illinois was sufficient to subject it to
personal jurisdiction. Id. The Seventh Circuit disagreed concluding that Calder required
something more to show that the defendant had intentionally directed its activities at the
forum. Id. Applying the same reasoning here, I conclude that I cannot constitutionally
exercise personal jurisdiction over defendant. Thus, I need not consider defendant’s
alternative motion to transfer venue.
THEREFORE, IT IS ORDERED that defendant’s motion to dismiss for lack of
jurisdiction (Docket #12) is GRANTED, and defendant’s alternative motion to transfer
venue (Docket #12) is DENIED AS MOOT.
IT IS FURTHER ORDERED that this case is DISMISSED WITHOUT PREJUDICE.
Dated at Milwaukee, Wisconsin, this 28th day of April 2013.
s/ Lynn Adelman
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