throbber
Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 1 of 22 PageID #:<pageID>
`
`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.,
`Defendants.
`
`Case No. 16 C 6097
`Judge Harry D. Leinenweber
`
`MEMORANDUM OPINION AND ORDER
`Plaintiff The Chamberlain Group, Inc. (“Chamberlain”)
`brings this action for patent infringement, alleging that
`certain models of Ryobi-branded garage door openers (“GDOs”)
`infringe two patents it holds on the same technology.
`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,
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 1
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 2 of 22 PageID #:<pageID>
`
`including Milwaukee, Hoover, Oreck, and Ryobi. TTI HK has a
`number of subsidiaries based in Asia and the United States.
`Defendant Techtronic Industries North America, Inc. (“TTI NA”)
`is one such subsidiary, but its activities are strictly
`administrative.
`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 sure which legal entity – entity Techtronic Industries
`Company Limited falls under? A. No. They’re partners – our co-
`development partners, really, part of our company.
`We treat
`them as our company. 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 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 2
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 3 of 22 PageID #:<pageID>
`
`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.) Farrah “look[ed] forward to
`approval so we can move this program ahead.” (Ibid.)
`Once
`development was approved, Galli asked to be kept abreast of “any
`Home Depot meetings/decisions on” the Ryobi GDO opportunity.
`(Id. at Ex. H.) 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 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 3
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 4 of 22 PageID #:<pageID>
`
`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 link, which navigates them to the homepage for Ryobi
`Tools.
`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 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 4
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 5 of 22 PageID #:<pageID>
`
`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 stated that “[t]he TTI organization is delivering a
`continuous flow of compelling and innovative new products.”
`(Pl.’s Resp. at Exs. X-Z.)
`
`- 5 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 5
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 6 of 22 PageID #:<pageID>
`
`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; and has never itself manufactured, produced,
`marketed, imported, or sold any products in Illinois.
`The
`question sub judice is whether Chamberlain has made a prima
`facie showing that TTI HK is subject to specific personal
`jurisdiction in Illinois based on its role in 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). When personal jurisdiction is challenged
`under Fed. R. Civ. P. 12(b)(2) without the benefit of an
`
`- 6 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 6
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 7 of 22 PageID #:<pageID>
`
`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. v. Sanofi-Synthelabo,
`S.A., 338 F.3d 773, 782 (7th Cir. 2003). 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 question whether the Court may exercise jurisdiction
`here:
`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 jurisdiction, which
`
`- 7 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 7
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 8 of 22 PageID #:<pageID>
`
`Chamberlain does not advance as a basis for jurisdiction over
`TTI HK in this case.
`Specific jurisdiction exists only for
`controversies that arise out of or are related to the
`defendant’s purposeful availment of the forum. 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. AFTG-TG, LLC v. Nuvoton
`Tech. Corp., 689 F.3d 1358, 1361 (Fed. Cir. 2012) (citation
`omitted).
`The specific jurisdiction inquiry centers “on the
`relationship among the defendant, the
`forum, and the
`litigation.”
`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 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 8
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 9 of 22 PageID #:<pageID>
`
`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 Illinois customers can
`purchase the infringing product. Apart from these sales-based
`activities, Chamberlain points 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 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 9
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 10 of 22 PageID #:<pageID>
`
`The stream-of-commerce theory governing exercise of
`specific personal jurisdiction is set forth in Asahi 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 (noting that “the Supreme Court’s framework
`applying the stream-of-commerce theory –
`including the
`
`- 10 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 10
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 11 of 22 PageID #:<pageID>
`
`conflicting articulations of that theory in Asahi – had not
`changed” in Nicastro).
`Even under the more stringent test, however, TTI HK is
`subject to specific personal jurisdiction in this action. Two
`Federal Circuit guideposts help delineate the crucial “something
`more” required:
`whether the defendant to some degree selects or
`controls the distribution process accounting for the accused
`product’s presence in the forum state. 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 evidence that a private investigator “purchased 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), the court found personal
`
`- 11 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 11
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 12 of 22 PageID #:<pageID>
`
`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.
`patent
`Applying
`these
`precedents,
`courts
`hearing
`infringement disputes in this District have 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 defendant “established distribution channels in
`Illinois such that it ‘knew the likely destination’ of 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 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 12
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 13 of 22 PageID #:<pageID>
`
`corporation’s opting for – and knowledge that it was enjoying -
`a “‘regular flow or regular course of sales’” in the forum
`state. In re Testosterone, 2016 WL 5890022, at *3 (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 who sold the drug in the U.S. and
`remitted royalty payments to the tune of over $600 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 a significant
`number of the products at issue in Illinois. 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 or fortuitous) Illinois
`
`- 13 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 13
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 14 of 22 PageID #:<pageID>
`
`Similar to In re Testosterone, TTI HK’s knowledge
`consequences.
`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 Tile Unlimited, Inc. v. Blanke Corp., 47
`F.Supp.3d 750 (N.D. Ill. 2014), for example, the defendant
`manufacturer’s subsidiary contracted equally with several
`distributors, only one of whom sold products into the forum
`state.
`See, id. at 755-56 (“Once the Uni-Mat reached the Blanke
`USA warehouse in Georgia [from the foreign defendant’s
`subsidiary], Blanke USA would sell the product to Virginia Tile
`and other distributors who would distribute the product
`throughout the United States.
`Tile Unlimited, 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 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 14
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 15 of 22 PageID #:<pageID>
`
`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 in Tile Unlimited or the four machines in Nicastro.
`Cf., uBID, Inc., 623 F.3d at 428-29 (holding that “GoDaddy
`purposefully availed itself of the Illinois 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). Doubtless, the
`law of personal jurisdiction – notoriously thorny and fact-
`specific – would be more lucid if the seminal cases recognized
`the sort of formal distinction TTI HK advocates. Alas, it is
`
`- 15 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 15
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 16 of 22 PageID #:<pageID>
`
`not so facile as to hale into federal court only those foreign
`companies that operate the machines of manufacture or the
`instrumentalities of importation.
`See, e.g., 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 their distribution and reviews sale reports,
`confirming that the GDOs indeed reach Illinois; and 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 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 16
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 17 of 22 PageID #:<pageID>
`
`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 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 17
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 18 of 22 PageID #:<pageID>
`
`the allegedly infringing Ryobi GDOs and otherwise actively
`induced
`its subsidiaries –
`particularly, TTI Trading and
`Defendant One World - to engage in the activities prohibited by
`the statute. While its burden to show liability will require
`greater
`proof
`that TTI HK in fact did so, Chamberlain’s
`allegations and jurisdictional evidence suffice to defeat TTI
`HK’s Motion to Dismiss.
`To the extent TTI HK’s argument is
`premised on the idea that actions in Illinois must be the
`exclusive ground of the complaint, this is incorrect.
`“Such
`reasoning would allow defendants with allegedly infringing
`activities in multiple states to argue that 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 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 18
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 19 of 22 PageID #:<pageID>
`
`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)). Factors that are relevant to the reasonableness
`inquiry include:
`“‘the burden on the defendant, the forum
`State’s interest in adjudicating the dispute, the plaintiff’s
`interest in obtaining convenient and effective relief, the
`interstate judicial system’s interest in obtaining the most
`efficient resolution of controversies, and the shared interest
`of the several States in furthering fundamental social
`policies.’”
`Patent Rights Protection Group, LLC v. Video Gaming
`Techs., Inc., 603 F.3d 1364, 1369 (Fed. Cir. 2010) (quoting
`Burger King, 471 U.S. at 476-77).
`The ultimate constitutional
`lodestar is whether it is “fair and reasonable to call the
`defendant into the state’s courts to answer the plaintiff’s
`claim.”
`uBID, 623 F.3d at 426.
`The burden par excellence on a foreign 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.
`682 F.3d 665, 677 (7th Cir. 2012) (emphasis in
`Clifton,
`original), and the extent to which “modern methods of
`transportation and communication have significantly ameliorated
`
`- 19 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 19
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 20 of 22 PageID #:<pageID>
`
`[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. Medico, 563 F.3d 1285, 1299 (Fed. Cir. 2009)
`(same).
`Also warranting a mention is the burden 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 interest in this patent
`
`- 20 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 20
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 21 of 22 PageID #:<pageID>
`
`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 injuries that occur within the state, and this
`interest
`extends
`to
`patent
`infringement
`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 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 21
`
`

`

`Case: 1:16-cv-06097 Document #: 517 Filed: 08/08/17 Page 22 of 22 PageID #:<pageID>
`
`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]. Though
`travel is a burden, it is not generally a reason 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.
`
`Dated: August 8, 2017
`
`Harry D. Leinenweber, Judge
`United States District Court
`
`- 22 -
`
`
`Chervon (HK) Limited
`Exhibit 2024 - Page 22
`
`

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket