STORE DECOR DIV. OF JAS INT. v. STYLEX WORLDWIDE

• Decision Date: 21 June 1991
• Docket Number: No. 90 C 4353.,90 C 4353.
• Parties: STORE DECOR DIVISION OF JAS INTERNATIONAL, INC., an Illinois corporation, Plaintiff, v. STYLEX WORLDWIDE INDUSTRIES, LTD., a Massachusetts Corporation, Beauty Brokers, Ltd., a Massachusetts corporation, and Francis Laurence. Defendants.
• Court: U.S. District Court — Northern District of Illinois

767 F. Supp. 181

STORE DECOR DIVISION OF JAS INTERNATIONAL, INC., an Illinois corporation, Plaintiff, v. STYLEX WORLDWIDE INDUSTRIES, LTD., a Massachusetts Corporation, Beauty Brokers, Ltd., a Massachusetts corporation, and Francis Laurence. Defendants.

No. 90 C 4353.

United States District Court, N.D. Illinois, E.D.

June 21, 1991.

Charles A. Laff, Larry L. Saret, Lawrence R. Robins, Laff, Whitesel, Conte & Saret, Chicago, Ill., for plaintiff.

Henry L. Brinks, Gustavo G. Siller, Jr., Willian, Brinks, Olds, Hofer, Gilson & Lione, Ltd., Chicago, Ill., for defendants.

MEMORANDUM OPINION AND ORDER

MAROVICH, District Judge.

Plaintiff filed this suit against defendants alleging, inter alia, copyright infringement. Before the court is defendants' motions to dismiss for lack of personal jurisdiction, for improper venue, and for failure to state a claim for copyright infringement. Alternatively, defendants move to transfer this action to the District of Massachusetts pursuant to 28 U.S.C. § 1404(a). For the following reasons, all of defendants' motions are denied.

BACKGROUND

The facts alleged in plaintiff's amended complaint are as follows. Plaintiff is an Illinois corporation with its principal place of business in Chicago. Defendants Stylex and Beauty Brokers are Massachusetts corporations with their principal places of business in Massachusetts. Defendant Laurence is the president of both Stylex and Beauty Brokers.

In 1987, plaintiff created four mirrored acrylic sculptures for use as beauty parlor furnishings. Since 1987, the sculptures have been published by plaintiff "in conformance with the provisions of the Copyright Laws." The certificates of registration for these sculptures were issued on February 21, 1990. Both corporate defendants had access to these works because both purchased them from plaintiff on May 15, 1989. Sometime prior to January of 1990, defendants copied the copyrighted works and sold the copies in the northern district of Illinois and elsewhere in the United States. Beauty Brokers "sells all of its products through independent sales representatives and distributors and directly to customers via United Parcel Services." Beauty Brokers has sold the allegedly infringing products in Illinois through its independent sales representatives and distributors in Illinois. Stylex sold the allegedly infringing products in Chicago in March of 1990. Defendant Laurence is the dominant influence in both Stylex and Beauty Brokers and personally determined the corporate policies of both Stylex and Beauty Brokers which have resulted in the alleged infringement. Laurence has derived financial benefit directly from the sales of the allegedly infringing products.

ANALYSIS

Personal Jurisdiction

Unless authorized by a federal statute or a federal rule of civil procedure (e.g., in interpleader cases), a federal district court has personal jurisdiction over a nonresident defendant only if the courts of the state in which the federal court sits would have personal jurisdiction over the defendant. Davis v. A & J Electronics, 792 F.2d 74, 75-76 (7th Cir.1986). In making this determination, the court must apply a two-step analysis: (1) whether the facts alleged in a particular case bring the defendant within the reach of the forum state's long arm statute, and if so, (2) whether the court's exercise of personal jurisdiction over the defendant is consonant with due process.

The Illinois long arm statute provides in relevant part:

(a) Any person, whether or not a citizen or resident of this state, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person, ... to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any such acts:

(1) The transaction of any business within this state;

(2) The commission of a tortious act within this state.

Ill.Rev.Stat. ch. 110, para. 2-209(a).

A cause of action for copyright infringement sounds in tort. Leo Feist, Inc. v. Young, 138 F.2d 972, 975 (7th Cir. 1943); Burwood Products Company v. Marsel Mirror and Glass Products, Inc., 468 F.Supp. 1215, 1218 (N.D.Ill.1979); see also Video Views, Inc. v. Studio 21, Ltd., 925 F.2d 1010, 1013 (7th Cir.1991) (dictum). With respect to the issue of whether an allegedly tortious act was committed "within Illinois", another court in this district has observed that "damage to intellectual property rights ... by definition takes place where the property owner suffers the damage." Acrison, Inc. v. Control and Metering, Ltd., 730 F.Supp. 1445, 1448 (N.D.Ill.1990) (Shadur, J.) (emphasis in original) (holding that court did not have personal jurisdiction pursuant to § 2-209(a)(2) over a defendant who was not "transacting ... business" in Illinois within the meaning of § 2-209(a)(1) because the plaintiff was a non-Illinois corporation and the tort thus occurred outside of Illinois). This court agrees with the Acrison court's conclusion that an infringement of a plaintiff's intellectual property right, which right is by definition intangible, must, by definition occur "where the owner suffers the damage", i.e. where the owner is located. The plaintiff in this case, Store Decor, is an Illinois corporation with its headquarters and operations in Chicago.¹

Defendant Beauty Brokers concedes in its memorandum in support of its motion to dismiss that it has independent sales representatives and distributors in Illinois and that it has sold the allegedly infringing products in Illinois. Defendant Stylex also concedes in its memorandum in support of its motion to dismiss that it has independent sales representatives and distributors in Illinois and that it attended a "flea market"² in Chicago in March of 1990 and sold $400 worth of the allegedly infringing products at that "flea market". Both corporate defendants have thus committed alleged torts in Illinois and thus fall within the reach of § 2-209(a)(2). Defendant Laurence is liable for these alleged infringements if he was the dominant influence in the two corporate defendants and personally determined the corporate policies which resulted in the alleged infringement. Burwood Products at 1219. Plaintiff has so alleged. Plaintiff thus properly states a claim for copyright infringement against Laurence. Since copyright infringement is a tort, Laurence falls within the ambit of § 2-209(a)(2).³

Since all three defendants have allegedly committed tortious acts in Illinois and since these acts form the basis of plaintiff's complaint against defendants, all three defendants fall within the ambit of § 2-209(a)(2) of the Illinois long arm statute. The next issue is whether this court's exercise of personal jurisdiction over defendants is consonant with their due process rights. In contrast to the inquiry under § 2-209(a)(2) of the Illinois long arm statute, the extent of defendants' contacts with Illinois is a relevant consideration in determining whether this court's exercise of personal jurisdiction over them would violate their due process rights.

The demands of due process are met when there are "minimum contacts" between the forum and the defendant such that "maintenance of the suit in that particular forum does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). Due process is satisfied when "a defendant's conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980).

Store Decor's asserted cause of action against all three defendants arises out of their tortious conduct in violating Store Decor's copyright rights. Some of this tortious conduct admittedly occurred in Illinois. This conduct, which is the basis of plaintiff's complaint, provides the necessary "minimum contacts" with Illinois. Defendants who violate the copyright rights of an Illinois owner in Illinois cannot be heard to complain that they could not reasonably anticipate being haled into an Illinois court to defend against a complaint by the Illinois owner for copyright infringement.

Failure to State a Claim

To state a claim for copyright infringement, a plaintiff must allege ownership of a valid copyright and "copying" of the copyrighted material by the defendant. Atari, Inc. v. North American Philips Consumer Electronics Corp., 672 F.2d 607, 614 (7th Cir.1982) (superseded by statute on other grounds as stated in Scandia Down Corp. v. Euroquilt, Inc., 772 F.2d 1423, 1429 (7th Cir.1985)). Because direct evidence of copying often is unavailable, copying may be inferred where the defendant had access to the copyrighted work and the allegedly infringing work is substantially similar to the copyrighted work. Id. Plaintiff alleges in its amended complaint that it owns a validly registered copyright for the four sculptures in question. Plaintiff also alleges that defendants Stylex and Beauty Brokers had direct access to the copyrighted goods, having purchased them from plaintiff in May of 1989 through their president, defendant Laurence. Plaintiff also alleges that defendants Stylex and Beauty Brokers copied and sold copies of plaintiff's copyrighted sculptures. Plaintiff thus clearly states a claim for copyright infringement against these two defendants. Plaintiff also alleges that defendant Laurence is liable for these alleged infringements as a corporate officer because he was the dominant influence in both Stylex and Beauty Brokers and because he personally determined the corporate policies which resulted in the alleged infringement. Plaintiff thus also states a claim against Laurence. Burwood Products at 1219.

Propriety of Venue in Illinois

Venue in a copyright infringement action lies in the district where the defendants "reside or may be found." 28 U.S.C. § 1400(a)....