Chicago Reader, Inc. v. Metro College Pub., Inc., 79 C 2109.

• Decision Date: 07 May 1980
• Docket Number: No. 79 C 2109.,79 C 2109.
• Parties: CHICAGO READER, INCORPORATED, a corporation, Plaintiff, v. METRO COLLEGE PUBLISHING, INC., a corporation, Defendant.
• Court: U.S. District Court — Northern District of Illinois

495 F. Supp. 441

CHICAGO READER, INCORPORATED, a corporation, Plaintiff, v. METRO COLLEGE PUBLISHING, INC., a corporation, Defendant.

No. 79 C 2109.

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

May 7, 1980.

Dennis C. Waldon, David W. Andich, Roan & Grossman, Chicago, Ill., for plaintiff.

Edward J. Chalfie, Dennis McWilliams, McWilliams, Mann & Zummer, Chicago, Ill., for defendant.

MEMORANDUM OPINION AND ORDER

CROWLEY, District Judge.

Chicago Reader, Incorporated (Chicago), an Illinois corporation, brought this action against Metro College Publishing, Inc. (Metro), a Minnesota corporation, alleging trademark infringement, false representation and unfair competition in violation of the Lanham Trademark Act of 1946, 15 U.S.C. § 1051 et seq. and various state statutes.¹ Jurisdiction is based on 15 U.S.C. § 1121, 28 U.S.C. § 1332 and 28 U.S.C. § 1338; venue is laid under 28 U.S.C. § 1391. Currently before the Court is Metro's motion, under Fed.R.Civ.P. 12, to dismiss for improper venue or to transfer to the District of Minnesota.²

Chicago publishes a weekly newspaper, under its registered trademark, "Reader", which is distributed throughout the United States. Metro publishes a similar newspaper, distributed under the name "Twin Cities Reader".³ The gravamen of Chicago's complaint is that Metro, by using the name "Twin Cities Reader" is intentionally deceiving the public as to the source, nature and quality of Metro's newspaper in an attempt to profit from the goodwill and reputation identified with the "Reader" trademark.

Metro argues that, under 28 U.S.C. § 1391⁴, venue is improper here for several reasons. First, it claims that subsection 1391(a) is inapplicable because this subsection applies only to civil actions founded solely on diversity of citizenship. Since this action was brought pursuant to the Lanham Act, and thus, not founded solely on diversity, Metro claims that the propriety of venue in this district is controlled by subsection 1391(b). Under subsection 1391(b) venue is proper in the district "where all the defendants reside or in which the claim arose." Relying heavily on Hindu Incense v. Meadows, 439 F.Supp. 844 (N.D.Ill.1977) and Honda Associates, Inc. v. Nozawa Trading, Inc., 374 F.Supp. 886 (S.D.N.Y.1974), Metro maintains that the requirements of subsection 1391(b) cannot be satisfied because a substantial part of the claim did not occur in this district nor does Metro reside here.

Metro sets forth several arguments in support of its contentions that venue is improper in the Northern District. First, it asserts that a cause of action for trademark infringement arises where the passing off occurs and reasons that since Metro distributes its newspapers almost exclusively in the Minneapolis-St. Paul area, any alleged infringement occurred in Minnesota, not Illinois. Next, it alleges that it does not reside in Illinois, nor is it doing business here because: 1) Metro's only place of business and all its assets are in Minnesota; 2) the "Twin Cities Reader" is printed in Minnesota; and 3) the articles, editorial comments and advertising materials published in the "Twin Cities Reader" are directed toward local readers. Metro contends that its contacts with Illinois are insignificant, consisting of the distribution of thirty-six copies of the "Twin Cities Reader" in Illinois, the initiation of some telephone calls to Illinois advertisers and the attendance by Metro personnel at two Illinois trade shows in connection with one of Metro's musical publications. Thus, Metro contends that it does not have sufficient contacts with Illinois to require it to defend an action in the Northern District.

Chicago responds that Metro has been conducting business in Illinois on an ever-increasing basis. It maintains that in the past Metro has regularly conducted business within the state, billing Illinois advertisers for at least $43,000 and that Metro continues to actively solicit additional Illinois advertisers. Chicago states that Metro has solicited business with Illinois advertising agencies via mail and telephone and encourages these advertisers to distribute the "Twin Cities Reader" to their Illinois clients. Next, Chicago avers that Metro media kits, defining Metro's market as "the Twin Cities (Minneapolis and St. Paul) and the upper midwest (Minnesota, Illinois, Wisconsin, North and South Dakota, Iowa and Nebraska)" are mailed on a continuous basis to potential Illinois advertisers. Further, Chicago alleges that on two occasions Metro personnel, while in Chicago in connection with various musical productions, negotiated several sales of advertising space in the "Twin Cities Reader". Finally, Chicago contends that Metro reporters traveled to Illinois to prepare material for the Twin Cities Reader. Chicago argues that these phone calls, mailing and personal visits constitute a continuous and purposeful pattern of contact with Illinois which satisfies the doing business requirement of the venue statute.

It is well settled that the mere fact that the infringer has sent goods or sales literature bearing the infringing mark into the district cannot be the basis of venue, and that in a "transitory" cause of action, venue is proper only in those districts in which the trademark infringer has had significant activities. See TransAmerica Corp. v. Transfer Planning, Inc., 419 F.Supp. 1261 (S.D.N.Y.1976). Thus, a claim will not be "deemed to have arisen in a district in which the defendant has had only miniscule contact . . ." Honda Associates, Inc. v. Nozawa Trading Inc., 374 F.Supp. 886, 892 (S.D.N.Y.1974). Accord, Hindu Incense v. Meadows, 439 F.Supp. 844 (N.D.Ill.1977).

Weighing Metro's contacts with Illinois, it is clear that these contacts are "more than miniscule." Tefal, S.A. v. Products International Company, 529 F.2d 495 (3d Cir. 1976). The totality of Metro's activities, which includes: negotiations by mail and telephone with potential Illinois advertisers, the attendance at two Illinois trade shows during which sales for advertising space in the "Twin Cities Reader" were consummated, and the circulation of the "Twin Cities Reader" within the state constitute more than a "mere vestige of venue." Hindu Incense v. Meadows, 439...