Ids Publ'g Corp. v. Europe

• Decision Date: 18 September 2017
• Docket Number: Case No. 2:16-CV-00535
• Parties: IDS PUBLISHING CORPORATION Plaintiff, v. REISS PROFILE EUROPE, B.V., Defendant.
• Court: U.S. District Court — Southern District of Ohio

IDS PUBLISHING CORPORATION Plaintiff, v. REISS PROFILE EUROPE, B.V., Defendant.

Case No. 2:16-CV-00535

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

September 18, 2017

CHIEF JUDGE EDMUND A. SARGUS, JR.

Magistrate Judge Kimberly A. Jolson

OPINION AND ORDER

This matter is before the Court on Defendant's Motion to Dismiss the Complaint. For the reasons that follow, Defendant's Motion is GRANTED.

I.

Plaintiff, IDS Publishing Corporation ("IDS"), is a for-profit corporation incorporated in the State of Illinois and licensed as a foreign for-profit corporation in Ohio as of May 31, 2016.¹ (Complaint "(Compl.") ¶ 1, ECF No. 1.) IDS has its principal place of business in Columbus, Ohio. (Id.) IDS is a global publisher of assorted psychological assessments and was founded by Dr. Steven Reiss in 1988. (Id. ¶ 8.) Dr. Reiss was an expert in psychological assessments and published books in the area of motivational psychology. (Id. ¶ 6.) Dr. Reiss also wrote the Reiss Motivation Profile ("Reiss Profile"), a "standardized instrument for measuring the root causes of human motivation and behavior." (Id. ¶ 8.) As IDS explains in its Complaint, the Reiss Profile"captures specifically identified dimensions of individual personality" for use in "different types of personal evaluations including those related to business consulting, HR decision-making, educational counseling, and personal coaching." (Id. ¶ 9.)

IDS holds a United States copyright in the Reiss Profile (United States Copyright Registration TX-5-488-769), and United States Patent and Trademark Office trademarks for the "Reiss Motivation Profile" (No. 3724884) and "Reiss Profile" (No. 4117758). (Id. ¶ 10.) In Europe, IDS holds trademarks issued by the Office for Harmonization in the Internal Market (the European Union Intellectual Property Office as of March 26, 2016) for "Reiss Profile" (No. 009540691) and "Reiss Motivational Profile" (No. 010508273). (Id.)

Defendant, Reiss Profile Europe, B.V. ("RPE"), is a corporation incorporated and operating in the Netherlands. (Id. ¶ 2.) RPE is owned by Peter Boltersdorf, John J.M. Delnoy, and Thomas Staller. (Id. ¶ 12.) RPE represents that it "does not have in Ohio . . . any employees, documents, offices, registered agents, or property." (Defendant's Memorandum in Support of its Motion to Dismiss ("Def.'s Mot.") at 4, ECF No. 18-1.)

IDS had a previous contractual relationship with Helmut Fuchs, in which IDS granted "exclusive marketing rights" of the Reiss Profile to Helmut Fuchs in Europe. (Steven Reiss Decl. ¶ 33, ECF No. 21-3.) In 2006, IDS canceled Helmut Fuch's marketing rights in accordance with a clause in the parties' agreement. (Id.) The prior summer of 2005, Dr. Reiss visited Frankfurt, Germany to give a lecture, and the parties do not dispute that Dr. Reiss and Peter Boltersdorf had a face-to-face conversation regarding the license. (Steven Reiss Decl. ¶ 35; Def.'s Mot. at 4.) However, the parties do dispute the content of their conversation in Frankfurt. IDS asserts that Mr. Boltersdorf asked Dr. Reiss to "terminate the license then in place with Helmut Fuchs" to grant a new license for his "corporate entity yet to be formed," and that Dr. Reiss did not makeany promises to him at that time. (Steven Reiss Decl. ¶ 35.) RPE claims that Dr. Reiss and RPE representatives, including Mr. Boltersdorf, met twice in the summer of 2005 in Europe where they "reached a general agreement." (Def.'s Mot. at 4.)² RPE supports its claim with signed affidavits by Mr. Delnoy and Mr. Boltersdorf. (Delnoy Decl. ¶¶ 4-5, ECF No. 18-9; Boltersdorf Decl. ¶¶ 4-5, ECF No. 18-10.) For the purposes of this motion, the Court views their statements as uncontested claims since the Plaintiff has not contradicted with admissible "specific facts" arguing otherwise. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991).

At some point after the summer of 2005, IDS and RPE negotiated the details of the License Agreement ("License") through email communications directed to Steven Reiss in Ohio. (Plaintiff's Response to Def.'s Mot. ("Pl.'s Resp.") at 19, ECF No. 21; Def.'s Mot. at 5.) RPE's European attorneys reviewed the draft license during negotiations and faxed the completed License to Steven Reiss in Ohio for him to sign in October 2006. (Def.'s Mot. at 5; Steven Reiss Aff. ¶¶ 40-42.) In mid-October 2006, IDS and RPE entered into the License Agreement. (License Agreement ("License"), ECF No. 1-1; Compl. ¶ 11.)

The Reiss Profile "consists of 128 items or psychological questions, a 44-page usermanual, 16 psychological norms, and an Internet based mechanical administration and scoring systems." (License at 3.) It "identifies specific dimensions of the individual personality" to analyze "what motivates a person over the age of 12." (Maggi Reiss Decl. ¶ 19, ECF No. 21-2.) Under the terms of the License, IDS granted RPE the exclusive right to market the Reiss Profile in "Germany, Netherlands, Belgium, Luxemburg, France, and Italy . . . but nowhere else." (Id.) In turn, RPE agreed to "commercially exploit only" copies of the Reiss Profile that it purchased directly from IDS, not to modify the Reiss Profile without written consent, and not to "develop its own version" or "to develop a competitive product." (Id.) The License provided that RPE could issue one sub-license for each nation in its territory after receiving written consent from IDS and paying an upfront fee. (Id. at 4.) Furthermore, RPE promised to "require each and every person or company holding a sub-license to purchase from IDS Publishing (indirectly)—via RPE (directly)—a minimum number of tests" each month. (Id.) Both parties agreed to take "reasonable precautions" to protect the "confidentiality of information" which might "adversely impact the commercial exploitation" of the Reiss Profile. (Id. at 5.) However, the License included the caveat that the License did not "restrict nonprofit, scientific research on the Reiss Profile," provided that the scientists published no more than six sample test items and did not publish or format the Reiss Profile's "psychological norms." (Id.) RPE agreed to pay IDS €60,000 (euros) for the rights granted by IDS, and €10 for each Reiss Profile "test" to be purchased "exclusively" from IDS. (Id.) The License does not include a forum selection or choice of law clause.

The Reiss Profile is a "normative assessment" that requires a comparison between the performance of an individual test taker with all other test takers in the reference group. (Pl.'s Resp. at 3; Maggi Reiss Decl. ¶ 30.) Accordingly, the Reiss Profile must be "re-normedperiodically as data are collected on new test takers" to ensure that the assessment remains "valid and reliable." (Maggi Reiss Decl. ¶ 30.) During the License term, Dr. Reiss, in Ohio, re-normed the Reiss Profile twice with the help of Spinningwebz Services ("Spinningwebz"), IDS' technical service provider. (Id. ¶ 33; Pl.'s Resp. at 1.) After re-norming, IDS would incorporate the updated data into the Reiss Profile's "scoring algorithm" for RPE to use. (Maggi Reiss Decl. ¶ 33.)

The License grants RPE the right to use the Reiss Profile's psychological questions to learn information about an individual. (License at 2.) Authorized individuals, called "Masters," may administer the Reiss Profile to an individual. (Maggi Reiss Decl. ¶ 34.) After an individual answers all 128 questions, RPE, through the Masters, sends a file with the answers to IDS' server. (Hicks Decl. ¶ 11, ECF No. 21-1.) The IDS server is maintained by Spinningwebz and was originally located in New York but moved to Arizona sometime in 2011. (Id. ¶¶ 14, 16.) The responses are scored using a "complex mathematical formula, developed exclusively for IDS by Spinningwebz for scoring the [Reiss Profile]." (Id. ¶ 8.) When the scoring is complete, the scores are sent to RPE from IDS' server. (Id. ¶ 12.) After RPE receives the scores for each of the Reiss Profile's sixteen norms, it "generates an interpretative report for each test taker," as originally written by Dr. Reiss. (Id. ¶ 38.) Until his death, Dr. Reiss oversaw the ongoing scoring of the Reiss Profile from in Columbus, Ohio. (Id. ¶ 17.)

Spinningwebz provided technical support to RPE on the Reiss Profile as necessary, in accordance with guidance from IDS. (Hicks Decl. ¶¶ 4, 18.) In 2007, 2011, 2012, and 2015, Spinningwebz provided various technical support to RPE from its offices in New York. (Id. ¶¶ 20-24.) From October 2006 to November 2015, RPE sent a total of 47,950 answers to IDS' server in either New York or Arizona for scoring. (Id. ¶ 33.) In late November 2015, RPE allegedly "stopped sending test taker responses to IDS for scoring and apparently started scoringtest taker responses using its own scoring routine on its own server." (Maggi Reiss Decl. ¶ 42.) After that point, IDS does not know the "number of test takers actually tested." (Id. ¶ 43.)

In 2015, RPE's counsel, Holger Müller, notified IDS that "RPE issued sub-licenses for Germany, Belgium, The Netherlands, Luxembourg, and RPE's Institut fur das Reiss Profile in Management and Leistungsport in Germany." (Id. ¶ 57.) IDS asserts that it never "received any written request from RPE to grant any sublicenses" and did not consent to the "issuance of any such sublicenses." (Compl. ¶ 16.) In early February 2015, RPE allegedly informed IDS that it was developing and marketing a mobile application for "compliment cards" to be sold to test takers based on the results of the Reiss Profile. (Id. ¶ 29.) IDS states that it complained to RPE about the License violation, after which RPE "changed its position and asserted that this product is not derived from the Reiss Profile." (Id.)

In mid-June 2015, RPE wrote to IDS and voluntarily terminated the License "effective December 31, 2016." (Id. ¶ 31.) In the beginning of July, IDS sent RPE an invoice for €860,000 for past due royalties under the License. (Id. ¶ 32.) RPE later made two...