Johnson Worldwide Associates, Inc. v. Brunton Co., 96-C-0965.

• Decision Date: 08 May 1998
• Docket Number: No. 96-C-0965.,96-C-0965.
• Citation: 12 F.Supp.2d 901
• Parties: JOHNSON WORLDWIDE ASSOCIATES, INC., and Johnson Worldwide Associates Canada, Inc., Plaintiffs, v. The BRUNTON COMPANY, and Silva Production AB, Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

12 F.Supp.2d 901

JOHNSON WORLDWIDE ASSOCIATES, INC., and Johnson Worldwide Associates Canada, Inc., Plaintiffs, v. The BRUNTON COMPANY, and Silva Production AB, Defendants.

No. 96-C-0965.

United States District Court, E.D. Wisconsin.

May 8, 1998.

COPYRIGHT MATERIAL OMITTED

Peter J. Stone, Foley & Lardner, Milwaukee, WI, for plaintiffs.

John P. Frederickson, Nilles & Nilles, Milwaukee, WI, John E. Reilly, Kurt S. Lewis, Reilly & Purcell, Denver, CO, for defendants.

DECISION AND ORDER

ADELMAN, District Judge.

Currently pending before me are motions brought by defendants, Silva Production AB and The Brunton Company under Federal Rule of Civil Procedure 12(b)(2) to dismiss for lack of personal jurisdiction. The Brunton Company also moves for a change of venue pursuant to rule 12(b)(3). For the reasons set forth below, all of these motions are denied.

I. FACTUAL BACKGROUND

The following facts are derived from the Amended Complaint and from the parties' evidentiary submissions, as indicated. Additional facts will be discussed as necessary.

Plaintiffs Johnson Worldwide Associates, Inc., a Wisconsin corporation, and Johnson Worldwide Associates Canada, Inc., a Canadian corporation, filed this case in this district on August 23, 1996. Both plaintiffs (together referred to as "JWA") have their principal offices in Sturtevant, Wisconsin, which is within the territory of this district. JWA designs, develops, markets, sells, and distributes magnetic compasses in the United States and Canada. Amended Complaint at ¶ 1; JWA's Johnson-Leipold Decl. (Jan. 10, 1997) at ¶ 3.

Defendant Silva Production AB is a Swedish corporation with its principal place of business in Sollentuna, Sweden. Silva' Production designs, develops, manufactures, markets, and sells compasses worldwide. Silva' Production's Tillander Decl. (Oct. 31, 1996) at ¶¶ 1, 2, 6. Silva Production has never qualified to do business in Wisconsin; has never had a mailing address, telephone line or bank account in Wisconsin; owns no property in Wisconsin; and has no employees, officers or directors in Wisconsin. Id. at ¶¶ 7, 9, 10. It has no subsidiaries, affiliates, or agents doing business in Wisconsin. Id. at ¶ 8.

The contract underlying this lawsuit is one that originally had little connection to Wisconsin. Neither plaintiff was an original party to the contract. On December 20, 1973, Silva Production (then known as AB Instrumentverken) entered into a Supply and Know-How Licensing Agreement (the "licensing agreement") with Silva, Inc., an Indiana corporation located in La Porte, Indiana. The licensing agreement was negotiated and signed in Stockholm, Sweden, and provides that Indiana law applies to its terms. Id. at ¶¶ 4, 5; Johnson-Leipold Decl., Exh. A. Pursuant to the licensing agreement Silva Production provided compasses to Silva, Inc. in La Porte. Tillander Decl. at ¶ 5.

In approximately 1980, Silva, Inc. was purchased by and liquidated into JWA predecessor Johnson Wax Associates, Inc., a Delaware corporation located in Racine, Wisconsin. Johnson-Leipold Decl., Exh. B at 1. JWA succeeded to all of the rights and obligations of Silva, Inc., including the licensing agreement with Silva Production. Id. Johnson Wax then assigned all rights and obligations under the licensing agreement to its wholly-owned subsidiary Johnson Camping, Inc., a Delaware corporation with its principal office in Binghamton, New York. Id. Silva Production, Johnson Wax, and Johnson Camping then entered into a second agreement, dated September 23, 1981, which resolved various issues between the parties and amended certain terms of the licensing agreement. Id. at 1-5. The amendments extended the licensing agreement to September 23, 1996. Id. at 4. The September 23, 1981, agreement between Silva Production, Johnson Wax, and Johnson Camping provided that Wisconsin law applied to its terms. Id. at 5. It is unclear where the agreement was signed.

Johnson Wax became JWA. JWA then apparently reorganized at some point and Johnson Camping's separate identity may have disappeared, although that is unclear. See Johnson-Leipold Decl. at ¶ 4; Silva Production's Reply Memorandum (May 19, 1997) at 8. In any event, JWA now has three divisions operating out of Sturtevant: camping, fishing and marine, and diving. Johnson-Leipold Decl. at ¶ 4.

Pursuant to the licensing agreement, Silva Production manufactured and sold exclusively to JWA or its predecessors magnetic compasses for distribution, marketing and sale by JWA in the United States and Canada, including Wisconsin. Id. at ¶ 5. JWA used SILVA as a trade name; JWA owns all right, title and interest in and to the SILVA trade name and trademark in the United States and Canada with respect to compasses. Id. at ¶ 3. JWA's camping division is responsible for the SILVA compass. Id. at ¶ 4.

According to JWA, notwithstanding its assignment of the licensing agreement to Johnson Camping, the compass orders and payments to Silva Production all originated from JWA's Wisconsin offices and all decisions regarding the supply relationship with Silva Production were handled in Wisconsin as well. Id. at ¶¶ 8, 9. According to JWA, a "flurry of communications" occurred between JWA in Wisconsin and Silva Production in Sweden regarding their relationship, including letters from Silva Production addressed to employees of Johnson Wax and JWA in Racine. Id. at ¶¶ 10, 11; see id., Exh. C. Representatives of Silva Production traveled to Wisconsin approximately eight to ten times from 1973 through 1996 to discuss issues regarding Silva Production's relationship with Johnson Camping, including the resolution of the current dispute. Tillander Decl. at ¶ 15.

In February 1996 Silva Production bought all outstanding shares of defendant The Brunton Company, making Brunton its wholly-owned subsidiary. Brunton, a Wyoming corporation with its principal office in Riverton, Wyoming, still maintains a separate corporate identity from Silva Production. Brunton's Herron Decl. (Sept. 20, 1996) at ¶¶ 2, 4, 5. Brunton is engaged primarily in the business of manufacturing and marketing transits, telescopes, binoculars, rifle scopes, compasses, and related products. Id. at ¶ 3. Brunton has no office or manufacturing facility in Wisconsin and is not registered to do business in this state. Id. at ¶ 8. It sells its products through independent sales representatives, none of whom live in Wisconsin. The sales representative servicing Wisconsin lives and works in Illinois. Id. at ¶¶ 6, 10. Brunton advertises its products in national industry publications and through catalogs, brochures, and flyers, some of which find their way into Wisconsin. Id. at ¶¶ 7, 9.

In March 1996 Silva Production officials traveled to Wisconsin to discuss the licensing agreement and to offer to purchase the SILVA trademark from JWA. Johnson-Leipold Decl. at ¶ 12. (JWA apparently declined.) Silva Production then sent a letter dated March 15, 1996, and addressed to JWA in Sturtevant, Wisconsin, terminating the licensing agreement effective September 23, 1996. Johnson-Leipold Decl., Exh. D.

Silva Production and Brunton had decided to sell a line of magnetic compasses, manufactured by Silva Production and distributed by Brunton under the name "NEXUS". Herron Decl. at ¶ 12. To introduce Brunton's representatives to these new products, on or about July 29, 1996, Brunton sent a fax to its representatives in which it noted the expansion of its product line "to include Made in Sweden compass products trademarked `Nexus' (formerly sold by Johnson Worldwide Associates as `Silva')." Id., Amended Complaint, Exh. 3; Johnson-Leipold Decl. at ¶ 21. The fax was not sent to anyone in Wisconsin. Brunton met with its representatives in Salt Lake City, Utah, in conjunction with the Outdoor Retailer Show in August 1996 to discuss the NEXUS product line. Herron Decl. at ¶ 12. Preliminary literature about and other promotion of the NEXUS line may have involved references by Brunton or Silva Production that the NEXUS products were the same as JWA's SILVA products, although that is a disputed point. See, e.g., JWA's Arent Decl., Exh. H at Exh. 13, Exh. C at 21-22. According to JWA, the NEXUS line of compasses appears very similar to JWA's SILVA line and includes many of the same model names and numbers used by JWA. Amended Complaint at ¶¶ 19, 22.

Meanwhile, on July 5, 1996, Silva Production sent JWA in Wisconsin a letter indicating that it would not fill certain of JWA's outstanding orders for compasses. Johnson-Leipold Decl. at ¶ 14, Exh. F.

In this lawsuit, JWA alleges nine federal and state-law claims against Silva Production and Brunton based on the termination of its licensing agreement and the defendants' actions regarding the NEXUS line. Specific claims include trademark and trade dress infringement, fraudulent registration of a trademark by Silva Production, unfair competition, unjust enrichment, violation of the Wisconsin Fair Dealership Law, Wis.Stat. § 135.01 et seq., breach of contract, and tortious interference with the contracts between JWA and its customers.

II. PERSONAL JURISDICTION

Defendants contend that this court has no personal jurisdiction over them and the case therefore must be dismissed.¹ Plaintiffs have the burden of proving personal jurisdiction exists, RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997), although the burden is not a heavy one, 5A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1351 (2d ed.1990). In support of jurisdiction the plaintiffs have proffered the allegations in their complaint as well as deposition testimony and affidavits, which the court may receive and weigh to assist it in determining the jurisdictional facts. O'Hare Int'l Bank v. Hampton, 437 F.2d 1173, 1176 (7th Cir.1971); Cram v. Medical College of Wis., 927 F.Supp. 316, 319 (E.D.Wis.1996). The plaintiff need only make a prima facie showing that personal jurisdiction exists. O...