Labtest Int'l Inc. v. Ctr. Testing Int'l Corp..

• Citation: 766 F.Supp.2d 854
• Decision Date: 01 February 2011
• Docket Number: Case No.: 10–CV–02897.
• Parties: LABTEST INTERNATIONAL, INC., d/b/a Intertek Consumer Goods North America, a Delaware corporation, Plaintiff,v.CENTRE TESTING INTERNATIONAL CORP., a Chinese corporation, Defendant.
• Court: U.S. District Court — Northern District of Illinois

766 F.Supp.2d 854

LABTEST INTERNATIONAL, INC., d/b/a Intertek Consumer Goods North America, a Delaware corporation, Plaintiff,

v.CENTRE TESTING INTERNATIONAL CORP., a Chinese corporation, Defendant.

Case No.: 10–CV–02897.

United States District Court, N.D. Illinois, Eastern Division.

Feb. 1, 2011.

John A. Leja, Polsinelli Shughart P.C., Chicago, IL, for Plaintiff.Brian D. Saucier, Jeffrey Edward Schiller, Phillip Jay Zisook, Deutsch, Levy & Engel, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

ROBERT M. DOW, JR., District Judge.

This matter is before the Court on Defendant Centre Testing International Corp.'s motion to dismiss Plaintiff Labtest International Inc's complaint for lack of personal jurisdiction [8] pursuant to Federal Rule of Civil Procedure 12(b)(2) and Defendant's motion for costs [11]. Having reviewed the briefs and pertinent exhibits, the Court grants the motion [8] and dismisses this case for lack of personal jurisdiction. The Court denies Defendant's motion for costs [11].

I. Background

Defendant Labtest International, Inc., d/b/a Intertek Consumer Goods North America (hereinafter “Intertek”), is an international company dealing in the certification of systems as well as testing, inspection, and certification of products and commodities. In connection with its certification and testing services, Intertek has created and authored a number of works regarding product safety training and testing analysis. Such works include: (1) A Design Hazard Analysis Testing Form; (2) A Product Safety Training—Overview Guide; and (3) A Product Safety Training—Human Factors Guide (collectively, the “Intertek Materials”). The Intertek Materials were designed and authored—and are now maintained—at Intertek's testing facility in Arlington Heights, Illinois. Intertek's primary administrative office in Illinois is located in Oak Brook (where a small testing facility also is located), but Intertek's primary testing facility is in Arlington Heights. According to the complaint, Intertek is the sole owner of all rights, including the copyrights, in the Intertek Materials.

Defendant Centre Testing International Corp.'s (“CTI”) is a Chinese corporation that is organized and operating under the laws of the People's Republic of China and has a principal place of business in Shenzhen, Guangdong Province, China. CTI, like Intertek, provides testing, inspection, audit, and certification services to the consumer products industry. CTI does not produce any commercial products. CTI maintains facilities in China, and does not have any facilities in the United States. According to CTI, it does not own or rent any property in the United States. CTI also maintains that it does not employ any workers in the United States; however, in October 2009, CTI retained Herbert Hewitt for the purposes of soliciting business in the United States and Canada. Under the terms of the consulting agreement between Hewitt and CTI, Hewitt's duties generally include introducing prospective clients to CTI, maintaining CTI's image in North America, and forwarding requests or orders from prospective clients to CTI for its consideration. Mr. Hewitt also has attended trade shows and appeared at business meetings on CTI's behalf in the United States. According to CTI, Hewitt is forbidden from signing contracts on behalf of CTI, and CTI retains ultimate authority over whether to contract with a prospective client referred to it by Hewitt. Hewitt is compensated in the form of both salary and commissions, and is solely responsible for paying taxes on the compensation that he receives from CTI. Hewitt operates out of his own home.

Intertek alleges that since September 2009, CTI has attended a number of trade shows in the United States. According to Intertek, in February 2010, CTI purchased a platinum sponsorship (the highest sponsorship available) for the International Consumer Product Health & Safety Organization's 17th Annual Meeting and Training Symposium in Washington, D.C. During that same month, CTI attended the Toy Fair at the Jacob J. Javits Convention Center in New York, New York. Intertek alleges that CTI's booth was manned by Mr. Hewitt, Paul Nie (CTI's vice-president), Jody Yam (part of CTI's Sales and Marketing Department), and Julie Zhang (THD Marketing). CTI also attended two American Apparel & Footwear Association (“AAFA”) shows in September 2009—one in Danvers, Massachusetts, and the other in Portland, Oregon. Mr. Hewitt and Jead Renaud, CTI's Product Director—Softline Products Division, attended on CTI's behalf.

CTI also is involved in a few American-based organizations. Four CTI employees—Mr. Hewitt, Chongchong Ding, Cathy Wang, and Jason Yang—are members of the AAFA's Product Safety Council and its Environmental Committee. Noted next to each of the committee members' respective names is that member's affiliated organization. Each of the four committee members listed above have “CTI Center Testing International Corp” next to their names. CTI also is listed in the Toy Industry Association's Resource Directory for Testing Laboratories. Additionally, one of CTI's informational brochures states that “CTI implements testing under the requirements of [the] following standards, in order that their services help manufacturers meet the need of lead and phthalate content bans of different countries and territories.” Specifically, CTI states that it can provide testing services for the United States.

According to CTI, and not refuted by Intertek, over the last five years CTI has not provided services to any client based in Illinois and has provided testing and analytical services to only one client with substantive ties to Illinois. Since 2008, CTI has performed testing services for the Chinese offices of an American manufacturer with headquarters that are located in the United States, but outside of Illinois. The services performed by CTI on behalf of this client include chemical, physical, and functionality testing of the American manufacturer's products with respect to relevant regulations and standards. According to CTI, the value of the services provided by CTI to this client in 2009 represents 0.55% of CTI's worldwide gross revenues in that year.

After CTI began providing testing services to the American manufacturer, the American manufacturer was acquired by another American company that is headquartered in Illinois. Prior to December 2009, payments provided to CTI for these testing services were issued by the American manufacturer's Chinese offices. However, since December 2009, payments have been issued by the Illinois-based parent company's Hong Kong office. Each of the products tested by CTI is manufactured by the American manufacturer, not the Illinois-based parent company.

According to the complaint, in late 2009, Intertek discovered that CTI was publishing and marketing materials regarding product safety training and testing analysis, including a design hazard analysis testing form and a Safety Certification Program Guide. Intertek claims that CTI was infringing its copyright in the Design Hazard Analysis Testing Form when Intertek received a copy of the form at a trade show in China. According to the complaint, the Design Hazard Analysis distributed by CTI was identical to Intertek's copyrighted work. Then, an Intertek employee located in the United States discovered CTI's Safety Certification Program Guide on CTI's website. According to the complaint, Intertek never authorized CTI to reproduce or distribute any of the Intertek Materials.

In March 2010, Intertek filed a complaint and motion for preliminary injunction in the United States District Court for the District of Connecticut. See D. Conn. Civ. A. No. 3:10–CV–00291–AVC (“Connecticut lawsuit”). The Connecticut Complaint asserted that CTI has been publishing and marketing a Design Hazard Analysis Testing Form and a Safety Certification Program Guide, which are allegedly protected by copyrights registered in the United States Copyright Office. The Connecticut Complaint further alleged that the Safety Certification Program Guide was posted by CTI on its Internet sites, and that the Design Hazard Analysis Testing Form was obtained by Intertek at a trade show in China.

According to CTI, the Safety Certification Program Guide was previously posted on its Internet sites by its marketing team in China. Once CTI learned that Intertek filed the Connecticut lawsuit, CTI removed the Safety Certification Program Guide from its Internet sites. CTI submits that the Design Hazard Analysis Testing Form has never been distributed in the United States by CTI. Additionally, CTI maintains (and Intertek does not dispute) that the work performed by CTI on behalf of the lone client with any ties to Illinois is entirely unrelated to either the Design Hazard Analysis Testing Form or the Safety Certification Program Guide, which stand as the basis of Plaintiff's copyright infringement allegations.

II. AnalysisA. Motion to Dismiss

When personal jurisdiction over a defendant is challenged by way of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of proving that jurisdiction exists and must make a prima facie case of jurisdiction. See Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir.2002). When a court decides a motion on the basis of paper submissions, a court accepts as true the plaintiff's undisputed allegations, and disputes in the evidence are resolved in favor of jurisdiction. See, e.g., Purdue Research Foundation v. Sanofi–Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.2003). However, the Seventh Circuit has cautioned that “once the defendant has submitted affidavits or other evidence in opposition to the exercise of jurisdiction, the plaintiff must go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction.” Id. at 783. The Court takes as true those facts contained in a defendant's...