Pkware, Inc. v. Meade
| Citation | 79 F.Supp.2d 1007 |
| Decision Date | 07 January 2000 |
| Docket Number | No. 99-C-0658.,99-C-0658. |
| Parties | PKWARE, INC., Plaintiff, v. Timothy L. MEADE and Ascent Solutions, Inc., Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
Adam L. Brookman, Milwaukee, WI, for plaintiff.
Timothy F. Mentkowski, Milwaukee, WI, Dwight D. Brannon, James P. Fleisher, for Defendants.
DECISION AND ORDER
Plaintiff PKWare, Inc. is a Milwaukee company which develops and licenses various software products. Plaintiff is the originator of certain software known as PKZIP software, and owns a patent, trademarks and copyrights on some of the technology related to the software. Defendant Timothy L. Meade is an Ohio resident in the business of translating and reselling software. In September 1992 plaintiff and Meade entered into a contract (the "agreement") under which Meade would convert some of plaintiff's software so that it could be used in environments other than those for which it was designed. At the time Meade entered into the agreement he was a sole proprietor doing business under the name "Ascent Solutions." In 1993 Meade incorporated his business in Ohio under the name Ascent Solutions, Inc. ("ASI") and became ASI's majority shareholder, president and CEO. (Meade Aff. 9/16/99.)
In 1999 plaintiff commenced this action against both defendants alleging a variety of claims under both state and federal law. These claims include (1) breach of contract, (2) copyright infringement, (3) patent infringement, (4) trademark infringement, (5) false designation of origin, (6) common law trademark infringement, (7) common law unfair competition, (8) dilution of mark, and (9) breach of duty of good faith and fair dealing. Pursuant to Fed.R.Civ.P. 12(b)(2) and 12(b)(3), defendants moved to dismiss for lack of personal jurisdiction and improper venue or, in the alternative, pursuant to 28 U.S.C. § 1404(a), for transfer of venue to the Southern District of Ohio. I now address defendants' motions.
Plaintiff alleges that "on information and belief some time after the effective date of the Agreement, Meade ... purported to assign his rights and duties under the Agreement to [ASI]." (Compl. ¶ 2.) The agreement, however, provides that neither party may assign it without the other party's written consent. (Compl.Ex. I, ¶ 20.) The record contains no evidence that Meade formally assigned his interest to ASI or that plaintiff consented in writing to such an assignment. The parties agree, however, that ASI performed Meade's responsibilities under the agreement. Further ASI does not dispute that it was a party to the agreement despite Meade's having signed it while he was a sole proprietor. ASI agrees that it had a "business relationship [with] PKWare ... from September 1992 to the present." (ASI Mot. to Dismiss ¶ 10.)
Under the agreement Meade was to convert or "port" plaintiff's software so that it could have wider use. Porting is generally accomplished by rewriting a component of the software known as source code. Upon completion of the porting Meade was to send PKWare copies of the resulting software known under the agreement as "Resulting Programs and Software Collections." (Compl, Ex. I, 1.f.) Also, under the agreement plaintiff granted Meade a license to resell the converted software in return for a thirty percent royalty which was to be paid monthly. Under the agreement Meade could license the source code to third parties and subcontract the conversion work with plaintiff's consent but was responsible for the work of subcontractors. Meade's royalty payments were to be accompanied by monthly reports setting forth the sales for each environment for which the software had been converted during the period that the agreement was in effect. Defendants sent plaintiff some royalty payments and sales reports. (Compl. ¶ 23.)
Meade and plaintiff negotiated the agreement after lengthy communications by telephone, e-mail and writings between Meade in Ohio and plaintiff in Wisconsin. .) During the course of the agreement Meade communicated with plaintiff's employees about matters related to the agreement on numerous occasions via telephone and e-mail. (Id., Ex. C ¶ 4.) Meade also visited Milwaukee once to attempt to hire one of plaintiff's employees, Steven Burg, during which visit and subsequently "the ongoing relationship between PKWare and ASI was occasionally discussed." (Id. ¶ 5.) The agreement provided that it would be governed by Wisconsin law.
ASI operates an interactive website with an on-line store where users from around the world can place orders for ASI products including some PKZIP products and other software. (Id., Ex. B ¶ 8.) ASI sells software products all over the world including in Wisconsin. ASI has also provided products and/or services to at least eighty-six different customers in Wisconsin over the course of the last several years with the majority of these sales occurring in the Eastern District of Wisconsin. (Pl.'s Supp'l Mem. in Opp'n, Ex. A and Pl.'s Second Supp'l Mem. in Opp'n, Ex. 1.) ASI also advertises on the internet search engine "AltaVista" and in ComputerWorld magazine and the SciTech Science catalogue, all of which have Wisconsin subscribers. (Pl.'s Mem. in Opp'n, Ex. B ¶¶ 10 and 11.)
Plaintiffs have the burden of proving that 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. Johnson Worldwide Assoc., Inc. v. Brunton Co., 12 F.Supp.2d 901, 906 (E.D.Wis.1998). The plaintiff need only make a prima facie showing of the existence of personal jurisdiction. Id. The plaintiff is entitled to have all inferences from the record drawn in its favor. RAR, 107 F.3d at 1275. In considering the issue of personal jurisdiction I rely on the complaint and the affidavits and exhibits submitted by the parties.
Plaintiff alleges that subject matter jurisdiction is present here based both on diversity of citizenship and on the existence of a federal question. In diversity cases a federal court has personal jurisdiction over the parties only if a court in the state in which the federal court sits would have such jurisdiction. Klump v. Duffus, 71 F.3d 1368, 1371 (7th Cir.1995). To determine whether I have personal jurisdiction for this purpose, I first must decide whether the defendants are subject to personal jurisdiction under Wisconsin's longarm statute and, if so, whether exercising jurisdiction under the statute is consistent with the due process requirements of the Fourteenth Amendment. Daniel J. Hartwig Assoc., Inc. v. Kanner, 913 F.2d 1213, 1216 (7th Cir.1990).
In federal question cases, by contrast, whether this court has personal jurisdiction depends on whether defendants are amenable to process from this court. Johnson Worldwide at 906. I look first to the applicable federal statute to see what it says about the matter. See Fed.R.Civ.P. 4(d)(1)(D).1 United States v. De Ortiz, 910 F.2d 376, 382 (7th Cir.1990). Plaintiff's federal claims are based on the federal trademark, copyright and patent infringement statutes, none of which authorizes nation-wide service of process. Thus, personal jurisdiction will be established if the defendants would be subject to the jurisdiction of the Wisconsin courts. Fed. R.Civ.P. 4(K)(1)(A); Johnson Worldwide at 906.
In this case, then, no matter whether subject matter jurisdiction is based on diversity or the presence of a federal question, I have personal jurisdiction only if the defendants are subject to the jurisdiction of Wisconsin courts. Graphic Controls Corp. v. Utah Med. Prods., Inc., 149 F.3d 1382, 1385 n. 2 (Fed.Cir.1998). Defendants are subject to the jurisdiction of Wisconsin courts if plaintiff's allegations and evidence satisfy the requirements of Wisconsin's long-arm statute, Wis. Stat. § 801.05, and if personal jurisdiction comports with due process.
The Wisconsin long-arm statute provides for personal jurisdiction in any action over "a defendant who when the action is commenced ... [i]s engaged in substantial and not isolated activities within this state, whether such activities are wholly interstate, intrastate or otherwise." Wis. Stat. § 801.05(1)(d). The statute is to be liberally construed in favor of exercising jurisdiction and is intended to confer jurisdiction to the extent allowed by due process. Johnson Worldwide, 12 F.Supp.2d at 906.
A person is engaged in substantial activities in the state when the activities are "systematic and continuous." Harley-Davidson Motor Co. v. Motor Sport, Inc., 960 F.Supp. 1386 (E.D.Wis.1997). A defendant generally has "substantial and not isolated" contacts with the state if it "solicit[s], create[s], nurture[s], or maintain[s], whether through personal contacts or long-distance communications, a continuing business relationship with anyone in the state." Stauffacher v. Bennett, 969 F.2d 455, 457 (7th Cir.1992). Even if a nonresident never sets foot in Wisconsin, the existence of a continuing business relationship with someone in Wisconsin is enough to warrant an inference that the defendant benefits from services provided in Wisconsin "and could therefore be required, as a quid pro quo, to submit to the jurisdiction of the state's courts." Id. at 457.
Five factors are relevant to the question of whether a defendant's Wisconsin contacts are "substantial" and not isolated for purposes of § 801.05(1)(d): (1) the quantity of contacts, (2) the nature and quality of the contacts, (3) the source of the contacts and their connection with the cause of action, (4) the interests of the State of Wisconsin, and (5) the convenience of the parties. Nagel v. Crain Cutter Co., 50 Wis.2d 638, 648-50, 184 N.W.2d 876 (1971).
Because Meade and ASI are different entities I must find an independent basis for...
To continue reading
Request your trial
-
N. Sails Grp. v. Bds. & More GmbH
...established sufficient minimum contacts, with special weight given to fact that defendant initiated contact); PK Ware, Inc. v. Meade, 79 F.Supp.2d 1007, 1014-15 (E.D. Wis. 2000) (six year contractual relationship, in addition to quantity and quality of contacts, including numerous communica......
-
Shepherd Investments Intern. v. Verizon Commun.
...Inc., 2 F.Supp.2d 1150, 1160 (E.D.Wis.1998), and I draw all inferences from the record in plaintiff's favor, PKWare, Inc. v. Meade, 79 F.Supp.2d 1007, 1011 (E.D.Wis.2000). In diversity cases, a federal court has personal jurisdiction over the only if a court in the state in which the federa......
-
N. Sails Grp., LLC v. Bds. & More GMBH
...established sufficient minimum contacts, with special weight given to fact that defendant initiated contact); PKWare, Inc . v. Meade , 79 F. Supp. 2d 1007, 1014–15 (E.D. Wis. 2000) (six year contractual relationship, in addition to quantity and quality of contacts, including numerous commun......
-
Sompo Japan Ins. Co. v. Yang Ming Marine Trans.
...arising out of the same nucleus of operative facts." See Pacer Global Logistics, 272 F.Supp.2d at 790; see also PKWare, Inc. v. Meade, 79 F.Supp.2d 1007, 1019 (E.D.Wis.2000) (noting that courts have found the doctrine of pendent venue inconsistent with the requirements of the patent special......