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Defendant Shye Worldwide, LLC, by and through its undersigned counsel, hereby
denies any allegations of personal jurisdiction, and denies venue in the Northern District
of Illinois. Defendant moves pursuant to Rule 12(b)(2), and Rule 12(b)(6), FED. R. CIV.
Introduction.
The Complaint fails to plead a connection between the gravamen of the action, the
defendant, and/or the Northern District of Illinois. Plaintiff did not allege any presence of
Defendant Shye has no physical presence in Illinois, and has not specifically
targeted any of its activities towards Illinois. Defendant has no systematic and continuous
contacts in, or any purposefully directed at, the State of Illinois or its citizens. Taken as if
true, the Complaint does not plead any plausible basis for personal jurisdiction or venue.
1
TABLE OF POINTS AND AUTHORITIES.
2
B. The Statutory or Typically Pleaded Elements of Contributory Infringement
Ricoh Co., Ltd. v. Quanta Computer Inc., 550 F.3d 1325 (Fed.Cir. 2008),
cert. den'd, 129 S.Ct. 2864 (2009)
BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373,(Fed. Cir. 2007)
Aro Mfg. Co. v. Convertible Top Repl.Co., 377 U.S. 476 (1964)
CONCLUSION
3
ARGUMENT
agents in Illinois. It is, as pleaded in ¶3, an LLC organized under the laws of California,
District of Illinois. Calder v. Jones, 465 U.S. 783, 788 (1984) (the focus is on “the
I.
The Complaint is the starting point for assessing whether the plaintiff can meet its
burden to show personal jurisdiction over this defendant. Morton Grove Pharma, Inc. v.
The Nat. Pediculosis Ass'n, Inc., 485 F.Supp.2d 944, 947 (N.D. Ill. 2007) (it is plaintiff’s
“burden to demonstrate that venue is proper and that this court has personal jurisdiction
over the defendant.”). Any uncontroverted allegations in the Complaint are accepted as if
true, and “construed in the light most favorable to" plaintiff. Avocent Huntsville Corp. v.
Aten Intern. Co., Ltd., 552 F.3d 1324, 1329 (Fed. Cir. 2008).1 Here, however, plaintiff’s
Defendant’s Answer does not deny that Shye Worldwide is a California LLC,
which has its business office in California. [Dkt. #10]. All “uncontested jurisdictional
facts presented by the defendants [are taken] as true.” Compliance Software Solutions,
1
Avocent, cert. den'd, 129 S.Ct. 2796 (2009).
4
Corp. v. MODA Technology Partners, Inc., 2008 WL 2960711 (N.D. Ill. 2008) (granting
Rule 12(b)(2) dismissal). Fundamentally, the plaintiff did not plead any personal
withstand a motion to dismiss.” Search Force, Inc. v. Dataforce Int'l, Inc., 112 F.Supp.2d
771, 774 (S.D. Ind. 2000) (dismissing for lack of personal jurisdiction), quoted in, Guide
Technologies, LLC v. Killeen, 2009 WL 1437568 (S.D. Ind. 2009). Failing to plead facts
at1338. This action should be dismissed pursuant to Rule 12(b)(2), FED. R. CIV. PROC.
II.
of the U.S. Court of Appeals for the Federal Circuit. Avocent, at 1328. Followed here, a
somewhat abstract inquiry results, since the plaintiff’s Complaint does not plead any
In any patent infringement case, the inquiries are whether “(1) jurisdiction exists
under the state long-arm statute and (2) exercise of jurisdiction would be consistent with
the limitation of the due process clause.” Compliance Software, supra.2 On each aspect
of those inquires, plaintiff has the burden of making a prima facie showing. A “plaintiff's
obligation to provide the grounds of his entitlement to relief requires more than labels and
2
"Whether due process is satisfied must depend rather upon the quality and nature of the
activity in relation to the fair and orderly administration of the laws which it was the purpose of
the due process clause to insure." Int'l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945). A
“defendant's conduct and connection with the forum state [must be] such that [it] should
reasonably anticipate being haled into court there.” World-Wide Volkswagen Corp. v. Woodson,
444 U.S. 286, 297 (1980).
5
conclusions.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).3 There is no
III.
Defendant Shye operates from its principal office in California. Because it has no
Illinois office or agents, owns no property in Illinois, pays no taxes in Illinois, and has no
telephone listing or bank account in Illinois, the defendant Shye does not have sufficient,
counsel will not surmise what was un-pleaded in the plaintiff’s Complaint.4 No acts of
infringement occurring in this district were pleaded.5 No such allegations need be taken
as true, since none were pleaded; and too, none need be disputed.
The failure to plead, or even mention, jurisdictional contacts in the complaint also
defeats the idea of pre-ruling discovery. "Nor is there anything in the complaint …[to]
3
“While legal conclusions can provide the framework of a complaint, they must be
supported by factual allegations." Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1950 (2009).
4
A "nonresident defendant does not subject itself to personal jurisdiction in Illinois simply
by entering into a contract with an Illinois resident." and "mere solicitation of customers in the
forum state is also insufficient to establish personal jurisdiction." CF Industries v. Ben-Trei, Ltd.,
2009 WL 2765972 (N.D. Ill. 2009); “The placement of a product into the stream of commerce,
without more, is not an act of the defendant purposefully directed toward the forum State.” Asahi
Metal Industry Co., Ltd. v. Super. Ct. of Calif., 480 U.S. 102, 112 (1987).
5
It is possible that a de minimis number of the alleged infringing products end up in this
district, but that would be insufficient to maintain the suit in the Northern District. See, Campbell
Pet Co. v. Miale, 542 F.3d 879, 884, 88 U.S.P.Q.2d 1252 (Fed. Cir. 2008) ("very small volume of
sales … made to customers in Washington falls far short of enough to reflect the substantial and
continuous presence in the state"), cited with approval in, Maclean-Fogg Co. v. Edge Composites,
L.L.C., 2009 WL 1010426 (N.D.Ill. 2009).
6
discovery." MSI v. C Change Surgical LLC, 541 F.3d 1136, 1142 (Fed. Cir. 2008) (aff'g
For these reasons, and in view of the failure to plead facts supporting a plausible
assertion of personal jurisdiction, the defendant prays for entry of an order of dismissal.
IV.
The Complaint, fairly read, does not allege the “doing of” any act, “within this
State,” by defendant “in person or through an agent.” 735 ILCS 5/2-209.6 In the most
favorable light, it may allege that, via the stream of commerce, products ended up in
Illinois. In the Avocent case, supra, it was contended “that Aten International should be
Aten International products for sale in the forum state”, based on a 'stream of commerce'
theory. 552 F.3d at 1337. The Avocent case rejects an “assertion of general jurisdiction
under a 'stream of commerce' theory.” Id. After considering the Complaint, it was found
that "Avocent has failed to allege 'sufficient activities related to the claim ...' as to support
the declarations it submitted ...-even when construed in the light most favorable to
The inquiry - whether plaintiff pleaded an act “within” the ambit of the long-arm
6
"A nonresident defendant may be sued in Illinois if (1) he or she performs one of the
enumerated acts in Illinois and (2) the minimum contacts with Illinois that due process requires
are present." FMC Corp. v. Varonos, 892 F.2d 1308, 1310 (7th Cir. 1990)(courts will "consider
the two requirements separately").
7
V.
The Lack of Relevant Contacts Makes Assertion of Jurisdiction Unreasonable.
The second part of the assessment asks whether the exercise of jurisdiction would
contravene due process. Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1359 (Fed. Cir. 2001).
involves two inquiries: whether a forum state's long-arm statute permits service of
process, and whether the assertion of personal jurisdiction would violate due process”).7
The Federal Circuit, in Akro Corp. v. Luker, 45 F.3d 1541 (Fed. Cir. 1995),
summarized the Supreme Court cases governing the due process inquiry and "outlined a
three-prong minimum contacts test: “(1) whether the defendant purposefully directed its
activities at residents of the forum, (2) whether the claim arises out of or relates to those
activities, and (3) whether assertion of personal jurisdiction is reasonable and fair."
Further, the Circuit Court has explained that the “first two factors correspond with the
‘minimum contacts' prong of the International Shoe analysis, and the third factor
corresponds with the ‘fair play and substantial justice’ prong of the analysis.” Avocent,
A.
No Pleaded Purposeful Activities Constituting Indirect Infringement.
8
Differing, but similar, assessments under the Akro decision must be made for the
indirect infringement accusation. The Court needs to inquire: (1) what indirectly
infringing activities by defendant were alleged; (2) where those activities have occurred;
and (3) whether defendant purposely directed those activities at the forum state.9
On each inquiry about whether the plaintiff’s indirect infringement accusation has
minimum contacts with this forum, the Complaint is lacking. No activity or plausible
contributory infringement, was alleged in the Complaint. The absence of any such
assertion defeats inquiry into the ‘where’ and the ‘purposeful’ part of the Akro standard.
the categories of general and specific. In simple terms, general contacts are unrelated to
alleged patent infringement, while those in the category of specific contacts regards any
plausibly alleged that particular products are infringing, or not. A “court considering a
motion to dismiss can choose to begin by identifying pleadings that, because they are no
more than conclusions, are not entitled to the assumption of truth." Iqbal, supra at 1950.
Plaintiff’s conclusory assertion that a particular product is infringing “is no more than” a
infringing acts were alleged, leaving that legal conclusions unsupported and implausible.
9
Akro, cert. den'd, 515 U.S. 1122 (1995), appeal after remand, 178 F.3d 1311 (Fed.Cir.
1998), cert. den'd, Luker v. Akro Corp., 526 U.S. 1113 (1999).
10
Cf., Avocent, supra at 1336, "While such activities may in the aggregate justify the
exercise of general jurisdiction …they do not establish a basis for specific jurisdiction".
9
In its Complaint, plaintiff avers that “Shye sells” three “Xventure” products, then
pleads the conclusion that: “Accordingly, Shye commits direct and/or contributory
infringement, and/or induces infringement, of the ‘060 Reissued Patent.” ¶7. Plaintiff’s
Complaint avers those legal conclusions, lacking in factual support, and in crucial
aspects, lacking plausibility. “It is the conclusory nature of [the infringement] allegations
... that disentitles them to the presumption of truth.” Iqbal, supra at 1951. Plaintiff failed
to plead any basis to find that either of the first two Akro factors are present, because it
pleads no general, specific, or purposeful contacts with the forum. Consequently, the
B.
On Balance, Assertion of Jurisdiction Here Would Be Unfair and Unreasonable.
forum, then the due process inquires into fairness and reasonableness include: “the forum
State's interest in adjudicating the dispute,” “the interstate judicial system's interest in
obtaining the most efficient resolution of controversies,” and the “shared interest of the
As considered here, the interest of the forum state in the case, as pleaded, is
meager. No act in, and no activities within the state were pleaded. That is outweighed by
the third consideration, the “shared interest” of California, where defendant Shye is
located, in furthering “social policies” against implausible infringement suits against its
resident businesses, and in favor of vindicating its resident businesses’ right to compete
10
VI.
A.
The Complaint alleges the legal conclusions that defendant “Shye commits direct
have to be pleaded, and proved, to state a claim for “contributory” infringement, than for
evaluate the plausibility vel non of the plaintiff’s assertions of contributory, inducing and
willful infringements. While the plaintiff’s complaint need not contain “detailed factual
allegations,” of these three types of infringement, it must allege more than mere “labels
and conclusions.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "If discovery is
likely to be more than usually costly, the complaint must include as much factual detail
and argument as may be required to show that the plaintiff has a plausible claim."
Limestone Devel.Corp. v. Village of Lemont, Ill., 520 F.3d 797, 804 (7th Cir. 2008).
infringement case, the Federal Circuit adopts the pleading requirements set by the law of
the local Circuit. With "a purely procedural question not pertaining to patent law, such as
whether a Rule 12(b)(6) motion was properly granted, this court again applies the rule of
the regional circuit." Phonometrics, Inc. v. Hospitality Franchise Systems, Inc., 203 F.3d
790, 793 (Fed. Cir. 2000) (pre-Twombly case, applying a "no set of facts" standard).
11
Caselaw in the 7th Circuit, applying a notice standard to Rule 12(b)(6) motions
and requiring claims to be “plausible,” has held that “in considering the plaintiff's factual
allegations, courts should not accept as adequate abstract recitations of the elements of a
cause of action or conclusory legal statements." Brooks v. Ross, 578 F.3d 574, 581 (7th
Cir. 2009). The assertion of contributory and inducing infringement recites no facts, only
B.
of § 271(c)," the statutory version "was designed to codify the contributory infringement
doctrine." Ricoh Co., Ltd. v. Quanta Computer Inc., 550 F.3d 1325, 1336 (Fed.Cir.
2008), cert. den'd, 129 S.Ct. 2864 (2009). The essential elements are not pleaded.
Here, a contributory infringement claim under the statutory terms would pertain,
§271(c) regards selling an item “constituting a material part of the invention ..especially
made or especially adapted for use in an infringement of [the] patent,” and that part being
“not a staple article …suitable for substantial noninfringing use.” Plaintiff’s Complaint is
completely devoid of facts pleaded about the key aspects of §271(c), or any identified
"part" of the invention being sold is made or adapted "for use in an infringement." BMC
Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373, 1381 (Fed. Cir. 2007) (statute "is
12
limited to sales of components or materials without substantial noninfringing uses");
essential defendant "knew that the combination for which his component was especially
designed was both patented and infringing.” Aro Mfg. Co. v. Convertible Top Repl.Co.,
377 U.S. 476, 488 (1964). No allegation of “knowing” per §271(c) was pleaded.
raise plaintiff's claim to relief under §271(c) above a “speculative” level, Twombly at 555,
and thus, the claim of contributory infringement is not “plausible on its face,” id. at 570.
It too is true that defendant has no notice of what acts supposedly give plaintiff any cause
C.
under 35 U.S.C. §271(b) requires elements of activity and knowledge.11 Plaintiff did
nothing to plead “that the alleged infringer's actions induced infringing acts and that he
knew or should have known his actions would induce actual infringements.” DSU Med.
Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1304 (Fed.Cir.2006) (en banc) (mere “knowledge
11
The "Complaint does not specifically allege that Defendants had knowledge ... Nor does
[it] contain sufficient facts on which the Court can reasonably infer an allegation that Defendants
possessed such knowledge." Mallinckrodt, Inc. v. E-Z-Em Inc., 2009 WL 4023134 (D.Del. 2009)
(Rule 12(b)(6) dismissal of indirect infringement claims).
13
of the acts alleged to constitute infringement” is not enough; "specific intent and action to
induce infringement" is required). Here, no facts and no inducing “acts” were pleaded.
D.
the nature of a fishing expedition, would be “unusually costly” and must not be permitted
on mere legal conclusions, pleaded without “factual detail.” Limestone Devel., supra.
E.
The patent pleaded in plaintiff’s complaint issued less than two months ago. It is
attached to the complaint, and at the top right, the patent issue date of “Dec. 29, 2009” is
printed. No granted by patent, are effective until the date that a patent is granted.
No claim for willful infringement is stated unless “a patentee [can] show by clear
and convincing evidence that, as a threshold matter, 'the infringer acted despite an
objectively high likelihood that its actions constituted infringement of a valid patent,'”
[cit. om.], SEB S.A. v. Montgomery Ward & Co., Inc., 2010 WL 398118 (Fed. Cir. 2010),
and that the "objectively-defined risk ... was either known or so obvious that it should
have been known." In re Seagate, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc). Even
14
As a matter of commonsense, a willful infringement claim is not plausible for a
patent that issued only weeks ago. On the most basic level, plaintiff should plead how or
why anyone other than itself would even have known about this recently-issued patent.
That point arises before reaching the ‘known risk’ that conduct would infringe a “valid”
patent. Defendant must again state: plaintiff’s Complaint leaves this all to speculation.
F.
The essential pleading requirements established in the Twombley and Iqbal cases
“Colida's infringement claims were facially implausible and provided the district court
with no basis on which to reasonably infer” that a claim was stated. Colida v. Nokia,
Here, plaintiff’s direct infringement claim against the accused Xventure 12 LED
Crank Lantern is facially implausible. Id. In short, plaintiff’s reissue patent RE41,060
(attached to the complaint) claims as an essential element that the patented unit output
power to an external device.13 Claim 1 in plaintiff’s reissue patent [] requires “an output
portion for outputting the power to an electrical device.” All the other claims in the
patent begin by describing the invention as a “charger.” The Xventure 12 LED Crank
Lantern has no feature to charge an external device and has no feature to “output” power.
Stated another way, the plaintiff has not pleaded, and could not plead plausibly, that this
13
Court can consider a “concededly authentic” document attached to a complaint, that is
“central to the plaintiff's claim,” and can consider it to decide a Rule 12(b)(6) motion to dismiss.
Hecker v. Deere & Co., 556 F.3d 575, 582 (7th Cir. 2009).
15
Crank Lantern has any feature to charge, or to output power to another electrical device.
The bald pleading that the product is infringing is merely a legal conclusion,
which is not presumed true, and indeed, is not plausible. On a motion to dismiss, a court
“must accept as true all factual allegations in the complaint, but not its legal conclusions.”
2009) citing, Iqbal, supra. A conclusory allegation that the Crank Lantern directly
infringes, is a mere formulaic conclusion, about a product that lacks an essential feature
accepting the allegations in the complaint as true, Mr. Sharafabadi has not made out a
claim for direct infringement"). To quote from the 7th Circuit’s decision in Brooks, supra,
with an implausible or conclusory claim, the "behavior ...alleged ...is just as consistent
plaintiff failed, or could not, plead “factual content that allows the court to draw the
reasonable inference that the defendant is liable” for direct infringement of the recently-
CONCLUSION
The Complaint fails to plead personal jurisdiction, or any connection between the
parties, the forum and specific activities. Dismissal under Rule 12(b)(2) is proper.
contributory acts, was put forth in the Complaint. Also, no willful infringement claim
can be stated. Thus, for the reasons set forth above, dismissal per Rule 12(b)(6) is proper.
16
Date: Feb. 23, 2010
Respectfully submitted
~ S ~ Charles L. Thomason
Charles L. Thomason, pro hac vice pending
SPALDING & THOMASON
106 N. 4th St.
P.O. Box 745
Bardstown, KY 40004
thomason@spatlaw[dot]com
Telep. (502) 349-7227
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CERTIFICATE OF SERVICE
I hereby certify that on this 23rd day of February, 2010, I electronically filed the
foregoing Memorandum Supporting Motion to Dismiss with the Clerk of the Court by
using the CM/ECF system, which will send a notice of electronic filing to the following:
~ S ~ Charles L. Thomason
Charles L. Thomason, pro hac vice pending
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