Citations
- 169 F. Supp. 2d 530
Full opinion text
MEMORANDUM OPINION
TURK, District Judge.
This case is before the Court on the motion of Defendant Yaskawa Electric Corporation (“YEC”) to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). In the alternative, both YEC and Defendant Yas-kawa Electric America, Inc. (“YEA”), move to have the case transferred to the United States District Court for the Northern District of Illinois, where YEA has its principal place of business.
Each side filed voluminous papers in support of its position. Arguments were heard by this Court on November 29,1999. For the reasons that follow, YEC’s motion to dismiss, or alternatively to transfer is denied, as is YEA’s motion to transfer.
I. OPERATIVE FACTS
Kollmorgen is a corporation, with its principal manufacturing facility in Rad-ford, Virginia, that manufactures electrical devices and components. (Mem. in Opp. at 4) In addition, Kollmorgen holds numerous patents, of which two-U.S. Patent Numbers 4,686,437 and 4,447,771-are the alleged subjects of infringement by defendants YEC and YEA. YEC is a Japanese corporation, based in Tokyo, and engaged in the same type of electrical design and manufacturing business as Kollmorgen. A view of a company website reveals that YEC disburses its products globally through a network of wholly-owned subsidiaries in various countries. ( , visited Dec. 10, 1999). YEA, located in Waukegan, Illinois, is YEC’s American subsidiary. It is also the only company in the United States which transacts any business directly with YEC. YEA does not purchase goods from any other source besides YEC. Unlike a conventional distributor or sales agent, YEA actually purchases its entire inventory directly from YEC. YEA then sells the products through its distribution channels to various customers nationwide. There is no evidence that YEC receives any direct share of YEA’s sales proceeds; rather, YEC’s benefit in this bargain is through YEA’s purchase of its products for resale in the United States. If YEA’s customers like the products, they will buy more from YEA, who in turn will purchase more from YEC.
One such customer of YEA is Commonwealth Controls, which maintains an office in Roanoke. When Lane Brizendine, investigator for Kollmorgen’s counsel, visited Commonwealth Controls’ offices back in June, he asked for information regarding electrical controls “or other products made by Yaskawa.” (Brizendine Affid. at 2). In response, he was provided with a cata-logue, printed by YEA, containing detailed information and schematic drawings of various products available through Commonwealth Controls from YEA.
II. DISCUSSION: YEC’s MOTION TO DISMISS
The issue is whether YEC can be sued in the Western District of Virginia. During argument, YEA’s counsel acknowledged that YEA can be sued in the Western District because of its contacts with Commonwealth Controls. (Brizendine Aff. at 1) This admission is bolstered by YEA’s website, which contains a page listing “Virginia Contact Information.” ( , visited Dec. 10, 1999) By maneuvering through the site, a user can obtain all manner of information about YEC, as well as about all of YEC’s other overseas subsidiaries. YEC has filed numerous declarations to the effect that the web site is maintained and created by YEA, in Illinois, and that YEC has no control or input into the site. These are mainly intended to demonstrate that YEC is not using the web site as a contact with Virginia, and it therefore cannot by itself be a basis for jurisdiction. See CTVIX-DDI LLC v. Microsoft, 52 USPQ2d 1501 (D.Colo.1999). This may be so, but neither is YEA using the website to promote itself. Instead, the web site extolls the “Yaska-wa” family of companies, leading the viewer to believe they are all part of the same distribution chain. For example, one page of the site contains a link labeled “Yaska-wa International Offices,” which gives the unmistakable impression that “Yaskawa” has “offices” all over the world, and that companies like YEA are not separate entities, but sales offices for a mother corporation. ( , visited Dec. 10,1999).
And although YEC may not be the originator of the site or its primary caretaker, it is unquestionably responsible for much of its content. The catalogues, schematics, and corporate charter/structure/philosophy information contained in YEA’s page had to come from YEC, because YEA does not manufacture those components, it only sells them. By providing that material to YEA, YEC is seeking to help YEA’s marketing efforts and improve sales of its products worldwide. This is enough to constitute purposeful direction by YEC, because YEC’s arguments that it does not control YEA are wide of the mark. YEC need not be in control. The test is whether the corporations are in “consort.”
Corporate “Consort”
The fact that YEA possesses so much information about YEC and its products casts doubt on the affidavits of YEC executives like Mr. Junji Tsuda, Executive Vice President of Sales and Marketing, who stated that “YEA does not act as a marketing arm for YEC.” As mentioned above, the test is not really whether YEC controls YEA’s activities. Rather, the standard is whether the two corporations “acting in consort, placed the accused [product] in the stream of commerce ...” Motorola, 58 F.Supp.2d at 355, quoting Beverly Hills Fan, 21 F.3d at 1566. As the Court noted in Motorola, “there is no concept of control in any of the definitions provided by either the Beverly Hills Fan court or, for that matter, Webster. So ... the Federal Circuit’s choice of words, a choice this court assumes was careful and intentional, does not appear to expressly state or even imply the requirement of control.” Motorola at 355.
In other words, YEC need not be in “control” of YEA’s marketing strategy, or even aware of all its particulars. It is enough that YEC and YEA work together-contractually or otherwise-to get YEC’s products into the stream of commerce. See id. The record provides ample evidence of this consort. For example, the fact that YEC’s schematics and marketing data were provided to YEA for inclusion in YEA’s catalogue of YEC products that it provided to Commonwealth Controls indicates a cooperative effort by YEC and YEA to do whatever is necessary to sell YEC’s products in the United States. Much of the information on YEA’s website must have been provided by YEC, as discussed above. The most logical reason for that is a willingness by YEC to have its corporate philosophy and products promoted by YEA, its subsidiary. It makes no difference that YEA may be the sole operator of the web site. YEC’s information is used in a way that suggests a cooperative effort by the two companies. Indeed, the website makes no attempt to differentiate YEC from YEA, instead referring to the business collectively as “The Yaskawa Family”. YEA may have come up with this concept on their own, but YEC cannot insulate itself from jurisdiction by simply claiming it has a rogue subsidiary running around marketing its products without its knowledge. Under the unmistakable reasoning of Beverly Hills Fan, and Motorola, YEC has purposefully directed its activities toward Virginia. It is therefore subject to the jurisdiction of this Court.
b. Fairness
The final prong of both the Federal Circuit test for minimum contacts and the International Shoe v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) Due Process analysis is fairness. “Notwithstanding the existence of purposeful minimum contacts, a due process determination requires one further step ... ‘minimum requirements’ inherent in the concept of fair play and substantial justice may defeat reasonableness of jurisdiction even if the defendant has purposefully engaged in forum activities.” Beverly Hills, 21 F.3d at 1567.
Typically, however, “these cases are limited to the rare situation in which the plaintiffs interest and the state’s interest in adjudicating the dispute in the forum are so attenuated that they are clearly outweighed by the burden of subjecting the defendant to litigation within the forum.” Id. at 1568, quoting Burger King, 471 U.S. at 477, 105 S.Ct. 2174 (must be “compelling case” of unreasonableness).
As in Beverly Hills, the facts and circumstances of this dispute simply do not rise to the level of unfairness to either party. Kollmorgen has its primary manufacturing facilities in the Western District. Commonwealth Controls, the alleged infringing contact in Virginia, is in the Western District as well. Virginia certainly has a substantial interest in providing a forum for this case. Furthermore, the cases where unreasonableness does exist are almost always ones where neither plaintiff nor defendant have any particular contact with the forum; and even then, jurisdiction is often held to be proper notwithstanding. See, e.g. Keeton v. Hustler Magazine, 465 U.S. 770, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984). This is simply not one of those cases.
For the foregoing reasons, YEC’s contacts with Virginia, through YEA, are sufficient to subject it to jurisdiction in this Court. This leaves only the subject of YEC and YEA’s motions to transfer venue.
III. MOTIONS TO TRANSFER VENUE
Because the Court feels there is no compelling need to transfer this case to the Northern District of Illinois, discussion on this point will be brief. YEC has moved, in the alternative, to have the case transferred to Illinois, where YEA is located. YEC concedes that it is subject to jurisdiction there. YEA joins the motion only on the grounds that it should be tried with YEC. Therefore, it is only necessary to decide where to try YEC; YEA will follow as a matter of comity and judicial economy.
“For the convenience of parties and witnesses, [or] in the interest of justice,” a Court may transfer a case to “any other district where it might have been brought.” 28 U.S.C.A. § 1404(a). This is a matter left largely to the discretion of the trial judge, who should weigh the equities and determine whether it will be unduly burdensome to one side or the other to have the case tried here. See Motorola, 58 F.Supp.2d at 356. Since Kollmorgen selected the forum, the Court need only consider the potential inconvenience to YEC and its witnesses.
While it is true that YEC’s witnesses will have to fly from Japan to Roanoke to attend this trial, it is likewise true that YEC concedes that venue would be proper in the Northern District of Illinois. Therefore, as counsel for Kollmorgen noted at arguments, it is not really a question of the convenience of flying from Japan to Roanoke, but rather a question of the reasonableness of flying from Chicago to Roanoke. No matter where this case is assigned, YEC’s people will have to fly to Chicago. And while the additional travel time places a slight extra burden on them, it is recognized that “progress in communications and transportation has made the defense of a lawsuit in a foreign tribunal less burdensome.” Beverly Hills Fan, 21 F.3d at 1569, quoting World-Wide Volkswagen, 444 U.S. at 294, 100 S.Ct. 559; Hanson v. Denckla, 357 U.S. 235, 251, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). This ruling is bolstered by Beverly Hills Fan, where the Federal Circuit held that a Chinese company in a virtually identical alleged patent-infringement situation, would not be overburdened by having to travel to Virginia to have its case heard in Federal Court there. The burden on YEC is no greater than that on the Chinese company.
Moreover, the burdens on Kollmorgen would be heavy if the case were transferred to Illinois. Kollmorgan manufactures its versions of the disputed electrical devices in Radford. The inventors of the patented products reside in the Roanoke area. If the case were moved to Illinois, Kollmorgen would have no way of compelling the attendance of certain of its witnesses who reside in the Western District. And according to Kollmorgen’s counsel, the vast majority of documents in the possession of Kollmorgen that are relevant to this case are warehoused in the Western District. A change of venue to Northern Illinois would throw a wrench in Kollmor-gen’s ability to present its case. Accordingly, the motions to transfer venue by YEC and YEA are denied.
CONCLUSION
For the foregoing reasons: (1) YEC’s motion to dismiss for lack of personal jurisdiction is denied. YEC’s alternative motion to transfer venue is also denied. Because its motion was linked to its desire to be in the same forum as YEC, YEA’s parallel motion to transfer venue is also denied.
The Clerk of Court is directed to send a copy of this Memorandum Opinion and the accompanying Order to all counsel of record.
ORDER
This case is before the Court on the motion of Defendant Yaskawa Electric Corporation (“YEC”) to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). In the alternative, both YEC and Defendant Yas-kawa Electric America, Inc. (“YEA”) move to have the case transferred to the United States District Court for the Northern District of Illinois, where YEA has its principal place of business.
Upon review of the voluminous papers filed by both sides, after hearing arguments on November 29, 1999, and for the reasons articulated on the accompanying Memorandum Opinion, it is hereby
ADJUDGED AND ORDERED
(1) That YEC’s motion to dismiss for lack of personal jurisdiction be DE- . NIED;
(2) That YEC’s alternative motion to transfer venue be DENIED; and
(3) That YEA’s motion to transfer venue is DENIED.
The Clerk of Court is directed to send certified copies of this Order and the accompanying Memorandum Opinion to all counsel of record.
. Although the website is technically operated, designed, and maintained by YEA, it is replete with corporate structure, catalogue, maintenance/service, and sales contact information obviously gleaned from YEC. Indeed, whole pages of the site are devoted to providing information about YEC’s corporate philosophy, management, and product lines.
. There is no evidence in the record that YEC retains any form of security interest or other legal or equitable claim to these goods once they are sold to YEA.
. As counsel for Kollmorgen noted during oral arguments, the fact that the products in YEA's catalogue are from YEC is plain because (1) YEA manufactures no products of its own, (2) YEA's only source of products is YEC, and (3) on page 187 of the catalogue, a reproduction of a "Certificate of Registration” from the Japan Quality Assurance Organization appears. The certificate is signed by the President of YEC, and pertains to the electrical control systems contained in the catalogue. Specifically, the Sigma Servo products which are alleged by Kollmorgen to infringe on its patents are contained in the catalogue and certificate.
. The same is true of the catalogue provided to Lane Brizendine by Commonwealth Controls. As counsel for Kollmorgen stated during arguments, the catalogue may have been printed by YEA, but the content of the cata-logue had to come from YEC. By providing YEA with that information, YEC is undoubtedly seeking to aid YEA’s sales efforts by providing data, drawings, and other information for use in YEA’s marketing brochures and catalogues.
. Because this Court finds minimum contacts aplenty in other areas, a detailed analysis of the complexities of internet jurisdiction need not occur here. However, for an outstanding discussion of this emerging topic, see Donnie L. Kidd, Jr. “Casting the Net: Another Confusing Analysis of Personal Jurisdiction and Internet Contacts in Telco Communications v. An Apple a Day,” 32 U.Rich.L.Rev. 505 (1998).