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By only providing ordering information and offering no “commercial response,” the defendants’ Web site is insufficient to establish personal jurisdiction over the foreign defendants, the U.S. District Court for the Northern District of Illinois held May 10 ( Berthold Types Ltd. v. European Mikrograf Corp., N.D. Ill., No. 99 C 8248, 5/10/00). The plaintiff, Berthold Types Ltd., is in the business of marketing typefaces bearing distinctive registered trademarks. The plaintiff filed suit, alleging that the defendants market and sell font software as part of a software package called PDF Handshake, which includes font software for over 340 typefaces identified by the Berthold trademarks, without permission or authorization. Co-defendant Helios Software GMBH is a German corporation, with its principal place of business in Garbsen, Germany, that markets font software in competition with the plaintiff. Co-defendant Helmut Tschemernjak is Helios’ president, and was alleged to have personally directed and controlled the infringing and deceptive activity of Helios and European Mikrograf. Co-defendant EMC is the American distributor of Helios, located in California. Helios authorizes EMC to market the font software sold by Helios in the United States. As part of its business, Helios runs an interactive English Web site at www.helios.com. The Web site provides comprehensive product presentations on PDF Handshake’s features and applications and provides customers with the ability to download and print a document titled “HELIOS Software Update Service Agreement.” A customer may fill out that agreement and submit it to “[the customer's] national Helios dealer/distributor” and make a payment to the national distributor “one year in advance.” Once these steps are taken, the customer can access and download files containing updates of the PDF Handshake and other Helios products directly from the Helios Web site. However, customers cannot purchase Helios products directly off the Web site, and no commercial transactions take place over the Web site. The Web site also has interactive features that allow the customer to interact with the Helios host computer. One such feature is a “feedback forum” in which customers are encouraged to submit ideas on how to enhance the software so as to make it more efficient and easy to use. There is also a “support site,” which includes a “questions and answers” section and a link to a downloadable addendum to the PDF Handshake manual. The site also contains e-mail addressees to contact Helios. Tschemernjak is identified as the main contact person reachable by e-mail. Finally, the site includes downloadable news briefs on Helios’ activities. The defendants filed a motion to dismiss, arguing that Illinois did not have personal jurisdiction over them. The plaintiff claimed that the defendants were subject to personal jurisdiction based on the Illinois long-arm statute. Writing the opinion of the court, Judge James F. Holderman, citing United States v. Martinez De Ortiz, 910 F.2d 376, 381 (7th Cir. 1990), noted that to exercise personal jurisdiction over a foreign defendant in a federal question case, two elements must be present: (1) the exercise of jurisdiction must accord with due process, and (2) the defendant must be amenable to service of process. There is proper jurisdiction in Illinois courts when: (1) jurisdiction is authorized under the Illinois long-arm statute, and (2) the minimum contacts required by due process are present. IP INFRINGEMENT TAKES PLACES IN STATE OF SALE The court wrote that the plaintiff failed to show that any of the defendants has had the “continuous and systematic contacts” with Illinois required for general jurisdiction. The plaintiff argued that the defendants’ “purposeful direction of commercial activity” in Illinois was apparent through its Web site. “Plaintiff,” the court wrote, “has not argued that defendants have had any other contact with the state of Illinois, with the exception of possible visits to a trade show and the sponsorship of an educational seminar in Chicago. While several courts have found specific jurisdiction based upon a defendant’s soliciting business through a Web site, plaintiff has not cited and this court has not found any case which found general jurisdiction over a defendant premised upon a Web site which does not provide for direct sales.” As for specific jurisdiction, the court wrote that it “must decide whether a defendant has ‘purposefully established minimum contacts with the forum State’ and consider whether, by traditional standards, those contacts would make personal jurisdiction reasonable and fair under the circumstances,” quoting RAR Inc. v. Turner Diesel Ltd., 107 F. 3d 1272 (7th Cir., 1997), quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-77 (1985). “Critical to the analysis is a showing that the defendant reasonably anticipated being haled into court in the forum state. … At issue here is whether defendants Helios and Tschemernjak’s contacts with Illinois, which have been primarily over the Internet, are sufficient to support the exercise of personal jurisdiction. Defendants argue that the Internet contacts they have with Illinois are insufficient, and the exercise of personal jurisdiction in Illinois would not comport with fair play and substantial justice. Plaintiff counters that defendants’ Internet site caused injury in Illinois and that defendants purposefully direct commercial activity to Illinois, thus making the exercise of personal jurisdiction fair and reasonable.” The court wrote that while the plaintiff argued that jurisdiction was proper in Illinois because the injury was felt and thus the defendants committed a tort in Illinois, it did not allege that any infringing products have been sold or even used in Illinois. “Thus, plaintiff is arguing that jurisdiction is proper in Illinois because it felt economic harm here. However, a limitation exists on the general rule that a tort occurs where the harm is felt. An Illinois court does not acquire jurisdiction simply because the last act of the tort is an economic loss felt in Illinois,” the court wrote, citing Lifeway Foods Inc. v. Fresh Made Inc., 940 F. Supp. 1316, 1319 (N.D. Ill. 1996). “Rather, intellectual property infringement takes place in the state of the infringing sales, rather than the state of the trademark owner’s domicile for purposes of tort provisions of the Illinois long arm-statute. Thus, Illinois does not acquire jurisdiction merely by the fact that plaintiff felt harm here. In order to establish jurisdiction over defendants, plaintiff must show more,” the court wrote. WEB SITE ONLY PROVIDES INFORMATION The plaintiff also argued that the defendants are subject to jurisdiction because they have specifically directed commercial activity in Illinois via the Internet and by attending a trade show and sponsoring a seminar in Chicago. The court noted that “a jurisprudence of the relationship between Internet activities and personal jurisdiction is emerging” and that “courts in this district have adopted a ‘sliding scale’ approach that divides Internet activities into three categories: (1) those in which the defendant clearly transacts business in foreign jurisdictions over the Internet; (2) those in which a defendant has posted information on the Internet, but has no further communication with potential customers via the Internet; and (3) those in which the defendant operates an interactive Web site that allows defendant and potential customers in foreign jurisdictions to communicate regarding defendant’s goods or services.” In this case, the court wrote, “defendants do not transact business directly over the Web. No orders are taken and no contracts are entered into over the Web site. Instead, customers are instructed to fill out a service agreement and mail it, along with a payment, to the national dealer. Here, that national dealer is EMC in California. This level of business activity is insufficient to confer jurisdiction under the first category” and “courts cannot exercise personal jurisdiction over defendants in the second category who simply operate passive Web sites that merely provide information or advertisements … and here, defendants Helios and Tschemernjak do more than simply provide information over the Web. Customers may also submit information and download font software. This case thus does not fall into the second category of Internet cases, where jurisdiction is prohibited.” This case, the court wrote, fell into the “middle ground” of the sliding scale where a user can exchange information with the host computer. “However, this level of interactivity is insufficient to enable the exercise of personal jurisdiction over defendants on the basis of their Internet activities,” the court wrote. “The exercise of jurisdiction is ultimately determined by examining the level of interactivity and the commercial nature of the exchange of information. While the Helios site does provide information on ordering products, Helios makes no commercial response to customers’ submissions. At most, Helios uses the information provided by customers to improve its site and services. Moreover, nothing on the Web site is specifically targeted at Illinois consumers. This level of interaction is not sufficient to confer jurisdiction under the third category,” the court wrote. The court concluded by noting that some courts have found minimum contacts through additional activities regardless of whether the activity is related to the underlying claim, considering non-Web contacts as well as Web pages in determining whether the defendant is subject to jurisdiction in a given state, citing Digital Equip. Corp. v. Altavista Tech. Inc., 960 F. Supp. 456, 462 (D. Mass. 1997). But in this case, the court wrote, the only contacts alleged by the plaintiff unrelated to the Web site were a trip to a trade show in Chicago by representatives of Helios and an upcoming educational seminar in Chicago to be sponsored by Helios. “These contacts are certainly insufficient, even when considered in connection with the Web site, to be considered ‘systematic and continuous,’ making general jurisdiction proper,” the court wrote.

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