Summary prepared by Devashish Bharuka
For the full version of the case, click here
Plaintiff Berthold Types Limites is in the business of marketing typefaces bearing distinctive registered trademarks. Defendant Helios Software is a German corporation which markets font software in competition with plaintiff. Plaintiff filed a complaint against the Defendants alleged counterfeiting, trademark infringement, false desigation of origin and unfair competition, deceptive trade and business practices and unjust enrichment. Plaintiff alleges that 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 Berthhold trademarks, without permission or authorization. Defendants argued in their motion to dismiss that Illinois does not have personal jurisdiction over them. Plaintiff claimed that defendant are subject to personal jurisdiction in this case based on the Illinois long-arm statute.
Illinois long-arm statute provides for personal jurisdiction in Illinois courts when: (1) jurisdiction is authorized under the Illinois long-arm statute, and (2) the minimum contacs required by due process are present. One may assert general or specific jurisdiction over a defendant. Plaintiff failed to show that either of the defendants has had "continuous and systematic contacts" with Illinois required for general jurisdiction. Plaintiff argued at length defendants' "purposeful direction of commercial activity" in Illinois through its website. However, Plaintiff did not argue that defendants had any other contact with the state of Illinois.
For specific jurisdiction, the issue is 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. At issue here was whether defendants' contacts with Illinois, which has been primarily over the Internet, are sufficient to support the exercise of personal jurisdiction. Defendants argued that the Internet contacts they had with Illinois are insufficient. Plaintiff countered that defendants' Internet site caused injury in Illinois and that it felt economic harm there. 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. Intellectual property infringement takes place in the state of the infringing sales, rather than the state of the trademark owner's domicile for purposese of tort provisions of the Illinois long arm-state. Illinois does not require jurisdiction merely by the fact that plaintiff felt harm here. In order to establish jurisdiction over defendants, plaintiff must show more.
Plaintiff further argued that 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.
On question of Internet activities, it was found that defendant did not transact business directly over the web. Helios runs an interactive English website at www.helios.com. No orders were taken and no contract entered into over the website.Customers were instructed to fill out an a service agreement and mail it, along with a payment, to the national dealer. This level of business activity was, held, insufficient to confer jurisdiction under the "active website" category. Furthers, Court held it could not exercise personal jurisdiction over defendants in the second category of "passive website" that merely provide information or advertisements without more. Here, defendants did more than simply provide information over the web.
Therefore, the case fell into the third category of "intermediate category" where a user can exchange information with the host computer. Customers could submit suggestions for improving services, may link to on-line service manuals, were provided a list of contact persons, and could download updates on Helios' activities. However, this level of interactivity, held, is insufficient to enable the exercise personal jurisdiction over defendants on the basis of their Internet activities. Moreover, nothing on the website was specifically targeted at Illinois customers.
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. Here, the Court found that the only contacts by plaintiff unrelated to the web site are 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, held, were insufficient.
Held, there is no personal jurisdiction.