Hong Kong Holding Company’s Alleged Inducement of Infringement Supports Assertion of Specific Personal Jurisdiction

The World in U.S. Courts: Fall 2017 - Intellectual Property – Patent

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The Chamberlain Group, Inc. v. Techtronic Industries Co., Ltd., US District Court for the Northern District of Illinois, August 8, 2017

Plaintiff Chamberlin Group sued a number of US and non-US entities involved in the manufacture and sale of allegedly infringing garage door openers sold under the Ryobi brand. The parent entity among the defendants, Techtronic Industries Co., Ltd. (TTK-HK), a Hong Kong holding company, argued that the Court could not assert specific personal jurisdiction over it because it had no contacts with Illinois, including that it had no direct or advertising presence and had never conducted any of the following activities in the state: (i) employed anyone, (ii) maintained a registered agent, (iii) paid taxes, (iv) owned, leased, possessed, or maintained any real or personal property, or (v) manufactured, produced, marketed, imported, or sold any products. The Court stated, however, that Chamberlain Group had made an initial showing that TTK-HK approved, monitored, and oversaw both the development of the allegedly infringing products and their sale to an exclusive distributor with a heavy Illinois presence, and on this basis found that it had jurisdiction over the Chinese company.

The Court noted that it was required to apply the jurisdictional law as stated by the US Court of Appeals for the Federal Circuit, which has exclusive jurisdiction over patent infringement cases. Under that law, jurisdiction must satisfy the Illinois “long-arm” jurisdictional statute, which has been construed to apply to the full extent permitted under the Due Process Clause of the US Constitution. The applicable test thus was whether (i) TTK-HK “purposefully directed activities at forum residents,” (ii) the claim “arises out of or relates to those activities,” and (iii) asserting personal jurisdiction is “reasonable and fair.”

Among other issues, the Court considered TTK-HK’s argument that the plaintiff’s claim could not have “arisen from” or been “related to” the holding company’s alleged conduct because that conduct—which did not involve the manufacture, sale, or importation of the garage door openers—could not constitute patent infringement. The Court agreed that the conduct was not direct infringement, but found that it could constitute the inducement of patent infringement, which would make TTK-HK “liable as an infringer.”

[Editor’s note: The Chamberlain Group case is also discussed in the Personal Jurisdiction/Forum non Conveniens Section of this report.]

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