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WORLDTRONICS INT'L, INC. v. EVER SPLENDOR ENTERPRI

July 10, 1997

WORLDTRONICS INTERNATIONAL, INC., Plaintiff,
v.
EVER SPLENDOR ENTERPRISE CO., LTD., Defendant.



The opinion of the court was delivered by: NORDBERG

 Plaintiff Worldtronics International, Inc. ("Worldtronics") has sued Defendant Ever Splendor Enterprise Co., Ltd. ("Ever Splendor"), claiming patent infringement. Presently before the Court is Defendant's Motion to Dismiss Based on Lack of Personal Jurisdiction, brought pursuant to Fed. R. Civ. P. 12(b)(2).

 BACKGROUND

 Worldtronics is the current owner of U.S. Letters Patent No. 4,566,802, which issued on January 28, 1986 for an invention entitled "Electronic Cycle Timer for a Household Appliance." Worldtronics is incorporated in Illinois, the location of its principle place of business. Ever Splendor manufactures coffee makers that Worldtronics alleges infringe its patent. Ever Splendor is a Taiwanese corporation, with its principal place of business in Taipei, Taiwan, Peoples' Republic of China, and manufactures the coffee makers in Taiwan and mainland China. Worldtronics alleges in its Complaint that Ever Splendor has been, and still is, infringing its patent by making, using, selling, offering for sale and/or importing for sale coffee makers and/or timing devices embodying the elements of two claims of the patent, and/or is inducing or contributing to the same.

 However, Ever Splendor avers, through its sales manager Jenny Wang, that it: (1) has no exclusive or regular distributor in the State of Illinois; (2) does not use, sell, or offer to sell the allegedly infringing products in the United States; (3) does not import the products into the United States; (4) makes all of the products in Taiwan or Hong Kong; (5) sells all of the products free on board (f.o.b.) Taiwan or Hong Kong; and (6) delivers the products to purchasers in Taiwan or Hong Kong, where it relinquishes control of the products to the purchaser, who can ship those products anywhere in the world at its discretion. (Wang Aff. PP 9-18).

 Worldtronics, in turn, submits voluminous, undisputed evidence demonstrating that the products manufactured by Ever Splendor end up in the United States, including Illinois, where they are sold to consumers at national retail stores including Target and K Mart. Significantly, the process occurs through an established distribution channel, whose destination is known to Ever Splendor. For example, Ever Splendor sells allegedly infringing products to Ying Fat in Taiwan, who in turn sells the products to Sunbeam, who then sells the products under the "Oster" trade name within national retail chains, including Target and Service Merchandise, throughout Illinois and the United States. When asked at her deposition whether Ever Splendor makes a product that Oster sells in the United States, Jenny Wang responded "No," consistent with her affidavit, but with the elaboration that Ever Splendor's customer Ying Fat sells to Oster. Upon further questioning, she clarified that the Oster product ends up in the United States "because we sell to Ying Fat, and Ying Fat told us that they sell to U.S." (Pl.'s ex. 1, Wang Dep. at 61-62). Indeed, Ever Splendor has met with Sunbeam at the Chicago Housewares Show. (Pl.'s ex. 57). In the same vein, Ever Splendor has sent product samples to United States companies, including Mr. Coffee and Hamilton Beach, although Ever Splendor does not sell the product directly to the companies. (Pl.'s ex. 1 at 124).

 This distribution channel is further demonstrated by the following questions and answers at the deposition of David St. George, an employee of Ever Splendor's customer High Performance Appliances ("HPA"):

 Q: Could you explain to me what the distribution system of HPA is?

 A: We purchase products on an OEM basis f.o.b. Hong Kong or Taiwan. We bring them into either our warehouse if it's domestic sale or directly to K Mart's warehouses and distribute to retailers from that point on. . . .

 Q: So, for example, the coffee makers that you indicated earlier were manufactured by Ever Splendor, you purchased them from Ever Splendor and then Ever Splendor ships them to your warehouse?

 A: Either to our warehouse or to K Mart's warehouse.

 . . . .

 Q: How does Ever Splendor know where to ship the product?

 A: There's a K Mart liaison office in both Hong Kong and Taiwan. ...


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