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KOHLER CO. v. KOHLER INTERNATIONAL

March 27, 2002

KOHLER CO., PLAINTIFF,
V.
KOHLER INTERNATIONAL, LTD., KOHLER WINDOWS AND ENTRANCE SYSTEMS, INC., DIMENSIONAL MILLWORK, INC., PETER KOHLER, TRACY EDGEMON, AND KARAN EDGEMON, DEFENDANTS.



The opinion of the court was delivered by: Elaine S. Bucklo, United States District Judge.

  MEMORANDUM OPINION AND ORDER

Kohler Company ("Kohler Co."), a Wisconsin corporation, manufactures home and building products and equipment, sold under the trademark "Kohler." It owns as registered trademarks a stylized "K," the mark "Kohler," and several other marks, and it owns the domain names "www. kohler. com" and "www. kohlerco. com". Kohler Co. alleges that the various defendants here, including Dimensional Millwork, Inc. ("Dimensional Millwork of Chicago"), a Texas corporation with its principal place of business in Orland Park, Illinois, and Tracy and Karan Edgemon of Texas, who own and operate Dimensional Millwork of Chicago, as well as Peter Kohler, who substantially owns, and operates Kohler International, a Canadian corporation, and Kohler Windows and Entrance Systems ("Kohler

Windows"), a Maine corporation, infringed Kohler Co.'s marks by selling home and building supplies manufactured by Kohler International and Kohler Windows, in violation of the Lanham Act, 15 U.S.C § 1111 et seq., and of several Illinois intellectual property and deceptive trade practices laws.

Tracy and Karan Edgemon (the "Edgemons") moved to dismiss the First Corrected Amended Complaint, as does Peter Kohler. Dimensional Millwork of Chicago has filed an Answer to a subsequently filed Second Corrected Amended Complaint. A Washington state firm also called "Dimensional Millwork, Inc." ("Dimensional Millwork of Washington") moved to be dismissed from this action. I deal first with Dimensional Millwork of Washington's motion, then I address the Edgemons' motion together with Peter Kohler's. I deny those motions.

I.

Kohler Co. responds that it has no interest in suing Dimensional Millwork of Washington in this court, and did not do so. It sued Dimensional Millwork of Chicago, operating in Illinois, under the name "Dimensional Millwork, Inc." Dimensional Millwork of Chicago is named as a defendant in both the Corrected First Amended Complaint of June 24, 2001, and the Corrected Second Amended Complaint of October 11, 2001, and it is not disputed that Kohler Co. properly served Dimensional Millwork of Chicago. It is also clear, and undisputed, that personal jurisdiction is proper over Dimensional Millwork of Chicago, because that firm does business in Illinois. See Haedike v. Kodiak Research, Ltd., 814 F. Supp. 679, 682 (N.D. Ill. 1992) ("Doing business" is a basis for personal jurisdiction in Illinois.). A defendant is "doing business" if it has some reasonable subset of, e.g., an office, mailing address, telephone number, agents, or employees in Illinois. Id. Kohler Co. introduces evidence that there is a business with that name operating at an address in Orland Park, Illinois, which has an Illinois tax number, stationary with an Illinois address, a truck in Illinois, all with the name "Dimensional Millwork, Inc." on them. It has several employees, including Ms. Czmyr. At the time of service of process Dimensional Millwork of Chicago was not incorporated or licensed in Illinois, but the undisputed jurisdictional facts, supported with the evidence that Kohler Co. offers, show that it is doing business in Illinois. Nothing in the record contradicts these facts.

Dimensional Millwork of Washington, by contrast, has not been sued, and so I cannot dismiss any claims against it. There are no claims against it in this court. It is not a defendant in this case.*fn1 Because it is not a party, Dimensional Millwork of Washington has no standing. It has no business filing any motions. The only motions to dismiss I may entertain are of the parties.

II.

Kohler Co.'s Second Amended complaint names Tracy and Karan Edgemon a married couple, who are also the individual officers and owners of Dimensional Millwork of Chicago. They moved to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6), arguing that, as corporate officers or directors, they are not liable for acts of the corporation as a matter of law.*fn2 Peter Kohler makes parallel arguments. Each invokes Dangler v. Imperial Mach. Co., 11 F.2d 945, 946 (7th Cir. 1926.) ("[I]n the absence of some special showing, the managing officers of a corporation are not liable for the infringements of such corporation, though committed under their general direction.") (patent case). It is only when:

the officer acts willfully and knowingly — that is, when he personally participates in the manufacture or sale of the infringing article (acts other than as an officer), or when he uses the corporation as an instrument to carry out his own willful and deliberate infringements, or when he knowingly uses an irresponsible corporation with the purpose of avoiding personal liability — that officers are held jointly with the company.

Id. at 947. Accord Panther Pumps & Equip. Co. Inc. v. Hydrocraft, Inc., 468 F.2d 225, 233 (7th Cir. 1972) (citing Dangler with approval, and holding officers personally liable only when acting outside the scope of their duties); Hoover Group, Inc. v. Custom Metalcraft, Inc., 84 F.3d 1408, 1411 (Fed. Cir. 1996). If an individual "actively and knowingly caused the infringement, he is personally liable." Chanel, Inc. v. Italian Activewear, Inc., 931 F.2d 1472, 1477 (11th Cir. 1991) (President and CEO of corporation was liable when he purchased counterfeit goods, advertised goods as trademarked products, and operated showroom from which goods were sold.); Wilden Pump & Eng'g Co. v. Pressed & Welded Prods. Co., 655 F.2d 984, 990 (9th Cir. 1981) (Individual corporate officer was liable for patent infringement if he is a "moving, active, conscious force" behind violation and was significant shareholder, executive officer or president, having personal control, supervision, and direction of the company.).

On a 12(b)(6) motion, I accept all the well-pleaded allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. City Nat'l Bank of Florida v. Checkers, Simon & Rosner, 32 F.3d 277, 281 (7th Cir. 1994). Dismissal is proper only where it appears beyond a doubt that the plaintiff can prove no set of facts in support of its claims that would entitle it to relief. Conley v. Gibson, 2355 U.S. 41, 45-46 (1957). The Edgemons say, and offer an affidavit to show, that they merely owned Dimension Chicago, and were not involved in its daily operations. They say that its day-to-day business was run by their office manager, Ron Pauley. They were not personally involved in marketing or selling the allegedly infringing products. Peter Kohler offers an affidavit to the effect that he acted only as a corporate officer at Kohler International. However, I cannot look at matters outside the complaint in deciding a motion to dismiss for failure to state a claim. "Under Rule 12(b), when "matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.'" Bohac v. West, 85 F.3d 306, 311 (7th Cir. 1996). For the purposes of the motion to dismiss for failure to state a claim, I therefore exclude the matters in the affidavits.


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