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Modern Trade Communications, Inc v. Psmj Resources

August 19, 2011

MODERN TRADE COMMUNICATIONS, INC., PLAINTIFF,
v.
PSMJ RESOURCES, INC. AND OSER
COMMUNICATIONS GROUP, INC. DEFENDANTS.



The opinion of the court was delivered by: Judge Rebecca R. Pallmeyer

MEMORANDUM OPINION AND ORDER

Plaintiff Modern Trade Communications, Inc., an Illinois-based magazine publisher, claims rights in the trademark, Metal Construction News-the title of a trade magazine that Plaintiff has distributed to attendees of the Metal Construction Association's annual "Metalcon International" trade show since 1991. The mark is unregistered, but Plaintiff claims it is well-recognized. Defendant PSMJ Resources, Inc., a Massachusetts-based consulting firm, produces the trade show pursuant to an agreement with the Metal Construction Association. In this lawsuit, Plaintiff asserts that Defendant PSMJ wrongfully authorized Defendant Oser Communications Group, Inc., an Arizona-based magazine publisher, to distribute a magazine entitled Metal Daily News at the Metalcon trade show in October 2010. Plaintiff alleges that Defendant Oser's trade magazine is likely to cause substantial confusion in the marketplace, and charges Oser with trademark infringement, unfair competition, and unlawful appropriation of Plaintiff's trademark under the Lanham Act, 15 U.S.C. § 1125(a) (Counts I & II). Plaintiff charges Defendant PSMJ with contributory trademark infringement and unfair competition under the Lanham Act (Count III), breach of the implied covenant of good faith and fair dealing (Count VII), and promissory estoppel (Count IV). Lastly, Plaintiff has alleged several claims against both Defendants: unfair business practices in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1, et seq. (Count IV); deceptive trade practices under the Illinois Uniform Deceptive TradePractices Act, 815 ILCS 510/1, et seq. (Count V); common law trademark infringement and unfair competition (Count VI), and tortious interference with prospective business advantage (Count VIII).

Defendants have moved to dismiss Plaintiff's claims for lack of personal jurisdiction and failure to state a claim pursuant to FED. R. CIV. P. 12(b)(2), (6). Plaintiff has moved to file an amended complaint, alleging claims nearly identical to those presented in its initial complaint, and adding a claim for breach of contract against Defendant PSMJ. For the reasons stated below, the court grants Defendants' motions to dismiss for lack of personal jurisdiction and denies Plaintiff leave to file its proposed amended complaint.

FACTUAL BACKGROUND

Plaintiff Modern Trade Communications ("Plaintiff" or "Modern Trade") is a magazine publishing company based in Skokie, Illinois. (Compl. ¶ 2.) Plaintiff has published a monthly magazine, Metal Construction News, for over 30 years. (Id. ¶ 8.) According to Plaintiff, in 1983, Modern Trade's founders, John Lawrence and Sam Milnark, helped organize the Metal Construction Association ("MCA"), a trade association for manufacturers and suppliers of metal products used in construction projects. (Id. ¶ 9.) In 1991, the MCA established "Metalcon International," a trade show for the metal construction industry featuring various exhibitions and seminars.*fn1 (Id.) For the first show, Plaintiff published a complimentary exhibition magazine entitled Metal Construction News: The Official Metalcon International Show Guide, which provided information to show attendees on exhibitors, booth locations, and the schedule of events, and included advertisements from metal construction industry companies. Plaintiff claims that it has published an "Official Show Guide" for every Metalcon trade show in October since 1991, in addition to the non-Metalcon affiliated version of the magazine that it publishes every month.

In November 1998, the MCA entered into an agreement with Defendant PSMJ Resources, Inc. ("PSMJ"), a Massachusetts-based consulting firm, for production of the Metalcon show. (Id. ¶ 11.) The agreements states, in pertinent part:

For each Metalcon International show produced under this agreement, Modern Trade Communications, in coordination with PSMJ, may produce and distribute an exhibition magazine to be distributed to all attendees and exhibitors at the show.

In the event that Modern Trade Communications does not produce and distribute an exhibition magazine, then PSMJ may produce and distribute the exhibition magazine so long as the content, image, quantity produced, number mailed in advance and size is at least equal to whatever exhibition magazine has been produced for the prior two Metalcon International shows. (Id. ¶¶ 12-13.) According to Plaintiff, over the past ten years, Plaintiff's Metal Construction News has acquired a secondary meaning in the market and has become a distinctive, well-recognized publication by members of the MCA. (Id. ¶ 16.)

Defendant Oser Communications, Inc. ("Oser") also publishes trade magazines. In June 2010, Oser entered into an agreement with PSMJ under which Oser would publish a "show daily," Metal Daily News: An Official Publication, for the October 2010 Metalcon show in Las Vegas. (Def. PSMJ's Mot. to Dismiss at 2.) According to Defendant PSMJ, a "show daily," unlike an exhibition magazine, is distributed overnight to the hotel rooms of trade show attendees, and contains news summarizing seminars and other events from the previous day.*fn2 (Id.) Plaintiff insists that Defendant Oser's publication is in direct competition with Modern Trade's exhibition magazine, and that Oser could mislead MCA members into believing that Modern Trade is no longer the publisher of Metalcon's "Official Show Guide" because Oser's show daily labels itself "An Official Publication."

In July 2010, Plaintiff's counsel issued a cease and desist letter to Defendant PSMJ, asserting Modern Trade's trademark rights in the title, Metal Construction News, and claiming that PSMJ's apparent authorization of Oser's publication conflicts with the agreement between PSMJ and the MCA. (Letter from Kuczma to Kilcoyne of 7/30/10, Ex. D to Compl.) One month later, Plaintiff sent a similar letter to Defendant Oser, warning that Oser's use of the name Metal Daily News for a publication that covers the same industry as Modern Trade's magazine is likely to cause substantial confusion in the marketplace. (Letter from Kuczma to Oser of 8/6/10, Ex. F to Compl.) On August 10, 2010, PSMJ responded to Plaintiff's letter, rejecting Plaintiff's reliance on the 1998 agreement between PSMJ and the MCA on the ground that Modern Trade was not a party to that agreement, and noting, further, that the agreement does not designate Modern Trade as the exclusive publisher of Metalcon exhibition materials. (Letter from Belt to Luczma of 8/10/10, Ex. E to Compl.) Believing that Defendant Oser's adoption of the magazine title Metal Daily News and Defendant PSMJ's authorization of Defendant Oser's actions constituted infringement of Plaintiff's rights, Plaintiff brought this suit against Defendants on August 25, 2010.

ANALYSIS

Defendants have moved to dismiss Plaintiff's complaint under FED. R. CIV. P. 12(b)(2) for lack of personal jurisdiction and under 12(b)(6) for failure to state a claim. While a complaint "need not include facts alleging personal jurisdiction," once the defendant moves to dismiss under 12(b)(2), "plaintiff bears the burden of demonstrating the existence of jurisdiction." Purdue Research Foundation v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003) (citations omitted); uBID, Inc. v. GoDaddy Group, Inc., 623 F.3d 421, 423-24 (citations omitted). In order to withstand a motion to dismiss under 12(b)(6), a plaintiff's complaint need not set forth "detailed factual allegations," but it must plead facts that "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).

I. Personal Jurisdiction

Modern Trade asserts claims arising under both the federal Lanham Act and state law. Because the Lanham Act does not authorize nationwide service of process, this court may only exercise jurisdiction over Defendants PSMJ and Oser if authorized by Illinois law and theFourteenth Amendment's Due Process Clause. be2 LLC v. Ivanov, 642 F.3d 555, 558 (7th Cir. 2011). The Illinois long-arm statute permits courts to exercise personal jurisdiction over a non-resident defendant to the full extent permitted under the Illinois and U.S. Constitution. 735 ILCS 5/2--209(c); Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 715 (7th Cir. 2002) (citing RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997); Klump v. Duffus, 71 F.3d 1368, 1371 n.4 (7th Cir. 1995)) (observing that "there is no operative difference between the limits imposed by the Illinois Constitution and the federal limitations on personal jurisdiction."). The central inquiry under the Due Process Clause is whether the defendants have sufficient ...


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