Rockwell Automation, Inc. v. EU Automation, Inc.

CourtDistrict Court, D. Delaware
DecidedJune 6, 2022
Docket1:21-cv-01162
StatusUnknown

This text of Rockwell Automation, Inc. v. EU Automation, Inc. (Rockwell Automation, Inc. v. EU Automation, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rockwell Automation, Inc. v. EU Automation, Inc., (D. Del. 2022).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE ROCKWELL AUTOMATION, INC., ) ) Plaintiff, ) ) v. ) C.A. No. 21-cv-1162-MN-MPT ) EU AUTOMATION, INC. and EU ) AUTOMATION AMERICA LTD., ) ) Defendants. ) REPORT AND RECOMMENDATION On August 11, 2021, Rockwell Automation, Inc. (“Rockwell” or “plaintiff”) brought this trademark action alleging misleading advertising and sale of infringing Rockwell goods by EU Automation, Inc. (“EU Illinois”) and EU Automation America Ltd. (“EU UK”) (collectively, the “EU Defendants” or “defendants”).1 Defendants allegedly: engaged in the unlawful sale and distribution within the United States of unauthorized gray market Rockwell products, which are materially different from those sold by Rockwell and its authorized distributors in the United States (“Genuine Rockwell Products”) . . . [and] bear registered trademarks owned by Rockwell, ([the] “Asserted Trademarks”), yet differ from Genuine Rockwell Products in many respects[.] [The] offers to sell and . . . sales of materially different Rockwell products infringe Rockwell’s Asserted Trademarks; and, . . . [defendants’] violations have caused and continue to cause confusion, mistake, and/or deception to the public and constitute willful and deliberate trademark infringement.2 Presently before the court is defendants’ Motion to Dismiss the Complaint for lack of personal jurisdiction pursuant to FEDERAL RULE OF CIVIL PROCEDURE 12(b)(2), 1 D.I. 1 (“Complaint”) ¶ 1. EU Automation Inc. and EU Automation America Ltd. are Illinois and United Kingdom entities, respectively. Id. ¶¶ 6-7. Plaintiff refers defendants as “EUA Inc.” and “EUA America,” whereas defendants refer to “EU Illinois” and “EU UK.” To avoid confusion, the court adopts defendants’ naming convention. 2 Id. ¶¶ 2-3. and for improper venue pursuant to FEDERAL RULE OF CIVIL PROCEDURE 12(b)(3) (“Motion”).3 Plaintiff opposes the Motion and requests jurisdictional discovery. For the following reasons, the court recommends the Motion be Granted-in-Part and Denied-in- Part, and Denying plaintiff’s request for jurisdictional discovery. I. BACKGROUND FACTS4

Plaintiff Rockwell is the world’s largest company dedicated to industrial automation and information.5 Its products run a variety of industrial and commercial operations including: automotive, food processing, and pharmaceutical assembly lines; critical infrastructure such as oil refineries; and automation involving the safety of amusement park rides.6 A commonality among its products is that breakdowns are extremely costly and potentially dangerous.7 Thus, Rockwell does not sell to a mass consumer market and its industrial control products include a “quality assurance safety net” to maintain safe and reliable operation.8 Its products are sold only by Rockwell and highly trained domain experts employed by its Authorized Distributors (“ADs”).9

3 D.I. 15. Briefing is found at D.I. 16; D.I. 20; and D.I. 22. The Motion is supported by the Declarations of Claudia Jarrett (Head of Sales, EU Illinois) and Jonathan Wilkins (Director and co-owner, EU UK). D.I. 17 (Jarrett Decl.); D.I. 17-1 (Ex. A); D.I. 18 (Wilkins Decl.). Plaintiff’s opposition is supported by the Declaration of Neal McLaughlin (plaintiff’s counsel). D.I. 21 (McLaughlin Decl.); D.I. 21-1 (Exs. A-E). 4 Relevant facts are from the Complaint and declarations, which the court may consider on a motion to dismiss for lack of personal jurisdiction. See, e.g., TriDinetworks Ltd. v. NXP USA, Inc., C.A. No. 19-1062-CFC-CJB, 2020 WL 2220152, at *2 (D. Del. May 7, 2020). 5 D.I. 1 ¶ 21. Rockwell is a Delaware corporation with its principal place of business in Wisconsin. Id. ¶ 5. 6 Id. ¶ 22. 7 Id. ¶ 23. 8 Id. ¶ 24. 9 Id. ¶ 25. 2 Rockwell monitors its products through its ADs and issues software and firmware updates, product safety notices, and/or recalls designed to preempt problems.10 Defendant EU Illinois’ principal place of business in Elk Grove Village, Illinois.11 The Elk Grove Village facility is its only physical location in the United States.12 It has no other offices, warehouses, or physical spaces in this country, including Delaware.13

All EU Illinois employees work and are paid in Illinois; none travel to Delaware to interact with customers or for any other business purpose.14 All sales to customers in the U.S. are made solely by EU Illinois.15 Defendant EU UK’s principal place of business in the United Kingdom.16 EU UK provides “some administrative services” for EU Illinois, but does not control its operations.17 It has no U.S. employees, offices, warehouses, or other physical space, including in Delaware.18 No EU UK employee was ever directed to travel to Delaware to interact with customers or for any other business purpose.19 The EU Defendants serve as “middlemen” who purchase machine parts in the market to resell.20 Part of their business is sourcing obsolete parts for older automation

equipment so customers can continue to operate existing equipment with replacement

10 Id. 11 Id. ¶ 6. 12 D.I. 17 ¶ 4. 13 Id. ¶ 5. 14 Id. ¶¶ 6, 19. 15 Id. ¶ 15. 16 D.I. 18 ¶ 4. 17 Id. ¶ 5. 18 Id. ¶¶ 6-7. 19 Id. ¶ 10. 20 D.I. 1 ¶ 58; D.I. 17 ¶ 9. 3 parts rather than purchase new equipment from the manufacturer.21 EU Illinois advertises parts for sale in the U.S. on euautomation.com/us.22 Customers cannot buy directly from the website: they must request a price quote via a phone call to a number on the website or a “click on a link.”23 The customer then receives a quote by email or phone and decides whether to purchase at the quoted

price.24 Any purchase is also made by phone or email.25 From 2016 to date, EU Illinois generated U.S. sales of $107 million in pre- expense revenue, of which ~$465,000, or 0.4%, was from Delaware customers.26 Sales of parts reflecting Rockwell-owned brands or trademarks generated ~$19,000, or 4%, of total Delaware revenue, and less than 0.01% of total U.S. revenue.27 EU UK does not make sales or generate revenue in the U.S., including Delaware.28 The EU Defendants ceased selling and advertising Rockwell products in response to plaintiff’s allegations.29 EU Illinois began phasing out sales in October 2020 by no longer accepting orders for Rockwell products from new U.S. customers, and only filling pre-existing orders for parts or orders from existing customers.30 Defendants’

website ceased advertising plaintiff’s products worldwide by November 14, 2020.31 EU

21 D.I. 17 ¶ 10. 22 Id. ¶ 11. 23 Id. ¶ 15. 24 Id. 25 Id. 26 Id. ¶ 22. 27 Id. ¶ 24. 28 D.I. 18 ¶ 8. 29 Id. ¶ 21. 30 D.I. 17 ¶ 25. 31 D.I. 18 ¶ 22. 4 Illinois made its last U.S. shipment of Rockwell products in August 2021.32 On August 11, 2021, plaintiff filed this action alleging “misleading advertising and sale of infringing Rockwell goods” by defendants.33 On October 22, 2021, defendants filed the instant Motion.34 II. LEGAL STANDARDS

A. FEDERAL RULE OF CIVIL PROCEDURE 12(b)(2) Pursuant to Rule 12(b)(2), the court may dismiss a suit for lack of jurisdiction over the person. When a defendant challenges a court's exercise of personal jurisdiction under Rule 12(b)(2), “the plaintiff bears the burden of establishing personal jurisdiction by a preponderance of the evidence and must do so by ‘establishing with reasonable particularity sufficient contacts between the defendant and the forum state.’”35 “To meet this burden, the plaintiff must produce ‘sworn affidavits or other competent evidence,’ since a Rule 12(b)(2) motion ‘requires resolution of factual issues outside of the pleadings.’”36 “[W]hen the court does not hold an evidentiary hearing on

the motion to dismiss, [however,] the plaintiff need only establish a prima facie case of

32 D.I. 17 ¶ 27. 33 D.I. 1 ¶ 1. The Complaint alleges Trademark Infringement (15 U.S.C. § 1114), False Advertising (15 U.S.C.

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Rockwell Automation, Inc. v. EU Automation, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/rockwell-automation-inc-v-eu-automation-inc-ded-2022.