2000 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

10-3-2000

BP Chem Ltd v. Formosa Chem & Fibre Corp.

Precedential or Non-Precedential:

Docket 99-5452

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Recommended Citation

"BP Chem Ltd v. Formosa Chem & Fibre Corp." (2000). 2000 Decisions. Paper 212.

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Filed October 3, 2000 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

NOS. 98-5468/5469 and 99-5423/5451/5452 

BP CHEMICALS LTD. (an English corporation) 

v. 

FORMOSA CHEMICAL & FIBRE CORPORATION 

(a Taiwanese corporation); JOSEPH OAT CORPORATION 

(a Pennsylvania corporation) 

 Formosa Chemical & Fibre Corporation 

 Appellant in Nos. 98-5468 and 99-5423 

 Joseph Oat Corporation 

 Appellant in Nos. 98-5469 and 99-5451 

BP CHEMICALS LTD. (an English corporation) 

 Appellant in No. 99-5452 

v. 

FORMOSA CHEMICAL & FIBRE CORPORATION 

(a Taiwanese corporation); JOSEPH OAT CORPORATION 

(a Pennsylvania corporation) 

On Appeal From the United States District Court 

For the District of New Jersey 

(D.C. Civil Action No. 97-cv-04554) 

District Judge: Honorable Joseph J. Rodriguez 

Argued February 29, 2000 

Before: ALITO and STAPLETON, Circuit Judges, and 

POLLAK,* District Judge 

_________________________________________________________________ 

* Honorable Louis H. Pollak, Senior United States District Judge for the 

Eastern District of Pennsylvania, sitting by designation. 
(Filed: October 3, 2000) 

 John E. Caruso 

 Montgomery, McCracken, Walker & 

 Rhoads 

 123 South Broad Street 

 Philadelphia, PA 19109 

 and 

 Daniel L. Brockett (Argued) 

 Robin G. Weaver 

 Squire, Sanders & Dempsey 

 4900 Society Center 

 Cleveland, OH 44114-1304 

 Attorneys for Appellee/ 

 Cross-Appellant BP Chemicals Ltd. 

 Marc S. Palay (Argued) 

 Winston & Strawn 

 43 Rue du Rhone 

 1204 Geneva 

 Switzerland 

 and 

 Jerome W. Pope 

 Winston & Strawn 

 35 West Wacker Drive, Suite 4200 

 Chicago, IL 60601 

 and 

 Jonathan F. Bloom 

 Robert D. Carmignani 

 Stradley, Ronon, Stevens & Young 

 2600 One Commerce Square 

 Philadelphia, PA 19103 

 Attorneys for Appellant/ 

 Cross Appellee Formosa Chemical 

 & Fibre Corporation 

 2 
 Allison E. Accurso 

 Jon C. Martin 

 Fox, Rothschild, O'Brien & 

 Frankel, LLP 

 Princeton Pike Corporate Center 

 997 Lenox Drive, Building 3 

 Lawrenceville, NJ 08648-2311 

 Attorneys for Appellant/ 

 Cross-Appellee Joseph Oat 

 Corporation 

OPINION OF THE COURT 

STAPLETON, Circuit Judge: 

This is a trade secret case filed in the United States 

District Court for the District of New Jersey by BP

Chemicals Ltd. (BP), a British corporation, against Formosa 

Chemical & Fibre Corporation (FCFC), a Taiwanese 

corporation, and Joseph Oat Corporation (JOC), a 

Pennsylvania corporation with its principal place of 

business in New Jersey. BP asserts claims underS 44(b) 

and (h) of the Lanham Act, 15 U.S.C. S 1126(b) and (h), 

Articles 2 and 10 bis of the Paris Convention for the 

Protection of Industrial Property (hereinafter "the Paris 

Convention"), and New Jersey common law. BP alleges that 

FCFC misappropriated trade secrets relating to its 

methanol carbonylation process for making acetic acid by 

copying elements of an acetic acid plant design that BP's 

predecessor, Monsanto, had provided in 1980 to a licensee, 

China Petrochemical Development Corporation (CPDC). BP 

further alleges that FCFC and JOC entered into a contract 

whereby JOC would fabricate in New Jersey a number of 

chemical process vessels and heat exchangers using 

misappropriated technical specifications for ultimate use in 

the construction of an acetic acid plant in Taiwan. BP 

sought a preliminary injunction preventing JOC and FCFC 

from exporting these vessels to Taiwan. BP's amended 

complaint made clear that it sought to enjoin FCFC not 

only from taking possession of the JOC equipment, but 

from taking possession of any equipment manufactured in 

 3 
the United States by U.S. companies using BP's trade 

secrets. BP also sought compensatory and punitive 

damages from FCFC. 

FCFC moved to dismiss the claim against it for lack of 

personal jurisdiction. The District Court deferred ruling on 

the motion until the conclusion of the five-month 

preliminary injunction hearing. The Court ultimately denied 

FCFC's motion to dismiss and ruled that BP had 

demonstrated its entitlement to preliminary injunctive relief 

against FCFC and JOC. The injunction entered pertained 

only to the JOC equipment. Following further submissions 

of the parties, the District Court established the length and 

terms of the injunction, limiting the duration to thirty 

months, beginning April 20, 1998, and ending October 20, 

2000. FCFC and JOC filed timely notices of appeal. BP filed 

a timely cross-appeal. 

The undisputed facts are as follows. FCFC is a publiclytraded Taiwanese corporation with its principal place of 

business in Taipei, Taiwan. FCFC is a subsidiary of a 

Taiwanese conglomerate known as the Formosa Plastics 

Group (FPG), which is owned by Y.C. Wang. In 1996, FPG's 

U.S. operations produced revenue of $2.58 billion. FCFC 

has a 3.51% stock interest in Formosa Plastics 

Corporations (FPC), a Delaware corporation with 

headquarters in New Jersey. In developing the design for its 

acetic acid plant, FCFC used "ASPEN" software that it 

leased from Nan Ya Plastics Corporation, another affiliate of 

FPG. 

FCFC has a contract with JOC under which JOC will 

fabricate vessels in New Jersey for delivery to FCFC in 

Taiwan. It is performance of this contract that the instant 

action seeks to enjoin. Correspondence by fax or otherwise 

between FCFC and JOC regarding this contract has 

occurred "at least once a week" over a period of a number 

of months. (A. 19597-600.) 

FCFC has contracts for the purchase of equipment for its 

acetic acid plant with at least eight U.S. vendors in addition 

to JOC. These vendors received "bid packages" containing 

specifications that allegedly incorporate misappropriated 

trade secrets. The process for soliciting bids was that 

 4 
FCFC's engineering team would prepare a bid package and 

send it to a purchasing group. BP asserts, and FCFC does 

not dispute, that the purchasing group was actually the 

purchasing group of FPG, not FCFC. The purchasing group 

would then send the bid packages to the Taiwanese agents 

of U.S. vendors, who would in turn send them to their U.S. 

clients. All meetings between FCFC representatives and 

representatives of equipment vendors and their agents took 

place in Taiwan. No FCFC personnel visited the United 

States for any purpose in connection with the design or 

construction of the acetic acid plant. There is no evidence 

that any U.S. vendor received bid packages directly from 

FCFC, or even from FPG's purchasing group, rather than 

through Taiwanese agents of the U.S. vendors. 

FCFC's contract with Nooter, one of the U.S. equipment 

vendors, contains a provision requiring arbitration in New 

York of any disputes concerning that contract. The 

contracts with the other vendors call for arbitration in 

Taiwan. 

FCFC also has business contacts with the United States 

that are unrelated to its acetic acid plant project. In the 

past five years, FCFC entered into four contracts with U.S. 

companies for the purchase of chemical process technology, 

at least two of which involved the training of FCFC

personnel in the United States. For example, FCFC has 

recently contracted with ABB Lummus Global, Inc., a New 

Jersey engineering firm. In performing this contract, 

Lummus is receiving daily faxes from FCFC in Taiwan. 

For more than a decade, FCFC has exported products 

(primarily rayon and fiber) to customers in the U.S. The 

parties agree that in 1996, these sales totaled about four 

million dollars. However, these sales were normally made in 

Taiwan through Taiwanese agents, and there is no evidence 

of direct sales by FCFC to purchasers in the United States. 

FCFC has no sales force, no representative offices, and no 

warehouses or other facilities in the U.S. There is no 

evidence that FCFC ever advertised its products in the U.S. 

FCFC argues on appeal that the District Court did not 

have personal jurisdiction over it. Both FCFC and JOC 

further argue that the District Court erred in issuing the 

 5 
preliminary injunction by (1) determining the likelihood of 

success on the merits under the law of New Jersey rather 

than Taiwan, and (2) finding that the injunction was 

necessary to prevent imminent, irreparable harm. BP crossappeals, asserting that the District Court erred in limiting 

the duration of the injunction to thirty months. 

I. 

The District Court found that "the nature and extent of 

[FCFC's] contacts with New Jersey and with the United 

States as a whole allow[ed it] to assert jurisdiction over 

FCFC under Fed. R. Civ. P. 4(k)(2)." (Dist. Ct. Op. at 10.) 

We hold that the District Court did not have personal 

jurisdiction over FCFC. 

Rule 4(k)(2) provides that: 

 [i]f the exercise of jurisdiction is consistent with the 

 Constitution and laws of the United States, serving a 

 summons or filing a waiver of service is also effective, 

 with respect to claims arising under federal law, to 

 establish personal jurisdiction over the person of any 

 defendant who is not subject to the jurisdiction of the 

 courts of general jurisdiction of any state.

Fed. R. Civ. Proc. 4(k)(2). 

 Rule 4(k)(2) thus sanctions personal jurisdiction over 

 foreign defendants for claims arising under federal law 

 when the defendant has sufficient contacts with the 

 nation as a whole to justify the imposition of United 

 States' law but without sufficient contacts to satisfy the 

 due process concerns of the long-arm statute of any 

 particular state. 

World Tanker Carriers Corp. v. MV YA Mawlaya, 99 F.3d 

717, 720 (5th Cir. 1996). FCFC argues that while the 

District Court correctly found that FCFC did not have 

sufficient contacts with New Jersey to justify assertion of 

jurisdiction under the State's long-arm statute, it

incorrectly concluded (1) that BP's cause of action arose 

under federal law, and (2) that FCFC had sufficient

contacts with the United States as a whole to justify 

assertion of jurisdiction under Rule 4(k)(2). Because we 

 6 
agree that the District Court erred in concluding that 

FCFC's contacts with the United States were sufficient to 

warrant the assertion of personal jurisdiction over it, we 

may assume, without deciding, that BP's claim arises under 

federal law.1 

Once FCFC moved to dismiss, BP had the burden of 

coming forth with competent evidence demonstrating that 

FCFC had sufficient contacts with the United States to 

justify the court's assertion of either specific or general 

personal jurisdiction. See Stranahan Gear Co. v. NL Indus., 

Inc., 800 F.2d 53, 58 (3d Cir. 1998). Specific personal 

jurisdiction exists when the defendant has "purposefully 

directed his activities at residents of the forum and the 

litigation results from alleged injuries that `arise out of or 

related to' those activities." Burger King Corp. v. Rudzewicz, 

471 U.S. 462, 472 (1985). General personal jurisdiction 

exists when the defendant's contacts with the forum, 

whether or not related to the litigation, are "continuous and 

systematic." Helicopteros Macionales de Columbia v. Hall, 

_________________________________________________________________ 

1. Great Britain and the United States are signatories to the Paris 

Convention. BP characterizes its claim as arising under Articles 2 and 10 

bis of the Paris Convention and S 44 of the Lanham Act. Article 2 

provides that nationals of signatory countries "shall, as regards to the 

protection of industrial property, enjoy in all the other countries of the 

Union the advantages that their respective laws now grant, or may 

hereafter grant, to nationals." Paris Convention, Art. 2, I.E.L. IV-A. 

Article 10 bis provides that "[t]he countries of the Union are bound to 

assure to nationals of such countries effective protection against unfair 

competition." Id. Art. 10 bis. In L'Aiglon Apparel, Inc. v. Lana Lobell, 

Inc., 

214 F.2d 649 (3d Cir. 1954), we found that S 44 subsections (b) and (h) 

were intended by Congress "to implement international agreements [like 

the Paris Convention] that are not self-executing" and "to fashion a 

remedy to coincide with rights growing from the . . . substantive 

provisions of [those] agreements." Id. at 654. BP thus asserts that as a 

matter of federal law it is entitled to the same protection that New 

Jersey 

law affords to U.S. citizens. Its pleadings expressly disavow any right to 

relief based on conduct of FCFC in Taiwan so it claims no extraterritorial 

effect for the Lanham Act. Compare Van ity Fair Mills, Inc. v. T. Eaton 

Co., 

234 F.2d 633, 644 (2d Cir. 1956). Given FCFC's limited contacts with 

the United States, we find it unnecessary to decide whether BP's claim 

against it arises under federal law and, if so, whether it states a claim 

against FCFC upon which relief could be granted. 

 7 
466 U.S. 408, 416 (1984). We examine in turn whether the 

District Court has specific or general personal jurisdiction 

over FCFC. 

A. 

FCFC's contacts with the United States do not give rise to 

specific jurisdiction. The constitutional touchstone of due 

process analysis is "whether the defendant purposefully 

established `minimum contacts' in the forum." Burger King 

Corp., 471 U.S. at 474. "[T]he foreseeability that is critical 

to due process analysis . . . is that the defendant's conduct 

and connection with the forum . . . are such that he should 

reasonably anticipate being haled into court there." Id. 

(quoting World-Wide Volkswagen Corp. v. Woodson , 444 

U.S. 286, 295 (1980)). "It is essential in each case that 

there be some act by which the defendant purposely avails 

itself of the privilege of conducting activities within the 

forum . . . , thus invoking the benefits and protections of its 

laws." Id. at 475 (quoting Hanson v. Denckla, 357 U.S. 235, 

253 (1958)). "This `purposeful availment' requirement 

ensures that a defendant will not be haled into a 

jurisdiction solely as a result of `random,'`fortuitous,' or 

`attenuated' contacts . . . ." Id. (quoting Keeton v. Hustler 

Magazine, Inc., 465 U.S. 770, 774 (1984)). 

The Supreme Court has given several reasons why a 

forum may legitimately exercise jurisdiction over a

nonresident who "purposefully directs" his activities toward 

forum residents. "A State generally has a `manifest interest' 

in providing its residents with a convenient forum for 

redressing injuries inflicted by out-of-state actors." Id. at 

473 (quoting Keeton, 465 U.S. at 776). "Moreover, where 

individuals `purposefully derive benefit' from their interstate 

activities, it may well be unfair to allow them to escape 

having to account in other States for consequences 

that arise proximately from such activities." Id. at 

473-74. Finally, "because `modern transportation and 

communications have made it much less burdensome for a 

party sued to defend himself in a State where he engages in 

economic activity,' it usually will not be unfair to subject 

him to the burdens of litigating in another forum for 

disputes relating to such activity." Id. at 474 (quoting 

 8 
McGee v. International Life Ins. Co., 355 U.S. 220, 223 

(1957)). 

"With respect to interstate contractual obligations, [the 

Supreme Court] ha[s] emphasized that parties who `reach 

out beyond one state and create continuing relationships 

and obligations with citizens of another state' are subject to 

regulation and sanctions in the other State for the

consequences of their activities." Id. at 473 (quoting 

Travelers Health Ass'n v. Virginia, 339 U.S. 643, 647 

(1950)). On the other hand, "[i]f the question is whether an 

individual's contract with an out-of-state party alone can 

automatically establish sufficient minimum contacts in the 

other party's home forum, . . . the answer is clearly that it 

cannot." Id. at 478. The Supreme Court has endorsed "a 

`highly realistic' approach that recognizes that a `contract' is 

`ordinarily but an intermediate step serving to tie up prior 

business negotiations with future consequences which 

themselves are the real object of the business transaction.' " 

Id. at 479 (quoting Hoopeston Canning Co. v. Cullen, 318 

U.S. 313, 316 (1943)). "It is these factors--prior 

negotiations and contemplated future consequences, along 

with the terms of the contract and the parties' actual 

course of dealing--that must be evaluated in determining 

whether the defendant purposefully established minimum 

contacts within the forum." Id. 

"Once it has been decided that a defendant purposefully 

established minimum contacts within the forum . . . , these 

contacts may be considered in light of other factors to 

determine whether the assertion of personal jurisdiction 

would comport with `fair play and substantial justice.' " Id. 

(quoting International Shoe, 326 U.S. at 320). "Thus courts 

`in appropriate case[s]' may evaluate `the burden on the 

defendant,' `the forum State's interest in adjudicating the 

dispute,' `the plaintiff's interest in obtaining convenient and 

effective relief,' `the interstate judicial system's interest in 

obtaining the most efficient resolution of controversies,' and 

the `shared interest of the several States in furthering 

fundamental substantial social policies.' " Id. at 476-77 

(quoting World-Wide Volkswagen, 444 U.S. at 292). "These 

considerations sometimes serve to establish the 

reasonableness of jurisdiction upon a lesser showing of 

 9 
minimum contacts than would otherwise be required." Id. 

at 477. "On the other hand, where a defendant who 

purposefully has directed his activities at forum residents 

seeks to defeat jurisdiction, he must present a compelling 

case that the presence of some other considerations would 

render jurisdiction unreasonable." Id."Nevertheless, 

minimum requirements inherent in the concept of`fair play 

and substantial justice' may defeat reasonableness of 

jurisdiction even if the defendant has purposefully engaged 

in forum activities." Id. at 477-78. 

Applying these principles in Burger King, the Supreme 

Court found jurisdiction proper where the defendant, 

"[e]schewing the option of operating an independent local 

enterprise, . . . deliberately `reach[ed] out beyond' [his home 

forum] and negotiated with a Florida corporation for the 

purchase of a long-term franchise and the manifold benefits 

that would derive from affiliation with a nationwide 

organization." Id. at 479-80. The Court emphasized that he 

entered "a 20-year relationship that envisioned continuing 

and wide-reaching contacts with Burger King in Florida," 

which relationship could be viewed as neither "random," 

"fortuitous," or "attentuated." Id. Moreover, the Court stated 

that the Court of Appeals, in finding jurisdiction improper, 

"gave insufficient weight to provisions in the various 

franchise documents providing that all disputes would be 

governed by Florida law." Id. at 481. The Court reasoned 

that "[a]lthough such a provision standing alone would be 

insufficient to confer jurisdiction, . . . when combined with 

the 20-year interdependent relationship [the defendant] 

established with Burger King's Miami headquarters, it 

reinforced his deliberate affiliation with the forum State and 

the reasonable foreseeability of possible litigation there." Id. 

In this case FCFC's alleged misappropriation and 

improper use of BP's trade secrets have occurred and 

continue to occur in Taiwan. The primary alleged injury to 

BP has occurred and continues to occur in Great Britain. 

See Horne v. Adolph Coors Co., 684 F.2d 255, 259-60 (3d 

Cir. 1982) (holding that in a trade secret case, the injury 

occurs to the owner of the trade secret wherever he

resides). Thus, the primary tortious conduct giving rise to 

BP's claim against FCFC and to the injury caused thereby 

 10 
is unrelated to the United States. The only FCFC contacts 

with the United States that are in any way related to BP's 

claim against it are that (1) it placed orders in Taiwan with 

eight United States based equipment suppliers to enable it 

to build the offending plant in Taiwan, (2) in furtherance of 

those orders it has sent correspondence from Taiwan into 

the United States, and (3) in one of those eight orders it 

agreed to arbitrate with that supplier in New York. Thus, in 

substance, this is a case where FCFC availed itself of the 

assistance of eight U.S. based companies who solicited its 

business in Taiwan in order to build a plant in Taiwan 

allegedly with resulting injury to BP in Great Britain. 

Accordingly, we find no act by which FCFC "purposefully 

avail[ed] itself of the privilege of conducting activities within 

the forum . . . , thus invoking the benefits and protections 

of its laws." Burger King, 471 U.S. at 475. 

Burger King teaches that "a non-resident's contracting 

with a forum resident, without more, is insufficient to 

establish the requisite `minimum contacts.' " Sunbelt Corp. 

v. Noble, Dentor & Assoc., Inc., 5 F.3d 28, 32 (3d Cir. 1993). 

The same is true of "informational communications in 

furtherance of [such a] contract." Id. at 32. Besides the 

contracts and implementing correspondence, there are no 

significant contacts here with the United States. The fact 

that these contracts were for a one-time purchase of 

equipment that was to be shipped to Taiwan and were

solicited and negotiated through the Taiwanese agents of 

the U.S. vendors seems to us to negate any inference of 

"purposeful availment." 

In our view, FCFC's undertaking, in its contract with 

Nooter, to arbitrate in New York any disputes arising under 

the contract is the single fact that offers most substantial 

support for the proposition that the manner in which FCFC 

conducted its program of purchases of American equipment 

for its acetic acid plant reflected a measure of acquiescence 

in the possible need to submit to the jurisdiction of 

American courts, should disputes arise. But we think that 

this fact is not sufficient to carry the day. We of course 

recognize that, in the event of a dispute between FCFC and 

Nooter, the contractual agreement between FCFC and 

Nooter would probably -- and properly -- be regarded as a 

 11 
waiver of objections to judicial jurisdiction as well, whether 

that jurisdiction was to be exercised by a New York state 

court or, in the alternative, by a federal court, located 

anywhere in the United States, with respect to a claim 

arising under federal law. But the dispute in the case at bar 

does not involve Nooter, and the FCFC-JOC contract 

contains no comparable venue-selection provision. More to 

the point, the provision in the FCFC-Nooter contract only 

involved venue selection. It was not a provision stipulating 

that New York law, or the law of any other American

jurisdiction, would govern such disputes as might arise. 

Accordingly, we are not persuaded that the provision 

constitutes purposeful availment of the benefits and 

protections of United States law. Given the attenuated 

connection between the arbitration clause and the instant 

litigation, it is insufficient to make the Court's exercise of 

jurisdiction comport with "traditional notions of fair play 

and substantial justice." Cf. Kahn Lucas Lancaster v. Lark 

Int'l Ltd., 956 F. Supp. 1131, 1138-39 (S.D.N.Y. 1997) (New 

York arbitration clause is insufficient basis for jurisdiction 

over suit even between the parties to the contract 

containing the clause until the plaintiff indicates a desire to 

arbitrate the suit). 

Finally, we note that the United States has, at best, a 

very limited interest in adjudicating this dispute between 

two non-citizens, which is primarily a dispute regarding 

acts that took place in Taiwan that caused an injury in 

Great Britain. Although BP emphasizes that this suit seeks 

only to enjoin and recover damages for FCFC's actions in 

the United States, and not its acts of misappropriation in 

Taiwan, it cites no authority for the proposition that a 

plaintiff can strengthen the relationship between the 

defendant, the forum and the litigation by limiting the relief 

sought. Regardless of whether BP seeks relief for the 

actions of FCFC in Taiwan, the fact remains that FCFC has 

done nothing of substance other than contract in Taiwan 

with the Unites States based vendors to make one-time 

deliveries of equipment in Taiwan. Under Burger King, those 

purchases and the associated correspondence sent from 

Taiwan are insufficient to create specific personal

jurisdiction. 

 12 
We find substantial support for our holding in Burlington 

Indus., Inc. v. Maple Indus., Inc., 97 F.3d 1100, 1103 (8th 

Cir. 1996). The plaintiff there brought a claim for

misappropriation of trade secrets in the Eastern District of 

Arkansas. As a basis for specific jurisdiction, the plaintiff 

pointed to the fact that the four machines incorporating the 

misappropriated trade secrets were purchased from a thirdparty Arkansas resident. See id. However, none of the 

defendant's employees went to Arkansas to negotiate their 

purchase or supervise their manufacture. See id. The Court 

acknowledged that telephone calls between the defendant 

and the vendor, numbering at least one hundred,"can be 

evidence of a continuous and systematic business 

relationship," but it found that while these phone contacts 

"remain a consideration, they are insufficient, alone, to 

confer personal jurisdiction." Id. 

B. 

We conclude, as well, that FCFC's United States contacts 

are not such that an assertion of general personal 

jurisdiction comports with the demands of due process. As 

we have noted, even where the connection between a 

defendant's contacts and the litigation are insufficient to 

give rise to specific jurisdiction, general jurisdiction will be 

available where the defendant's contacts unrelated to the 

litigation are "continuous and systematic." Helicopteros 

Nacionales de Colombia v. Hall, 466 U.S. 408, 416 (1984). 

While FCFC exports its products to the United States, it 

is undisputed that it has no personnel or facilities here and 

there is no evidence that it has in any way advertised or 

solicited business here. As a result there is simply no basis 

for concluding that it has a continuous presence in the 

United States. 

Contrary to BP's suggestion, FCFC's relationship with 

FPG and its chairman, Mr. Wang, does not provide the 

requisite presence here. FCFC is a legally separate entity. 

The mere fact that FCFC had an arrangement with FPG, 

the details of which are not revealed in the record, whereby 

FCFC would submit bid packages to FPG's purchasing 

group, who would in turn submit them to other agents, and 

 13 
the fact that FCFC leased software from Nan Ya, another 

FPG affiliate, is not a sufficient basis on which to pierce the 

corporate veil and assert jurisdiction over FCFC on the 

basis of the United States contacts of other FPG affiliates. 

See Cohn v. Insurance Co., 54 F.3d 1108, 1116 (3d Cir. 

1995) ("party seeking to pierce corporate veil must establish 

that controlling corporation wholly ignored separate status 

of controlled corporation and so dominated and controlled 

its affairs that separate existence is a mere sham"). 

Moreover, FCFC's passive ownership of 3.5% of the stock of 

a Delaware corporation cannot constitute the kind of 

continuous and systematic business contacts that give rise 

to general jurisdiction. See Shaffer v. Heitner , 433 U.S. 186, 

213 (1977); Grimes v. Vitalink Communications Corp., 17 

F.3d 1553, 1559 (3d Cir. 1994). Finally, the fact that FCFC 

has entered into four other recent contracts for the 

purchase of chemical technology, two of which involved 

FCFC personnel traveling to the United States for training, 

is insufficient. See Helicopteros, 466 U.S. at 416-17 (visits 

in connection with training and purchases, even if 

occurring at regular intervals, are insufficient basis for 

general jurisdiction). Even considering the cumulative effect 

of these various contacts together, the requirements for 

general jurisdiction are not met. 

II. 

"In order to obtain a preliminary injunction, the moving 

party must show (1) irreparable injury, (2) a reasonable 

probability of success on the merits, (3) the harm to it 

outweighs the possible harm to other interested parties, 

and (4) harm to the public." Frank Russell Co. v. Wellington 

Management Co., 154 F.3d 97, 101 (3d Cir. 1998). A 

District Court then balances these four factors to determine 

if an injunction should issue. See id. JOC asserts that the 

District Court erred in finding that BP had demonstrated 

both imminent and irreparable injury and a likelihood of 

success on the merits. 

A. 

We find that the record supports the District Court's 

conclusion that an injunction was necessary to prevent 

 14 
imminent and irreparable harm. The District Court did not 

clearly err in crediting BP's witness who testified as to the 

damage that would be done to BP's reputation, credibility 

and ability to license its technology if FCFC's plant became 

operational, giving rise to the public perception that BP was 

unable to protect its proprietary trade secrets. Such 

injuries to reputation are difficult to calculate, and thus 

money damages are an inadequate remedy. See Ferrero v. 

Associated Materials Inc., 923 F.2d 1441, 1449 (11th Cir. 

1991) (holding that injury to goodwill is irreparable). 

Moreover, although the evidence suggests that FCFC's plant 

would not have become operational for at least a year after 

the injunction was issued, the history of the instant 

proceedings belies JOC's unsupported assertion that a year 

was ample time to obtain a trial on the merits in Taiwan in 

the event that the equipment were allowed to leave this 

country. See Geritrex Corp. v. Dermarite Indus., LLC, 910 F. 

Supp. 955, 966 (S.D.N.Y. 1996); Wright et al., Federal 

Practice and Procedure S 2948.1, at 139 (2d ed. 1995) 

(explaining that imminence requires that the harm will 

occur before a trial on the merits can be had). The

operation of FCFC's plant is not so remote in time as to be 

uncertain or speculative. See Continental Group, Inc. v. 

Amoco Chems. Corp., 614 F.2d 351, 359 (3d Cir. 1980). 

Finally, the District Court's finding that any delay on BP's 

part in filing suit "was caused by BP's conscientious 

decision to fully investigate the very serious charges before 

filing suit" is not clearly erroneous. BP Chems., Ltd. v. 

Formosa Chem. & Fibre Corp., No. 97-cv-4554, at 41 (D.N.J. 

Sept. 15, 1998). To the extent that delay can justify denial 

of a motion for a preliminary injunction, see, e.g., Citibank, 

N.A. v. Citytrust, 756 F.2d 273, 276 (2d Cir. 1985), "a delay 

caused by a plaintiff's good faith efforts to investigate an 

infringement" or to determine how serious an infringement 

is does not preclude a finding of irreparable harm. Tom 

Doherty Assocs., Inc. v. Saban Entertainment, Inc. , 60 F.3d 

27, 39 (2d Cir. 1995). 

B. 

In determining whether BP had shown a likelihood of

success, however, the District Court concluded that New 

 15 
Jersey had the most significant relationship with the case 

and applied New Jersey law in analyzing each issue. We 

conclude that it erred in doing so.2 

BP bases its claim against JOC on the following 

Restatement rule to which it maintains the New Jersey 

courts are committed: 

 One who discloses or uses another's trade secret 

 without a privilege to do so is liable to the other if . . . 

 (c) he learned the secret from a third person with 

 notice of the facts that it was a secret and that the 

 third person discovered it by improper means or that 

 the third person's disclosure was otherwise a breach of 

 duty to the other. 

Restatement (First) of Torts S 757 (1939); see also Williams 

v. Curtiss-Wright Corp., 681 F.2d 161, 164 & n.3 (3d Cir. 

1982) (holding that New Jersey has substantially adopted 

Restatement section 757(c)). 

JOC does not dispute, as we understand it, that New

Jersey courts follow this rule.3 It stresses, however, that 

_________________________________________________________________ 

2. FCFC and JOC argued before us, under appropriate argument 

headings, that BP had not shown a likelihood of success on the merits 

and, under appropriate subheadings, that the record would not support 

a finding (1) that any information Tu gave FCFC was a trade secret, or 

(2) that Tu breached a duty by giving information to FCFC. Both briefs 

(see FCFC's opening brief at 50 and JOC's opening brief at 17-18) took 

the position that, contrary to the ruling of the District Court, both of 

these issues are governed by Taiwanese law. FCFC's brief cited authority 

in support of this position, and JOC expressly incorporated that 

authority. Having considered the conflicts of law issues thus raised, we 

have concluded that the District Court has entered an injunction, and is 

currently proceeding to the merits issues, based on an erroneous view of 

the law. Under these circumstances, we deem it appropriate and prudent 

to advise the District Court at this time regarding our view of the 

conflicts of law issues. 

3. It does dispute the application of the rule to the facts of this case, 

asserting that JOC did not have notice that FCFC had discovered the 

secret by improper means at the time it learned the secret from FCFC, 

and that therefore Restatement section 758 rather than section 757 

applies. Section 758 governs where the defendant does not have notice 

that the third party who disclosed the secret obtained it by improper 

 16 
under New Jersey's flexible "governmental-interest analysis, 

. . . the determinative law is that of the state with the 

greatest interest in governing the particular issue to be 

decided." Veazey v. Doremus, 510 A.2d 1187, 1189 (N.J. 

1986) (emphasis supplied); accord O'Connor v. Busch

Gardens, 605 A.2d 773, 774 (N.J. Super. Ct. App. Div. 

1992) ("[C]hoice of law decisions can and should be made 

on an issue-by-issue basis, and thus the law of different 

states can apply to different issues in the same case.); see 

also Restatement (Second) of Conflict of LawsS 145, S145 

cmt. d. JOC points out that in addition to issues regarding 

its knowledge and conduct, the likelihood of BP's success 

on its claim depends on whether it can establish (1) that it 

had a protectable interest in its proprietary information -- 

i.e., a "trade secret" (and, in particular, that Monsanto and 

CPDC took the requisite security measures to protect the 

methanol carbonylation technology) and (2) that FCFC 

tortiously acquired BP's trade secret (and, in particular, 

that FCFC's consultant, Mr. Tu, owed a duty of 

confidentiality with respect to the technology and that 

FCFC had knowledge of a breach of duty in receiving and 

using BP's technology). Thus, while it appears to be 

undisputed that New Jersey law governs the issues of 

JOC's knowledge and conduct, this does not necessarily 

signify that New Jersey law -- as opposed to Taiwanese law 

-- applies to the two additional issues necessary to BP's 

case against JOC. 

JOC has tendered affidavits tending to show that 

Taiwanese law governing the protectability of commercially 

valuable information and what constitutes a tortious 

_________________________________________________________________ 

means until after the defendant learns the secret. See Restatement (First) 

of Torts S 758 & cmt. a. Section 758 protects from liability an innocent 

third party who learns of the secret if prior to receiving notice "he has 

so 

changed his position that to subject him to liability would be 

inequitable." Id. S 758(b). JOC argues that its substantial investment of 

time and money in the manufacturing process thus precludes liability. 

The events from which the District Court inferred notice, however, all 

occurred prior to JOC's entering into its contract with FCFC. Thus, 

sections 757 and 758 do not differ in any respect that is relevant to the 

issue before us in this appeal. 

 17 
conversion of such a protectable interest is different from, 

and more difficult for BP than, the New Jersey law 

governing those issues. As to the issue of protectability, the 

affidavits indicate, for example, that "[a] single unprotected 

disclosure [by either BP, Monsanto, CPDC or other 

Monsanto licensees] of the secret terminates its trade secret 

status immediately (like a needle hits a balloon)," (A. 6024), 

and that "BP is required to show that CPDC actually took 

steps to safeguard the information," (A. 1046 (emphasis 

added)). As to the issue of whether FCFC tortiously

acquired the information from Tu, the affidavits indicate 

that: 

 BP is required to show that CPDC actually entered into 

 a confidentiality agreement with Mr. Tu. There must be 

 evidence that Mr. Tu was put on notice or instructed 

 as to what materials he should consider confidential. 

 Under Taiwanese law, corporate obligations do not 

 attach to a corporation's employee. The employee has 

 to be subject to [sic] specific agreement or clear 

 instructions as to exactly what he was required to keep 

 confidential. 

(A. 1046). 

We recognize that BP has tendered conflicting affidavits 

tending to show that JOC's affidavits do not accurately 

characterize Taiwanese law and that Taiwanese and New 

Jersey law are the same as to these issues. It is enough for 

present purposes, however, to find that there is record 

evidence that, if believed, would support a finding that 

there are relevant differences in the laws of the two 

sovereigns that the parties claim to be governing. This 

requires us to determine whether Taiwan or New Jersey has 

the more substantial interest in determining: 

 (1) whether proprietary information licensed by its 

 purported owner for use in Taiwan was protectable and 

 whether at the time of its alleged conversion in Taiwan 

 it had been returned to the public domain; and 

 (2) whether FCFC's acquisition of the alleged trade 

 secret in Taiwan was wrongful. 

In both instances, we conclude based on the current record 

that Taiwan had the more substantial interest in having its 

 18 
law applied and that a New Jersey court would apply that 

law in a case like this. 

We believe Taiwan has the greater interest in setting the 

standards regarding whether information that has been 

licensed by a British company to a Taiwanese company has 

been sufficiently safeguarded to warrant legal protection or 

whether it has entered the Taiwanese public domain. This 

issue implicates policy judgments regarding the appropriate 

balance between protecting trade secrets, thereby 

encouraging both the development of new technology and 

the willingness of foreign companies to share their

technology with Taiwanese businesses, and free 

interchange and access to information, which also has 

profound implications for the health of the Taiwanese 

economy. New Jersey's interest, on the other hand, would 

appear to be virtually nil. As we have previously pointed 

out, BP, the purported owner of the trade secret, is not a 

resident of New Jersey and, while it may suffer some 

marginal injury there, New Jersey is assuredly not the 

principal situs of either the direct or the indirect injury 

inflicted.4 Moreover, we are doubtful that a New Jersey 

court would apply New Jersey law even if BP were a New 

Jersey corporation. A state's interest in protecting its 

citizens from injury by protecting intellectual property 

which they choose to license to foreign companies cannot 

outweigh the interests of the foreign sovereign in setting the 

standards for the protection of intellectual property within 

its own borders. Cf. O'Connor, 605 A.2d at 775. 

The New Jersey Superior Court's decision in O'Connor is 

instructive. There, a New Jersey resident was injured in 

Virginia. The injuries were allegedly caused by both the 

New Jersey plaintiff's and the Virginia defendant's

negligence. The issue was whether the court should apply 

Virginia's strict rule of common-law contributory negligence 

_________________________________________________________________ 

4. As we have previously pointed out, Great Britain, where BP is 

domiciled, is the principal situs of the injury alleged by BP. However, as 

we point out below, conventional choice of law doctrine ordinarily does 

not give great weight to the place of injury in cases, like the case at 

bar, 

arising out of claims of misappropriation of trade values. In any event, 

no party has suggested that British law governs any of the issues 

presented in this case. 

 19 
or New Jersey's comparative negligence rule, which afforded 

more protection to the injured plaintiff. The court held that: 

 New Jersey's concern for its injured citizens is also 

 legitimate, but it cannot exempt them from other 

 states' law setting standards for local conditions and 

 conduct. If New Jersey's comparative negligence 

 doctrine followed [the plaintiff] [i]nto. . . Virginia, it 

 would follow her into every other state as well, and 

 would supplant local liability rules wherever she went. 

 That would be an impermissible intrusion into the 

 affairs of other states. 

Id.; cf. Restatement (Third) of the Foreign Relations Law of 

the United States SS 402, 403 (1987) (discussing bases of 

and limitations on the jurisdiction to prescribe law with 

respect to a person or activity having connections with 

other states). Similarly, in this case, neither New Jersey nor 

Great Britain's concern for their injured citizens can 

outweigh Taiwan's interest in setting standards for the 

protection of intellectual property in Taiwan. 

Similarly, Taiwan has the greater interest in having its 

law applied to determine whether FCFC, a Taiwanese 

company, acted tortiously in acquiring information in 

Taiwan from CPDC, another Taiwanese company, and, in 

particular, as to the circumstances under which a 

Taiwanese company's actions have created a duty of 

confidentiality in its employees. Again the law in this area 

reflects a delicate balance of competing interests that has 

the capacity to profoundly affect the Taiwanese economy, 

and any interest that New Jersey would have in protecting 

trade secret holders who export their intellectual property 

to Taiwan is greatly outweighed by Taiwan's interest in 

setting the standards that govern the conduct of its own 

citizens regarding intellectual property that is present 

within its borders. 

The conclusion that Taiwan's interest in both of these 

issues is greater than New Jersey's finds further support in 

the Restatement (Second) of Conflict of Laws , to which New 

Jersey courts have often looked for guidance. See, e.g., 

Veazey, 510 A.2d at 251; Rose, 293 A.2d at 367-77; 

O'Connor, 605 A.2d at 774. The Restatement suggests that 

 20 
the following factors should be taken into account in 

determining which state has the most significant 

relationship with a particular issue in tort law: 

 (a) the place where the injury occurred, 

 (b) the place where the conduct causing the injury 

 occurred, 

 (c) the domicile, residence, nationality, place of 

 incorporation and place of business of the parties, and 

 (d) the place where the relationship, if any, betw een 

 the parties is centered. 

Restatement (Second) of Conflicts S 145 (1971). 

"[T]he place where the conduct occurred is given 

particular weight in the case of torts involving . .. unfair 

competition." Id. S 145, cmt. (e), at 420. Moreover, while the 

general rule is that in determining whether an interest is 

entitled to legal protection, "the applicable law will usually 

be the local law of the state where the injury occurred," id. 

S 158 (emphasis added), the Restatement qualifies this rule, 

stating: 

 "[s]ituations do arise, however, where the place of 

 injury will not play an important role in the selection of 

 the state of applicable law. . . . This will . . . be so 

 when . . . there may be little reason in logic or 

 persuasiveness to say that one state rather than 

 another is the place of injury, or when, such as in the 

 case of multistate defamation, injury has occurred in 

 two or more states. 

Id. The Restatement further states that"the place of injury 

is less significant in the case of . . . such unfair competition 

as consists of false advertising and the misappropriation of 

trade values." Id. S145 cmt f. The Restatement's 

explanation for the unimportance of the place of injury in 

cases of misappropriation of trade values is directly 

applicable here: 

 The injury suffered through false advertising is the loss 

 of customers or of trade. Such customers or trade will 

 frequently be lost in two or more states. The effect of 

 the loss, which is pecuniary in its nature, will normally 

 21 
 be felt most severely at the plaintiff's headquarters or 

 principal place of business. But this place may have 

 only a slight relationship to the defendant's activities 

 and to the plaintiff's loss of customers or trade. 

 The situation is essentially the same when 

 misappropriation of the plaintiff's trade values is 

 involved, except that the plaintiff may have suffered no 

 pecuniary loss but the defendant rather may have 

 obtained an unfair profit. 

Id. Equally applicable here is the conclusion that in such 

cases, "the place of injury does not play so important a role 

for choice-of-law purposes . . . as in the case of other kinds 

of torts[ and that i]nstead, the principal location of the 

defendant's conduct is the contact that will usually be given 

the greatest weight in determining the state whose local law 

determines the rights and liabilities that arise." Id. 

The vast majority of the conduct that is relevant to these 

two issues occurred in Taiwan.5 BP licenced the trade 

secrets to CPDC in Taiwan. To the extent that BP and 

CPDC took measures to safeguard those secrets in CPDC's 

hands, those measures were taken in Taiwan. FCFC 

acquired whatever information it acquired in Taiwan, 

designed its plant in Taiwan, prepared the bid packages 

with the specifications for the equipment in Taiwan, and 

delivered those packages to Taiwanese agents of U.S. 

companies in Taiwan. 

Moreover, while neither BP nor JOC is Taiwanese, which 

by itself weighs against the application of Taiwanese law, 

both have established significant relationships with Taiwan, 

BP by licensing its technology to a Taiwanese company and 

JOC by maintaining agents in Taiwan for the purpose of 

soliciting Taiwanese business. These relationships are 

centered in Taiwan, and these relationships gave rise to the 

events that are at issue here. 

We hold that Taiwan has the greater interest in having its 

_________________________________________________________________ 

5. Although BP has alleged misconduct occurring in New Jersey, namely 

JOC's fabrication of equipment using misappropriated technical 

specifications, this conduct has no relevance to either of the issues 

regarding which JOC asserts that Taiwanese law applies. 

 22 
law govern the issues of whether BP had a protectable 

interest in the information licensed to CPDC and whether 

FCFC acted unlawfully in acquiring it. Therefore, to the 

extent that there is a conflict of law on these issues, 

Taiwanese law should govern. 

As we have previously noted, there is evidence in the 

current record that, if believed, would support a conclusion 

that Taiwanese and New Jersey law do not differ in any 

respect material here. The District Court had no occasion to 

resolve the conflict presented in the affidavits before it 

because it erroneously concluded that New Jersey law 

governed all issues. While we conclude that we are 

authorized to resolve that conflict, see Fed. R. Civ. Proc. 

44.1 (the content of foreign law is an "issue of law"); 

Franzen v. Equitable Life Assurance Soc'y, 33 A.2d 599, 602 

(N.J. 1943) (same), we believe the District Court is in the 

best position to determine what at this point is essentially 

a credibility issue -- i.e., which expert to believe. The 

District Court will thus be required to determine hereafter 

whether Taiwanese law differs from that of New Jersey. It 

may address this issue in the context of a renewed 

application for a preliminary injunction and/or in the 

context of a merits determination. In either context, it will 

have discretion to supplement the existing record with 

testimony or otherwise and/or to conduct its own 

independent investigation regarding Taiwanese law. See 

Fed. R. Civ. Proc. 44.1; N.J. R. Evid. 201(a); Franzen, 33 

A.2d at 602. 

III. 

We will reverse the District Court's order of May 14, 

1999, and direct that it: (a) dismiss FCFC for want of 

personal jurisdiction, and (b) conduct further proceedings 

with respect to BP's claim against JOC in a manner 

consistent with this opinion.6 

_________________________________________________________________ 

6. Because we are setting aside the injunction entered by the District 

Court and remanding for further proceedings, we need not address the 

question, posed by BP's cross-appeal, whether the District Court erred in 

limiting the duration of the injunction to thirty months. 

 23 
ALITO, Circuit Judge, concurring in the judgment: 

Except with respect to the comments below, writing 

separately in this case would not serve a useful purpose. I 

do not join part IIIB of the opinion of the Court. Both FCFC 

and JOC merely mentioned the choice-of-law issue in

passing in their briefs. See FCFC Br. At 41, 50 n.7; JOC Br. 

At 17. " `[A] passing reference to an issue . . . will not suffice 

to bring that issue before this Court.' " Laborers' Int'l Union 

of N. Am. v. Foster Wheeler Corp., 26 F.3d 375, 398 (3d Cir. 

1994) (citation omitted) (ellipsis in original). I would hold 

that no choice-of-law issue is properly before the Court in 

this appeal. Without full briefing from the parties, I am 

unwilling to join the Court's novel application of New Jersey 

choice-of-law principles. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 24