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. e du/thir dc ir c uit_2000/212Filed 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 D istrict Judge for the Eastern District of Pennsylvania, sitting by design ation.(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

2Allison 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 Sta tes 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 o f 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 t he 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 ac id by copying elements of an acetic acid plant design tha t BP's predecessor, Monsanto, had provided in 1980 to a li censee, China Petrochemical Development Corporation (CPDC). BP further alleges that FCFC and JOC entered into a co ntract whereby JOC would fabricate in New Jersey a number of chemical process vessels and heat exchangers using misappropriated technical specifications for ultima te 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 amende d complaint made clear that it sought to enjoin FCFC not only from taking possession of the JOC equipment, b ut from taking possession of any equipment manufacture d in

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

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 ultimatel y denied
FCFC's motion to dismiss and ruled that BP had demonstrated its entitlement to preliminary injunct ive relief against FCFC and JOC. The injunction entered pertai ned only to the JOC equipment. Following further submis sions of the parties, the District Court established the length and terms of the injunction, limiting the duration to t hirty months, beginning April 20, 1998, and ending Octobe r 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 publ iclytraded Taiwanese corporation with its principal pla ce of business in Taipei, Taiwan. FCFC is a subsidiary of a Taiwanese conglomerate known as the Formosa Plastic s 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 desig n for its acetic acid plant, FCFC used "ASPEN" software that it leased from Nan Ya Plastics Corporation, another af filiate of

FPG.

FCFC has a contract with JOC under which JOC will fabricate vessels in New Jersey for delivery to FCF C in Taiwan. It is performance of this contract that the instant action seeks to enjoin. Correspondence by fax or ot herwise 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 fo r its acetic acid plant with at least eight U.S. vendors in addition to JOC. These vendors received "bid packages" conta ining specifications that allegedly incorporate misapprop riated trade secrets. The process for soliciting bids was that

4FCFC'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 g roup would then send the bid packages to the Taiwanese a gents of U.S. vendors, who would in turn send them to the ir U.S. clients. All meetings between FCFC representatives and representatives of equipment vendors and their agen ts took place in Taiwan. No FCFC personnel visited the Unit ed States for any purpose in connection with the desig n 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 t han through Taiwanese agents of the U.S. vendors.

FCFC's contract with Nooter, one of the U.S. equipm ent vendors, contains a provision requiring arbitration in New York of any disputes concerning that contract. The
contracts with the other vendors call for arbitrati on in
Taiwan.

FCFC also has business contacts with the United Sta tes that are unrelated to its acetic acid plant project . In the past five years, FCFC entered into four contracts w ith U.S. companies for the purchase of chemical process tech nology, at least two of which involved the training of FCFC personnel in the United States. For example, FCFC h as recently contracted with ABB Lummus Global, Inc., a New Jersey engineering firm. In performing this contrac t, 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 abo ut four million dollars. However, these sales were normally made in Taiwan through Taiwanese agents, and there is no ev idence 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 n ot have personal jurisdiction over it. Both FCFC and J OC further argue that the District Court erred in issu ing the

5preliminary injunction by (1) determining the likel ihood of

success on the merits under the law of New Jersey r ather than Taiwan, and (2) finding that the injunction wa s 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 exten t of [FCFC's] contacts with New Jersey and with the Unit ed States as a whole allow[ed it] to assert jurisdicti on over FCFC under Fed. R. Civ. P. 4(k)(2)." (Dist. Ct. Op. at 10.) We hold that the District Court did not have person al jurisdiction over FCFC.

Rule 4(k)(2) provides that:

[i]f the exercise of jurisdiction is consist ent with the Constitution and laws of the United States, serving a summons or filing a waiver of service is als o effective, with respect to claims arising under federal law, to establish personal jurisdiction over the per son of any defendant who is not subject to the jurisdic tion of the courts of general jurisdiction of any state.

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

Rule 4(k)(2) thus sanctions personal jurisdi ction over foreign defendants for claims arising under federal law
when the defendant has sufficient contacts w ith 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 th e District Court correctly found that FCFC did not ha ve sufficient contacts with New Jersey to justify asse rtion 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 justi fy assertion of jurisdiction under Rule 4(k)(2). Becau se we

6agree that the District Court erred in concluding t hat

FCFC's contacts with the United States were suffici ent to warrant the assertion of personal jurisdiction over it, we may assume, without deciding, that BP's claim arise s 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 pers onal jurisdiction exists when the defendant has "purpose fully
directed his activities at residents of the forum a nd the litigation results from alleged injuries that `aris e out of or related to' those activities." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985). General personal jurisdic tion
exists when the defendant's contacts with the forum
, whether or not related to the litigation, are "cont inuous and systematic." Helicopteros Macionales de Columbia v. Hall,

___________________________________________________ ______________

1. Great Britain and the United States are signator ies to the Paris Convention. BP characterizes its claim as arising u nder Articles 2 and 10
bis of the Paris Convention and S 44 of the Lanham Act. Article 2 provides that nationals of signatory countries "sha ll, 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, A rt. 2, I.E.L. IV-A. Article 10 bis provides that "[t]he countries of th e Union are bound to assure to nationals of such countries effective pro tection 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 sub sections (b) and (h) were intended by Congress "to implement internation al 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 pr otection that New
Jersey law affords to U.S. citizens. Its pleadings express ly disavow any right to
relief based on conduct of FCFC in Taiwan so it cla ims no extraterritorial effect for the Lanham Act. Compare Van ity Fair Mil ls, Inc. v. T. Eaton
Co., 234 F.2d 633, 644 (2d Cir. 1956). Given FCFC's limi ted contacts with the United States, we find it unnecessary to decide whether BP's claim against it arises under federal law and, if so, whe ther it states a claim against FCFC upon which relief could be granted.

7466 U.S. 408, 416 (1984). We examine in turn whethe r the

District Court has specific or general personal jur isdiction

over FCFC.

A.

FCFC's contacts with the United States do not give rise to specific jurisdiction. The constitutional touchston e of due process analysis is "whether the defendant purposef ully established `minimum contacts' in the forum." Burge r 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 h e should reasonably anticipate being haled into court there. " Id. (quoting World-Wide Volkswagen Corp. v. Woodson , 4 44 U.S. 286, 295 (1980)). "It is essential in each cas e that there be some act by which the defendant purposely avails itself of the privilege of conducting activities wi thin the forum . . . , thus invoking the benefits and protec tions of its laws." Id. at 475 (quoting Hanson v. Denckla, 357 U .S. 235, 253 (1958)). "This `purposeful availment' requireme nt
ensures that a defendant will not be haled into a jurisdiction solely as a result of `random,'`fortui tous,' 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 activiti es 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 actor s." Id. at 473 (quoting Keeton, 465 U.S. at 776). "Moreover, w here individuals `purposefully derive benefit' from thei r 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. a t 473-74. Finally, "because `modern transportation an d
communications have made it much less burdensome fo r a party sued to defend himself in a State where he en gages in economic activity,' it usually will not be unfair t o subject him to the burdens of litigating in another forum f or disputes relating to such activity." Id. at 474 (qu oting

8McGee 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 `r each out beyond one state and create continuing relation ships 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 (quot ing Travelers Health Ass'n v. Virginia, 339 U.S. 643, 6 47 (1950)). On the other hand, "[i]f the question is w hether an individual's contract with an out-of-state party al one can automatically establish sufficient minimum contacts in the other party's home forum, . . . the answer is clear ly 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 whic h themselves are the real object of the business tran saction.' " 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' act ual course of dealing--that must be evaluated in determ ining whether the defendant purposefully established mini mum contacts within the forum." Id.

"Once it has been decided that a defendant purposef ully
established minimum contacts within the forum . . . , these contacts may be considered in light of other factor s to determine whether the assertion of personal jurisdi ction would comport with `fair play and substantial justi ce.' " Id. (quoting International Shoe, 326 U.S. at 320). "Thu s courts `in appropriate case[s]' may evaluate `the burden o n the defendant,' `the forum State's interest in adjudica ting the dispute,' `the plaintiff's interest in obtaining co nvenient and effective relief,' `the interstate judicial system' s interest in obtaining the most efficient resolution of controve rsies,' and
the `shared interest of the several States in furth ering 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 showin g of

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

at 477. "On the other hand, where a defendant who purposefully has directed his activities at forum r esidents seeks to defeat jurisdiction, he must present a com pelling case that the presence of some other considerations would render jurisdiction unreasonable." Id."Nevertheless
, minimum requirements inherent in the concept of`fai r 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 Supre me Court found jurisdiction proper where the defendant
, "[e]schewing the option of operating an independent local enterprise, . . . deliberately `reach[ed] out beyon d' [his home forum] and negotiated with a Florida corporation fo r the purchase of a long-term franchise and the manifold benefits
that would derive from affiliation with a nationwid e organization." Id. at 479-80. The Court emphasized that he entered "a 20-year relationship that envisioned con tinuing and wide-reaching contacts with Burger King in Flor ida," which relationship could be viewed as neither "rand om," "fortuitous," or "attentuated." Id. Moreover, the Court stated that the Court of Appeals, in finding jurisdiction improper, "gave insufficient weight to provisions in the vari ous franchise documents providing that all disputes wou ld be governed by Florida law." Id. at 481. The Court rea soned that "[a]lthough such a provision standing alone wo uld be insufficient to confer jurisdiction, . . . when com bined with the 20-year interdependent relationship [the defend ant] established with Burger King's Miami headquarters, it
reinforced his deliberate affiliation with the foru m State and the reasonable foreseeability of possible litigatio n there." Id.

In this case FCFC's alleged misappropriation and improper use of BP's trade secrets have occurred an d continue to occur in Taiwan. The primary alleged in jury to
BP has occurred and continues to occur in Great Bri tain. See Horne v. Adolph Coors Co., 684 F.2d 255, 259-60 (3d Cir. 1982) (holding that in a trade secret case, th e 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 th ereby

10is unrelated to the United States. The only FCFC co ntacts

with the United States that are in any way related to BP's claim against it are that (1) it placed orders in T aiwan with eight United States based equipment suppliers to en able it to build the offending plant in Taiwan, (2) in furt herance of those orders it has sent correspondence from Taiwan into the United States, and (3) in one of those eight or ders 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 solici ted its business in Taiwan in order to build a plant in Tai wan allegedly with resulting injury to BP in Great Brit ain. Accordingly, we find no act by which FCFC "purposef ully avail[ed] itself of the privilege of conducting act ivities within the forum . . . , thus invoking the benefits and pr otections of its laws." Burger King, 471 U.S. at 475.

Burger King teaches that "a non-resident's contract ing with a forum resident, without more, is insufficien t to establish the requisite `minimum contacts.' " Sunbe lt Corp. v. Noble, Dentor & Assoc., Inc., 5 F.3d 28, 32 (3d Cir. 1993).
The same is true of "informational communications i n furtherance of [such a] contract." Id. at 32. Besi des the contracts and implementing correspondence, there ar e no significant contacts here with the United States. T he fact that these contracts were for a one-time purchase o f equipment that was to be shipped to Taiwan and were solicited and negotiated through the Taiwanese agen ts of the U.S. vendors seems to us to negate any inferenc e of "purposeful availment."

In our view, FCFC's undertaking, in its contract wi th Nooter, to arbitrate in New York any disputes arisi ng under the contract is the single fact that offers most su bstantial support for the proposition that the manner in whic h FCFC conducted its program of purchases of American equi pment for its acetic acid plant reflected a measure of ac quiescence in the possible need to submit to the jurisdiction of American courts, should disputes arise. But we thin k that this fact is not sufficient to carry the day. We of course recognize that, in the event of a dispute between F CFC and Nooter, the contractual agreement between FCFC and Nooter would probably -- and properly -- be regarde d as a

11waiver of objections to judicial jurisdiction as we ll, whether

that jurisdiction was to be exercised by a New York state court or, in the alternative, by a federal court, l ocated anywhere in the United States, with respect to a cl aim arising under federal law. But the dispute in the c ase at bar does not involve Nooter, and the FCFC-JOC contract contains no comparable venue-selection provision. M ore to the point, the provision in the FCFC-Nooter contrac t only involved venue selection. It was not a provision st ipulating that New York law, or the law of any other American jurisdiction, would govern such disputes as might a rise. Accordingly, we are not persuaded that the provisio n constitutes purposeful availment of the benefits an d protections of United States law. Given the attenua ted
connection between the arbitration clause and the i nstant litigation, it is insufficient to make the Court's exercise of jurisdiction comport with "traditional notions of f air play and substantial justice." Cf. Kahn Lucas Lancaster v. Lark Int'l Ltd., 956 F. Supp. 1131, 1138-39 (S.D.N.Y. 19 97) (New York arbitration clause is insufficient basis for j urisdiction 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 bes t, a very limited interest in adjudicating this dispute between two non-citizens, which is primarily a dispute rega rding acts that took place in Taiwan that caused an injur y in Great Britain. Although BP emphasizes that this sui t seeks only to enjoin and recover damages for FCFC's actio ns in the United States, and not its acts of misappropria tion in Taiwan, it cites no authority for the proposition t hat a plaintiff can strengthen the relationship between t he defendant, the forum and the litigation by limiting the relief sought. Regardless of whether BP seeks relief for t he actions of FCFC in Taiwan, the fact remains that FC FC has done nothing of substance other than contract in Ta iwan
with the Unites States based vendors to make one-ti me deliveries of equipment in Taiwan. Under Burger Kin g, those purchases and the associated correspondence sent fr om Taiwan are insufficient to create specific personal jurisdiction.

12We find substantial support for our holding in Burl ington

Indus., Inc. v. Maple Indus., Inc., 97 F.3d 1100, 1 103 (8th Cir. 1996). The plaintiff there brought a claim for misappropriation of trade secrets in the Eastern Di strict of Arkansas. As a basis for specific jurisdiction, the plaintiff pointed to the fact that the four machines incorpor ating the misappropriated trade secrets were purchased from a thirdparty Arkansas resident. See id. However, none of t he defendant's employees went to Arkansas to negotiate their purchase or supervise their manufacture. See id. T he Court acknowledged that telephone calls between the defen dant 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, alo ne, to confer personal jurisdiction." Id.

B.

We conclude, as well, that FCFC's United States con tacts are not such that an assertion of general personal jurisdiction comports with the demands of due proce ss. As we have noted, even where the connection between a defendant's contacts and the litigation are insuffi cient to give rise to specific jurisdiction, general jurisdi ction will be
available where the defendant's contacts unrelated to the litigation are "continuous and systematic." Helicop teros Nacionales de Colombia v. Hall, 466 U.S. 408, 416 ( 1984).

While FCFC exports its products to the United State s, it is undisputed that it has no personnel or facilitie s here and there is no evidence that it has in any way adverti sed or solicited business here. As a result there is simpl y no basis for concluding that it has a continuous presence in the
United States.

Contrary to BP's suggestion, FCFC's relationship wi th FPG and its chairman, Mr. Wang, does not provide th e 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 agent s, and

13the fact that FCFC leased software from Nan Ya, ano ther

FPG affiliate, is not a sufficient basis on which t o pierce the corporate veil and assert jurisdiction over FCFC on the
basis of the United States contacts of other FPG af filiates. See Cohn v. Insurance Co., 54 F.3d 1108, 1116 (3d C ir. 1995) ("party seeking to pierce corporate veil must establish that controlling corporation wholly ignored separat e status of controlled corporation and so dominated and cont rolled its affairs that separate existence is a mere sham" ). Moreover, FCFC's passive ownership of 3.5% of the s tock of a Delaware corporation cannot constitute the kind o f continuous and systematic business contacts that gi ve rise to general jurisdiction. See Shaffer v. Heitner , 4 33 U.S. 186, 213 (1977); Grimes v. Vitalink Communications Corp. , 17 F.3d 1553, 1559 (3d Cir. 1994). Finally, the fact t hat FCFC
has entered into four other recent contracts for th e purchase of chemical technology, two of which invol ved FCFC personnel traveling to the United States for t raining, 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 ba sis for general jurisdiction). Even considering the cumulat ive effect of these various contacts together, the requirement s for general jurisdiction are not met.

II.

"In order to obtain a preliminary injunction, the m oving party must show (1) irreparable injury, (2) a reaso nable probability of success on the merits, (3) the harm to it outweighs the possible harm to other interested par ties, and (4) harm to the public." Frank Russell Co. v. W ellington 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 demonst rated both imminent and irreparable injury and a likeliho od of
success on the merits.

A.

We find that the record supports the District Court 's conclusion that an injunction was necessary to prev ent

14imminent and irreparable harm. The District Court d id not

clearly err in crediting BP's witness who testified as to the damage that would be done to BP's reputation, credi bility and ability to license its technology if FCFC's pla nt became operational, giving rise to the public perception t hat BP was unable to protect its proprietary trade secrets. Su ch 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 (11t h Cir. 1991) (holding that injury to goodwill is irreparab le). Moreover, although the evidence suggests that FCFC' s plant would not have become operational for at least a ye ar after the injunction was issued, the history of the insta nt proceedings belies JOC's unsupported assertion that a year was ample time to obtain a trial on the merits in T aiwan in the event that the equipment were allowed to leave this country. See Geritrex Corp. v. Dermarite Indus., LL C, 910 F. Supp. 955, 966 (S.D.N.Y. 1996); Wright et al., Fede ral Practice and Procedure S 2948.1, at 139 (2d ed. 199 5) (explaining that imminence requires that the harm w ill 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, In c. v. Amoco Chems. Corp., 614 F.2d 351, 359 (3d Cir. 1980 ). Finally, the District Court's finding that any dela y on BP's part in filing suit "was caused by BP's conscientio us decision to fully investigate the very serious char ges before filing suit" is not clearly erroneous. BP Chems., L td. v. Formosa Chem. & Fibre Corp., No. 97-cv-4554, at 41 (D.N.J. Sept. 15, 1998). To the extent that delay can justi fy 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 inves tigate an infringement" or to determine how serious an infrin gement 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

15Jersey had the most significant relationship with t he 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 Jers ey courts are committed:

One who discloses or uses another's trade se cret without a privilege to do so is liable to th e other if . . . (c) he learned the secret from a third perso n 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 (3 d Cir. 1982) (holding that New Jersey has substantially ad opted Restatement section 757(c)).

JOC does not dispute, as we understand it, that New Jersey courts follow this rule.3 It stresses, howev er, that

___________________________________________________ ______________

2. FCFC and JOC argued before us, under appropriate argument headings, that BP had not shown a likelihood of suc cess 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 t o FCFC. Both briefs (see FCFC's opening brief at 50 and JOC's opening b rief at 17-18) took the position that, contrary to the ruling of the Di strict Court, both of these issues are governed by Taiwanese law. FCFC's brief cited authority in support of this position, and JOC expressly inco rporated that authority. Having considered the conflicts of law i ssues 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 appr opriate 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 t he facts of this case, asserting that JOC did not have notice that FCFC ha d discovered the secret by improper means at the time it learned the secret from FCFC,
and that therefore Restatement section 758 rather t han section 757 applies. Section 758 governs where the defendant do es not have notice that the third party who disclosed the secret obtai ned it by improper

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

. . . the determinative law is that of the state wi th 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. Di v. 1992) ("[C]hoice of law decisions can and should be made on an issue-by-issue basis, and thus the law of dif ferent states can apply to different issues in the same ca se.); see also Restatement (Second) of Conflict of LawsS 145, S145 cmt. d. JOC points out that in addition to issues r egarding its knowledge and conduct, the likelihood of BP's s uccess on its claim depends on whether it can establish (1 ) that it had a protectable interest in its proprietary infor mation -- i.e., a "trade secret" (and, in particular, that Mo nsanto and CPDC took the requisite security measures to protec t the methanol carbonylation technology) and (2) that FCF C tortiously acquired BP's trade secret (and, in part icular, 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 b e undisputed that New Jersey law governs the issues o f JOC's knowledge and conduct, this does not necessar ily signify that New Jersey law -- as opposed to Taiwan ese law -- applies to the two additional issues necessary t o BP's case against JOC.

JOC has tendered affidavits tending to show that Taiwanese law governing the protectability of comme rcially
valuable information and what constitutes a tortiou s

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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 re ceiving notice "he has

so changed his position that to subject him to liabili ty would be inequitable." Id. S 758(b). JOC argues that its sub stantial investment of time and money in the manufacturing process thus pr ecludes liability.
The events from which the District Court inferred n otice, however, all occurred prior to JOC's entering into its contract with FCFC. Thus, sections 757 and 758 do not differ in any respect t hat is relevant to the issue before us in this appeal.

17conversion of such a protectable interest is differ ent from,

and more difficult for BP than, the New Jersey law governing those issues. As to the issue of protecta bility, the affidavits indicate, for example, that "[a] single unprotected disclosure [by either BP, Monsanto, CPDC or other Monsanto licensees] of the secret terminates its tr ade secret status immediately (like a needle hits a balloon)," (A. 6024), and that "BP is required to show that CPDC actuall y took steps to safeguard the information," (A. 1046 (emph asis added)). As to the issue of whether FCFC tortiously acquired the information from Tu, the affidavits in dicate

that:

BP is required to show that CPDC actually en tered into a confidentiality agreement with Mr. Tu. The re must be evidence that Mr. Tu was put on notice or in structed
as to what materials he should consider conf idential. Under Taiwanese law, corporate obligations d o not attach to a corporation's employee. The empl oyee has to be subject to [sic] specific agreement or clear instructions as to exactly what he was requi red to keep
confidential.

(A. 1046).

We recognize that BP has tendered conflicting affid avits tending to show that JOC's affidavits do not accura tely
characterize Taiwanese law and that Taiwanese and N ew Jersey law are the same as to these issues. It is e nough for present purposes, however, to find that there is re cord evidence that, if believed, would support a finding that
there are relevant differences in the laws of the t wo sovereigns that the parties claim to be governing. This requires us to determine whether Taiwan or New Jers ey has the more substantial interest in determining:

(1) whether proprietary information licensed by its purported owner for use in Taiwan was protec table and whether at the time of its alleged conversio n in Taiwan it had been returned to the public domain; a nd

(2) whether FCFC's acquisition of the allege d trade secret in Taiwan was wrongful.

In both instances, we conclude based on the current record
that Taiwan had the more substantial interest in ha ving its

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

law in a case like this.

We believe Taiwan has the greater interest in setti ng the standards regarding whether information that has be en licensed by a British company to a Taiwanese compan y has been sufficiently safeguarded to warrant legal prot ection or whether it has entered the Taiwanese public domain. This issue implicates policy judgments regarding the app ropriate 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 h as profound implications for the health of the Taiwane se economy. New Jersey's interest, on the other hand, would appear to be virtually nil. As we have previously p ointed out, BP, the purported owner of the trade secret, i s not a resident of New Jersey and, while it may suffer som e marginal injury there, New Jersey is assuredly not the principal situs of either the direct or the indirec t injury inflicted.4 Moreover, we are doubtful that a New Je rsey court would apply New Jersey law even if BP were a New Jersey corporation. A state's interest in protectin g its citizens from injury by protecting intellectual pro perty which they choose to license to foreign companies c annot outweigh the interests of the foreign sovereign in setting the standards for the protection of intellectual proper ty within its own borders. Cf. O'Connor, 605 A.2d at 775.

The New Jersey Superior Court's decision in O'Conno r is instructive. There, a New Jersey resident was injur ed in Virginia. The injuries were allegedly caused by bot h 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 n egligence

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4. As we have previously pointed out, Great Britain , where BP is domiciled, is the principal situs of the injury all eged by BP. However, as we point out below, conventional choice of law doct rine ordinarily does not give great weight to the place of injury in cas es, 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.

19or 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 citizen s is also legitimate, but it cannot exempt them from o ther states' law setting standards for local cond itions and conduct. If New Jersey's comparative neglige nce doctrine followed [the plaintiff] [i]nto. . . Virginia, it would follow her into every other state as w ell, and would supplant local liability rules whereve r she went. That would be an impermissible intrusion int o the
affairs of other states.

Id.; cf. Restatement (Third) of the Foreign Relatio ns Law of the United States SS 402, 403 (1987) (discussing ba ses of and limitations on the jurisdiction to prescribe la w 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 havin g its law applied to determine whether FCFC, a Taiwanese company, acted tortiously in acquiring information in Taiwan from CPDC, another Taiwanese company, and, i n 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 eco nomy, and any interest that New Jersey would have in prot ecting trade secret holders who export their intellectual property to Taiwan is greatly outweighed by Taiwan's interes t in setting the standards that govern the conduct of it s own citizens regarding intellectual property that is pr esent
within its borders.

The conclusion that Taiwan's interest in both of th ese issues is greater than New Jersey's finds further s upport in the Restatement (Second) of Conflict of Laws , to w hich 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 suggest s that

20the 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, pl ace of incorporation and place of business of the p arties, 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 inte rest is entitled to legal protection, "the applicable law w ill usually be the local law of the state where the injury occu rred," id. S 158 (emphasis added), the Restatement qualifies t his rule, stating:

"[s]ituations do arise, however, where the p lace of injury will not play an important role in th e selection of the state of applicable law. . . . This will . . . be so when . . . there may be little reason in log ic or persuasiveness to say that one state rather than another is the place of injury, or when, suc h as in the case of multistate defamation, injury has oc curred in

two or more states.

Id. The Restatement further states that"the place o f injury is less significant in the case of . . . such unfai r competition as consists of false advertising and the misappropr iation of

trade values." Id. S145 cmt f. The Restatement's explanation for the unimportance of the place of in jury in cases of misappropriation of trade values is direct ly applicable here:

The injury suffered through false advertisin g is the loss

of customers or of trade. Such customers or trade will frequently be lost in two or more states. Th e effect of the loss, which is pecuniary in its nature, will normally

21be felt most severely at the plaintiff's hea dquarters 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 va lues 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 import ant 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 usuall y 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 t o these
two issues occurred in Taiwan.5 BP licenced the tra de
secrets to CPDC in Taiwan. To the extent that BP an d CPDC took measures to safeguard those secrets in CP DC's hands, those measures were taken in Taiwan. FCFC acquired whatever information it acquired in Taiwan
, designed its plant in Taiwan, prepared the bid pack ages 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, wh ich by itself weighs against the application of Taiwane se law, both have established significant relationships wit h Taiwan, BP by licensing its technology to a Taiwanese compa ny and JOC by maintaining agents in Taiwan for the purpose of soliciting Taiwanese business. These relationships are centered in Taiwan, and these relationships gave ri se to the
events that are at issue here.

We hold that Taiwan has the greater interest in hav ing its

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5. Although BP has alleged misconduct occurring in New Jersey, namely JOC's fabrication of equipment using misappropriate d technical specifications, this conduct has no relevance to ei ther of the issues regarding which JOC asserts that Taiwanese law appl ies.

22law govern the issues of whether BP had a protectab le

interest in the information licensed to CPDC and wh ether FCFC acted unlawfully in acquiring it. Therefore, t o the
extent that there is a conflict of law on these iss ues, Taiwanese law should govern.

As we have previously noted, there is evidence in t he current record that, if believed, would support a c onclusion that Taiwanese and New Jersey law do not differ in any respect material here. The District Court had no oc casion to resolve the conflict presented in the affidavits be fore it because it erroneously concluded that New Jersey la w governed all issues. While we conclude that we are authorized to resolve that conflict, see Fed. R. Ci v. Proc. 44.1 (the content of foreign law is an "issue of la w"); Franzen v. Equitable Life Assurance Soc'y, 33 A.2d 599, 602 (N.J. 1943) (same), we believe the District Court i s in the best position to determine what at this point is es sentially a credibility issue -- i.e., which expert to believ e. The District Court will thus be required to determine h ereafter
whether Taiwanese law differs from that of New Jers ey. 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 contex t, it will have discretion to supplement the existing record w ith 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); Fran zen, 33

A.2d at 602.

III.

We will reverse the District Court's order of May 1 4, 1999, and direct that it: (a) dismiss FCFC for want of personal jurisdiction, and (b) conduct further proc eedings with respect to BP's claim against JOC in a manner consistent with this opinion.6

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6. Because we are setting aside the injunction ente red by the District Court and remanding for further proceedings, we nee d not address the question, posed by BP's cross-appeal, whether the D istrict Court erred in limiting the duration of the injunction to thirty m onths.

23ALITO, Circuit Judge, concurring in the judgment:

Except with respect to the comments below, writing separately in this case would not serve a useful pu rpose. 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 . . . w ill 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