UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

FORD MOTOR COMPANY, a Delaware 

corporation, and FORD GLOBAL 

TECHNOLOGIES, LLC, Delaware 

Limited Liability Company, 

Plaintiffs and 

Counterclaim Defendants, 

v. 

AUTEL US INC, a New York corporation, 

and AUTEL INTELLIGENT 

TECHNOLOGY CO., LTD, a Chinese 

corporation, 

Case No. 14-13760 

Hon. Terrence G. Berg 

Defendants and 

Counter Claimants, 

v. 

LAUNCH TECH CO. LTD, a Chinese 

corporation, 

INNOVA ELECTRONICS, CORP., a 

California corporation, and IEON CHEN, 

an individual, 

Counterclaim Defendants. 

OPINION AND ORDER GRANTING IEON CHENS’ AND LAUNCH TECH 

CO. LTD’S MOTIONS TO DISMISS FOR LACK OF PERSONAL 

JURISDICTION (DKTS. 57 and 65) 

I. INTRODUCTION 

In this this action alleging trade secret misappropriation and trademark and 

copyright infringement, Ford claims that Autel obtained access to Ford’s proprietary 

automobile-diagnostic software, hacked it, copied proprietary information, and 

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pasted that information into Autel’s own diagnostic software.1 Autel denies the 

allegations, and contends in response that Counterclaim Defendants Launch Tech 

Co. Ltd,2 Innova Electronics, and Ieon Chen teamed up with Ford to craft and spread 

Ford’s allegations to damage Autel’s position in the marketplace—in essence to take 

out the competition. Third Party Defendants Chen and Launch have moved to dismiss 

the case against them on the ground that the Court lacks personal jurisdiction over 

them. Because Autel has failed to present a prima facie case that the Court has 

personal jurisdiction over Chen and Launch, Chen’s and Launch’s motions are 

GRANTED and Autel’s claims against them are DISMISSED WITHOUT 

PREJUDICE. 

II. BACKGROUND 

Chen is the CEO of Innova, a Nevada corporation. Dkt. 57, Pg. ID 1595. He lives 

in California. Dkt. 57, Pg. ID 1595. He does no business in Michigan and has not 

entered into any contracts here. Dkt. 57, Pg. ID 1595. Twice, in connection with this 

matter, Chen affirmatively contacted a Michigan resident by email. On August 23, 

2013, Chen emailed Colin Fielding at Bosch Automotive. Dkt. 57, Pg. ID 1595. And 

on October 3, 2013, Chen emailed Ken Dornoy of Ford. Dkt. 57, Pg. ID 1596. Both 

emails concerned information Innova had obtained relating to Ford’s diagnostic 

 

1 Throughout this Order, the Court refers to both Ford entities as “Ford” and to both 

Autel entities as “Autel.”

2 Originally Autel sued two “Launch” entities: Launch Tech Co. Ltd. (a Chinese 

corporation) and Launch Tech, Inc. (a California corporation). Autel then dismissed 

Launch Tech, Inc., so only Launch Tech Co. Ltd. remains a party. Throughout this 

Order, the Court refers to “Launch Tech Co. Ltd.” as simply “Launch.”

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software and Autel’s diagnostic software. These emails set off a series of 

communications between Chen and Ford’s lawyers, who are located in Utah. Dkt. 57, 

Pg. ID 1597. 

Launch is a Chinese corporation headquartered in Shenzhen, China. Dkt. 65, 

Pg. ID 1838. It manufactures automotive diagnostic tools and sells them throughout 

the world using third-party distributors. Dkt. 65, Pg. ID 1838. In the United States, 

Launch sells to two third-party distributors, Matco Tools and Launch Tech, Inc. 

Dkt. 65, Pg. ID 1838. Launch Tech, Inc. is a California corporation. Launch Tech, Inc. 

is not a subsidiary of Launch; their relationship is that of customer and vendor. 

Dkt. 65, Pg. ID 1839. Launch does no business in Michigan. Dkt. 65, Pg. ID 1839. It 

has neither offices nor employees here, owns no property here, has no bank accounts 

here, and neither ships nor sells here. Dkt. 65, Pg. ID 1839. 

Autel alleges that Launch asked Chen to establish an ongoing relationship with 

Ford and that Launch supplied information to Chen that Chen then relayed to Ford. 

Dkt. 38, Pg. ID 814. Autel further alleges that the information Launch supplied 

included a false claim: that Autel used a program called PARSEALL.EXE to hack 

Ford’s diagnostic software. Dkt. 38, Pg. IDs 814-815. And Autel alleges that Launch, 

Chen, and Ford knew or should have known that the PARSEALL.EXE hacking claim 

was false. Dkt. 38, Pg. ID 815. 

Chen and Launch filed their motions to dismiss in September of 2016. Dkts. 57, 

65. Autel opposed both motions. Dkts. 69, 75. Following full briefing, the Court held 

oral argument on November 30, 2016. 

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III. ANALYSIS 

Chen and Launch argue that this Court lacks both general and specific 

jurisdiction over them. Dkt. 57, Pg IDs 1601-1615; Dkt. 65, Pg. IDs 1844-1849. Autel 

concedes that this Court lacks general jurisdiction, but maintains that it has specific 

jurisdiction over them. Dkts. 69, 75. 

A. Standard of Review. 

A federal court’s exercise of jurisdiction over litigants must be both “(1) authorized 

by the law of the state in which it sits, and (2) in accordance with the Due Process 

Clause of the Fourteenth Amendment.” Neogen Corp. v. Neo Gen Screening, Inc., 

282 F.3d 883, 888 (6th Cir. 2002). Michigan’s long-arm statute, Mich. Comp. Laws 

§§ 600.715 (corporations) and 600.705 (individuals), governs issues of personal 

jurisdiction and gives the “maximum scope of personal jurisdiction permitted by the 

due process clause of the Fourteenth Amendment.” Chrysler Corp. v. Fedders Corp., 

643 F.2d 1229, 1236 (6th Cir. 1981). Accordingly, if jurisdiction is proper under the 

Fourteenth Amendment, it is also proper under Michigan's long-arm statute. 

Due process is satisfied if a defendant has “sufficient minimum contacts” with the 

forum state “such that the maintenance of the suit does not offend traditional notions 

of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 

(1945) (citation omitted). “But the plaintiff cannot be the only link between the 

defendant and the forum. Rather, it is the defendant's conduct that must form the 

necessary connection with the forum State.” Walden v. Fiore, 134 S. Ct. 1115, 1122 

(2014) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985)). For the 

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Court to find that it has specific personal jurisdiction over Chen and Launch, three 

factors must be met: (1) the defendant must “purposefully avail himself [or itself] of 

the privilege of acting in the forum state;” (2) “the cause of action must arise from the 

defendant's activities there;” and (3) “the acts of the defendant ... must have a 

substantial enough connection with the forum state to make the exercise of 

jurisdiction over the defendant reasonable.” Southern Mach. Co. v. Mohasco Indus., 

Inc., 401 F.2d 374, 381 (6th Cir. 1968). 

B. Analysis 

As counterclaimant, Autel bears the burden of establishing the Court’s personal 

jurisdiction over Chen and Launch. Neogen Corp., 282 F.3d at 883. Because the Court 

has not held an evidentiary hearing on this issue, Autel need only present a prima 

facie case for jurisdiction. Audi AG v. Volkswagon of Am., Inc., 341 F. Supp. 2d 734, 

741 (E.D. Mich. 2004). Autel can meet this burden by “establishing with reasonable 

particularity sufficient contacts between [the Third-Party Defendants] and the forum 

state to support jurisdiction.” Neogen 282 F.3d at 887. Thus, the Court must consider 

all affidavits and pleadings in a light most favorable to Autel. Audi AG, 

341 F. Supp. 2d at 741. Even under this favorable standard of review, Autel has not 

met its burden. 

1. Autel has not made a prima facie showing that Chen has 

purposefully availed himself of the privilege of acting in Michigan 

Purposeful availment, the “constitutional touchstone” of personal jurisdiction, 

exists where the defendant's contacts with the forum state “proximately result from 

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actions by the defendant himself that create a ‘substantial connection’ with the forum 

state,” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, (1985) (emphasis in 

original), and are such that he “should reasonably anticipate being haled into court 

there.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295 (1980). This 

requirement ensures that a defendant will not be subject to the jurisdiction of a forum 

solely as a result of “random, fortuitous, or attenuated contacts.” Burger King Corp., 

471 U.S. at 475. 

Chen argues that he has not purposefully availed himself of the privilege of acting 

in Michigan. Dkt. 57, Pg. IDs 1603-1611. Chen submits that he has never personally 

sold anything in Michigan and has never entered into any agreement with a Michigan 

resident, Dkt. 57, Pg. ID 1604, and that Autel’s counterclaims reference neither the 

two communications he affirmatively sent to Michigan nor any statements within 

those communications. Dkt. 57, Pg. ID 1605. 

Chen likens this case to the Sixth Circuit’s decision in Rice v. Karsch, where the 

Sixth Circuit affirmed a district court’s order dismissing a defendant for lack of 

personal jurisdiction in part because the only reason that the defendant’s 

communications went to the forum state was because the corporation that received 

the communications was located in the forum state. 154 F. App’x 454, 462—63 

(6th Cir. 2005). Chen argues that he did nothing to further his personal business in 

Michigan or to create continuous and substantial connections in Michigan, and that 

his email communication with Bosch US and Ford caused consequences in this forum 

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solely because those companies chose to have offices in Michigan. Dkt. 57, 

Pg. ID 1607. 

In response, Autel argues that Chen’s contact with Ford was the event that 

precipitated a series of continuous and systematic contact between the two. Dkt. 69, 

Pg. ID 1889. Autel also points to one of Ford’s interrogatory responses, where Ford 

states that it was Chen who reported that Autel hacked Ford’s software by using a 

program called PARSEALL.EXE. This one statement by Chen, Autel asserts, should 

itself be sufficient to meet the purposeful availment test. Dkt. 69, Pg. ID 1888. 

Moreover, Autel suggests that Chen sought to establish an ongoing relationship with 

Ford, conduct which would also constitute purposeful availment. Dkt. 69, Pg. ID 1889. 

Autel’s arguments are unavailing. Despite a flurry of emails between Ford’s 

lawyers and Chen, Chen initiated communication with parties in Michigan only 

twice. And nothing about those two emails shows an intention to further his 

connections in Michigan or to take advantage of privileges available to those who act 

in Michigan. Chen’s communications were directed to employees of Bosch US and 

Ford because his subject matter pertained to those companies. The only reason those 

communications arrived in Michigan is because the employees to whom Chen sent 

his emails were employed in Michigan. Bosch is headquartered in Germany, with its 

U.S. subsidiary headquartered in Michigan. And Ford is headquartered in Michigan, 

but operates in every continent except Antarctica. An employee in another state—

perhaps even in another country—could have opened Chen’s emails. What tied Chen’s 

communications to Michigan was the decision by each company to locate some of its 

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offices here and to dedicate portions of its Michigan office space to employees whose 

responsibilities included the subject of Chen’s emails: Ford’s diagnostic software. This 

connection is attenuated, random, and fortuitous; it depends on the office-location 

decisions of two corporations whose operations span the globe. 

The weakness of Chen’s connection to Michigan is further demonstrated by the 

content of his two messages. Chen did not solicit business from Bosch or Ford in 

Michigan, nor did he sell goods or services to them; he simply passed along 

information about Ford’s and Autel’s diagnostic software. Once Ford received the 

information, Ford’s attorneys reached out to Chen and commenced what became an 

ongoing dialogue. Understandably, Ford had questions. Unlike traditional cases 

where a defendant is found to have purposefully availed himself through targeting 

his communications and conduct toward the forum state, Chen’s contact with the 

forum state was not motivated by a desire to affect this forum. Chen’s purpose was to 

alert Ford to a problem and assist in solving it, not to engage in activities in Michigan 

or to have an impact here. Such conduct, alone, does not create a connection to the 

forum state so substantial that Chen would reasonably anticipate being haled into 

court here. The record does not support a finding of purposeful availment. 

2. Autel has not made a prima facie showing that Launch has 

purposefully availed itself of the privilege of acting in Michigan 

Launch’s contacts with this forum are even less substantial than Chen’s. Launch 

also argues that it has not purposefully availed itself of the privileges of acting in 

Michigan. Dkt. 65, Pg. ID 1846. According to the third-party claims, Autel merely 

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alleges that Launch contacted Chen, not Ford, Dkt. 65, Pg. ID 1847, and that Ford 

later asked Launch to provide additional information to Ford but Launch declined to 

do so. Dkt. 65, Pg. ID 1847. Launch also argues that Autel’s blanket allegation that 

“the Counterclaim Defendants” made false statements in Michigan fails to 

distinguish between the actions of each counterclaim defendant and does nothing to 

demonstrate purposeful availment by Launch itself. Dkt. 65, Pg. IDs 1847-1848. 

Autel responds that emails and other documents obtained in discovery and Ford’s 

interrogatory responses demonstrate that Launch asked Chen to establish an ongoing 

relationship with Ford and that Launch supplied information to Chen that Chen then 

relayed to Ford. Dkt. 75, Pg. IDs 2450-2451. Accordingly, Autel argues, what matters 

is that Launch intended the information it gave to Chen to be delivered into Ford’s 

hands. Dkt. 75, Pg. ID 2452. 

These responses fail to demonstrate purposeful availment. As previously 

explained, a communication that simply conveys information and is made generally 

to a multi-national corporation does not create a substantial enough connection to a 

particular forum to demonstrate purposeful availment of that forum’s jurisdiction. 

This is particularly so when the reason for the communication is not to develop a 

commercial relationship but rather to warn that corporation of what is believed to be 

an ongoing wrong perpetrated by another party. Launch’s connection to Michigan is 

even more attenuated than Chen’s; it initiated no direct contact with Ford and even 

refused to assist Ford when Ford asked for more information. Launch’s actions did 

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not create a connection to Michigan so substantial that Launch should have 

reasonably anticipated being haled into court here. 

Because the Court concludes that Chen’s and Launch’s conduct does not constitute 

purposeful availment, the Court lacks personal jurisdiction and their motions to 

dismiss must be granted. There is no need to discuss the other factors of the Southern 

Machine test, nor to consider Launch’s arguments on insufficient service of process 

and failure to state a claim. 

* * * 

From a review of this record, it appears to the Court that Chen and Launch were 

acting as whistleblowers. They alerted Ford to what they considered blatant copying 

of Ford’s diagnostic software. After its own investigation, Ford brought an action 

against Autel on a number of theories, including trade secret misappropriation and 

trademark and copyright infringement. This lawsuit will test the merits of those 

claims. By trying to expand this case to include these third-party defendants, 

however, Autel seeks to penalize them for blowing the whistle—roping Chen and 

Launch into Ford’s lawsuit against Autel on the theory that their sharing of 

information with Ford is proof of a purposeful effort to avail themselves of the 

jurisdiction where Ford is headquartered. To hold that out-of-state entities evoke the 

jurisdiction of this forum by alerting victims in the forum to alleged wrongdoings of 

other parties, indeed to allow the alleged wrongdoers to hale the whistleblowers into 

a far-away court to be sued—effectively punished—for reporting the misconduct, 

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would be both unreasonable and against public policy. Autel may or may not have 

valid claims against Chen and Launch for what they did, but it must bring those 

claims before a court with proper in personam jurisdiction over them. 

IV. CONCLUSION 

For the foregoing reasons, Third Party Defendant Ieon Chen’s and Third Party 

Defendant Launch’s motions to dismiss (Dkts. 57 and 65) are GRANTED. Autel’s 

claims against Chen and Launch are therefore DISMISSED WITHOUT 

PREJUDICE. 

SO ORDERED. 

Dated: February 13, 2017 s/Terrence G. Berg 

TERRENCE G. BERG 

UNITED STATES DISTRICT JUDGE 

Certificate of Service 

I hereby certify that this Order was electronically submitted on February 13, 

2017, using the CM/ECF system, which will send notification to all parties. 

 s/A. Chubb 

Case Manager 

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