protections of the forum state’s law; (2) the claim arises out of defendant’s specific contacts with the
forum state; and (3) the exercise of jurisdiction is reasonable. Euromarket Designs, 96 F.Supp.2d at
833. As discussed below, Swanky Partners lacks minimum contacts and purposeful availment with
Ulinois. Thus, we need not address the latter two requirements.

Minimum Contacts and Purposeful Availment

A defendant has minimum contacts when a plaintiff shows that the defendant “reasonably

anticipated being haled into court” in the forum state. Burger King Corp. v. Rudzewicz, 471 U.S.
462, 474 (1985). Furthermore, a defendant may expect to be haled into court if he “purposefully
avails” himself of the “privilege of conducting activities within the forum state, thus invoking the
benefits and protections of its laws.” Jd. at 475.

Donmar argues that Swanky Partners established minimum contacts in two ways. First,
Donmar claims that Swanky Partners subjected itself to Illinois jurisdiction by committing a tort
within its boundaries under the effects doctrine. Second, Donmar claims that Swanky Partners could
have established minimum contacts by maintaining an Internet web site under the sliding scale test of
Internet activity. We analyze these arguments in turn below.

a. Effects Doctrine

The Illinois long arm statute provides a list of specific actions that will authorize the
jurisdiction of Illinois courts. One such act is the “commission of a tortious act within this state.”
735 ILCS 5/2-209(a)(2). Donmar asserts that since Swanky Partners has committed a tort within
Illinois (trademark infringement), it is subject to the jurisdiction of Llinois courts under the effects
(or last act) doctrine.

The effects doctrine provides that personal jurisdiction over a defendant is proper when the
defendant’s intentional, tortious acts are expressly aimed at the forum state and they cause harm to

the plaintiff, which harm the defendant knows is likely to be suffered. Euromarket Designs, 96

4


residents of Illinois. Since the level of Swanky Partners' conduct is minimally interactive and
commercial, the exercise of personal jurisdiction would not be proper.
IV. CONCLUSION
For the foregoing reasons, Swanky Partner’s motion to dismiss for lack of personal

jurisdiction is granted.

It is so ordered. Ve

~~ MARVIN E. ASPEN
United States District Judge

Dated & i gfe —


Internet web site. Thus, there are no regular, continuous, or systematic contacts to confer general
jurisdiction.

Second, in the absence of general jurisdiction, a court can acquire specific jurisdiction over a
non-resident defendant when the claim ariscs from or is related to the defendant’s contacts with the
forum. Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945). Because Swanky Partners’ only relevant
contacts with Illinois concern the maintenance of an Internet web site, only an analysis of specific
jurisdiction is appropriate here.

To establish a prima facie case for specific personal jurisdiction in federal question cases a
plaintiff must show (1) that the assertion of jurisdiction does not violate due process requirements
(characterized as “traditional notions of fair play and substantial justice”) and (2) that the defendant
is amenable to process. See, e.g., Watchworks, Inc. v. Total Time, Inc., 2002 WL 424631 (N.D.IIL.
2002). We address these elements in reverse order.

A. Amenability To Service

Federal Rule of Civil Procedure 4(k) states that a defendant is amenable to service when
authorized by statute or when the defendant is subject to the forum state’s long arm statute, thereby
conferring personal jurisdiction. As the Lanham Act does not provide for national service of process,
the court must look to the Hlinois long arm statute to determine if the defendant is amenable to
process. LFG, LLC v. Zapata Corp., 78 F.Supp.2d 731, 734 (N.D.IIl 1999). Because Illinois
authorizes personal jurisdiction to the maximum extent allowed by the Illinois and federal
constitutions, this inquiry collapses into the due process inquiry below. See, e.g., Euromarket
Designs, Inc. v. Crate & Barrel Ltd., 96 F.Supp.2d 824, 833 (N.D.IIl. 2000); 735 ILCS 5/2-209(c).

B. Due Process
Federal due process requirements are met when (1) the defendant has sufficient minimum

contacts with the forum state such that he has purposefully availed himself of the benefits and

3


F.Supp.2d at 834, However, the Seventh Circuit has clearly drawn a line between the commission of
a tort affecting interests in Illinois and the commission of a tort that merely inflicts economic injury
in Illinois. See, e.g., Turnock, 816 F.2d at 334-35. “An Illinois court does not acquire jurisdiction
under the last act doctrine simply because an economic loss is felt in Illinois when all the conduct
contributing to the injury occurred outside Illinois.” /d. (citing Green v. Advance Ross Electronics
Corp., 427 N.E.2d 1203, 1206 (1981)). Cases allowing specific personal jurisdiction over a non-
resident defendant for the commission of a tort are limited to instances where there is an additional
entrance into the forum or intentional injury. See also Lifeway Foods, Inc. v. Fresh Made, Inc., 940
F.Supp. 1316, 1319 (N.D.IIl. 1996); Indianapolis Colts, Inc. v. Metro. Baltimore Football Club, Ltd.,
34 F.3d 410, 412 (7" Cir, 1994).

Here, Swanky Partners has conducted all activity outside of Illinois. Other than the
maintenance of a web site (which cannot be said to have been “aimed at the forum state”), there is no
evidence of any contacts with Illinois. Furthermore, the injury alleged by plaintiff is purely
economic and thus is not enough to allow the effects doctrine to confer personal jurisdiction,
Donmar has not disputed any of the above assertions. Thus, given the fact that Swanky Partners had
no additional entrance into Illinois, had no reason to know its actions would cause suffering in
Ulinois, and has mercly caused economic injury, the effects doctrine does not confer personal
jurisdiction.

b. Sliding Scale Test for Internet Activities

The only possible “contact” Defendant has with Illinois is a web site, so we next consider the
Internct based claim for personal jurisdiction. While the Seventh Circuit has not addressed Internet
claims for personal jurisdiction, we find the “sliding scale” framework set forth in Zippo
Manufacturing Company v. Zippo Dot Com. Inc., 952 F.Supp. 1119, 1123-24 (W.D.Pa. 1997), to be

instructive. See also Euromarket Designs, 96 F.Supp. 2d at 836. The sliding scale framework

5


Minute Order Form (06/97)

United States District Court, Northern District of IHinois

Aa

4 ros aloe Judge Marvin Aspen Sitting Judge if Other
01 trate Judge than Assigned Judge
dase NUMBER 02 C 1482 DATE 8/19/2002

CASE Donmar, Inc. vs. Swanky Partners, INc.
TITLE
{In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: ‘of the motion being presented. ]
n 3
DOCKET ENTRY:
qa Oo Filed motion of [ use listing in “Motion” box above.]
(2) o Brief in support of motion due
(3) o Answer brief to motion due. . Reply to answer brief due
(4) a Ruling/Hearing on set for at
(5) a Status hearing{held/continued to] [set for/re-set for] on set for _at_
(6) a Pretrial conference[held/continued to] [set for/re-set for] on set for at
(ea) o Trial{set for/re-set for] on at
(8) oO [Bench/Jury trial] [Hearing] held/continued to at
(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OOFRCP4(m) O Local Rule 41.1 CFRCP41(a)(1) OO FRCP41(a)(2).

ao) [Other docket entry] Enter Memorandum Opinion and Order: Swanky Partner’s motion to dismiss

(8-1) for lack of personal jurisdiction is granted. Any pending motions are moot. The ruling date of

8/29/02 is stricken.
(1) wf [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required.
‘4 sumber of notices:

Document
Number

V | Notices mailed by judge’s staff.

AUG 20 2002

Notified counsel by telephone. darefdockered

|_ Docketing to mail notices.

Mail AO 450 form, eee Adige dots
Copy to judge/magistrate judge. Lobes
s/1972002
date mailed notice
courtroom Couey
GL deputy’s ae a
initials :
Date/time received in ; ;
_central Clerk's Office railing deputy initials



divides Internet activity into three categories: (1) those in which the defendant clearly transacts
business in foreign jurisdictions over the Internet; (2) those in which the defendant operates an
interactive web site that allows defendant and potential customers in foreign jurisdictions to
communicate regarding defendant’s goods or services; and (3) those in which a defendant has posted
information on the Internet but has no further communication with potential customers via the
Internet. Jd.

Courts generally exercise personal jurisdiction over defendants maintaining web sites that
actively do business over the Internet. /d. In general, courts do not exercise jurisdiction over merely
passive web sites. Jd. However, for web sites that are interactive but do not conduct business, a
court must “examine the level of interactivity and commercial nature of the exchange of information
that occurs on the web site.” Zippo Mfg. Co., 952 F.Supp. at 1123-24. Only an additional entrance
into the forum suffices to confer personal jurisdiction in category three cases. See Transcraft Corp.
v. Doonan Trailer Corp., 45 U.S.P.Q.2d 1097, 1103 (N.D.II1.1997).

Swanky Partners concedes that their web site falls into category two. Here, Swanky Partners
does not transact business over the Internet. While customers may join a mailing list and receive
driving directions from the web site, out-of-state residents are immediately removed from the mailing
list, and the site only provides driving directions from locations within Atlanta. Def. Brief at 2.
Furthermore, Swanky Partners’ motion and exhibits demonstrate that it has no affiliations with
Illinois whatsoever. Swanky Partners has no business address, telephone, or mailing address in
Illinois. None of its suppliers operate out of Illinois, and none of its advertisements are distributed
outside of Atlanta. Donmar has failed to controvert this testimony and has furthermore failed to
provide evidence of any additional entrance into Illinois. Clearly the quality and nature of

Defendant’s Internet conduct is not designed to target any out-of-state residents, let alone the


UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
DONMAR, INC. )
Plaintiff, )
v. } No, 02 C 1482
SWANKY PARTNERS, INC. }
Defendant. } \ acarita

ago 7002
MEMORANDUM OPINION AND ORDER By

MARVIN E. ASPEN, Scnior Judge:

Plaintiff Donmar, Inc. (“Donmar”) filed a complaint against Defendant Swanky Partners, Inc.
(“Swanky Partners”), alleging trademark infringement and unfair competition under the Lanham Act.
Donmar also alleged unfair competition, trademark infringement, and consumer fraud under the
Illinois Uniform Deceptive Trade Practices Act. Swanky Partners has filed a motion to dismiss for
lack of personal jurisdiction. For the reasons stated below, the motion to dismiss is granted.

I, FACTUAL BACKGROUND

The following facts are adopted from Donmar’s complaint and the uncontested jurisdictional
facts asserted by Swanky Partners and are assumed to be true for purposes of this motion. Donmar,
an Illinois corporation, owns and operates the “Leopard Lounge,” a nightclub located in the
Bucktown ncighborhood of Chicago, Illinois since 1996. The “Leopard Lounge” provides bar and
restaurant services at its single location. Donmar has registered the “Leopard Lounge” trademark in
connection with its bar and restaurant services. According to Donmar, the Leopard Lounge is well
known throughout the Chicago area and the United States as an exciting and unique nightspot.

In December 1997, Swanky Partners, a Georgia corporation, opened a nightclub also named

the “Leopard Lounge” in Atlanta, Georgia. In carly 1998, Swanky Partners registered the domain

| 24)


name “leopardlounge.com’” and posted a passive advertisement for the Atlanta nightclub on its web
site. Until October 1998, this site allowed no interaction between users and the host computer.
Thereafter, however, the site allowed users to sign up for a mailing list and receive driving directions
from locations within Atlanta. Out-of-state residents were intentionally removed from the mailing
list because Swanky Partners wished to target only persons within driving distance.

During 1998, one of Swanky Partners’ former partners visited the Chicago Leopard Lounge
on a personal vacation and left his business card as a social gesture. This is Defendant’s only known
contact with Illinois, other than the maintenance of a web sitc. Donmar became aware of the Georgia
Leopard Lounge because of this visit.

Three years later, Donmar discovered that the domain name was registered to Swanky
Partners and now alleges customer confusion over the affiliation of the two establishments. These
events prompted Donmar to seek redress for the alleged infringement of its “Leopard Lounge”
trademark.

Il. ANALYSIS

A motion to dismiss under Rule 12(b)(2) based on lack of personal jurisdiction requires the
court to accept the allegations in the plaintiffs complaint as true, as it must accept any uncontested
jurisdictional facts presented by the defendant as true. Turnock v. Cope, 816 F.2d 332, 333 (7" Cir.
1987). While all factual disputes must be resolved in the plaintiffs favor, the plaintiff has the burden
to establish a prima facie case for personal jurisdiction. RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d
1272, 1276 (7" Cir. 1997).

A federal court can acquire personal jurisdiction over a non-resident defendant in one of two
ways. First, general jurisdiction is proper if the defendant has regular, continuous, and systematic
contacts with the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408,

414-16 (1984). Here, Swanky Parnters has no contact with Illinois other than the maintenance of an

2