IPOX Schuster, LLC v. Nikko Asset Management Co.
191 F. Supp. 3d 790
N.D. Ill.2016Background
- IPOX, a Delaware LLC based in Chicago, develops proprietary IPO benchmark indexes and owns the registered U.S. IPOX trademark.
- IPOX offered data licenses (research-only) and product licenses (for creating investable products); Nikko inquired and requested a data license but never executed one.
- Lazard engaged IPOX for a free trial and discussions; Nikko launched the Nikko US Growing Venture Fund (managed by Lazard) allegedly using IPOX’s index, branding, and proprietary information without a paid product license.
- IPOX sued Nikko and Lazard asserting claims including Illinois common-law misappropriation, ITSA violation, Lanham Act trademark infringement and false designation/false advertising, IDTPA and dilution claims, and alternate contract/unjust enrichment claims.
- Nikko moved to dismiss for lack of personal jurisdiction (12(b)(2)) and for failure to state claims (12(b)(6)); the court denied the jurisdictional motion, dismissed only the Lanham Act §1125 count (false designation/advertising) for failure to allege consumer reliance, and otherwise denied dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Nikko | Nikko purposefully directed conduct at Illinois by initiating communications with IPOX, knew IPOX was in Illinois, and used IPOX’s mark/reputation causing injury in Illinois | Nikko's contacts (pre-tort correspondence and response to cease-and-desist) are insufficient; the fund was marketed only in Japan | Court: Specific jurisdiction exists — Nikko’s targeted communications and use of IPOX’s goodwill in Illinois suffice to establish minimum contacts |
| ITSA preemption of common-law misappropriation and unjust enrichment | IPOX: claims include misuse of trademark, reputation, and non-confidential assets so not wholly preempted | Nikko: ITSA preempts all non-contract claims based on misappropriation of confidential information | Court: ITSA preempts claims based solely on misappropriation of confidential info, but IPOX plausibly alleges non-confidential harms (trademark, goodwill) so counts survive |
| Extraterritorial reach / Lanham Act effect on U.S. commerce | IPOX alleges Nikko’s marketing materials (internet-accessible) used IPOX mark and affected U.S. commerce; IPOX suffered injury in Illinois | Nikko: Fund was marketed only in Japan; no effect on U.S. commerce or use in U.S. | Court: At motion-to-dismiss stage, allegations are sufficient to state Lanham Act infringement claim (§1114); factual disputes inappropriate for 12(b)(6) disposition |
| Lanham Act §1125 (false designation/false advertising) — reliance/damages | IPOX pleaded confusion and injury from false designation/advertising | Nikko: IPOX failed to allege actual consumer reliance causing damages | Court: IPOX conceded it did not plead consumer reliance; count 4 dismissed for failure to state a claim |
Key Cases Cited
- Mobile Anesthesiologists Chi., LLC v. Anesthesia Assocs. of Houston Metroplex, P.A., 623 F.3d 440 (7th Cir.) (discusses personal jurisdiction and limits on jurisdictional contacts)
- Tamburo v. Dworkin, 601 F.3d 693 (7th Cir.) (standards for minimum contacts and purposeful availment)
- Walden v. Fiore, 134 S. Ct. 1115 (U.S.) (plaintiff's forum connections alone cannot establish defendant's forum contacts)
- Spitz v. Proven Winners N.A., LLC, 759 F.3d 724 (7th Cir.) (ITSA preemption of conflicting state-law claims based on misappropriation of confidential information)
- Steele v. Bulova Watch Co., 344 U.S. 280 (U.S.) (Lanham Act extraterritorial application principles)
- Morrison v. National Australia Bank Ltd., 561 U.S. 247 (U.S.) (extraterritoriality is a merits question, not jurisdictional)
- Minn-Chem, Inc. v. Agrium, Inc., 683 F.3d 845 (7th Cir.) (treatment of extraterritoriality and Rule 12(b) distinctions)