Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 1 of 19 PageID #:7287
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`
`
`
`
`
`
`
`
`
`No. 1:19 CV 02648
`Hon. Marvin E. Aspen
`
`
`
`
`)
`
`PHILIPS MEDICAL SYSTEMS
`)
`(CLEVELAND), INC., and PHILIPS MEDICAL
`)
`SYSTEMS DMC, GmbH
`
`)
`
`
`
`)
`
`Plaintiffs,
`
`)
`
`
`
`)
`
`v.
`
`)
`
`
`
`)
`JOSE BUAN, GL LEADING TECHNOLOGIES,
`)
`INC., KUNSHAN YIYUAN MEDICAL
`
`TECHNOLOGY CO., LTD., KUNSHAN GUOLI )
`ELECTRONIC TECHNOLOGY CO., LTD.,
`)
`AND SHERMAN JEN,
`
`
`
`)
`
`
`
`
`
`
`
`)
`
`
`Defendants.
`
`
`
`)
`
`
`
`
`MARVIN E. ASPEN, District Judge:
`
`MEMORANDUM OPINION & ORDER
`
`
`
`This lawsuit concerns the alleged misappropriation of trade secrets. Before us are
`
`Defendants Kunshan Yiyuan Medical Technology Co., LTD. (“Yiyuan”) and Kunshan Guoli
`
`Electronic Technology Co., LTD’s (“Guoli”; collectively, “Defendants”)1 motions to dismiss
`
`Plaintiffs Philips Medical Systems (Cleveland), Inc. and Philips Medical Systems DMC,
`
`GmbH’s (collectively, “Philips” or “Plaintiffs”) Second Amended Complaint (Dkt. No. 92)
`
`(“SAC”). (Dkt. Nos. 158, 161.)2 Defendants move to dismiss pursuant to Federal Rules of Civil
`
`Procedure 12(b)(2) for lack of personal jurisdiction, 12(b)(4) for insufficient process, and
`
`
`1 The briefing also refers to Guoli as “GuoLi.”
`
` 2
`
` Also before us is Defendant Yiyuan’s motion to seal Exhibits 1, 2, and 3 of Feng Zhou’s
`Declaration. We grant this motion to seal because they relate to the Confidentiality Order’s
`designated materials of “business or strategic plans . . . price information . . . sales and financial
`data . . . other information of a competitive, financial or commercial significance.”
`(Confidentiality Order (Dkt. No. 31) ¶ 2.)
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 2 of 19 PageID #:7288
`
`12(b)(5) for insufficient service of process. (Id.) For the reasons set forth below, we deny
`
`Defendants’ motions to dismiss.
`
`BACKGROUND
`
`
`
`The following facts are taken from Plaintiffs’ Second Amended Complaint and are taken
`
`as true for the purposes of this motion. See Bell v. City of Chi., 835 F.3d 736, 738 (7th Cir.
`
`2016); see also Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008).
`
`
`
`Plaintiff Philips Medical Systems (Cleveland), Inc. is a California corporation with its
`
`principal place of business in Cleveland, Ohio. (SAC ¶ 1.) Plaintiff Philips Medical Systems
`
`DMC, GmbH, is a German entity with its principal place of business in Hamburg, Germany. (Id.
`
`¶ 2.) Plaintiffs engage in “research, development, and commercialization of medical imagining
`
`technology,” among other lines of business. (Id. ¶ 3.)
`
`
`
`Plaintiffs allege that Yiyuan is a Chinese entity with its principal place of business in
`
`Kunshan, Jiangsu Province, China. (Id. ¶ 7.) They believe that Yiyuan is engaged in research
`
`and development, manufacturing and selling products for medical imaging equipment, providing
`
`technical development, technical services and technical consultation in the field of medical
`
`imaging technology,” as well as the “import and export of goods and technologies.” (Id. ¶ 8.)
`
`
`
`Plaintiffs allege that Guoli is a Chinese entity with its principal place of business at the
`
`same location in China as Yiyuan. (Id. ¶ 9.) According to Plaintiffs, Guo Li is a stockholding
`
`enterprise specializing in developing and manufacturing electrical vacuum products, including
`
`X-ray tubes. (Id. ¶ 10.)
`
`
`
`2
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 3 of 19 PageID #:7289
`
`I.
`
`Former Employees Misappropriate Plaintiffs’ Information.
`
`A. Jose Buan
`
`
`
`Plaintiffs allege that two of their former employees, Defendants Jose Buan (“Buan”) and
`
`Sherman Jen (“Jen”), misappropriated trade secret information from Philips’ computer system to
`
`share with their new employer, Defendant GL Leading. (See, id. ¶¶ 72–83, 88–92, 96–97, 100–
`
`101.) On December 26, 2017, Buan “copied over 740 [of] Philips’ files, including trade secret
`
`and other confidential business information” onto a portable drive. (Id. ¶¶ 72, 74–77.) Plaintiffs
`
`believe that these files included, among other documents, presentations related to Philips’
`
`“2XXX X-ray Tubes and other X-ray tub products.” (Id. ¶ 73.)
`
`
`
`The following day, Buan copied more than 70 additional Philips files onto a portable
`
`drive. (Id. ¶¶ 78, 80–83.) These files included additional information pertaining to Philips’ x-
`
`ray tubs. (Id. ¶ 79.) A subsequent investigation revealed that Buan took “a trove” of additional
`
`files containing “confidential and trade secret technical and business information pertaining to
`
`the 2XXX series X-ray tubes, and other important Philips X-ray technologies, including Philips
`
`iMRC X-ray tubes.” (Id. ¶ 89.)
`
`
`
`At least one of the drives used to download the data referenced above was connected to
`
`Buan’s work computer at GL Leading. (Id. ¶ 91.) Plaintiffs believe that “additional USB
`
`devices that had been connected to Buan’s Philips Company Workstation . . . have also been
`
`connected to Buan’s work computer at GL Leading.” (Id. ¶ 92.)
`
`B. Sherman Jen
`
`
`
`By August 2017, Jen was communicating with Guoli regarding the formation of GL
`
`Leading. (Id. ¶ 51.) Plaintiffs believe that between August 2017 and December 2017, Jen was
`
`
`
`3
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 4 of 19 PageID #:7290
`
`also involved in recruiting Philips employees to join Guoli/GL Leading and sending Philips
`
`confidential information and trade secrets to Guoli/GL Leading. (Id.)
`
`
`
`Plaintiffs suspect that Jen kept “more than three thousand” of Philips’ electronic
`
`materials after he was terminated from Philips. (Id. ¶ 96 (emphasis in original).) A number of
`
`these documents’ legends indicate that they contain Philips’ confidential and proprietary
`
`information and contain schematics for various components, among other technical information.
`
`(See, e.g., id. ¶ 97.)
`
`II. Buan and Jen Begin Working for GL Leading / Guoli.
`
`
`
`Soon after Buan left Philips’ Dunlee facility, he began working at GL Leading as a
`
`Director of Engineering, and later, as a Senior Manager for Product Engineering. (Id. ¶ 100.)
`
`Plaintiffs believe that Buan is using information obtained from Philips in his new role. (Id.)
`
`
`
`Jen began working with Guoli before GL Leading’s formation and before he left Philips,
`
`“at least as of August 2017.” (Id. ¶ 101.) This “‘under the table’” work included R&D planning,
`
`visiting a Guoli manufacturing site in China, instructing the copying of certain of Plaintiffs’
`
`proprietary materials, and asking Plaintiffs’ employees to join GL Leading, among other things.
`
`(Id.) At some point, Jen assumed the role of Principal Engineer at GL Leading. (Id. ¶ 102.)
`
`
`
`Plaintiffs believe that Jen and Guoli were “directly involved” in forming GL Leading and
`
`recruiting various Philips employees who had “designed manufactured and commercialized”
`
`Plaintiffs’ x-ray tubs, including Buan, to join GL Leading. (Id. ¶¶ 103, 105.)
`
`
`
`The SAC provides additional information concerning how each of the Defendants
`
`purportedly used the misappropriated information. (See id. ¶¶ 114–161.) By way of example,
`
`while working at GL Leading, Buan and Jen purportedly used Philips’ proprietary information to
`
`
`
`4
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 5 of 19 PageID #:7291
`
`design an x-ray tube “for manufacture and commercialization by Guoli and/or Yiyuan.” (Id.
`
`¶¶ 114–16.)
`
`III. Relationship Between GL Leading, Guoli, and Yiyuan
`
`
`
`Plaintiffs allege that GL Leading, Guoli, and Yiyuan are all competitors and that two of
`
`their x-ray tube products are meant to “replace, operate similarly to, or be interchangeable with”
`
`certain of Philips’ x-ray tubes. (Id. ¶ 104.) Plaintiffs further allege that Guoli was “directly
`
`involved in the formation of GL Leading” and the hiring of Buan and other personnel from
`
`Philips. (Id. ¶ 105.)
`
`
`
`Plaintiffs believe that Yiyuan is a subsidiary of Guoli, and that one or both of those
`
`entities controls GL Leading and “have been acting in concert with GL Leading” with respect to
`
`the misuse of Plaintiffs’ trade secrets. (Id. ¶¶ 108–09.) Apart from that, Plaintiffs allege that
`
`Guoli, Yiyuan, and GL Leading share “common directors and/or management” and “certain
`
`information technology, electronic data storage and/or communication infrastructure;” one or
`
`both of the Defendants “exercise significant financial control over GL Leading;” and GL
`
`Leading uses a logo that is identical to the logo used by Guoli, among other things. (Id. ¶¶ 110–
`
`13.) In short, Plaintiffs allege that there is a high degree of inter-relatedness between GL
`
`Leading, Guoli, and Yiyuan, and all played a role in the misappropriate and misuse of Plaintiffs’
`
`proprietary information.
`
`LEGAL STANDARD
`
`I. Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(2)
`
`
`
`“A motion to dismiss under Federal Rule of Civil Procedure 12(b)(2) ‘tests whether a
`
`federal court has personal jurisdiction over a defendant.’” MOLD-A-RAMA Inc. v. Collector-
`
`Concierge-International, 451 F. Supp. 3d 881, 884 (N.D. Ill. 2020) (quoting United Airlines, Inc.
`
`
`
`5
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 6 of 19 PageID #:7292
`
`v. Zaman, 152 F. Supp. 3d 1041, 1045 (N.D. Ill. 2015). If a defendant challenges the existence
`
`of personal jurisdiction, the plaintiff bears the burden of establishing that it exists. Northern
`
`Grain Marketing, LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014).
`
`
`
`When the court rules on a 12(b)(2) motion based on its review of written materials
`
`submitted by the parties, as opposed to an evidentiary hearing, the plaintiff “need only make out
`
`a prima facie case of personal jurisdiction.” Purdue Research Foundation v. Sanofi-Synthelabo,
`
`S.A., et al., 338 F.3d 773, 782 (7th Cir. 2003) (quoting Hyatt Int’l Corp. v. Coco, 302 F.3d 707,
`
`713 (7th Cir. 2002). “[A]ny well-pleaded facts alleged in the complaint are taken as true and any
`
`factual disputes in the affidavits are resolved in the plaintiff’s favor.” MOLD-A-RAMA, 451 F.
`
`Supp. at 884. However, if a defendant “submits affidavits or other evidence in opposition, ‘the
`
`plaintiff must go beyond the pleadings and submit affirmative evidence supporting the exercise
`
`of jurisdiction.’” ABN AMRO, Inc. v. Capital Int’l Limited, 595 F. Supp. 2d 805, 818 (N.D. Ill.
`
`2008) (quoting Purdue, 338 F.3d at 783). “While in this context affidavits trump the pleadings,
`
`in the end all facts disputed in the affidavits will be resolved in the plaintiff’s favor.” Leong v.
`
`SAP Am., Inc., 901 F. Supp. 2d 1058, 1061 (N.D. Ill. 2008).
`
`
`
`A court may exercise either general or specific personal jurisdiction over a dispute.3
`
`Felland v. Clifton, 682 F.3d 665, 673 (7th Cir. 2012). “Specific jurisdiction exists ‘for
`
`controversies that arise out of or are related to the defendant’s forum contacts.’” Abbott Labs.,
`
`Inc. v. Biovalve Techs., Inc., 543 F. Supp. 2d 913, 920 (N.D. Ill. 2008) (quoting Hyatt Int’t Corp.
`
`v. Coco, 302 F.3d 707, 713 (7th Cir. 2002)). In the Seventh Circuit, there are “three essential
`
`requirements” for specific jurisdiction:
`
`
`3 No party argues that we have general jurisdiction over Defendants. (See generally Dkt. Nos.
`159, 162; Combined Resp.)
`
`
`
`6
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 7 of 19 PageID #:7293
`
`(1) the defendant must have purposefully availed himself of the
`privilege of conducting business in the forum state or purposefully
`directed his activities at the state; (2) the alleged injury must have
`arisen from the defendant’s forum related activities; and (3) the
`exercise of jurisdiction must comport with traditional notions of fair
`play and substantial justice.
`
`Felland, 682 F.3d at 673 (7th Cir. 2012) (internal citations omitted); see also Northern Grain
`
`Mktg., LLC v. Greving, 743 F.3d 487, 492 (7th Cir. 2014) (“[I]f Illinois constitutionally may
`
`exercise personal jurisdiction over a defendant, its long-arm statute will enable it to do so.”);
`
`Hyatt Int’l Corp. v. Coco, 302 F.3d 707, 715-16 (7th Cir. 2002).
`
`II. Motion to Dismiss Pursuant to Federal Rule of Civil Procedures 12(b)(4) and
`12(b)(5).
`
`
`
`Federal Rule of Civil Procedure 4 requires that every defendant be served with a copy of
`
`the operative complaint and summons. Luxxotica Grp. S.P.A. v. Partnerships, 391 F. Supp. 3d
`
`816, 821 (N.D. Ill. 2019) (citing Fed. R. Civ. P. 4(b), 4(c)(1)). “Only proper service vests a
`
`district court with personal jurisdiction over a defendant. Id. (internal citation omitted).
`
`
`
`“Rule 12(b)(4) motions challenge the form of the process; they test matters such as
`
`whether the summons bore the seal of the court, was signed, or was addressed to the proper
`
`party.” Luxxotica, 391 F. Supp. 3d at 821 (internal citation omitted). By contrast, Rule 12(b)(5)
`
`motions challenge the way the process was served. Id. “Because motions under both rules
`
`ultimately test the court’s personal jurisdiction over the defendant, the same standards govern
`
`motions under both rules.” Id. (internal citation omitted).
`
`
`
`“The plaintiff bears the burden to demonstrate that the district court has jurisdiction over
`
`each defendant through effective service.” Cardenas v. City of Chicago, 646 F.3d 1001, 1005
`
`(7th Cir. 2011) (internal citation omitted). If a court finds that a plaintiff has not met this burden
`
`and lacks good cause for not perfecting service, the court must either dismiss the lawsuit or
`
`specify a time within which the plaintiff should serve the defendant. Id.
`
`
`
`7
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 8 of 19 PageID #:7294
`
`ANALYSIS
`
`I. Yiyuan and Guoli’s Motions to Dismiss for Lack of Personal Jurisdiction.
`
`
`
`Defendants argue this this case should be dismissed for lack of personal jurisdiction
`
`because they have not engaged in suit-related conduct in this jurisdiction. (Dkt. Nos. 159 at 6–
`
`12, 162 at 5–12.) For example, Guoli argues that it was not “directly involved” in the formation
`
`of GL Leading, but even if it was, that conduct was lawful and unrelated to Plaintiffs’ DTSA and
`
`unjust enrichment claims. (Dkt. No. 159 at 6–7.) Both Defendants dispute that they control or
`
`have been “acting in concert” with GL Leading. (Dkt. Nos. 159 at 7, 162 at 6–7.) According to
`
`Defendants, they do not share common directors or management, nor certain information
`
`technology, electronic data storage, or communication infrastructure with GL Leading. (Dkt.
`
`Nos. 159 at 7, 162 at 6.) Defendants assert that they do not exert significant financial control
`
`over GL Leading either. (Id.)
`
`
`
`Guoli claims that it no incentive to “act in concert” with GL to misappropriate Plaintiffs’
`
`trade secrets because it had no use for them. (Id. at 8.) Yiyuan denies that it used the Philips
`
`intellectual property identified in the Second Amended Complaint and further adds that in its
`
`contract with GL Leading, Yiyuan “obtained a promise from GL Leading that GL Leading
`
`owned the intellectual property it was providing to Yiyuan and that GL Leading had not
`
`misappropriated trade secrets.” (Dkt No. 162 at 9–10.) In support of these contentions,
`
`Defendants submit declarations by Guoli’s General Manager Hao Huang (Dkt. No. 158-3),
`
`Yiyuan’s General Manager Feng Zhou (Dkt. No. 161-3), and Yiyuan’s Vice General Manager
`
`Xiaoqin Du (Dkt. No. 158-4) that generally refute the aforementioned allegations and others
`
`made in Plaintiffs’ Second Amended Complaint. (See generally Dkt Nos. 158-3, 158-4; 159 at
`
`6–11, 161-3, 162 at 7–8.)
`
`
`
`8
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 9 of 19 PageID #:7295
`
`
`
`In response, Philips argues that the declarations submitted by Guoli and Yiyuan should be
`
`given limited weight, if any, because they are contradicted by documentary evidence produced
`
`by Defendants in this case,4 GL Leading’s interrogatory responses, and admissions in Jen’s
`
`Answer to the Second Amended Complaint. (Philips’ Consolidated Opposition to Kunshan
`
`Guoli Electronic Technology Co., LTD.’s, and Kunshan Yiyuan Medical Technology Co.,
`
`LTD.’s Motions to Dismiss (“Combined Response” or “Combined Resp.”) (Dkt. No. 193) at 7–
`
`10.) According to Philips, these materials demonstrate “that numerous GuoLi and Yiyuan
`
`personnel” have directed business activity to Illinois with the purpose of acquiring proprietary
`
`and confidential Philips documents, and have maintained “absolute control” over GL Leading in
`
`Illinois, including, for example, the recruitment and hiring of employees in Illinois and the
`
`approval of capital improvements to GL Leading’s facility in Illinois. (Id. at 10.) In support of
`
`this argument, Plaintiffs attached 74 exhibits to their Combined Response, including email
`
`correspondence, schematics, and webpages, among other documents. (Combined Resp. at Exs.
`
`1–74.)
`
`
`
`Defendants moved to exclude 47 of those exhibits on various grounds. See generally
`
`Philips Medical Systems (Cleveland), Inc. v. Buan, No. 19 CV 2648, 2021 WL 83736 (N.D. Ill.
`
`Jan. 11, 2021). That motion was denied in January 2021. Id. at *1. Philips later filed
`
`declarations authenticating the webpage exhibits, as directed by Magistrate Kim. (See Dkt. Nos.
`
`256, 258.)5 Defendants then objected to Magistrate Judge Kim’s ruling (Dkt. No. 259),
`
`necessitating another round of briefing. We denied Defendants’ motion to reconsider Magistrate
`
`
`4 Discovery has been ongoing between Plaintiffs and other defendants in this case. (See, e.g.,
`Dkt. Nos. 27, 30, 251.)
`5 Dkt. No. 258 appears to be a corrected version of Dkt. No. 256-6.
`9
`
`
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 10 of 19 PageID #:7296
`
`Judge Kim’s Order for reasons explained in the separate Opinion issued contemporaneously with
`
`this one.
`
`
`
`Plaintiffs met their burden at this juncture. As Magistrate Judge Kim observed, “All that
`
`is needed at this stage . . . is a prima facie showing that Defendants are subject to personal
`
`jurisdiction in this district.” Philips Medical Systems, 2021 WL 83736, at *4 (citing Purdue, 338
`
`F.3d at 782).) The numerous exhibits attached to the Combined Response satisfy this standard.
`
`
`
`For example, the exhibits suggest that Yiyuan received certain of Philips’ proprietary
`
`information from individuals who left Philips’ Illinois facility to work for GL Leading:
`
`• On August 29, 2017, Jen sent Xiaoqin Du6 an eighteen-page schematic bearing the word
`
`“Philips” and “© 2014 Philips Healthcare USA Aurora, IL” on every page. (Dkt. No.
`
`193-1.)
`
`• On September 3, 2017, Jen sent Xiaoqin Du an email attaching a Philips PowerPoint
`
`stamped “Confidential,” which sets forth information about Philips’ “Organizational
`
`Direction,” “Organizational Changes,” and “Organizational Development.” (Dkt. No.
`
`193-2.)
`
`The exhibits also suggest that Defendants’ personnel were involved in establishing GL Leading
`
`in Illinois and played a role in its ongoing operations:
`
`• On November 22, 2017, Jen sent an email to a number of individuals, including Xiaoqin
`
`Du, whom he cc’d, in which he appears to describe steps being taken in connection with
`
`the establishment of GL Leading in Illinois. Among other things, he writes that “Ms.
`
`D”"—presumably Xiaoqin Du—“will finish all the paper work for the company
`
`
`6 Xiaoqin Du is Yiyuan’s Vice General Manager. (Dkt. No. 158-4.)
`10
`
`
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 11 of 19 PageID #:7297
`
`registration and everyone’s contract. . . . Ms. Du will fly to Cleveland to get all the IT
`
`support issue [sic] done.” (Dkt. No. 193-13.)
`
`• On June 18, 2018, Xiaoqin Du advises Buan that the “budget was approved by president
`
`Mr. Yin,” Guoli’s Chairman. (Dkt. No. 193-15.)
`
`• On July 26, 2018, Buan sent Xiaoqin Du and others a PowerPoint presentation entitled,
`
`“Monthly Management Review” in anticipation of an upcoming meeting. (Dkt. No. 193-
`
`61.) The presentation relates to GL Leading Technologies, Inc. and describes the
`
`company’s “Engineering Activities,” as well as its “Management/Site Activities.” (Id.)
`
`• On April 25, 2019, Xiaoqin Du sent Buan a schedule, presumably for Du’s upcoming trip
`
`to Illinois. Du describes logistics for meeting lawyers who Buan apparently “found,”
`
`noting “according [to] the evaluation by our lawyer we will make decision on most
`
`suitable one to be our attorney.” (Dkt. No. 193-20 (emphasis added).) Du comments on
`
`other tasks and writes, “Of course, every day we will have a meeting with Harry and Mr.
`
`Yin to discuss and analyze progress. Especially before we make any decision we have to
`
`get approval by Mr. Yin.” (Id. (emphasis added).)
`
`• On April 30, 2019, Xiaoqin Du sent what appears to be a draft employment agreement to
`
`Buan. Buan remarks that he as updated the agreement “to make sure it is correct for
`
`Illinois.” He adds that he “will send it out to everyone and ask them to sign it today.”
`
`The employment agreement attached to his email relates to employment for GL Leading
`
`Technologies, Inc., located in Aurora, Illinois. (Dkt. No. 193-14.)
`
`There is some suggestion that GL Leading may be a subsidiary of one or both Defendants:
`
`• On October 31, 2017, an individual at Cushman & Wakefield asked Jen to provide
`
`information about GL Technologies in connection with a rental arrangement. Jen
`
`
`
`11
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 12 of 19 PageID #:7298
`
`responded, “Basically, we are the subsidiary from GL Electronic which is based at
`
`KunShan, China. It is a well established company, and we will be the R&D division in
`
`US. The Company registered in US will be GL-Leading Technologies Inc. You can
`
`check this website www.glvac.com.” (Dkt. No. 193-49.) Exhibits to the declarations of
`
`Nicholas W. Armington (Dkt. No. 256-1) and Jan Leheij (Dkt. No. 256-5) reflect that
`
`Guoli and Yiyuan are located in Kunshan, China. (See Dkt. Nos. 256-2, 256-7, 258.)
`
`The exhibits further suggest that Yiyuan took steps to facilitate information sharing between
`
`Yiyuan and GL Leading:
`
`• On May 17, 2018, Xiaoquin Du sent Buan and others an email concerning an “IT
`
`Project.” (Dkt. No. 193-31.) Du wrote, “Mr. Yin decide [sic] to set up individual IT
`
`sysetem [sic] for Kunshan Yiyuan and GL Leading so that we can share the same server
`
`through VPN, each colleague can find and save documents in same place and easy to
`
`share the information.” (Id.)
`
`• On February 15, 2019, an individual who appears to be associated with Yiyuan based on
`
`his email address (xujiajia@glvac.cn) advised a group of individuals with
`
`@glleading.com email addresses, including Jen and Buan: “We created a folder for
`
`sharing the tube building status and record information (yiyuan/ks-au-common
`
`folder/GLA2153 tube built).” (Dkt. No. 193-33.)
`
`Additionally, the exhibits suggest that certain schematics used by Philips in Illinois may have
`
`been repurposed by Guoli for its own use:
`
`• Schematics produced by GL Leading include references to both Philips and Kunshan
`
`Guoli Electronic. (See, e.g., Dkt. Nos. 193-6 (noting that a “certificate of compliance”
`
`should be transmitted “BY E-MAIL TO INCOMING.INSP.AURORA@PHILIPS.COM”
`
`
`
`12
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 13 of 19 PageID #:7299
`
`and also bearing the phrase “KUNSHAN GUOLI ELECTRONIC” elsewhere on the
`
`document); 193-8 (noting “PHILIP’S/DONE APPROVAL REQUIRED” and also
`
`bearing the phrase “KUNSHAN GUOLI ELECTRONIC” elsewhere on the document).)
`
`Together, these and many other materials attached to, or otherwise referenced in, Plaintiffs’
`
`Response make a prima facie showing that Defendants intentionally engaged in the
`
`misappropriation of trade secrets, expressly aimed at Illinois,7 with knowledge that Philips would
`
`be injured in Illinois. See Felland, 682 F.3d at 674–75. Based on the information put forth by
`
`the parties to date, Defendants could reasonably anticipate being hailed into court here and doing
`
`so accords with traditional notions of fair play and justice. Accordingly, we have specific
`
`jurisdiction over Defendants in this case.
`
`
`
`At trial, Plaintiffs will still bear the burden of proving that jurisdiction is appropriate in
`
`this case. See Rice v. Nova Biomed. Corp., 38 F.3d 909, 914–15 (7th Cir. 1994 (noting that “the
`
`denial of a preliminary challenge to personal jurisdiction . . . is not an automatic bar to renew[a]
`
`of the motion after evidence bearing on it has been obtained by pretrial discovery or presented at
`
`trial”). And to the extent Plaintiffs intend to use any of the exhibits attached to their Response to
`
`prove their case at trial, the exhibits must be in admissible form.
`
`II. Yiyuan and Guoli’s Rule 12(b)(4) and (5) Motions to Dismiss.
`
`
`
`Defendants argue that Plaintiffs should have served them pursuant to the Hague
`
`Convention since they are Chinese corporations with their principal places of business in China.
`
`(Dkt. Nos. 159 at 14–15, 162 at 13–15.) They further argue that since Plaintiffs did not serve
`
`
`7 Defendants filed supplemental briefing analogizing this case to J.S.T. Corp. v. Foxconn
`Interconnect Tech. Ltd., 965 F.3d 571 (7th Cir. Jul. 13, 2020). These cases are distinguishable.
`In Foxconn, there were not enough facts to show that the defendants’ conduct was targeted to
`Illinois. Here, however, Plaintiffs’ allegations and the evidence before us shows a variety of
`Illinois based conduct, namely, that the defendants did business in Illinois and received stolen
`designs and drawings in and from business operations in Illinois. (See, e.g., SAC ¶¶ 16, 18.)
`13
`
`
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 14 of 19 PageID #:7300
`
`them through this mechanism, and only attempted service through an individual and an entity
`
`who were not authorized to accept service, service has not been accomplished.8 (Dkt. Nos. 159
`
`at 15, 162 at 14–15.)
`
`
`
`Plaintiffs dispute that they are required to comply with the service provisions of the
`
`Hague Convention. (Dkt. No. 193 at 22 n.6.) According to Plaintiffs, the service provisions of
`
`the Hague Convention do not apply where service of process is accomplished within the United
`
`States and in accordance with state law and the Due Process Clause. (Dkt. No. 193 at 22–29.)
`
`Plaintiffs claim that they properly served Defendants through Defendants’ subsidiary in Illinois
`
`(GL Leading) and Guoli’s U.S. Director of Operations (Jose Frias) in California. (Combined
`
`Resp. at 22–29.)
`
`
`
`Plaintiffs need not effectuate service using Hague Convention procedures if they properly
`
`effectuate service in the U.S. See Chung v. Tarom, S.A., 990 F. Supp. 581, 584 n.2 (N.D. Ill.
`
`198) (citing Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694 (1988)); see also
`
`Wissmiller v. Lincoln Trail Motosports, Inc., 552 N.E.2d 295, 299-300 (4th Dist. 1990).
`
`Accordingly, we will consider whether they properly served Defendants when they served GL
`
`Leading and Jose Frias.
`
`A. Service Upon GL Leading
`
`
`
`Under Federal Rule of Civil Procedure 4(h), a foreign corporation may be served in the
`
`manner directed by Rule 4(e)(1). This rule provides that an individual may be served in a
`
`judicial district of the United States by “following state law for serving a summons in an action
`
`
`8 Plaintiffs attempted to serve Guoli through both GL Leading and Jose Frias, but Yiyuan
`through GL Leading only. (Dkt. Nos. 159 at 15, 162 at 14–15.)
`14
`
`
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 15 of 19 PageID #:7301
`
`brought in courts of general jurisdiction in the state where the district court is located or where
`
`services is made. . . .” Fed. R. Civ. P. 4(e)(1).
`
`
`
`In Illinois, a private corporation may be served by leaving a copy of the process with any
`
`officer or agent of the corporation found anywhere in the State. 735 ILCS 5/2-204. Plaintiffs
`
`contend that GL Leading is such an agent by virtue of being a subsidiary of one or both
`
`Defendants. (Combined Resp. at 22–23.)
`
`
`
`Plaintiffs assume that GL Leading is Defendants’ subsidiary based on Defendants’
`
`purported involvement in GL Leading’s operations and an email from Jen to an individual at
`
`Cushman & Wakefield, in which Jen wrote of GL Leading: “Basically, we are the subsidiary
`
`from GL Electronic. . . .” (Combined Resp. at 22–27; Dkt. No. 193-49.) Plaintiff’s assumption
`
`is problematic for several reasons.
`
`
`
`The chief issue is that Defendants have put forth declarations attesting to the fact that GL
`
`Leading is not a subsidiary of either Defendant. (See, e.g., Dkt. No. 158-3 at ¶ 8 (“GuoLi does
`
`not have, and has never had, any ownership interest in GL Leading Technologies, Inc. . . .”);
`
`Dkt. No. 161-3 at ¶ 8 (“Yiyuan does not have any ownership interest in GL Leading.”).)
`
`
`
`Evidence put forth to the contrary is not persuasive because it is consistent with the idea
`
`that GL Leading is not Defendants’ subsidiary. Defendants’ purported involvement in the
`
`formation of GL Leading suggests a parent-subsidiary relationship but not definitive proof of it.
`
`Likewise, Jen’s email does not conclusively demonstrate that GL Leading is a subsidiary of
`
`either one or both of the Defendants. For one thing, it is not clear that Jen understood the legal
`
`significance of the term “subsidiary” when he used it in his email. Based on the information
`
`available to us, Jen was trained as an engineer, not an attorney. Additionally, Jen’s use of the
`
`term “basically” suggests that Jen regards GL Leading as akin to a subsidiary, though it might
`
`
`
`15
`
`

`

`Case: 1:19-cv-02648 Document #: 282 Filed: 04/19/21 Page 16 of 19 PageID #:7302
`
`not be one in fact. Further, Jen does not reference either Defendant by name in his email,
`
`referring to only “GL Electronic.” Without more information, it would be difficult to discern
`
`whether Jen’s use of the term “GL Electronic” was intended to encompass either, both, or neither
`
`of the Defendants.
`
`
`
`Had Plaintiffs put forth corporate formation documents demonstrating that GL Leading is
`
`a subsidiary of one or both Defendants, we might have reached a different conclusion. But as it
`
`stands, we cannot conclude that GL Leading is or was Defendants’ subsidiary, such that service
`
`upon Defendants was properly effectuated through GL Leading.
`
`
`
`Even if we were to assume that GL Leading is Defendants’ subsidiary, it is not clear that
`
`GL Leading would qualify as an “agent” for service of process under Illinois law. Illinois courts
`
`consider thirteen factors to determine whether a domestic subsidiary is an agent for the purpose
`
`of service of process:
`
`(1) the subsidiary was established and wholly owned by the parent;
`(2) the parent paid the salaries of the subsidiary’s directors; (3) the
`parent guaranteed the subsidiary’s lease; (4) the subsidiary’s sole
`business was the sale of parts for the parent; (5) the parent listed the
`subsidiary’s address in advertisements; (6) the subsidiary existed
`primarily to promote the sale and distribution of the parent’s
`products; (7) the subsidiary was obligated to repaid and sell parts for
`the parent’s products; (8) the subsidiary was contractually required
`to apprise the parent of all aspects of its business; (9) the subsidiary
`was authorized to prosecute trademark infringement suits in the
`parent’s name; (10) the parent controlled the subsidiary’s choice of
`dealers, designation of products and services, stock levels, and
`methods of ordering; (11) the parent dominated the subsidiary’s
`board of directors; (12) the subsidiary conducted its board meetings
`in the domicile of the parent; and (13) the subsidiary was listed on a
`consolidated financial sheet along with the parent rather than
`publishing its own annual report.
`
`Chung v. Tarom, S.A., 990 F. Supp. 581, 584 (N.D. Ill. 1998).
`
`
`
`By Plaintiffs’ own admission, there is insufficient evidenc