Fighter's Market, Inc. v. Champion Courage LLC et al, No. 3:2016cv01271 - Document 19 (S.D. Cal. 2016)

Court Description: ORDER Denying Defendant Champion LTD's 11 Motion to Dismiss for Lack of Personal Jurisdiction. Signed by Judge Gonzalo P. Curiel on 9/14/16. (dlg)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 12 FIGHTER’S MARKET, INC., a California corporation, 15 16 17 ORDER DENYING DEFENDANT CHAMPION LTD.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Plaintiff, 13 14 Case No.: 3:16-cv-01271-GPC-BGS v. CHAMPION COURAGE LLC, CHAMPION COURAGE LTD., DEAN THOMPSON, and VOILETTIA GHAWA ANE CURREY, and Does 1 through 100, inclusive, 18 [ECF No. 11.] Defendants. 19 20 21 Before the Court is Defendant Champion Courage Ltd.’s motion to dismiss for lack 22 of personal jurisdiction pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(2). 23 ECF No. 11. Plaintiff filed an opposition, and Champion Courage Ltd. filed a reply. 24 ECF Nos. 16–17. The Court deems the motion suitable for disposition without oral 25 argument pursuant to Civil Local Rule 7.1(d)(1). Based on the reasoning below, the 26 Court DENIES Champion Courage Ltd.’s motion to dismiss for lack of personal 27 jurisdiction. 28 //// 1 3:16-cv-01271-GPC-BGS 1 PROCEDURAL BACKGROUND 2 On May 26, 2016, Plaintiff Fighter’s Market, Inc. (“Plaintiff” or “Fighter’s 3 Market”) filed a verified Complaint against Defendants Champion Courage LLC, 4 Champion Courage Ltd., Dean Thompson, Voilettia Ghawa Ane Currey, and Does 1 5 through 100 inclusive (collectively, “Defendants”). ECF No. 1. The Complaint alleges 6 five causes of action, three of which arise under the Lanham Act and two of which arise 7 under California law: (1) counterfeiting, 15 U.S.C. §§ 1114(1)(a), 1116(d), and 1117(b)- 8 (c); (2) federal trademark infringement, 15 U.S.C. § 1114; (3) false designation of origin, 9 passing off, and unfair competition, 15 U.S.C. § 1125(a); (4) state common law 10 trademark infringement; and (5) violation of the California Unfair Competition Law, Cal. 11 Bus. & Prof. Code § 17200. See id. On July 12, 2016, Defendant Champion Courage 12 Ltd. filed a motion to dismiss for lack of personal jurisdiction. ECF No. 11. An 13 opposition was filed on August 5, 2016. ECF No. 16. A reply was filed on August 19, 14 2016. ECF No. 17. 15 FACTUAL BACKGROUND 16 Plaintiff Fighter’s Market is a California corporation with its principal place of 17 business in San Diego, California. ECF No. 1, Compl. ¶ 1. Defendant Champion 18 Courage Ltd. (“Champion Limited”1) is a British Virgin Islands limited company with its 19 principal place of business in Hong Kong. Id. ¶ 3. Champion Courage LLC (“Champion 20 Courage”) is a California limited liability company with its principal place of business in 21 Florida. Id. ¶ 2. Plaintiff alleges that Dean Thompson and Voilettia Ghawa Ane Currey, 22 both citizens of New Zealand and residents of Hong Kong, are officers, directors, and 23 shareholders of Champion Courage and Champion Limited. Id. ¶¶ 4–5, 7. Plaintiff also 24 alleges that Champion Courage and Champion Limited are alter egos of Thompson and 25 Currey. Id. ¶¶ 8–9. 26 27 1 28 To avoid confusion, Champion Courage LLC will hereinafter be referred to as Champion Courage, and Champion Courage Ltd. will be referred to as Champion Limited. 2 3:16-cv-01271-GPC-BGS 1 Plaintiff owns trademarks registered with the U.S. Patent and Trademark Office, 2 including (1) “KINGZ” in standard characters and in stylized form and (2) “MAEDA” in 3 standard characters. Id. ¶¶ 21, 22, 27. Plaintiff uses the KINGZ and MAEDA 4 trademarks (collectively, “K/M trademarks”) in connection with its KINGZ and MAEDA 5 brands of Brazilian jiu-jitsu “gis” (uniforms) and related apparel, as well as on its website 6 and advertisement materials. Id. ¶¶ 18–20, 23–25, 28–29. Plaintiff also uses an 7 unregistered crown-shaped design mark in connection with its KINGZ-brand gis and 8 owns all copyrights associated with this design. Id. ¶¶ 31, 33–35. 9 For several months in 2013, Bruno Munduruca, Chief Executive Officer and 10 President of Fighter’s Market, discussed with Dean Thompson, an officer of Champion 11 Limited, the possibility of partnering in the manufacture and sale of gis. ECF No. 16-2, 12 Munduruca Decl. ¶¶ 5, 7; ECF No. 11-2, Currey Decl. ¶ 2. The proposed joint venture 13 ultimately failed to move forward. Munduruca Decl. ¶¶ 5, 7; Currey Decl. ¶¶ 2–3. 14 Munduruca asserts that Plaintiff did not license to Thompson or the other Defendants any 15 of the K/M trademarks during the course of negotiations. Munduruca Decl. ¶6–7. 16 Although Plaintiff never ordered any gis from Defendant and never authorized Defendant 17 to use its trademarks, Thompson informed Munduruca that he had nonetheless set in 18 motion plans to manufacture gis bearing Plaintiff’s K/M trademarks. Munduruca Decl. ¶ 19 7. Voilettia Currey, a director and shareholder of Champion Limited, asserts that 20 Champion Limited was left with an unsold stockpile of K/M gis a result of the unrealized 21 joint venture. Currey Decl. ¶¶ 1, 5. 22 In April 2014, Champion Limited sued Plaintiff in San Diego Superior Court for 23 contract and tort claims relating to the unrealized joint venture. Munduruca Decl. ¶ 8; 24 Currey Decl. ¶ 3; ECF No. 11-3, Ex. A at 2.2 On September 2, 2014, the parties settled 25 the case. Munduruca Decl. ¶ 9; Currey Decl. ¶ 4. 26 27 28 2 Citations are based upon CM/ECF pagination. 3 3:16-cv-01271-GPC-BGS 1 In September 2015, Currey and Thompson negotiated a contract to sell gis with 2 K/M trademarks to a Hong Kong corporation. Currey Decl. ¶¶ 1, 6. All negotiations 3 took place in Hong Kong. Id. Champion Limited and the Hong Kong-based buyer 4 agreed that Champion Limited would first send the gis to a Brazil-based distributor. Id. ¶ 5 7. Currey acknowledges that these gis bore Plaintiff’s K/M trademarks and asserts that 6 they were from the same stockpile left over from the parties’ unrealized joint venture. Id. 7 ¶¶ 3, 5–7. 8 9 In or around March 2016, Plaintiff learned that Defendants were manufacturing gis with Plaintiff’s K/M trademarks in China and shipping them to a warehouse in Poway, 10 California, from where they were then shipped to Brazil.3 Compl. ¶ 39; Munduruca Decl. 11 ¶ 10. Plaintiff alleges that Defendants are not and were never authorized distributors or 12 licensees of the K/M trademarks. Compl. ¶ 43. Nor did Plaintiff authorize Defendants to 13 manufacture or import any products bearing the K/M trademarks. Id. Plaintiff alleges 14 that Defendants knew that Plaintiff owned the K/M trademarks at all relevant times. Id. ¶ 15 45. Plaintiff alleges that Defendant’s infringement has and continues to harm Plaintiff in 16 California by, inter alia, diluting Plaintiff’s trademarks, reducing Plaintiff’s revenue, and 17 diminishing Plaintiff’s goodwill. See, e.g., id. ¶¶ 44, 46, 69, 74–75, 78. 18 //// 19 20 21 22 3 23 24 25 26 27 28 Plaintiff alleges in its verified Complaint and in a declaration by Bruno Munduruca that Champion Limited shipped the K/M gis to a warehouse in Poway, California prior to shipping them to Brazil. Compl. ¶ 39; Munduruca Decl. ¶ 10. Defendant asserts that Champion Limited shipped the gis to a “forwarding service located outside of California.” See Currey Decl. ¶ 7. Defendant also presents a host of evidentiary objections to Plaintiff’s exhibits, see ECF No. 18, which Plaintiff attached to establish that Defendant shipped the K/M gis via California, see Munduruca Decl. ¶¶ 12 – 20; ECF Nos. 16-3–168. Because the court resolves all contested facts in favor of the non-moving party if the parties’ affidavits contain conflicting facts, the Court resolves the contested facts in favor of Plaintiff based on the statements in Plaintiff’s verified Complaint and Munduruca’s declaration. See In re Western States Wholesale Natural Gas Antitrust Litigation v. Oneok, Inc., 715 F.3d 716, 741 (9th Cir. 2013); AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996). 4 3:16-cv-01271-GPC-BGS 1 2 3 DISCUSSION A. Legal Standard on Personal Jurisdiction “When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff 4 bears the burden of demonstrating that the court has jurisdiction.” In re Western States 5 Wholesale Natural Gas Antitrust Litigation v. Oneok, Inc., 715 F.3d 716, 741 (9th Cir. 6 2013). If the motion is based on written materials rather than an evidentiary hearing, the 7 plaintiff need only make “a prima facie showing of jurisdictional facts to withstand the 8 motion to dismiss.” Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1127 9 (9th Cir. 2010) (internal citation omitted). On a prima facie showing, the court resolves 10 all contested facts in favor of the non-moving party. In re Western States, 715 F.3d at 11 741; AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996) (if the 12 parties’ affidavits contain conflicting facts, the facts must be resolved in favor of the 13 plaintiff for purposes of determining whether a prima facie case of personal jurisdiction 14 has been established). At the same time, however, the plaintiff cannot establish 15 jurisdiction by alleging bare jurisdictionally-triggering facts without providing some 16 evidence of their existence, “by affidavit or otherwise.” Amba Mktg. Sys., Inc. v. Jobar 17 Int’l, Inc., 551 F.2d 784, 787 (9th Cir. 1977). 18 “Where, as here, no federal statute authorizes personal jurisdiction, the district 19 court applies the law of the state in which the court sits.” Mavrix Photo, Inc. v. Brand 20 Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) (internal citations omitted). 21 California’s long-arm statute is “coextensive with the outer limits of due process under 22 the state and federal constitutions, as those limits have been defined by the United States 23 Supreme Court.” Republic Int’l Corp. v. Amco Eng’rs, Inc., 516 F.2d 161, 167 (9th Cir. 24 1976) (quoting Threlkeld v. Tucker, 496 F.2d 1101, 1103 (9th Cir. 1974)). As such, the 25 Court need only consider the requirements of due process. Due process requires that 26 nonresident defendants have “minimum contacts” with the forum state “such that the 27 maintenance of the suit does not offend traditional notions of fair play and substantial 28 justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Personal jurisdiction 5 3:16-cv-01271-GPC-BGS 1 can be either “general” or “specific.” See Helicopteros Nacionales de Colombia, S.A. v. 2 Hall, 466 U.S. 408, 415–16 (1984). 3 B. General Personal Jurisdiction over Defendant 4 “A court may assert general jurisdiction over foreign (sister-state or foreign- 5 country) corporations to hear any and all claims against them when their affiliations with 6 the State are so ‘continuous and systematic’ as to render them essentially at home in the 7 forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 8 (2011). With respect to corporations, “the place of incorporation and principal place of 9 business are ‘paradig[m] . . . bases for general jurisdiction.” Daimler AG v. Bauman, 134 10 S. Ct. 746, 760 (2014) (internal citation omitted). Outside of these paradigm bases, only 11 “in an exceptional case” should a court find a corporation’s operations in the forum to be 12 “so substantial and of such a nature as to render the corporation at home in that State.” 13 Id. at 761 n.19. Exceptional circumstances do not exist merely whenever “a foreign 14 corporation’s in-forum contacts can be said to be in some sense ‘continuous and 15 systematic,’ it is only whether that corporation’s ‘affiliations with the State are so 16 ‘continuous and systematic’ as to render [it] essentially at home in the forum State.’” Id. 17 at 761 (quoting Goodyear, 564 U.S. at 919). 18 Here, Defendant argues that this Court lacks general personal jurisdiction over it 19 because it lacks contacts with California that are continuous and systematic in nature. 20 See ECF No. 11-1 at 8. Defendant is a British Virgin Islands company with no addresses 21 in California, is not licensed to do business in California, does not pay California taxes, 22 and has no agent for service of process or employees in California. See Compl. ¶ 3; 23 Currey Decl. ¶ 10. Defendant’s principal place of business is in Hong Kong. Compl. ¶ 3. 24 In response, Plaintiff asserts that the Court has general personal jurisdiction over 25 Defendant by virtue of the fact that Defendant is a jiu-jitsu apparel company and that 26 California is “the center of the jiu-jitsu world.” ECF No. 16-1 at 4. Plaintiff states that 27 Defendant sponsors athletes who reside in, teach in, and compete in California and 28 requires sponsored athletes to don Defendant’s brand of gis. Munduruca Decl. ¶¶ 23–24. 6 3:16-cv-01271-GPC-BGS 1 Plaintiff also asserts that Defendant advertises in a California-based jiu-jitsu magazine 2 and sponsors jiu-jitsu events in California. Id. ¶¶ 25–26. However, such contacts are not so “continuous and systematic” as to establish 3 4 general personal jurisdiction over Defendant. See Corcoran v. CVS Health Corp., No. 5 15-CV-3504 YGR, 2016 WL 948880, at *5 (N.D. Cal. Mar. 14, 2016) (concluding there 6 was no general jurisdiction even though CVS Health had a substantial number of 7 pharmacies, maintained two distribution centers, and solicited employees in California); 8 Martinez v. Aero Caribbean, 764 F.3d 1062, 1070 (9th Cir. 2014) cert. denied, 135 S. Ct. 9 2310 (2015) (affirming district court’s finding of no general jurisdiction over defendant 10 who had contracts with California companies worth between $225 and $450 million, sent 11 employees to California, and advertised in trade publications with distribution in 12 California); Cahen v. Toyota Motor Corp., 147 F. Supp. 3d 955, 964 (N.D. Cal. 2015) 13 (concluding no general jurisdiction with respect to defendant car manufacturer who had 14 302 employees in California and over one hundred thousand cars registered in California 15 in the past year). Moreover, Plaintiff has not established any exceptional circumstances 16 that would render Defendant, a British Virgin Islands company with its principal place of 17 business in Hong Kong, essentially “at home” in California. Nor do Plaintiff’s formulaic 18 assertions that Defendants meet the requirements of alter ego liability, see Compl. ¶¶ 8–9, 19 permit the Court to impute the other Defendants’ contacts with California to Champion 20 Limited, see Doe v. Unocal Corp., 248 F.3d 915, 926–28 (9th Cir. 2001). Thus, the 21 Court concludes that it lacks general personal jurisdiction over Defendant. 22 C. 23 Specific Personal Jurisdiction over Defendant Specific jurisdiction exists when a case “aris[es] out of or relate[s] to the 24 defendant’s contacts with the forum.” Helicopteros Nacionales de Colombia, S.A., 466 25 U.S. at 414 n.8. The inquiry whether a forum State may assert specific jurisdiction over a 26 nonresident defendant “focuses on ‘the relationship among the defendant, the forum, and 27 the litigation.” Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014). Specific jurisdiction is 28 limited to ruling on “issues deriving from, or connected with, the very controversy that 7 3:16-cv-01271-GPC-BGS 1 establishes jurisdiction.” Goodyear Dunlop Tires, 564 U.S. at 919 (internal citation 2 omitted). 3 4 5 6 7 8 9 10 The Ninth Circuit conducts a three-prong test to determine whether a non-resident defendant is subject to specific personal jurisdiction: (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable. 11 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) (citing 12 Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987)). “A purposeful availment analysis is 13 most often used in suits sounding in contract,” while a “purposeful direction analysis . . . 14 is most often used in suits sounding in tort.” Id. “[P]urposeful availment” asks whether a 15 defendant has “purposefully avail[ed] [himself] of the privilege of conducting activities 16 within the forum State, thus invoking the benefits and protections of its laws.” Picot v. 17 Weston, 780 F.3d 1206, 1212 (9th Cir. 2015) (quoting Schwarzenegger, 374 F.3d at 802). 18 By contrast, “[i]n tort cases, [courts] typically inquire whether a defendant ‘purposefully 19 direct[s] his activities’ at the forum state, applying an ‘effects’ test that focuses on the 20 forum in which the defendant’s actions were felt, whether or not the actions themselves 21 occurred within the forum.” Washington Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 22 668, 672–73 (9th Cir. 2012) (quoting Yahoo! Inc. v. La Ligue Contre Le Racisme, 433 23 F.3d 1199, 1206 (9th Cir. 2006) (en banc)). The plaintiff bears the burden of satisfying 24 the first two prongs and then the burden shifts to the defendant to make a “compelling 25 case” that the third part has not been met. Schwarzenegger, 374 F.3d at 802. “If any of 26 the three requirements is not satisfied, jurisdiction in the forum would deprive the 27 defendant of due process of law.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th 28 Cir. 2006) (internal citations and quotations omitted). 8 3:16-cv-01271-GPC-BGS 1 1. Purposeful Direction 2 The purposeful direction test applies here, as Plaintiff’s trademark claims sound in 3 tort. See, e.g., Nissan Motor Co. v. Nissan Computer Corp., 246 F.3d 675, 675 (9th Cir. 4 2000) (applying purposeful direction analysis to trademark infringement lawsuit). The 5 “purposeful direction” or “effects” test is based on Calder v. Jones, 465 U.S. 783 (1984). 6 It requires that the defendant “(1) committed an intentional act, (2) expressly aimed at the 7 forum state, (3) causing harm that the defendant knows is likely to be suffered in the 8 forum state.” Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1228 (9th Cir. 9 2011) (internal quotation marks omitted). 10 a. Intentional Act “‘Intentional act’ has a specialized meaning in the context of the Calder effects 11 12 test.” Washington Shoe, 704 F.3d at 673 (quoting Schwarzenegger, 374 F.3d at 806). An 13 intentional act is an “external manifestation of the actor’s intent to perform an actual, 14 physical act in the real world, not including any of its actual or intended results.” Id. at 15 674. Plaintiff alleges that Defendant manufactured, sold, and shipped gis bearing 16 Plaintiff’s K/M trademarks. Compl. ¶ 39. These alleged sales constitute intentional acts 17 under the Calder effects test. See Washington Shoe, 704 F.3d at 674. 18 b. Expressly Aimed 19 The Ninth Circuit has rejected “the broad proposition that a foreign act with 20 foreseeable effects in the forum state always gives rise to specific jurisdiction.” Bancroft 21 & Masters, Inc. v. Augusta Nat’l Inc., 223 F.3d 1082, 1087 (9th Cir. 2000). There must 22 be “something more,” see Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1321 (9th 23 Cir. 1998), which the Ninth Circuit has held to be “what the Supreme Court described as 24 ‘express aiming’ at the forum state,” see Bancroft & Masters, 223 F.3d at 1087. The 25 Ninth Circuit has “repeatedly stated that the ‘express aiming’ requirement is satisfied, 26 and specific jurisdiction exists, ‘when the defendant is alleged to have engaged in 27 wrongful conduct targeted at a plaintiff whom the defendant knows to be a resident of the 28 forum state.’” Washington Shoe, 704 F.3d at 675 (quoting Dole Food Co. v. Watts, 303 9 3:16-cv-01271-GPC-BGS 1 F.3d 1104, 1111 (9th Cir. 2002)) (internal quotation marks and citation omitted); see also 2 Bancroft & Masters, 223 F.3d at 1087 (“‘[E]xpress aiming’ encompasses wrongful 3 conduct individually targeting a known forum resident.”). 4 “The ‘express aiming’ analysis depends, to a significant degree, on the specific 5 type of tort or other wrongful conduct at issue.” Schwarzenegger, 374 F.3d at 807 6 (clarifying that Calder did not involve “untargeted negligence,” but “intentional acts” 7 with “known impact”). Where a tort is “intentional,” the Ninth Circuit has “found 8 jurisdiction in the plaintiff’s home forum,” even though the directions of the intentional 9 act and the known impact diverged, because “in such cases the ‘acts are performed for the 10 very purpose of having their consequences felt in the forum state.’” Id. at 675–76 11 (quoting Brainerd v. Governors of the Univ. of Alberta, 873 F.2d 1257, 1260 (9th Cir. 12 1989)). “[T]he respective directions of the intentional act and the known impact need not 13 coincide for the ‘express aiming’ requirement to be satisfied.” Id. This is particularly 14 salient with respect to claims of infringement of intellectual property rights. See 15 Washington Shoe, 704 F.3d at 675; Adobe Sys. Inc. v. Blue Source Grp., Inc., 125 F. 16 Supp. 3d 945, 961 (N.D. Cal. 2015) (citing and collecting cases where courts have held 17 that “specific jurisdiction exists where a plaintiff files suit in its home state against an 18 out-of-state defendant and alleges that defendant intentionally infringed its intellectual 19 property rights knowing [the plaintiff] was located in the forum state” (internal citation 20 omitted)). “[W]here a defendant knows—as opposed to being able to foresee—that an 21 intentional act will impact another state, the ‘expressly aimed’ requirement is satisfied.” 22 Washington Shoe, 704 F.3d at 677. 23 Defendant argues that its acts were aimed at the Brazilian market, rather than 24 California, and that Plaintiff fails to demonstrate more than “possible foreseeable effects” 25 in California as a result of Defendant’s alleged infringement. See ECF No. 11-1 at 9–11. 26 However, the direction of Defendant’s intentional acts, which Defendant contends were 27 aimed at Brazil, does not need to coincide with the direction of the known impact of 28 Defendant’s acts. See Washington Shoe, 704 F.3d at 675. 10 3:16-cv-01271-GPC-BGS 1 Defendant cites to Pebble Beach Co. v. Caddy, 453 F.3d 1151 (9th Cir. 2006) and 2 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (9th Cir. 2004), to contend that 3 this Court lacks jurisdiction over Defendant. Both cases are distinct from the instant 4 case. In Washington Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 668 (9th Cir. 2012), 5 the Ninth Circuit concluded that specific jurisdiction over the defendant in Washington 6 was proper where the defendant, an Arkansas retailer, sold shoes that infringed a 7 Washington shoe manufacturer’s copyright. 703 F.3d at 679. Although the defendant 8 operated solely in Arkansas, and no part of the alleged infringement occurred in 9 Washington, there was a prior business relationship between the defendant and 10 Washington Shoe, and the defendant was aware that Washington Shoe owned the 11 copyright to the shoes at issue. Id. at 671–75. Because the defendant had “actual 12 awareness of its infringing activity,” the Ninth Circuit concluded that the defendant had 13 “expressly aimed” its conduct at Washington. Id. at 675–79. The Ninth Circuit 14 distinguished its decision in Washington Shoe from its decisions in Schwarzenegger and 15 Pebble Beach based on the defendant’s “[k]nowledge that an intentional act will have an 16 impact in another state.”4 Id. at 677. In Schwarzenegger, “the facts did not establish that 17 18 In Walden v. Fiore, 134 S. Ct. 1115 (2014), the Supreme Court held that a “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 that is the basis for its jurisdiction over him.” 134 S. Ct. at 1122 (emphasis added). The plaintiffs, residents of Nevada, filed a Bivens action in Nevada against a Drug Enforcement Administration agent for violating their Fourth Amendment rights by, inter alia, seizing cash from plaintiffs at a Georgia airport during their return trip to Nevada and subsequently filing a false affidavit. See id. at 1119–20. The Supreme Court concluded that personal jurisdiction over the defendant was improper in Nevada, because the mere fact that the defendant’s conduct affected Nevada residents did not connect defendant to the forum “in a meaningful way.” Id. at 1125–26. The Court emphasized that it is “insufficient to rely on a defendant’s ‘random, fortuitous, or attenuated contacts’ or on the ‘unilateral activity’ of a plaintiff. A forum State’s exercise of jurisdiction over an out-of-state intentional tortfeasor must be based on intentional conduct by the defendant that creates the necessary contacts with the forum.” Id. at 1123 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). Walden is factually distinguishable from cases alleging intentional trademark and copyright infringement. The Ninth Circuit has made clear that specific jurisdiction in the trademark and copyright context hinges not on the mere fact of a plaintiff’s injury in the forum, but on a defendant’s knowledge that an intentional act of infringement will impact residents of the forum state. See Washington Shoe, 4 19 20 21 22 23 24 25 26 27 28 11 3:16-cv-01271-GPC-BGS 1 [the defendant] knew that the impact of his intentional act would be felt in California.” 2 Id. (emphasis in original). Similarly, in Pebble Beach, there were no “facts establishing 3 knowledge that there would be an impact in California.” Id. at 677–78. 4 Here, Plaintiff sufficiently alleges that Defendant had knowledge that its acts of 5 infringement would have an impact in Plaintiff’s home forum. Given Defendant’s 6 months-long exploration of a joint venture opportunity with Plaintiff, plus Defendant’s 7 prior lawsuit against Plaintiff in San Diego Superior Court, Defendant knew that 8 Plaintiff’s principal place of business is in California. See Munduruca Decl. ¶¶ 5–8; 9 Currey Decl. ¶ 2–3. Moreover, Plaintiff alleges that Defendant knew Plaintiff owned the 10 K/M trademarks at all relevant times and intentionally infringed Plaintiff’s trademarks. 11 See Compl. ¶¶ 45, 68. Defendant offers testimony that corroborates these allegations— 12 Defendant provides an affidavit acknowledging that the gis Defendant contracted to sell 13 abroad bore Plaintiff’s K/M trademarks and were from the same stockpile that resulted 14 from the parties’ unrealized joint venture. Currey Decl. ¶¶ 5–7. Accordingly, Plaintiff 15 makes a prima facie showing that Defendant intentionally infringed Plaintiff’s 16 trademarks, knowing that Plaintiff is a resident of California and that the impact of 17 infringement would be felt in California. This showing satisfies the “expressly aimed” 18 requirement. See Washington Shoe, 704 F.3d at 675–76; Adobe Sys., 125 F. Supp. 3d at 19 962. 20 Defendant argues that the mere fact of shipping allegedly infringing products to 21 California prior to shipping them to Brazil cannot establish specific jurisdiction. See ECF 22 No. 17 at 5–6. However, Defendant’s suit-related contacts with this forum are not 23 24 25 26 27 28 704 F.3d at 676–77. Moreover, in the instant case, Fighter’s Market is not the only link between Defendant and the forum. Rather, Defendant’s intentional conduct supplies its contacts with the forum: Defendant allegedly attempted to form a business relationship with Plaintiff, manufactured a stockpile of gis bearing Plaintiff’s trademarks as a result of the attempted joint venture, negotiated contracts to sell some of those infringing gis abroad, and shipped the gis to California before shipping them to Brazil. Here, Defendant’s intentional conduct “connects him to the forum in a meaningful way.” Walden, 134 S. Ct. at 1125. 12 3:16-cv-01271-GPC-BGS 1 limited to Defendant’s alleged shipment of K/M gis via California. Plaintiff’s claim of 2 personal jurisdiction does not turn on Defendant’s alleged shipment of K/M gis to a 3 warehouse in California. See Adobe Sys., 125 F. Supp. at 962 (rejecting defendant’s 4 argument that specific jurisdiction was improper where Adobe did not allege that 5 defendant transacted any business in California, concluding that defendant “expressly 6 aimed” at California by willfully infringing Adobe’s copyrights and trademarks with 7 knowledge that Adobe is a resident of California). Here, Plaintiff has established a prima 8 facie case that Defendant intentionally infringed Plaintiff’s trademarks, knowing that 9 Plaintiff is a resident of this forum. See id. 10 c. 11 Forum State 12 Causing Harm that the Defendant Knows Is Likely to Be Suffered in the “It is foreseeable that the loss will be inflicted both in the forum where the 13 infringement took place . . . and where the [rights] holder has its principal place of 14 business.” Washington Shoe, 704 F.3d at 679; see also Adobe Sys., 125 F. Supp. 3d at 15 963 (stating the same); c.f. Mavrix Photo, 647 F.3d at 1231 (“The economic loss caused 16 by the intentional infringement of a plaintiff’s copyright is foreseeable.”). Plaintiff 17 alleges that Defendant’s alleged infringement has diluted Plaintiff’s trademarks, reduced 18 Plaintiff’s revenue, and diminished Plaintiff’s goodwill, among other injuries. See, e.g., 19 Compl. ¶¶ 44, 46, 69, 74–75, 78. Defendant knew at the time it allegedly infringed 20 Plaintiff’s trademarks that Plaintiff holds rights to the K/M trademarks. See Compl. ¶ 45. 21 Defendant also knew that Plaintiff’s principal place of business is in California, as 22 Defendant engaged in business negotiations with Plaintiff and formerly sued Plaintiff in 23 California. See Currey Decl. ¶¶ 2–3; Munduruca Decl. ¶¶ 5, 8. Under Ninth Circuit 24 precedent, Defendant knew or should have known that the impact of its infringement 25 would cause harm likely to be suffered in California. See Washington Shoe, 704 F.3d at 26 679. Thus, the third prong of the effects test is met. See Mavrix Photo, 647 F.3d at 1228. 27 Defendant argues that Plaintiff cannot establish Calder’s third prong because 28 Plaintiff does not own the K/M trademarks in Brazil, and because United States 13 3:16-cv-01271-GPC-BGS 1 trademark law does not govern use of trademarks extraterritorially. See ECF No. 11-1 at 2 11–12. Defendant’s argument is inapposite. It is settled law that Congress intended the 3 Lanham Act to apply extraterritorially. Trader Joe’s Co. v. Hallatt, No. 14-35035, 2016 4 WL 4488009, at *3 (9th Cir. Aug. 26, 2016) (citing Steele v. Bulova Watch Co., 344 U.S. 5 280, 286 (1952)). Whether the Lanham Act applies to Defendant’s alleged 6 extraterritorial conduct in this case is a question not currently before this Court. The 7 scope of “the extraterritorial reach of the Lanham Act is a merits question that does not 8 implicate federal courts’ subject-matter jurisdiction” and turns on the three-part test 9 articulated in Timberlane Lumber Co. v. Bank of America National Trust & Savings 10 Ass’n, 549 F.2d 597 (9th Cir. 1976). Id. at *5–11 (applying Timberlane test). Because 11 Defendant’s motion seeks to dismiss Plaintiff’s claims for lack of personal jurisdiction, 12 the Court does not reach the question of whether the Lanham Act covers Defendant’s 13 alleged extraterritorial conduct. 14 2. 15 Arising Out Of The Ninth Circuit adopted the “but for” test to determine the “arising out of” 16 requirement. Gray & Co. v. Firstenberg Mach. Co., 913 F.2d 758, 761 (9th Cir. 1990) 17 (internal citation omitted). “The Ninth Circuit has recognized that, in trademark or 18 copyright infringement actions, if the defendant’s infringing conduct harms the plaintiff 19 in the forum, this element is satisfied.” Adobe Sys., 125 F. Supp. 3d at 963. 20 Defendant cites to Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 21 284 F.3d 1114 (9th Cir. 2002) to argue that the “but for” test is not met. Glencore Grain 22 is distinguishable. The plaintiff in Glencore Grain filed in California federal court an 23 application for an order confirming an arbitration award that it had obtained against the 24 defendant in England. See id. at 1118–89. The dispute between the parties arose out of 25 contracts that were negotiated abroad, involved foreign companies, and required 26 performance in India. See id. at 1123–24. Because the plaintiff’s injuries arose out of 27 extraterritorial conduct completely unrelated to California, the Ninth Circuit concluded 28 14 3:16-cv-01271-GPC-BGS 1 that the plaintiff’s claim “d[id] not arise out of conduct directed at or related to 2 California.” Id. 3 Here, in the context of trademark infringement, Plaintiff alleges that it would not 4 have been injured but for Defendant’s infringing conduct. See, e.g., Compl. ¶¶ 44, 46, 5 69, 74–75, 78. Accordingly, Plaintiff sufficiently alleges that its claim arises out of 6 Defendant’s forum-related activities. See Panavision Int’l, L.P. v. Toeppen, 141 F.3d 7 1316, 1322 (9th Cir. 1998) (concluding that plaintiff would not have been injured but for 8 defendant’s registration of plaintiff’s trademarks as his own domain names on the 9 Internet, even though defendant’s infringing acts occurred outside of the forum). 10 3. 11 Reasonableness Finally, as to whether the exercise of jurisdiction comports with fair play and 12 substantial justice, if a defendant has purposefully directed its activities in California, 13 then “personal jurisdiction is presumptively reasonable.” Sher v. Johnson, 911 F.2d 14 1357, 1364 (9th Cir. 1990). The burden is on Defendant to “present a compelling case 15 that the presence of some other considerations would render jurisdiction unreasonable.” 16 Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)). 17 18 The Ninth Circuit considers seven factors to determine whether the exercise of jurisdiction is reasonable: 19 (1) the extent of the [defendant’s] purposeful interjection into the forum state’s affairs; (2) the burden on the defendant of defending in the forum; (3) the extent of conflict with the sovereignty of the defendant’s state; (4) the forum state’s interest in adjudicating the dispute; (5) the most efficient judicial resolution of the controversy; (6) the importance of the forum to the plaintiff’s interest in convenient and effective relief; and (7) the existence of an alternate forum. 20 21 22 23 24 25 26 Panavision, 141 F.3d at 1323. The court must balance all seven factors and not one is dispositive. Id. //// 27 28 15 3:16-cv-01271-GPC-BGS 1 a. 2 Purposeful Interjection Defendant argues that this factor weighs against reasonableness because it did not 3 expressly aim its acts at California. See ECF No. 11-1 at 13. As the Court has 4 determined that Defendant expressly aimed its acts at California, the Court finds that the 5 “purposeful interjection” factor does not weigh against the reasonableness of finding 6 jurisdiction over Defendant. See CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 7 1066, 1080 (9th Cir. 2011) (“Actions directed at a forum resident expected to cause harm 8 in the forum constitute purposeful injection.”) 9 b. Defendant’s Burden in Litigating “[U]nless the ‘inconvenience is so great as to constitute a deprivation of due 10 11 process, it will not overcome clear justifications for the exercise of jurisdiction.’” 12 Panavision, 141 F.3d at 1323 (quoting Caruth v. International Psychoanalytical Ass’n, 13 59 F.3d 126, 128–29 (9th Cir. 1995)). While the mere fact that Defendant has litigated in 14 California before will not subject it to personal jurisdiction, for purposes of assessing the 15 burden on Defendant in litigating in this forum, the fact that Defendant pursued litigation 16 in San Diego two years ago weighs against finding that the inconvenience to Defendant 17 would be so great as to constitute a deprivation of due process. See Munduruca Decl. ¶ 8; 18 Currey Decl. ¶ 3. 19 c. 20 Sovereignty Defendant contends that this factor weighs against finding jurisdiction because 21 Brazilian law governs this instant trademark dispute, and because it is a foreign 22 corporation. See ECF No. 11-1 at 14. However, Defendant does not address how 23 jurisdiction would pose a conflict with the sovereignty of Defendant’s state of 24 incorporation—the British Virgin Islands—or its principal place of business—Hong 25 Kong. See id. Furthermore, courts have extended the Lanham Act to reach 26 extraterritorial conduct. See, e.g., Trader Joe’s, 2016 WL 4488009, at *11. Whether the 27 Lanham Act reaches Defendant’s extraterritorial conduct is a merits question that is 28 16 3:16-cv-01271-GPC-BGS 1 currently not before this Court. See id. at *3. Defendant has not established that this 2 factor weighs against the reasonableness of exercising jurisdiction over Defendant. 3 d. 4 Forum State’s Interest Defendant reiterates its assertions that the instant trademark dispute is governed by 5 Brazilian law and argues that California’s interest is minimal where the conduct in 6 dispute took place abroad. See ECF No. 11-1 at 14; ECF No. 17 at 7. However, the 7 Ninth Circuit has held that “California maintains a strong interest in providing an 8 effective means of redress for its residents tortiously injured.” Panavision, 141 F.3d at 9 1323 (quoting Gordy v. Daily News, L.P., 95 F.3d 829, 836 (9th Cir. 1996)). That 10 tortious conduct which harms a forum state’s residents occurred outside of the forum will 11 not eliminate the forum state’s interest in providing redress for its residents. See 12 Washington Shoe, 704 F.3d at 675–76 (citing Licciardello v. Lovelady, 544 F.3d 1280, 13 1286 (11th Cir. 2008) (“[S]tates have a special interest in exercising jurisdiction over 14 those who commit intentional torts causing injury to their residents.”)). This factor 15 weighs in favor of the reasonableness of exercising specific jurisdiction over Defendant. 16 e. Efficient Resolution “This factor focuses on the location of the evidence and witnesses.” Panavision, 17 18 141 F.3d at 1323. Defendant makes conclusory assertions that the majority of the 19 witnesses and evidence are located in Hong Kong or Brazil. See Currey Decl. ¶¶ 6–7. 20 Assuming Defendant’s assertions were true, the Ninth Circuit has stated that this factor is 21 “no longer weighed heavily given the modern advances in communication and 22 transportation.” Panavision, 141 F.3d at 1323. This factor does not weigh against the 23 reasonableness of exercising jurisdiction over Defendant; at minimum, this factor is 24 neutral. 25 f. 26 Convenient and Effective Relief for Plaintiff Although it will likely be inconvenient for Plaintiff to litigate in a forum outside of 27 California, the Ninth Circuit has stated that “[i]n evaluating the convenience and 28 effectiveness of relief for the plaintiff, we have given little weight to the plaintiff’s 17 3:16-cv-01271-GPC-BGS 1 inconvenience.” Panavision, 141 F.3d at 1324. This factor does not weigh in favor of 2 exercising jurisdiction over Defendant in California; at most, this factor is neutral. 3 g. 4 Alternative Forum Plaintiff has not established that an alternative forum is unavailable. However, 5 “whether another reasonable forum exists becomes an issue only when the forum state is 6 shown to be unreasonable.” Sinatra v. Nat’l Enquirer, Inc., 854 F.2d 1191, 1201 (9th 7 Cir. 1988) (internal citation omitted). Here, Defendant has not carried its burden to show 8 that the forum state is unreasonable. Accordingly, the existence of an alternative forum is 9 not at issue. 10 In balancing the aforementioned factors outlined in Panavision, 141 F.3d at 1323, 11 the Court concludes that Defendant fails to carry its burden to present a compelling case 12 that exercising specific personal jurisdiction over Defendant would be unreasonable. See 13 Burger King, 471 U.S. 462 at 477; Schwarzenegger, 374 F.3d at 802. 14 15 CONCLUSION For the reasons stated above, the Court finds that Plaintiff sufficiently alleges that 16 personal jurisdiction over Defendant in this forum state would be proper. Accordingly, 17 the Court DENIES Defendant’s motion to dismiss for lack of personal jurisdiction. 18 IT IS SO ORDERED. 19 20 Dated: September 14, 2016 21 22 23 24 25 26 27 28 18 3:16-cv-01271-GPC-BGS

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