Opinion
Case No. CV 04-1181-RGK (FMOx).
July 20, 2004
I. FACTUAL BACKGROUND
This action is brought by Plaintiff New Tech Stainless Steel Products, Co., Ltd. ("Plaintiff") against Defendants Sun Manufacturing Corporation dba Bulletline.com ("Bullet Line"), and Jason Robbins dba Epromos.com ("Robbins") (collectively "Defendants") for:
(1) Patent Infringement of U.S. Patent D437,187 (the "`187 Patent");
(2) California Unfair Competition; and
(3) Federal Unfair Competition.
Plaintiff alleges the following in the Complaint:
Plaintiff is a Taiwanese Corporation who sells a variety of custom gifts such as thermal mugs with surfaces that accommodate customized printing. Plaintiffs business includes the design, development, sale and distribution of decorative handles throughout the United States and the world. The design is described in the '187 Patent, and pending copyright protection. The infringed design has many decorative and ornamental features.
Defendants copied Plaintiffs design for decorative handles, and have been and are infringing the '187 Patent by making, selling, offering for sale and using the invention covered by the patent. Defendants have not ceased after being given notice of their illegal activity.
Presently before this Court is Defendant Bullet Line's Motion to Dismiss for Lack of Personal Jurisdiction or, Alternatively, to Transfer Venue Pursuant to 28 U.S.C. §§ 1401(a) or 1406(a) ("Motion").
II. JUDICIAL STANDARD A. Dismiss For Lack of Personal Jurisdiction
In order to maintain an action in United States District Court, a plaintiff must establish that the court has personal jurisdiction over the defendant. See Fed.R.Civ.P. 12(b)(2). Although the plaintiff ultimately holds the burden to prove that the defendant is subject to personal jurisdiction, when the motion to dismiss is evaluated without an evidentiary hearing, the plaintiff need only make a prima facie showing to survive dismissal pursuant to FRCP 12(b)(2). Farmers Ins. Exch. v. Portage La Prairie Mut. Ins. Co., 907 F.2d 911, 912 (9th Cir. 1990). To establish a prima facie showing of personal jurisdiction, plaintiff must set forth some evidentiary basis to support the allegations offered in the complaint. Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995). A defendant may not simply contest the factual allegations made by the plaintiff, but instead must demonstrate additional considerations which undermine the court's personal jurisdiction over the defendant to overcome the plaintiff's prima facie showing. Burger King v. Rudkewicz, 471 U.S. 462, 476 (1985).
In order to show personal jurisdiction over the defendant, the plaintiff must show that the long arm statute of the forum state, in this case California, confers jurisdiction, and that the exercise of personal jurisdiction over the nonresident accords with federal constitutional principles of due process. Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987). Under World-Wide Volkswagon Corp. v. Woodson, 444 U.S. 286, 291 (1980), due process states that "a court may exercise personal jurisdiction over a nonresident defendant only so long as there exist `minimum contacts' between the defendant and the forum state such that "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); World-Wide Volkswagon, 444 U.S. at 291. The minimum contacts standard may be met in two ways: the court may either assert specific jurisdiction where the cause of action arises out of the contact with the forum state, or the court may assert general jurisdiction where the contacts with the forum state are substantial enough to warrant jurisdiction in any cause of action against the defendant.
When `minimum contacts' between the defendant and forum state have been established, to avoid personal jurisdiction, the defendant may demonstrate "some other considerations" that indicate that conferring jurisdiction would be unreasonable. Burger King, 471 U.S. at 476-77. An otherwise valid exercise of personal jurisdiction is presumptively reasonable, placing the burden on the defendant to demonstrate unreasonableness. Ballard, 65 F.3d at 1500. B. Standard For Motion To Transfer Pursuant to 28 U.S.C. § 1404(a)
In deciding whether to grant a motion to transfer pursuant to Section 1404(a), a district court must consider the following: (1) the convenience of the parties, (2) the convenience of the witnesses, and (3) the interests of justice. See 28 U.S.C. § 1404(a); see also Kaset v. Molybdenum Corp., 408 F.2d 16, 20 (9th Cir. 1969). The district court has discretion "to adjudicate motions for transfer according to an individualized case-by-case consideration of convenience and fairness." Jones v. GNC Franchising, 211 F.3d 495, 498 (9th Cir 2000). The burden of establishing that an action should be transferred pursuant to Section 1404(a) is on the moving party. See Commodity Futures Trading Commission v. Savage, 611 F.2d 270 (9th Cir. 1979).
III. DISCUSSION A. Personal Jurisdiction
1. General Jurisdiction
If a defendant is domiciled in the forum state, or its activities there are "substantial, continuous, and systematic," a federal court can exercise jurisdiction as to any cause of action, even if unrelated to defendant's activities within the state. Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 445 (1952).
Defendant Bullet Line does not posses the requisite contacts with the State of California for this Court to establish general jurisdiction. Bullet Line has no offices, manufacturing facilities, employees, officers, directors, sales agents or representatives, or licensees located in the State of California. Declaration of Neal Farr ¶ 7. Bullet Line sells products nationwide, and does not specifically target California. Id. at ¶ 6. As such, Plaintiff has not met its burden of proof of establishing that Bullet Line has substantial, continuous, and systematic activities in the State of California to constitute general jurisdiction.
2. Specific Jurisdiction
a. Stream Of Commerce
Even if a nonresident defendant's contacts with the forum state are not sufficiently "continuous and systematic" for general jurisdiction, the defendant may still be subject to jurisdiction on claims related to its contacts in the forum state. Specific personal jurisdiction requires a showing that: (1) the out-of-state defendant purposefully directed its activities towards residents of the forum state or otherwise established contacts with the forum state; (2) the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) the forum's exercise of personal jurisdiction in the particular case is reasonable. Hanson v. Denckla, 357 U.S. 235, 253-54 (1958); Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir. 1995); Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477-478 (1985).
To establish specific jurisdiction, the nonresident defendant must purposefully avail itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of local law. Hanson, at 253-254. When a nonresident manufacturer sells goods or services in the forum state the requisite standard connection will usually be found. World-Wide Volkswagen Corp. v. Woodson 444 U.S. 286, 297-98 (1980). The manufacturer need have no office, plant or personnel locally; it is enough that it has "placed its products in the stream of interstate commerce with the expectation that they will be sold to consumers in the forum state." Id.
However, the placement of the product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum state. Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102, 112 (1987) (Stevens, J., concurring). Whether or not conduct rises to the level of purposeful availment requires a constitutional determination that is affected by the volume and value of the product. Id.; see also Bridgestone Corp. v. The Superior Court of Los Angeles County, 99 Cal. App. 4th 767 (Cal.App. 2002) (noting that a company's awareness that a large volume of their product was being distributed for sale in California and that the company earned a substantial income from those sales amounts to purposeful availment).
Upon review of the record, the Court finds that the volume and value of the product sold by Bullet Line is inadequate to assert personal jurisidiction. Bullet Line's only contact with California is a single sale of the allegedly infringing product worth merely $8,800. Plaintiff does not provide any relevant legal argument or precent to show that such an insignigicant contact may warrant asserting personal jurisdiction. As such, Plaintiff has failed to satisfy the requirements necessary for this Court to have specific personal jurisdiction over Bullet Line.
The single sale was made to Logo Expression, Inc., a California company.
b. Internet Contacts
Bullet Line contends that although its Internet website is accessible in California, its website cannot justify asserting personal jurisdiction. This Court agrees.
Whether a Court will assert personal jurisdiction depends on whether the website at issue is passive or interactive. A resident's ability to access a passive website that does no more than provide information will generally not provide a basis for jurisdiction. GTE New Media Servs., Inc. v. BellSouth Corp., 199 F.3d 1343, 1349 (D.C. Cir. 2000). However, where the user of the website exchanges information with the host computer, the court must review the "level of interactivity and commercial nature of the exchange of information" to determine if the exercise of jurisdiction is proper." Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa 1997). A defendant that "conducts business" over the Internet with the residents of a forum will usually be found subject to that forum's jurisdiction. Zippo, 952 F. Supp. at 1124. Even if the only contacts a company has with a state are through its virtual store, a finding of jurisdiction is consistent with the sliding scale test that the Ninth Circuit has applied to Internet-based companies. Gator.com Corp. v. L.L. Bean, Inc., 341 F.3d 1072, 1079 (9th Cir. 2003). This test requires both that the party in question clearly do business over the Internet, and that the Internet business contacts with the forum state be substantial or continuous and systematic. Id. Recognizing that an online store can operate as the functional equivalent of a physical store, the test does not require an actual presence in the state; rather, the nature of the commercial activity must be of a substantial enough nature that it "approximates physical presence." Id. (quoting Bancroft Masters, Inc. v. Augusta Nat'l, Inc., 223 F.3d 1082, 1086 (9th Cir. 2000).
Plaintiff relies heavily on the fact that Bullet Line has a website on the Internet to argue that this court has personal jurisdiction over Bullet Line. However, Bullet Line's website is not interactive for the purposes of establishing specific personal jurisdiction. Indeed, Defendant's website does not permit the user to actually place product orders. In fact, the website is purely informative, and as such, the level of interactivity between Bullet Line and Internet users is minimal. Because Bullet Line does not conduct business transactions through their website, asserting personal jurisdiction over Bullet Line is not warranted.
Plaintiff's repeated references to websites operated by entities other than Bullet Line is immaterial for establishing personal jurisdiction over Bullet Line.
Due to this Court's ruling, Bullet Line's alternative requests to transfer venue pursuant to 28 U.S.C. §§ 1404 (a) or 1406(a) need not be determined.
IV. CONCLUSION
In light of the foregoing, Defendant Bullet Line's Motion to Dismiss for lack of personal jurisdiction is GRANTED. Accordingly, Defendant Sun Manufacturing Corporation dba Bulletline.com is hereby dismissed for lack of personal jurisdiction.