Jezign Licensing, LLC v. Maxima Apparel Corp.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JEZIGN LICENSING, LLC, a New York Case No.: 20-CV-1438-JLS (AGS) Limited Liability Company, 12 ORDER GRANTING MOTION TO Plaintiff, 13 DISMISS FOR IMPROPER VENUE v. 14 (ECF No. 12) MAXIMA APPAREL CORP., a New 15 York Corporation; MAXIMA 16 ECOMMERCE HOLDINGS LLC, a New York Limited Liability Company; 17 MAXIMA GLOBAL HOLDINGS LLC, a 18 Delaware Limited Liability Company; and HUDSON OUTWEAR INC., a New York 19 Corporation, 20 Defendants. 21 22 Presently before the Court is Defendants’ Motion to Dismiss (“MTD,” ECF No. 12) 23 Pursuant to Federal Rules of Civil Procedure 4(m), 12(b)(2), and 12(b)(3). Specifically, 24 Defendants seek to dismiss the action for lack of service, lack of personal jurisdiction, and 25 improper venue. See generally MTD. Also before the Court are Plaintiff’s Response in 26 Opposition (“Opp’n,” ECF No. 13) to Defendants’ MTD, and Defendants’ Reply (“Reply,” 27 ECF No. 14) in Support of the MTD. The Court vacated the hearing on the matter and 28 took the MTD under submission without oral argument pursuant to Civil Local Rule 1 7.1(d)(1). ECF No. 15. After considering the Parties’ arguments and the law, the Court 2 GRANTS Defendants’ Motion to Dismiss.1 3 BACKGROUND 4 Plaintiff Jezign Licensing, LLC (“Plaintiff”) is a company that specializes in the 5 design and technology of illuminated footwear. Complaint (“Compl.”) ¶ 7, ECF No. 1. 6 Jez Marston filed Patent Application No. 29/217,103 on November 15, 2004, which issued 7 as U.S. Design Patent No. D554,848 (the “’848 patent”) on November 13, 2007. Id. (“Ex. 8 A,” ECF No. 1-2). Patent Application No. 29/217,103 was a continuation-in-part of Patent 9 Application No. 10/386,509, filed on March 13, 2003, which issued as U.S. Patent No. 10 6,837,590, itself a continuation-in-part of Patent Application No. 09/963,787, filed on 11 September 27, 2001, now abandoned. See generally id. The ’848 patent is assigned to 12 Plaintiff. See generally id. 13 Defendants Maxima Apparel Corp., Maxima Ecommerce Holdings LLC, Maxima 14 Global Holdings LLC, and Hudson Outwear Inc. (collectively, “Defendants”) are the 15 defendants in suit. An unnamed separate Maxima Affiliate2 sold Hoverkicks Super Nova 16 LED sneakers (the “Accused Sneakers”) between 2014 and 2015. MTD at 1. A factory in 17 China designed, created, and manufactured the Accused Sneakers, which were then sold 18 by the Maxima Affiliate. Declaration of Aaron Barak (“Barak Decl.”) ¶ 12, ECF No. 12- 19 1. The Maxima Affiliate sold the Accused Sneakers through a no-longer active online 20 ecommerce site. Id. ¶ 13. 21 Plaintiff filed a Complaint against Defendants, accusing them of direct infringement 22 of the ’848 patent. See generally Compl. Plaintiff requested, inter alia, the following 23 relief: (1) a preliminary and permanent injunction against Defendants from manufacturing, 24 distributing, or selling any product that infringes the ’848 patent; (2) disgorgement of 25 26 1 Because the Court’s ruling on the propriety of venue is dispositive of the MTD, the Court will not 27 consider Defendants’ arguments on lack of service or lack of personal jurisdiction. 28 1 profits; (3) lost profits; (4) treble damages; (5) punitive and exemplary damages; and (6) a 2 declaration that the case is exceptional, which would entitle Plaintiff to an award of 3 reasonable costs and attorneys’ fees under 35 U.S.C. § 285. Id. at 5. In response, 4 Defendants filed the present MTD. See generally MTD. 5 LEGAL STANDARD 6 Section 1406(a) of Title 28 of the United States Code provides that “[t]he district 7 court of a district in which is filed a case laying venue in the wrong division or district shall 8 dismiss, or if it be in the interest of justice, transfer such case to any district or division in 9 which it could have been brought.” Pursuant to Federal Rule of Civil Procedure 12(b)(3), 10 a party may move to dismiss an action for improper venue. In deciding a Rule 12(b)(3) 11 motion, a court need not accept the pleadings as true and may consider facts outside the 12 pleadings. Murphy v. Schneider Nat’l, Inc., 362 F.3d 1133, 1137 (9th Cir. 2004). Upon a 13 motion by the defendant challenging venue in a patent case, the burden of establishing 14 proper venue shifts to the plaintiff. In re ZTE Inc., 890 F.3d 1008, 1013 (Fed. Cir. 2018). 15 In patent infringement actions, venue is proper “in the judicial district where the 16 defendant resides, or where the defendant has committed acts of infringement and has a 17 regular and established place of business.” 28 U.S.C. § 1400(b) (emphasis added). Section 18 1400(b) is the “sole and exclusive provision controlling venue in patent infringement 19 actions.” TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514, 1519 20 (2017). 21 For purposes of the first prong of § 1400(b), a defendant resides only in its state of 22 incorporation. Id. at 1517. The second prong of § 1400(b) has two parts, requiring that 23 alleged acts of infringement by the defendant occurred in the district and that the defendant 24 has a “regular and established place of business” in the district. Alleged actions of 25 infringement should be specific, rather than general, to satisfy § 1400(b). See Prolacta 26 Bioscience, Inc. v. Ni-Q, LLC, No. CV 17-04071, 2017 U.S. Dist. LEXIS 217030, at *12 27 (C.D. Cal. Aug. 7, 2017). 28 /// 1 ANALYSIS 2 Defendants argue that Plaintiff fails to establish that venue is proper in the Southern 3 District of California (the “District”) because: (1) Defendants are not incorporated in this 4 state; and (2) Plaintiff has not specifically identified acts of infringement by the Defendants 5 in the District, nor do Defendants maintain a regular and established place of business in 6 this District. See generally MTD. In other words, Defendants allege that Plaintiff has 7 failed to satisfy either prong of § 1400(b). See generally id. The Court agrees with the 8 Defendants. 9 Regarding the first prong of § 1400(b), all the Defendants, as well as the Maxima 10 Affiliate, are—or in the case of Maxima Affilate, were—incorporated in either New York 11 or Delaware,3 and thus no Defendant is incorporated in the District. Id. at 1. Plaintiff does 12 not contest this. See generally Opp’n. Thus, venue is not proper for any Defendant under 13 the first prong of § 1400(b). 14 Turning to the first part of the second prong of § 1400(b), Plaintiff has failed to 15 identify any specific acts of infringement committed by Defendants in the District. See 16 Compl. at 4. Indeed, Plaintiff only alleges that the acts of infringement occurred in the 17 United States, without any indication that the acts happened in California, let alone in the 18 District specifically. See id. Thus, Plaintiff has failed to describe any specific acts of 19 infringement that occurred in the District. 20 Finally, the second part of the second prong of § 1400(b) requires that Defendants 21 have a “regular and established place of business” in the District. To satisfy the “regular 22 and established place of business” requirement, “(1) there must be a physical place in the 23 district; (2) it must be a regular and established place of business; and (3) it must be the 24 place of the defendant.” In re Cray Inc., 871 F.3d 1355, 1360 (Fed. Cir. 2017). The 25 defendant must have “a physical, geographical location in the district from which the 26 27 3 Maxima Apparel Corp., Maxima Ecommerce Holdings LLC, and Hudson Outwear Inc. are incorporated 28 in New York, the defunct Maxima Affiliate was incorporated in New York, and Maxima Global Holdings 1 business of the defendant is carried out.” Id. at 1362. The defendant’s place of business 2 must be regular, rather than sporadic, as well as established, rather than transient. Id. at 3 1362–63. The defendant’s place of business must be owned, leased, or otherwise possessed 4 or controlled by the defendant itself. Id. at 1363–64. 5 Defendants aver that they do not have “any employees or agents in California, lease 6 or own offices or any other real property in California, utilize third-party manufacturers or 7 warehouses in California, pay taxes in California, maintain any bank accounts in 8 California, have a California telephone number or listing or have any physical presence in 9 California.” MTD at 1. Plaintiff fails to dispute a single one of these statements. See 10 generally Opp’n. Therefore, the Court finds that Plaintiff has not carried its burden of 11 establishing that venue is proper in the District. See In re ZTE, 890 F.3d at 1013. 12 Plaintiff urges this Court to apply 28 U.S.C. § 1404(a) to the present action. See 13 Opp’n at 5–7. However, a § 1404(a) analysis of the parties’ convenience is available only 14 if the transferor court is a proper venue. See Griffith v. Boll & Branch, LLC, No. 19-cv- 15 1551, 2020 U.S. Dist. LEXIS 18247, at *17 (S.D. Cal. Feb. 3, 2020). Such is not the case 16 here, as the Court has concluded that this District is not a proper venue. See supra. Thus, 17 the factors that Plaintiff relies on for transfer of venue are inapplicable. See Opp’n at 5–6. 18 Whether to dismiss a case or to transfer it to a proper venue is at the discretion of the 19 district court. See King v. Russell, 963 F.2d 1301, 1304 (9th Cir. 1992). A plaintiff’s 20 failure to even attempt to meet its burden to show proper venue is a factor that weighs in 21 favor of dismissal. Cart & Supply, Inc. v. Everstrong Commer. Prods., LLC, No. CV 18- 22 3932, 2018 U.S. Dist. LEXIS 226143, at *5 (C.D. Cal. Oct. 11, 2018). Here, since Plaintiff 23 does not contest a single one of Defendants’ arguments for why venue is improper, see 24 generally Opp’n, the Court chooses to dismiss the Complaint, rather than transfer this 25 action to another court. 26 /// 27 /// 28 /// 1 CONCLUSION 2 For the reasons stated above, the Court GRANTS Defendants’ Motion to Dismiss 3 ||(ECF No. 12), and DISMISSES the case in its entirety WITHOUT PREJUDICE to 4 || refiling in the proper venue. The Clerk of Court SHALL CLOSE the file. 5 IT IS SO ORDERED. 6 ||Dated: August 9, 2021 . tt f te 7 on. Janis L. Sammartino g United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28