Adtile Technologies Inc. v. Perion Network Ltd.

192 F. Supp. 3d 515, 2016 U.S. Dist. LEXIS 82346, 2016 WL 3475335
District Court, D. Delaware·Decided June 24, 2016·No. Civ. No. 15-1193-SLR·Published·Cited by 6 cases

Opinion

MEMORANDUM OPINION

SUE L. ROBINSON, District Judge

I. INTRODUCTION

On December 22, 2015, plaintiff Adtile Technologies, Inc. (“Adtile”) filed a complaint for breach of contract, breach of the covenant of good faith and fair dealing, misappropriation of trade secrets and confidential information, copyright and trademark infringement, unfair competition, false designation of origin, common law trademark infringement, and common law unfair competition against defendants Per-ion Network Ltd. (“Perion”) and Intercept Interactive, Inc. d/b/a Undertone (“Undertone”). (D.I. 1) Presently before the court are Perion’s motion to dismiss the complaint for lack of personal jurisdiction (D.I. 22) and Undertone’s motion to stay the present action and compel arbitration (D.I. 25). The court has jurisdiction over the copyright and Lanham Act claims pursuant to 28 U.S.C. §§ 1331, 1338(a) and (b) and 15 U.S.C. § 1121(a). The court has supplemental jurisdiction over Adtile’s ad[520] ditional claims pursuant to 28 U.S.C. § 1367(a).

II. BACKGROUND

Adtile is a company organized under the laws of the State of California with its principal place of business in San Diego, California. Adtile develops multi-sensor advertising technology and services for smaitphones and tablets, with a focus on mobile “Motion Ads.” (D.I. 1 at ¶ 8) Undertone is a marketing company organized under the laws of the State of New York with a principal place of business in New York, New York. Perion is a company organized under the laws of Israel with a principal place of business in Holon, Israel. (D.1.1 at ¶¶ 9-10)

Since 2013, Adtile has developed and launched Motion Ads, which provide users a unique motion-activated advertising experience. On February 14, 2014, Undertone and Adtile entered into discussions regarding Adtile’s sensor-enabled technology pursuant to a non-disclosure agreement dated March 11, 2014 (“March NDA”). On August 18, 2014, the parties entered into a license agreement (the “License Agreement”) and a new NDA, which provides that Adtile would produce’ Motion Ads and Undertone would sell such ads to its customers. (D,I. 33, ex. 11) On June 12, 2016, Adtile and Undertone terminated the License Agreement (the “Termination Agreement”). (D.I. 33, ex. 16) The License and Termination Agreements provide for the resolution of disputes according to the laws of the State of Delaware. (D.I. 33, exs. 11,16)

According to Adtile, in June 2015, Per-ion inquired about using and investing in Adtile’s technology.1 Perion stated that it had also reached out to Undertone, as Undertone used motion-activated ads with great success. Adtile informed Perion that Undertone was a client and was using Adtile’s technology. (D.I. 13 at ¶¶ 38-42) Perion announced on December 1, 2015 that it had acquired Undertone for $180 million. (D.I. 14, ex. A) Perion refers to Undertone as its “digital advertising firm.” (D.1.14, ex. B)

III. PERSONAL JURISDICTION

A. Standard

Rule 12(b)(2) of the Federal Rules of Civil Procedure directs the court to dismiss a case when the court lacks personal jurisdiction. Fed. R. Civ. P. 12(b)(2). When reviewing a motion to dismiss pursuant to Rule 12(b)(2), a court must accept as true all allegations of jurisdictional fact made by plaintiff and resolve all factual disputes in plaintiffs favor. Traynor v. Liu, 495 F.Supp.2d 444, 448 (D.Del.2007). Once a jurisdictional defense has been raised,, plaintiff bears the burden of establishing, with reasonable, particularity, that sufficient minimum contacts have occurred between defendant and the forum to support jurisdiction. See Provident Nat’l Bank v. Cal. Fed. Sav. & Loan Ass’n, 819 F.2d 434, 437 (3d Cir.1987). To meet this burden, plaintiff must produce “sworn affidavits or other competent evidence,” since a Rule 12(b)(2) motion “requires resolution of factual issues outside the pleadings.” Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 67 n. 9 (3d Cir.1984).

Pursuant to the relevant portions of Delaware’s long-arm statute, 10 Del. C. § 3104(c)(l)-(4), a court may exercise personal jurisdiction over a defendant when a defendant or its agent:

(1) Transacts any business or performs any character of work or service in the ' State; •
(2) Contracts to supply services or things in this State;
[521] (3) Causes tortious injury in the State by an act or omission in this, State;
(4) Causes tortious injury in the State or outside of the State by an act or omission outside the State if the person regularly does or solicits business, engages in any other persistent course of conduct in the State or derives substantial revenue from services, or things used or consumed in the State.

10 Del. C. § 3104(c)(l)-(4). With the exception of (c)(4), the long-arm statute requires a showing of specific-jurisdiction. See Shoemaker v. McConnell, 556 F.Supp.2d 351, 354, 355 (D.Del.2008). Subsection (4) confers general jurisdiction, which requires a greater number of contacts, but allows the exercise of personal jurisdiction even when the claim is uráelated to the forum contacts. See Applied Biosystems, Inc. v. Cruachem, Ltd., 772 F.Supp. 1458, 1466 (D.Del.1991).

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Adtile Technologies Inc. v. Perion Network Ltd., 192 F. Supp. 3d 515, 2016 U.S. Dist. LEXIS 82346, 2016 WL 3475335 (D. Del. 2016).

192 F. Supp. 3d 515 (Adtile Technologies Inc. v. Perion Network Ltd.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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