THE UNITED STATES DISTRICT COURT DISTRICT OF UTAH
ALFWEAR, INC., MEMORANDUM DECISION AND ORDER DENYING IN PART AND Plaintiff, GRANTING IN PART [35] DEFENDANTS’ MOTION TO DISMISS v. AND DENYING DEFENDANTS’ MOTION TO TRANSFER VENUE IBKUL UBHOT LTD., a New York corporation; IBKUL CORP., a Florida Case No. 2:21-cv-00698-DBB-JCB corporation; and IBCOOL INC., a Florida corporation, District Judge David Barlow
Defendants.
This matter is before the court on Defendants’ motion to dismiss for lack of jurisdiction and venue and, in the alternative, Defendants’ motion to transfer venue to the Southern District of Florida. Plaintiff Alfwear, Inc. (“Alfwear”) sells a product line with the mark “KÜHL.”1 Defendants IBKUL UBHOT Ltd. (“UBHOT”), IBKUL Corp. (“IBKUL”), and IBCOOL Inc. (“IBCOOL”) (collectively “Defendants”) have a product line with the mark “IBKÜL.”2 Alfwear alleges that Defendants’ use of a similar mark infringes Alfwear’s trademark rights, violates unfair competition laws, and constitutes dilution.3 Defendants assert that there is no personal jurisdiction in Utah, and that venue in the District of Utah is improper.4 They ask the court to dismiss Alfwear’s claims or to transfer venue to the Southern District of Florida.5 Having
1 Am. Compl. ¶¶ 60–64, ECF No. 28, filed Mar. 28, 2022. 2 Id. at ¶ 69. 3 Id. at ¶¶ 104, 110, 113, 119. 4 Def. Mot. to Dism. & Mot. to Transfer Venue 5, ECF No. 35, filed Apr. 26, 2022. 5 Id. reviewed the parties’ briefing, the court concludes that the motion may be resolved without oral argument.® Defendants’ motion to dismiss is denied as to IBKUL and IBCOOL and granted as to UBHOT. The court denies Defendants’ motion to transfer venue. BACKGROUND Alfwear is a Utah company that started selling products with the mark “KUHL” in 1994’: ki h |
Alfwear sells KUHL products to thousands of retailers nationwide, to online buyers, and to international customers.® In addition to gaining the rights to the mark “KUHL” in 1996,’ Alfwear owns trademarks for several related words and designs.'° Defendants are three corporate entities who, since 2016, have used the mark “IBKUL”!!: eo °®
IBKUL is a Florida corporation that sells IBKUL products wholesale to more than 1,400 retailers nationwide.!* IBCOOL is another Florida corporation that sells IBKUL products online.'°
6 See DUCivR 7-1(g). TECE No. 28, at {ff 1, 49; Notice of Opp’n 2, ECF No. 44-2, filed June 2, 2022; see Reg. No. 1,990,375, U.S. Pat. & Trademark Off., ECF No. 28-1, filed Mar. 28, 2022. 8 ECF No. 28, at 59-65 (international sales of over $200 million and shipments of over one million units annually). Id. at 7 50. 10 Td. at 52-58 (c.g., “KUHL”). "| ECF No. 35, at 6-7; see Decl. of Jamie Handler 4] 12, 59, ECF No. 44-1, filed June 2, 2022. '2 PL. Resp. to Mot. to Dism. 3, ECF No. 44, filed June 2, 2022; ECF No. 44-1, at 941. '3 ECF No. 44, at 3; ECF No. 28, at § 23.
UBHOT is a New York corporation that holds the IBKÜL mark and has licensed its use to IBKUL and IBCOOL.14 In 2016, UBHOT filed an application for “IBKÜL” that Alfwear opposes at the Trademark Trial and Appeal Board.15 Litigation in this case started when Alfwear filed its Complaint on November 29, 2021 against UBHOT.16 On March 28, 2022, Alfwear added Defendants IBKUL and IBCOOL in an Amended Complaint.17 Alfwear brings four claims against Defendants for the use of “IBKÜL”: trademark infringement, federal and common law unfair competition, and dilution.18 On April 26, 2022, Defendants filed a motion to dismiss for lack of jurisdiction and improper venue and, alternatively, a motion to transfer venue to the Southern District of Florida.19 Alfwear filed a response on June 2, 2022,20 and Defendants filed a reply on June 23, 2022.21 Defendants offered two declarations in their reply brief.22 The first declaration is from
Anurag Gauba, CEO of UBHOT, IBKUL, and IBCOOL.23 Gauba discusses IBCOOL’s practice of digital advertising with AdWords and reveals how many Utahns have subscribed to marketing emails through IBCOOL’s website.24 In the second declaration, IBKUL’s president revises his previous declaration where he said that he was the president of UBHOT.25 He further asserts that UBHOT does not sell any IBKÜL products and notes the number of Florida retailers carrying
14 ECF No. 44, at 3, 19–20. 15 Id. at 6 (citing ECF No. 28, at ¶¶ 72–76); see ECF No. 44-2. 16 Compl., ECF No. 2, filed Nov. 29, 2021. 17 ECF No. 28. 18 Id. at ¶¶ 85–119. 19 ECF No. 35. 20 ECF No. 44. 21 Reply Mem. in Supp. of Def. Mot. to Dismiss, ECF No. 48, filed June 23, 2022. 22 See Reply Decl. of Anurag Gauba, ECF No. 48-1, filed June 23, 2022; Decl. of Jamie Handler, ECF No. 48-2, filed June 23, 2022. 23 ECF No. 48-1, at ¶ 2. 24 Id. at ¶¶ 4–5. 25 ECF No. 48-2, at ¶¶ 3–4. IBKÜL products.26 Alfwear objected to the declarations, claiming that Defendants “unfairly
denied [them] the opportunity to respond.”27 The court finds that a surresponse to the reply is unnecessary. For purposes of this motion, the court will not consider the declarations to the extent that they raise new facts.28 STANDARD Dismissal is warranted if the court lacks personal jurisdiction over a defendant29 or venue is improper.30 For a motion to dismiss, the court must resolve factual disputes in favor of the plaintiff and treat well-pleaded factual allegations as true unless they are disputed by declarations.31 The plaintiff has the burden of showing that there is personal jurisdiction over a defendant, but when there has been no evidentiary hearing, the plaintiff need only make a prima facie showing to defeat a motion to dismiss.32 The plaintiff may bring “either uncontested allegations in its complaint or evidence in the form of an affidavit or declaration.”33
DISCUSSION The first issue is whether the court should treat Defendants’ motion as a motion to dismiss or for summary judgment. Next, the court will analyze whether there is personal jurisdiction over Defendants and whether venue in the District of Utah is proper. Finally, the court will determine whether transferring venue to the Southern District of Florida is appropriate.
26 ECF No. 48-2, at ¶¶ 5–7. 27 Pl. Obj. to Def. Reply Decls. 2, ECF No. 49, filed June 30, 2022 (citing Paugh v. Uintah County, No. 2:17-cv- 01249, 2020 WL 4597062, at *16 (D. Utah Aug. 11, 2020)). 28 See Blundell v. Elliott, No. 1:20-cv-00143, 2021 WL 4473426, at *6 (D. Utah Sept. 30, 2021) (“The court will not . . . consider new facts, arguments, or issues raised in . . . Reply briefs.” (citing United States v. Garfinkle, 261 F.3d 1030, 1031 (10th Cir. 2001)). 29 Fed. R. Civ. P. 12(b)(2); see Eighteen Seventy LP v. Jayson, 32 F.4th 956, 964 (10th Cir. 2022). 30 Fed. R. Civ. P. 12(b)(3); see Emps. Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1165–66 (10th Cir. 2010). 31 Jayson, 32 F.4th at 964. 32 Benton v. Cameco Corp., 375 F.3d 1070, 1074 (10th Cir. 2004). 33 Jayson, 32 F.4th at 965. A. Defendants’ Motion Is for Dismissal. Defendants contend that the court should rule on their motion as one for summary judgment because the parties have engaged in some jurisdictional discovery and Defendants offer declarations.34 Defendants’ arguments are unpersuasive. “[W]hen assessing personal jurisdiction under Rule 12(b)(2), the Court may consider matters outside of the pleadings without converting the motion to dismiss to one for summary judgment.”35 Declarations do not automatically result in a motion for summary judgment.36 Defendants offer no controlling law that stands for the proposition that summary judgment in a case like this should be considered before discovery.37 Indeed, “summary judgment [should] be refused where the nonmoving party has not had the opportunity to discover information that is essential to his opposition.”38 Here, Alfwear states that discovery has not yet taken place or has not concluded.39 The court thus applies the motion
to dismiss standard.40
34 ECF No. 35, at 8–9 (citing Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990)). 35 US Magnesium, LLC v. ATI Titanium, LLC, No. 2:16-CV-1158, 2017 WL 913596, at *2 (D. Utah Mar. 7, 2017); see Goff v. Hackett Stone Co., 185 F.3d 874 (10th Cir. 1999) (holding that for a 12(b)(2) or 12(b)(3) motion, it is improper to convert a motion to dismiss into a motion for summary judgment simply because materials are submitted outside of the pleadings); Velasco Briseno v. Mktg. & Mgmt. Sols., LLC, No. 18-02482, 2019 WL 2646661, at *2 (D. Kan. June 27, 2019) (“defenses of Rule 12(b)(2), 12(b)(4), and 12(b)(5) are generally not proper grounds for summary judgment”). 36 See Marcovechhio v. Wright Med. Grp. Inc., No. 2:18-cv-274, 2019 WL 1406606, at *2 (D. Utah 2019) (“While generally, a district court must convert a motion to dismiss into a motion for summary judgment when matters outside the pleadings are relied upon, the court may consider affidavits or other written materials on a motion to dismiss for lack of personal jurisdiction.” (cleaned up)). 37 Though Defendants cite Old Republic Ins. Co. v. Cont’l Motors, Inc., 877 F.3d 895, 904 (10th Cir. 2017), Old Republic does not discuss summary judgment. Defendants also cite Ball for the proposition that a defendant can move for summary judgment when jurisdiction is in dispute. ECF No. 35, at 8. Yet Ball discusses summary judgment “[a]fter discovery.” See 902 F.2d at 197 (“After discovery, the plaintiff’s prima facie showing, necessary to defeat a jurisdiction testing motion, must include an averment of facts that, if credited by the trier, would suffice to establish jurisdiction over the defendant.”). 38 Burke v. Utah Transit Auth., 462 F.3d 1253, 1264 (10th Cir. 2006) (alterations in original) (quoting Price v. W. Res., Inc., 232 F.3d 779, 783 (10th Cir. 2000)). 39 ECF No. 44, at 7–8 (“If the court does hold an evidentiary hearing, Alfwear requests an opportunity to seek discovery from Defendants and third parties before the evidentiary hearing.”). 40 If the jurisdictional facts materially change after any jurisdictional discovery in this action is completed, Defendants may seek leave to challenge jurisdiction. B. Specific Personal Jurisdiction Defendants contend that there are insufficient minimum contacts to subject them to Utah jurisdiction. The Fourteenth Amendment’s Due Process Clause “constrains a State’s authority to bind a nonresident defendant to a judgment of its courts.”41 Utah’s long-arm statute extends “jurisdiction over nonresident defendants to the fullest extent permitted by the due process clause of the Fourteenth Amendment to the United States Constitution.”42 Thus, the analysis is a single due process inquiry.43 Due process requires that the defendant “purposefully establish[] minimum contacts within the forum state” and that the “assertion of personal jurisdiction . . . comport with ‘fair play and substantial justice.’”44 “Depending on its relationship to the plaintiff’s cause of action, an out-of-state defendant’s contacts with the forum state may give rise to either general (all-purpose) jurisdiction or specific (case-linked) jurisdiction.”45 Alfwear
argues only specific jurisdiction.46 The court applies a two-step test for specific personal jurisdiction. First, the court asks “whether the plaintiff has shown that the defendant has minimum contacts with the forum state.”47 If so, the court asks if the defendant offers a “compelling case that . . . other considerations would render jurisdiction unreasonable.”48
41 Walden v. Fiore, 571 U.S. 277, 283 (2014). 42 Utah Code Ann. § 78B-3-201(3). 43 See Old Republic, 877 F.3d at 903. 44 Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 320 (1945)). 45 Old Republic, 877 F.3d at 903. 46 See ECF No. 44, at 9–10. 47 Old Republic, 877 F.3d at 903. 48 Burger King, 471 U.S. at 476–77. 1. Minimum Contacts Analysis The minimum contacts inquiry has two prongs. First, a defendant must purposefully direct its activities at residents of the forum state, and second, the plaintiff’s injuries must arise out of the defendant’s forum-related activities.49 a. “Purposeful Direction” Requirement To satisfy the purposeful-direction prong, a defendant must take “some act by which [it] purposefully avails itself of the privilege of conducting activities within the forum state.”50 The contacts must not be “random, isolated, or fortuitous” events.51 In Old Republic Insurance Co. v. Continental Motors, Inc., the Tenth Circuit identified three frameworks to help courts determine whether an out-of-state defendant can satisfy the purposeful-direction requirement. Two are relevant here: “continuing relationships with forum state residents” and “deliberate exploitation of the forum state market.”52
The “continuing relationships” framework considers an out-of-state defendant’s relationship and obligations with citizens of the forum state.53 The Supreme Court has found personal jurisdiction over defendants who have “purposefully ‘reached out beyond’ their State and into another by, for example, entering a contractual relationship that ‘envisioned continuing and wide-reaching contacts’ in the forum State.”54 Although a defendant’s mere relationship with a forum-state resident, standing alone, is insufficient to show that it has purposefully directed
49 Old Republic, 877 F.3d at 904. 50 Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1024–25 (2021) (alteration in original) (quoting Hanson v. Denckla, 357 U.S. 253, 253 (1958)). 51 Keeton v. Hustler Mag., Inc., 465 U.S. 770, 774 (1984). 52 Old Republic, 877 F.3d at 905. 53 Burger King, 471 U.S. at 473. 54 Walden, 571 U.S. at 285. activities at the forum, a court may find evidence of jurisdiction through parties’ “prior negotiations and contemplated future consequences, along with the terms of the contract and the parties’ actual course of dealing.”55 “An out-of-state defendant’s solicitations of or direct communications with forum state residents also provide ‘some evidence’ suggesting purposeful direction.”56 Under the “deliberate exploitation” framework, a plaintiff can show purposeful direction if the defendant “continuously and deliberately” targets a market.57 Courts have looked to whether the defendant has made “substantial and regular sales in the forum state.”58 In the internet context, personal jurisdiction may lie where a company engages in national advertising.59 For instance, the Seventh Circuit held in uBID, Inc. v. GoDaddy Group, Inc. that
“a typical business that operates on a national scale with [the defendant’s] sales . . . [,] customer base . . . , and . . . blanket of advertising in [the forum state] would unquestionably be subject to [specific] personal jurisdiction.”60 But the Tenth Circuit has held that “merely posting information on the internet does not, in itself, subject the poster to personal jurisdiction wherever that information may be accessed.”61
55 Old Republic, 877 F.3d at 905 (quoting Burger King, 471 U.S. at 479). 56 Id. (quoting Pro Axess, Inc. v. Orlux Distrib., Inc., 428 F.3d 1270, 1277 (10th Cir. 2005)). 57 Id. at 906 (cleaned up). 58 Id. at 914. 59 uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 427 (7th Cir. 2010). 60 Id. at 429. But see be2 LLC v. Ivanov, 642 F.3d 555, 558–59 (7th Cir. 2011) (no jurisdiction where twenty random state residents created free online dating profiles). 61 Id.; see Hood v. Am. Auto Care, LLC, 21 F.4th 1216, 1225 (10th Cir. 2021) (“Courts are reluctant to say that hosting a website constitutes purposeful direction to every jurisdiction on the globe. Thus, we ‘ask whether the defendant intended its online content to create effects specifically in the forum state.’” (internal citation omitted) (quoting Old Republic, 877 F.3d at 917 n.35)). (1) IBKUL Has Purposefully Directed Activities at Utah. Alfwear has made a prima facie showing that IBKUL has purposefully directed activities at Utah under the “continuing relationships” framework. For three years, IBKUL has directed the following activities at Utah: (i) shipping IBKÜL products to retailers;62 (ii) charging and receiving payment;63 (iii) traveling to Utah to visit retailers that sell IBKÜL products;64 (iv) developing relationships with Utah retailers;65 (v) soliciting business;66 (vi) storing customer information;67 (vii) receiving returns and exchanges;68 and (viii) sending marketing information.69 A Tenth Circuit case is instructive. In Marcus Food Co. v. DiPanfilo, the court found personal jurisdiction under the “continuing relationship” framework where a defendant communicated monthly with a plaintiff, received reimbursements, and visited twice over a ten- year period.70 Similar to Marcus Food, IBKUL sold products to Utah retailers over a period of
several years.71 Indeed, IBKUL visited Utah retailers to solicit business, made multiple sales to them, and benefited from sales of clothing with an allegedly similar insignia to Alfwear’s mark.72 IBKUL argues that its small volume of Utah sales does not support a finding that IBKUL deliberately exploited the Utah market. IBKUL points to the fact that here, it made eleven sales to four different retailers between 2019 and 2021, representing 0.02% of the corporation’s total
62 ECF No. 28, at ¶ 39. 63 Id. at ¶¶ 40–41. 64 Id. at ¶ 42. 65 Id. at ¶ 43. 66 Id. at ¶ 44. 67 Id. at ¶ 47. 68 Id. at ¶ 48. 69 Id. at ¶ 38. 70 Marcus Food Co. v. DiPanfilo, 671 F.3d 1159, 1167–68 (10th Cir. 2011); see Strobel v. Rusch, 364 F. Supp. 3d 1270, 1279–80 (D.N.M. 2019) (personal jurisdiction where defendant traveled to meet with plaintiffs to secure business and then transacted business in the state related to an infringing trademark). 71 ECF No. 44, at 18. 72 ECF No. 28, at ¶¶ 42–46; see ECF No. 44, at 18. sales.73 But the test for whether a defendant has purposefully directed activities at the forum state
is not focused primarily on the success of sales efforts or the overall percentage of a company’s sales in the jurisdiction. “[T]he Supreme Court has ‘emphasized the importance of the quality as opposed to the quantity of the contacts, examining whether the contacts resulted from the “purposeful” activity of the defendant.’”74 The well-pleaded facts and evidence do not suggest that IBKUL’s contacts with Utah are “random, isolated, or fortuitous.”75 IBKUL intentionally chose to market to and sell IBKÜL products to Utah retailers where they presumably would then be purchased by Utah residents.76 That IBKUL’s efforts over a three-year period have not yet resulted in a high volume of sales does not prevent the court from finding that IBKUL purposefully directed activities at Utah.
(2) IBCOOL Has Purposefully Directed Activities at Utah. The court also finds that Alfwear has met its burden to show that IBCOOL has purposefully directed activities at Utah. IBCOOL’s actions are different from those of IBKUL. IBCOOL sells products through an interactive website instead of directly to retailers and it has a higher volume of sales.77 According to Defendants, IBCOOL made 207 online sales to Utahns between 2019 and 2021, representing 0.43% of its total sales.78
73 ECF No. 35, at 9–10. 74 Edizone, LLC v. Asia Focus Int’l Grp., Inc., 196 F. Supp. 3d 1222, 1228 (D. Utah 2016) (emphases added) (quoting N. Am. Philips Corp. v. Am. Vending Sales, Inc., 35 F.3d 1576, 1580 (Fed. Cir. 1994)); see id. at 1227–28 (37 sales representing less than one percent of total sales); Illinois v. Hemi Grp. LLC, 622 F.3d 754, 755, 757–58 (7th Cir. 2010) (300 packs of cigarettes); TriStrata Tech., Inc. v. Emulgen Lab’ys, Inc., 537 F. Supp. 2d 635, 638, 642 (D. Del. 2008) (four orders constituting 0.0000008 percent of total sales for one year). 75 Ford Motor Co., 141 S. Ct. at 1025 (quoting Keeton, 465 U.S. at 774). 76 See ECF No. 28, at ¶¶ 27–33. 77 ECF No. 35, at 7. 78 Id. at 10. IBCOOL allegedly has directed the following activities at Utah: (i) fulfilling orders and shipping products;79 (ii) charging Utahns and accepting payment;80 (iii) listing Utah in the drop- down list of shipping destinations;81 (iv) sending marketing emails;82 (v) storing customer information;83 and (vi) processing returns and exchanges.84 This is not a case of a corporation managing a simple, passive website that has information on where to go to buy merchandise.85 Here, Utahns could (and did) directly purchase IBKÜL products on IBCOOL’s website.86 Further, XMission, L.C. v. Fluent LLC does not suggest a different result.87 In XMission, the Tenth Circuit did not find personal jurisdiction over an out-of-state defendant that sent thousands of emails to Utah customers.88 The emails included discount offers for restaurants and retailers.89 Once the recipient clicked on the offer, they were directed to the defendant’s website
where they entered personal data and the defendant then collected and sold the personal information.90 Analyzing personal jurisdiction under the “market exploitation” framework, the court found that there was no evidence that the resulting sales were connected to the defendant’s actions or that the emails were designed to attract Utah customers.91 The court reasoned that “even if it might suffice for personal jurisdiction if [the defendant] earned significant revenue by
79 ECF No. 28, at ¶¶ 27–30. 80 Id. at ¶ 29. 81 Id. at ¶ 33. 82 Id. at ¶¶ 35–38. 83 Id. at ¶ 47. 84 Id. at ¶ 48. 85 See Shrader, 633 F.3d at 1240–41, 1243. 86 See Lovesac Co. v. www.lovessac.com, No. 2:22-cv-00056, 2022 WL 504192, at *2 (D. Utah Feb. 18, 2022); Shrader, 633 F.3d at 1240–41. 87 XMission, L.C. v. Fluent LLC, 955 F.3d 833 (10th Cir. 2020). 88 Id. at 837. 89 Id. 90 Id. 91 Id. at 850. selling consumer data obtained from recipients of offending emails who entered their personal data . . . there is nothing in the record indicating that even one recipient of the offending emails provided such information.”92 Here, on the other hand, there is a direct connection between IBCOOL’s website and its sales. IBCOOL reaped the benefit of over 200 online sales because its website allowed Utahns to place orders and receive shipments.93 “These collective contacts establish that [IBCOOL] purposefully availed [it]self of the privileges of doing business in [Utah].”94 IBCOOL asserts that because Utahns reached out to IBCOOL’s website, there can be no showing of purposeful direction.95 In support, IBCOOL cites two Seventh Circuit cases for the proposition that forum residents’ random online activities or the bare existence of a website is insufficient to prove purposeful direction.96 This case involves more. IBCOOL allegedly sent
marketing emails to Utahns,97 listed Utah in its list of shipping destinations,98 charged Utahns and accepted payment,99 fulfilled orders and shipped products to Utah,100 stored Utah customers’ information,101 and processed returns and exchanges for Utahns.102 These activities over the
92 Id. 93 ECF No. 35, at 10. 94 Louis Vuitton Malletier, S.A. v. Mosseri, 736 F.3d 1339, 1357 (11th Cir. 2013). 95 See ECF No. 48, at 11. 96 See Advanced Tactical Ordnance Sys., LLC v. Real Action Paintball, Inc., 751 F.3d 796, 800 (7th Cir. 2014) (two allegedly misleading emails sent to a customer list that included forum-state residents and an interactive website was not enough to show minimum contacts); be2 LLC, 642 F.3d at 558–59 (rejecting personal jurisdiction when 20 people from the forum state created free dating profiles). 97 ECF No. 28, at ¶¶ 37–38. 98 Id. at ¶ 33. 99 Id. at ¶¶ 28–29. 100 Id. at ¶¶ 27, 30. 101 Id. at ¶ 47. 102 Id. at ¶ 48. course of multiple years are enough to show that IBCOOL purposefully directed sales at this forum through an interactive website. In a similar context, this court found personal jurisdiction in A.L. Enterprises, Inc. v. Sebron.103 The defendant in Sebron ran an interactive website and allowed guests—including Utahns—the ability to make purchases with a credit card.104 The court concluded that there was personal jurisdiction because the defendant “use[d] his website to reach a large number of potential buyers, including those in Utah, and benefit[ted] from that exposure.”105 IBCOOL has also used a website to reach potential customers, including Utahns, and benefitted.106 Like the seller in Sebron, IBCOOL “cannot expect to avail [itself] of the benefits of the internet-created world market that [it] purposefully exploit[s] and profit[s] from without accepting the concomitant legal responsibilities that such an expanded market may bring with it.”107 Finally,
the court rejects IBCOOL’s arguments regarding its purportedly low volume of sales for the same reasons above.108 (3) UBHOT Has Not Purposefully Directed Activities at Utah. Alfwear has not demonstrated that UBHOT purposefully directed activities at Utah. There are insufficient well-pleaded allegations that UBHOT has advertised, sold, or shipped allegedly infringing products in Utah.109 UBHOT allegedly holds intellectual property leased by
103 A.L. Enters., Inc. v. Sebron, No. 2:08CV536, 2008 WL 4356958 (D. Utah Sept. 17, 2008). 104 Id. at *2. 105 Id. 106 ECF No. 28, at ¶¶ 24–34. 107 Sebron, 2008 WL 4356958, at *2 (quoting Dedvukaj v. Maloney, 447 F. Supp. 2d 813, 820 (E.D. Mich. 2006)). 108 See Shrader, 633 F.3d at 1240 (focusing on whether the defendant directs its activity at the forum state). 109 The Amended Complaint contains a few “information and belief” allegations that UBHOT sent unspecified catalogs, magazines, or products to Utah, but no supporting facts regarding amounts, dates, or any other information is provided, and Alfwear does not even reference its general allegations in its argument. See ECF No. 28 at ¶¶ 15, 17–18. IBKUL and IBCOOL.110 Alfwear claims that because a UBHOT declarant stated that UBHOT
sells IBKÜL products to “1,400 retailers nationwide,” then UBHOT must have shipped products to Utahns.111 This is an insufficient nexus. Alfwear makes no showing that any of the 1,400 retailers that UBHOT purportedly sells to are in Utah. Alfwear also contends that UBHOT’s ability to control the use of the IBKÜL mark and its licensing to IBKUL and IBCOOL creates minimum contacts.112 In support, it cites Alcon Vision, LLC v. Lens.com, Inc. for the proposition that a “licensing agreement for intellectual property with a licensee that operates in the forum state can, in certain instances, give rise to personal jurisdiction over the licensor.”113 Some courts have found that the jurisdictionally relevant features of a licensing agreement include factors like “whether the licensing agreement
is exclusive; whether the licensing agreement creates continuing obligations for the licensor in the forum state . . . ; and whether the licensor retains control over the licensee’s sales and marketing activities.”114 Alfwear alleges, on information and belief, that UBHOT has the “right to exercise control over the use of the IBKÜL mark” and the “right to exercise control over IBCOOL’s and IBKUL’s sales and marketing activities.”115 But the Amended Complaint says nothing about the relevant features of the licensing agreement between the Defendants. In sum, Alfwear’s sparse allegations regarding UBHOT are insufficient to show minimum contacts with Utah and establish that the court has personal jurisdiction over UBHOT.
110 See ECF No. 35, at 7; ECF No. 35-1, at ¶¶ 4, 13. 111 ECF No. 44, at 19. 112 Id. 113 Alcon Vision, LLC v. Lens.com, Inc., No. 18-cv-407, 2020 WL 4810778, at *4 (E.D.N.Y. Aug. 11, 2020). 114 Id. 115 ECF No. 28, at ¶¶ 79–80. b. “Arising Out of” Requirement The second prong of the minimum contacts inquiry requires that a plaintiff’s injuries “arise out of” a defendants’ “forum-related activities.”116 In other words, “[t]here must be ‘an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation.”117 “When there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant[s’] unconnected activities in the State.”118 Alfwear adequately asserts that some of its alleged injuries have a nexus to IBKUL’s and IBCOOL’s forum-related activities. The main purpose of Alfwear’s suit is trademark infringement.119 Defendants do not contest the fact that IBKUL and IBCOOL sold IBKÜL products in Utah.120 Defendants, however, cite Walden v. Fiore for the proposition that a plaintiff
must show that defendants have a substantial connection with the forum state.121 In Walden, the court found that there was no personal jurisdiction because none of the alleged wrongful conduct occurred in the forum state.122 Defendants argue that Alfwear has not shown that Utah was the center of the purported infringing actions.123 But a plaintiff need only demonstrate that a “claimed injury resulted from the defendant’s forum-related activities” for there to be minimum
116 Old Republic, 877 F.3d at 908. 117 Ford Motor Co., 141 S. Ct. at 1025 (alteration in original) (quoting Bristol-Myers Squibb Co. v. Superior Ct., 137 S. Ct. 1773, 1780 (2017)). 118 Bristol-Myers Squibb, 137 S. Ct. at 1776. 119 See ECF No. 28, at ¶¶ 85–104. 120 See ECF No. 35, at 14; ECF No. 28, at ¶ 6. 121 See ECF No. 48, at 7. 122 Walden v. Fiore, 71 U.S. 277, 288 (2014). 123 ECF No. 48, at 8. contacts.124 Here, Alfwear has met its prima facie burden of showing that Defendants have
created a substantial connection with Utah by marketing and selling IBKÜL products through Utah retailers and online to Utah residents.125 The court rejects as unripe Defendants’ argument that Alfwear cannot prove injury. Defendants contend that Alfwear has not shown confusion between the parties’ marks, which they imply is required for trademark infringement.126 Defendants cite a 2017 declaration where a traveler stated that she was not confused about whether KÜHL goods seen in Charlotte were the same as IBKÜL goods in Key West.127 Also, Defendants point to testimony in the underlying trademark application litigation where a witness was not aware of confusion between Alfwear’s and Defendants’ marks.128 But evidence of “actual confusion . . . is not necessary to establish infringement.”129 More importantly, the fact that Defendants have some evidence pertaining to
whether Alfwear has been injured does not decide the jurisdictional question—the question of whether Alfwear can support its injury claims is a matter for another day. 2. Jurisdiction Over IBKUL and IBCOOL Would Not Offend Traditional Notions of Fair Play and Substantial Justice. Under the second prong of the test for personal jurisdiction, the court asks if jurisdiction would offend “traditional notions of fair play and substantial justice.”130 Courts usually consider
124 Compañía de Inversiones Mercantiles, S.A. v. Grupo Cementos de Chihuahua S.A.B. de C.V., 970 F.3d 1269, 1284 (10th Cir. 2020), cert. denied, 141 S. Ct. 2793 (2021) (citing Newsome v. Gallacher, 722 F.3d 1257, 1271 (10th Cir. 2013)). 125 See ECF No. 28, at ¶¶ 25–48. 126 See ECF No. 35, at 15. 127 Decl. of Lori Gildea ¶¶ 8–11, ECF No. 35-5, filed Apr. 26, 2022 (emphasis added); see ECF No. 35, at 15. 128 ECF No. 35, at 15. 129 Harris Rsch., Inc. v. Lydon, 505 F. Supp. 2d 1161, 1167 (D. Utah 2007) (citing Heartsprings, Inc. v. Heartspring, Inc., 143 F.3d 550, 556 (10th Cir.1998)). 130 Dudnikov, 514 F.3d at 1080 (quoting Int’l Shoe, 326 U.S. at 316). five factors, only four of which apply here131: (1) the burden on defendants, (2) the state’s
interests in deciding the matter, (3) the plaintiff’s interest in getting “convenient and effectual relief,” and (4) the judicial system’s interest in attaining “the most efficient resolution of controversies.”132 For the first factor, the burden on the defendant of litigating the case in a foreign forum is the “primary concern” in determining the reasonableness of personal jurisdiction.133 This factor is designed to prevent the filing of claims in a distant forum where the burden of appearing is difficult.134 The second factor is the forum state’s interest in adjudicating the dispute. “States have an important interest in providing a forum in which their residents can seek redress for injuries caused by out-of-state actors.”135 The third factor is whether a plaintiff may receive convenient and effective relief in another forum.136 “This factor may weigh heavily in cases
where a [p]laintiff’s chances of recovery will be greatly diminished by forcing him to litigate in another forum because of that forum’s laws or because the burden may be so overwhelming as to practically foreclose pursuit of the lawsuit.”137 The final factor is whether the forum state is the most efficient place to litigate the dispute.138 Key to this inquiry is the location of witnesses, where the alleged harm underlying the lawsuit occurred, which forum’s substantive law governs the case, and whether exercising jurisdiction is necessary to prevent piecemeal litigation.139
131 The fifth factor, “shared interest of the several states . . . in furthering fundamental social policies,” does not apply because the issue here is federal trademark law. Id. 132 Id. (citing OMI Holdings, Inc. v. Royal Ins. Co., 149 F.3d 1086, 1095 (10th Cir. 1998)). 133 OMI Holdings, 149 F.3d at 1096. 134 Id. 135 Id. (citing Burger King, 471 U.S. at 483). 136 Id. at 1097. 137 Id. 138 Id. 139 Id. Defendants first argue that litigating in Utah would be onerous.140 Of course, southern
Florida would be more convenient for Defendants, but IBKUL and IBCOOL allegedly conduct business nationwide and IBKUL has purportedly traveled to Utah to conduct business.141 Defendants’ principal argument, that Utah is two time zones away,142 is of little moment on these facts. Second, Defendants contend that Utah has no interest in the matter because of Defendants’ low number of sales.143 Yet Utah has a sufficiently strong interest in retaining jurisdiction because Alfwear is located in Utah and claims that an out-of-state actor has infringed its trademark.144 Indeed, a “State generally has a manifest interest in providing its residents with a convenient forum for redressing injuries inflicted by out-of-state actors.”145 Third, Defendants assert that Alfwear would get better relief in the Southern District of Florida, “where there are no personal jurisdiction and venue issues.”146 Because personal jurisdiction and venue are proper
here for IBKUL and IBCOOL, Alfwear’s interests are sufficiently met. If Alfwear prefers a single case against all three Defendants, it can move for transfer or dismiss and refile its claims.147 Last, Defendants argue that the Southern District of Florida is more convenient because IBKUL’s largest market is there along with “numerous retailers” as “potential third- party witnesses.”148 However, Alfwear is in Utah along with its “officers, employees, and documents” relevant to its trademark infringement case.149 And since Defendants sell their
140 See ECF No. 35, at 16. 141 See ECF No. 28, at ¶¶ 42–43. 142 See ECF No. 35, at 11. 143 See id. at 16. 144 See id. at 19–20; ECF No. 28, at ¶ 1. 145 Burger King, 471 U.S. at 473 (cleaned up). 146 ECF No. 35, at 17. 147 See ECF No. 44, at 25. 148 Id. 149 Id. at 22. IBKÜL products in Utah,150 both via a website and through retailers, there are also potential
Utahns to serve as third-party witnesses. Additionally, because Defendants do not specifically identify who the Florida third-party witnesses would be, the court is not persuaded that pointing to unnamed “potential third-party witnesses” materially changes the analysis. Alfwear has met its prima facie burden of showing that IBKUL and IBCOOL have the constitutionally required contacts with Utah. And IBKUL and IBCOOL have not “present[ed] a compelling case that the presence of some other considerations would render jurisdiction unreasonable.”151 For these reasons, the court has specific personal jurisdiction over IBKUL and IBCOOL. C. Venue Is Proper for IBKUL and IBCOOL.
Defendants also move to dismiss for improper venue.152 Venue is proper in a “district in which a substantial part of the events or omissions giving rise to the claim occurred.”153 “[T]he [p]laintiff bears the burden of establishing proper venue.”154 To determine whether venue is proper, the court conducts a two-part analysis. First, the court “examines the nature of the plaintiff’s claims and the acts or omissions underlying those claims,” and second, the court “determines whether substantial events material to those claims occurred in the forum district.”155
150 ECF No. 28, at ¶ 25. 151 Pro Axess, 428 F.3d at 1280. 152 Fed. R. Civ. P. 12(b)(3). 153 28 U.S.C. § 1391(b)(2). 154 C.R. Bard, Inc. v. Smiths Med. ASD, Inc., No. 2:12-cv-36, 2020 WL 6710425, at *2 (D. Utah Nov. 16, 2020). 155 PopSockets LLC v. Online King LLC, No. 19-cv-01277, 2019 WL 7168661, at *5 (D. Colo. Dec. 23, 2019) (citing Bartile Roofs, 618 F.3d at 1166); see 28 U.S.C. § 1391(b)(2) (“A civil action may be brought in . . . a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated.”). For the first prong, Alfwear brings claims of trademark infringement, unfair competition, and dilution against Defendants.156 Alfwear claims that Defendants’ use of the IBKÜL mark harms Alfwear because it is likely to cause potential customers to think that IBKÜL products are associated with Alfwear.157 Specifically, Alfwear asserts that their brand is widely sold;158 that Defendants’ mark, “IBKÜL,” is similar to Alfwear’s mark, “KÜHL”;159 that the two products are sold in overlapping markets;160 and that Defendants’ actions are likely to lead to confusion among Alfwear customers.161 Under the second prong, Alfwear must therefore show that “substantial events material to” these claims took place in Utah.162 In support of its argument, Alfwear cites PopSockets LLC v. Online King LLC. In PopSockets, a plaintiff brought a Lanham Act claim in Colorado for the unauthorized sale of trademarked goods.163 Even though the defendant did not sell all of his
product in Colorado, the court found that venue was proper because the defendant used a website to sell at least a portion of allegedly infringing products to Coloradans in the regular course of business.164 The court finds PopSockets persuasive under the facts of this case. Defendants assert that a substantial part of the events did not occur in Utah because Defendants had a low volume
156 ECF No. 28, at ¶¶ 85–119. 157 ECF No. 44, at 23; see 15 U.S.C. § 1125(a)(1) (“any person who . . . uses in commerce any . . . term, name, symbol, or device . . . which . . . is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation . . . of such person with another person . . . shall be liable in a civil action.”); Austl. Gold, Inc. v. Hatfield, 436 F.3d 1228, 1238 (10th Cir. 2006). 158 See ECF No. 28, at ¶¶ 59–64. 159 See id. at ¶¶ 49–50, 72–73. 160 See id. at ¶¶ 25–48, 61–66. 161 Id. at ¶ 102; see 15 U.S.C. § 1114(1). 162 PopSockets, 2019 WL 7168661, at *5–6 (“[I]n a trademark suit brought under the Lanham Act, a substantial part of the events giving rise to the claims occur in any district where consumers are likely to be confused by the accused goods, whether that occurs solely in one district or in many.”) (alteration in original) (quoting Allstar Mktg. Grp., LLC v. Your Store Online, LLC, 666 F. Supp. 2d 1109, 1128 (C.D. Cal. 2009)). 163 Id. at *1; see 15 U.S.C. § 1051 et seq. 164 PopSockets, 2019 WL 7168661, at *3, 6. of Utah sales.165 Defendants’ Utah sales may not have been substantial in terms of its total sales,
but that does not prevent the sales from being substantial respecting the Utah market.166 “[V]enue is not limited to the district with the most substantial events or omissions.”167 Given that Defendants have sold a number of allegedly infringing products to Utahns online and through retailers over several years,168 substantial events material to Alfwear’s claims have taken place in Utah. Defendants cite three cases for the proposition that substantial events cannot occur in a forum when the dealings there are only a fraction of total sales.169 All three cases are inapposite. First, the plaintiff in Noxell Corp. v. Firehouse No. 1 Bar-B-Que Restaurant filed suit in the District of Columbia even though Noxell’s operations were in Texas.170 The defendant moved to dismiss or transfer venue to the Northern District of California.171 The court reasoned that the
plaintiff chose venue in the District of Columbia “simply to suit its own convenience” and that venue in the District of Columbia was “barely plausible in terms of the accessibility of relevant evidence.”172 Unlike the plaintiff in Noxell Corp., Alfwear brought the instant action where it is incorporated,173 and access to evidence weighs in favor of Alfwear because its operations are in Utah and Defendants have sold IBKÜL products in Utah through retailers and online.174
165 ECF No. 35, at 17–18. 166 Id. at 9–10. 167 Bartile Roofs, 618 F.3d at 1165 (emphasis in original); see Adidas Am., Inc. v. Cougar Sport, Inc., 169 F. Supp. 3d 1079, 1095 (D. Or. 2016) (“Venue may be proper even where the defendant sells only a small amount of merchandise into the forum.”); 28 U.S.C. § 1391(b)(2). 168 See ECF No. 28, at ¶¶ 25–48. 169 See ECF No. 35, at 18–19. 170 Noxell Corp. v. Firehouse No. 1 Bar-B-Que Rest., 760 F.2d 312, 314 (D.C. Cir. 1985). 171 Id. 172 Id. at 317. 173 ECF No. 28, at ¶ 1. 174 See ECF No. 44, at 5. Second, in Delta Sigma Theta Sorority Inc. v. Bivins, a plaintiff sought to enjoin defendants from selling clothing that allegedly had infringing marks.175 The court found that despite discovery, the plaintiff could show only two sales by defendants and thus the court held that the “minuscule number of sales in this district, together with the manner of those sales through a generally accessible website, falls far short of the implicit finding . . . that venue is appropriate.”176 Here, Defendants apparently have sold multiple IBKÜL products to four Utah retailers through IBKUL and 207 IBKÜL products to Utahns directly online through IBCOOL.177 Finally, Defendants cite Detroit Coffee Shop Co. v. Soup for You, LLC for the proposition that venue is improper where there is a low number of sales.178 In Detroit Coffee Shop, the
plaintiff brought a trademark infringement claim in New York against an online seller of coffee products that bore a similar mark.179 The seller moved to dismiss or transfer venue to the Eastern District of Michigan, “the home city for which both companies are named.”180 The court found that the seller’s passive website was not sufficiently targeted at forum residents because the seller “ha[d] apparently done nothing else to market, advertise, or otherwise target sales into” New York but letting the user ship to all fifty states.181 The same is not true here, where Defendants are alleged to have marketed to Utah residents, sold and shipped products to Utah retailers, and sold and shipped products directly to Utah residents, among other actions. Additionally, Detroit
175 Delta Sigma Theta Sorority Inc. v. Bivins, 20 F. Supp. 3d 207, 209 (D.D.C. 2014). 176 Id. at 218. 177 ECF No. 35, at 9–10. 178 Detroit Coffee Shop Co., LLC v. Soup for You, LLC, No. 16-CV-9875, 2018 WL 941747 (S.D.N.Y. Feb. 16, 2018). 179 Id. at *1. 180 Id. 181 Id. at *4. Coffee Shop also found that “venue by substantial sales” only “requires, at minimum, that the plaintiff allege some non-nominal [number] of sales.”182 Here, IBCOOL by itself has made 207 direct online sales to Utahns in three years, while IBKUL has sold products to Utah retailers, who then presumably sell to Utah residents.183 As a result, none of Defendants’ cited cases support the argument that venue is improper here. D. The Court Denies Defendants’ Request to Transfer Venue.
Defendants ask in the alternative for the court to transfer venue to the Southern District of Florida. A court may transfer a civil action to another district where the case may have been brought “[f]or the convenience of parties and witnesses” and “in the interest of justice.”184 The movant has the burden to show that the current forum is inconvenient.185 “Unless the balance is strongly in favor of the movant, the plaintiff’s choice of forum should rarely be disturbed.”186 The court will give less deference if the plaintiff resides outside of the district or the relevant facts have “no material relation or significant connection to the plaintiff’s chosen forum.”187 Merely shifting the inconvenience to the other side is not a valid justification.188 Defendants, who have the burden of showing inconvenience, offer no specific arguments as to why Utah is inconvenient.189 Even if the court assumes that Defendants rely on an earlier argument that “litigating in the Southern District of Florida would be much less burdensome than
182 Id. at *3. 183 ECF No. 35, at 10. 184 28 U.S.C. § 1404(a). 185 Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1515 (10th Cir. 1991). 186 Bartile Roofs, 618 F.3d at 1168 (cleaned up). 187 Id. (quoting Cook v. Atchison, Topeka & Santa Fe Ry. Co., 816 F. Supp. 667, 669 (D. Kan. 1993)); see Nelson v. Aramark Sports & Ent. Servs., LLC, No. 2:14-cv-00474, 2015 WL 1014579, at *1 (D. Utah Mar. 9, 2015) (directing the court to consider factors similar to a forum non conveniens analysis). 188 Bartile Roofs, 618 F.3d at 1167. 189 See ECF No. 35, at 20. litigating in the District of Utah that is two time zones away,”!”° “[mlerely shifting the inconvenience from one side to the other . . . is not a permissible justification for a change in venue.”!*! Nor does the earlier argument about unspecific third-party witnesses change the analysis—there would be third-party witnesses in both forums. And a trial in the Southern District of Florida is not automatically more “easy, expeditious and economical” just because Defendants are in Florida.!°? Thus, the court denies the motion to transfer venue. ORDER Accordingly, Defendants’ motion to dismiss is DENIED as to IBKUL Corp. and IBCOOL Inc. and GRANTED as to IBKUL UBHOT Ltd. Defendants’ motion to transfer venue to the Southern District of Florida is DENIED.
Signed August 25, 2022. BY THE COURT
David Barlow United States District Judge
190 Td. at 11. 19! Cricut, Inc. v. Enough for Everyone, Inc., No. 2:21-CV-601, 2022 WL 798877, at *1 (D. Utah Mar. 16, 2022) (quoting Bartile Roofs, 618 F.3d at 1167). 192 Id. 24