Atlantis Hydroponics, Inc. v. International Growers Supply, Inc.

915 F. Supp. 2d 1365, 84 Fed. R. Serv. 3d 459, 2013 WL 28102, 2013 U.S. Dist. LEXIS 2187
CourtDistrict Court, N.D. Georgia
DecidedJanuary 3, 2013
DocketCivil Action No. 1:12-CV-1206-CAP
StatusPublished
Cited by28 cases

This text of 915 F. Supp. 2d 1365 (Atlantis Hydroponics, Inc. v. International Growers Supply, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Atlantis Hydroponics, Inc. v. International Growers Supply, Inc., 915 F. Supp. 2d 1365, 84 Fed. R. Serv. 3d 459, 2013 WL 28102, 2013 U.S. Dist. LEXIS 2187 (N.D. Ga. 2013).

Opinion

ORDER

CHARLES A. PANNELL, JR., District Judge.

This declaratory judgment action, seeking declaration of invalidity or non-infringement of two patents, is before the court on the following motions:

1. The defendant’s motion to dismiss for lack of personal jurisdiction or, alternatively, to transfer to the Central District of California [Doc. No. 7];
[1368]*13682. The plaintiffs motion to conduct jurisdictional discovery [Doc. No. 12];
3. The plaintiffs motion for leave to file a supplemental brief in opposition to the motion to dismiss [Doc. No. 15];
4. The defendant’s motion for leave to file a proposed sur-reply brief [Doc. No. 21];
5. The defendant’s supplemental motion for leave to file supplemental legal authority [Doc. No. 24]; and
6. The plaintiffs motion to stay this action pending reexamination of the defendant’s patent by the U.S. Patent and Trademark Office (PTO) [Doc. No. 27].

Each of the three motions for leave to file supplemental briefs [Doc. Nos. 15, 21, 24] is GRANTED as unopposed. Having considered the briefs and the record, the court concludes it cannot exercise personal jurisdiction over the defendant. Accordingly, the defendant’s motion to dismiss [Doc. No. 7] is GRANTED. The plaintiffs motion to conduct jurisdictional discovery [Doc. No. 12] is DENIED. Because the court dismisses the action, the plaintiffs motion for a stay [Doc. No. 27] is DISMISSED AS MOOT.

I. Introduction

Plaintiff Atlantis Hydroponics, Inc. (Atlantis) is a corporation based in Georgia. It sells hydroponic growing kits, grow rooms, grow lights, and other supplies. Among Atlantis’s products are its Viagrow Grow Tents, which are canvas indoor greenhouses. Defendant International Growers Supply, Inc. (International), incorporated in California, is likewise in the hydroponics retailing business. In particular, it sells a line of indoor greenhouses under the brand name HydroHuts. International is the owner, by assignment, of two patents that cover its HydroHuts products: U.S. Patent Nos. 7,823,324 B2 and 7,975,428 B2 (the '324 and '428 patents, respectively).

On March 26, 2012, International sent a letter to Steve Sevener and Demetri Hubbard, Atlantis’s co-owners, describing the two patents and asserting that Atlantis and its customers were infringing the patents. The letter, sent by International’s counsel for “licensing and enforcement of its patents,” offered a settlement and license as an alternative to litigation. The letter also warned that litigation could be “more destructive than it is productive” but could “result in enormous recoveries after trial.” The letter stated there was “considerable urgency to concluding all license negotiations by late April” and provided a deadline of April 1, 2012, for Atlantis to respond. See generally Ex. C to Compl. [Doc. No. 1-3].

Fearing that International would sue it for patent infringement, Atlantis filed this action for declaratory judgment on April 9, 2012 [Doc. No. 1]. The complaint seeks declarations of invalidity and non-infringement of both the '324 and '428 patents. True to its threat, International sued Atlantis and other parties for infringement of the same patents in the Central District of California just four days later, on April 13. On August 8, the judge in the California action granted Atlantis’s motion to transfer that case to this district under the “first-to-file” rule, because this declaratory judgment action had been filed first. See Int’l Growers Supply, Inc. v. Atlantis Hydroponics, Inc., No. 1:12-cv-2728-CAP (N.D.Ga. Aug. 8, 2012) [Doc. No. 43] (order granting motion to transfer).1

[1369]*1369In both this declaratory judgment action and the infringement action filed in California, the defendants contested the respective court’s. personal jurisdiction. Relevant to the present motions, Atlantis alleges in its complaint, under the heading Personal Jurisdiction: “Defendant [International] transacts extensive business within this state. Namely, Defendant’s products are sold by dozens of dealers in the State of Georgia, as evidenced by the listing of dealers provided through Defendant’s website www.HydroHuts.com.” Compl. ¶ 10 [Doc. No. 1]. Additionally, the complaint contains allegations describing International’s license demand letter and includes the letter as an attachment. Id. ¶¶ 26-30.

Interestingly, both the plaintiff and defendant point to the hydrohuts.com website as evidence of the defendant’s activities in the State of Georgia relevant to the personal jurisdiction issue. As noted above, according to the plaintiff, the website demonstrates the defendant’s “extensive business within this state.” On the other hand, International’s motion to dismiss repeatedly refers to this website in support of its contention that it does not have substantial contacts in this forum. For example, International argues that it “has no places of business within the State of Georgia, does not reside in the State of Georgia, and has no distributors (also see http://hydrohuts.com/) or other personnel ... within the State of Georgia.” Def.’s Mot. to Dismiss 2 [Doc. No. 7-1]. Additionally, International contends that the website “establishes that the Defendant has no distributors within the State of Georgia, and does not have an interactive website, and thus residents of the State of Georgia have not (and cannot have) ordered products of the Defendant to be shipped into the State of Georgia. (See http://hydrohuts.com/).” Id.

The court has reviewed the website and makes the following findings. Hydro-huts.com is a largely static website where customers can find general information about the HyrdoHuts product. It touts the product as being covered by the '324 and '428 patents, contains a link to a list of “Authorized HydroHut Distributors,” provides directions for HydroHut assembly, answers frequently asked questions, and directs users to contact an email address for other questions or comments. The website also includes page labeled “Find a Dealer Near You,” where users can input their location, press a “Search” button, and view a list of retail locations near that address. See Find a Dealer Near You, http://hydrohuts.com/find-a-dealer-nearyou (last visited Dec. 26, 2012). According to Atlantis, as of April 2012 a search using this feature provided a list of over thirty dealers within Georgia; by June 27, 2012 (after the defendant had filed its motion to dismiss), the number of Georgia dealers displayed dropped to only six businesses. See Pl.’s Resp. in Opp’n 2-3 [Doc. No. 11]. The obvious impression to any user of the “Find a Dealer Near You” page on the hydrohuts.com website is that the Hydro-Huts product would be for sale at these locations. Of course, if this impression is true, these results of the “Find a Dealer” search contradict both International’s argument in its motion to dismiss and the declaration filed in support of the motion that HydroHuts are not sold in Georgia.

[1370]*1370In its reply brief, International attempts to explain the discrepancy between its assertion that it has no dealers in Georgia and its own website’s display of at least six dealers in this state.

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915 F. Supp. 2d 1365, 84 Fed. R. Serv. 3d 459, 2013 WL 28102, 2013 U.S. Dist. LEXIS 2187, Counsel Stack Legal Research, https://law.counselstack.com/opinion/atlantis-hydroponics-inc-v-international-growers-supply-inc-gand-2013.