Ayla, LLC v. Alya Skin Pty. Ltd.

• Court: District Court, N.D. California
• Decided: November 13, 2019
• Docket: 4:19-cv-00679-HSG
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 AYLA, LLC, Case No. 19-cv-00679-HSG

8 Plaintiff, ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR LACK OF 9 v. PERSONAL JURISDICTION

10 ALYA SKIN PTY. LTD., Re: Dkt. No. 35 11 Defendant.

12 13 Plaintiff, Ayla, LLC (“Ayla” or “Plaintiff”) filed trademark infringement claims against 14 Defendant Alya Skin Pty. Ltd. (“Alya Skin” or “Defendant”) for its use of the ALYA and ALYA 15 SKIN marks. See Dkt. No. 1. Before the Court is Defendant’s motion to dismiss for lack of 16 personal jurisdiction, for which briefing is complete. See Dkt. No. 36 (“Mot.”), 40 (“Opp.”), and 17 44 (“Reply”). Because Plaintiff has not shown that Defendant has sufficient contacts within 18 California or the United States, the Court GRANTS Defendant’s motion. 19 I. BACKGROUND 20 A. Plaintiffs’ Allegations 21 Plaintiff alleges that Defendant, “has attempted to capitalize on Ayla’s valuable reputation 22 and customer goodwill in the AYLA® Mark by using the confusingly similar ALYA and ALYA 23 SKIN marks in connection with the advertisement, marketing, promotion, sale, and/or offer for 24 sale of beauty supplies and retail store services in a manner that creates consumer confusion.” 25 Dkt. No. 1 ¶15 (“Complaint”). To establish that the Court has personal jurisdiction over 26 Defendant, Plaintiff specifically alleges that “Defendant sells its products . . . in California, . . . 27 ships its products to California,” and “markets and advertises its products and services online . . . 1 ¶ 3. Defendant also “markets and advertises its products and services through social media 2 through its Instagram account, https://www.instagram.com/alyaskinaus/, and Facebook profile, 3 https://www.facebook.com/alyaskinaus/, which are accessible in California.” Id. Additionally, in 4 its opposition to Defendant’s motion, Plaintiff argues that Defendant has targeted consumers in 5 California because “Defendant appears to have an agreement with U.S. based retailer Urban 6 Outfitters which has several stores in California to offer for sale Defendant’s products bearing the 7 infringing marks,” and claims “Defendant has worked with social medial influencers residing in 8 California (and other parts of the U.S.) to market and promote” its products. Opp. at 9–10 (citing 9 Dkt. No. 43 Ex. 8, 13, 15, 17). 10 Relying on the nationwide jurisdiction provision, Plaintiff additionally argues that 11 Defendants have substantially targeted the United States as a whole because “the default pricing 12 shown on Defendant’s website is in U.S. Dollars,” Defendant’s products are marketed “as 13 approved by the U.S. Food and Drug Administration and certified by the U.S. based entity 14 PETA,” and “Defendant has applied for a U.S. federal trademark registration for the infringing 15 ALYA SKIN mark.” Id. at 10 (citing Dkt. No. 43 Exs. 1–2). 16 B. Defendant’s Evidence in Support of Its Motion to Dismiss 17 James Hachem, co-founder of Alya Skin, submitted a declaration in support of 18 Defendant’s motion. See Dkt. No. 37. Hachem explained that Alya Skin has no “retail stores and 19 none of its products are available in any retail store in the United States,” “Alya Skin has no 20 offices or branches in the U.S.,” “[n]o Alya Skin officers, directors, or employees reside or are 21 domiciled in the U.S.,” and “Alya Skin does not advertise in any publications that are directed 22 primarily towards California residents, nor does it target any marketing towards California.” Id. 23 ¶¶ 8–18. Hachem also indicated that “Alya Skin specifically targets the Australian market by 24 advertising its local elements—its ‘Australian native berries moisturizer’ and its ‘Australian Pink 25 Clay Mask’—and by branding its products with the phrase ‘Made with love in Australia.’” Id. 26 ¶ 19. Hachem also noted that “less than 10% of its sales have been to the United States and less 27 than 2% of its sales have been to California.” Id. ¶ 10. 1 Defendant’s motion. See Dkt. No. 44-1. Barbas stated that “Alya Skin does not employ or have 2 any contracts with any Instagram influencers . . . [but] independently contracts with various 3 intermediaries . . . located in the Philippines in order to contact Instagram influencers.” Id. at 4 ¶¶ 8–9. He also denied that Alya Skin has any contract with Urban Outfitters and noted that “[t]he 5 overwhelming majority of Alya Skin’s sales occur in Australia, New Zealand, China, and 6 Canada.” Id. ¶ 4, 20. 7 II. LEGAL STANDARD 8 “When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears 9 the burden of demonstrating that the court has jurisdiction over the defendant.” Pebble Beach Co. 10 v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006). Although the court “may not assume the truth of 11 allegations in a pleading which are contradicted by affidavit,” CollegeSource, Inc. v. 12 AcademyOne, Inc., 653 F.3d 1066, 1073 (9th Cir. 2011) (internal quotation marks omitted), the 13 court must resolve conflicts between the facts contained in the parties’ affidavits in plaintiff’s 14 favor. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). When 15 the court does not conduct an evidentiary hearing, the plaintiff need only make a prima facie 16 showing of facts supporting personal jurisdiction to avoid dismissal. See Myers v. Bennett Law 17 Offices, 238 F.3d 1068, 1071 (9th Cir. 2001). 18 A. California Personal Jurisdiction 19 Due process limits a court’s power to “render a valid personal judgment against a 20 nonresident defendant.” See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 21 (1980). Where a state authorizes “jurisdiction on any basis not inconsistent with the Constitution 22 of this state or of the United States,” as does California, see Cal. Civ. Proc. Code § 410.10, federal 23 courts must determine whether the exercise of jurisdiction over a defendant “comports with the 24 limits imposed by federal due process.” Daimler AG v. Bauman, 571 U.S. 117, 126 (2014); see 25 also Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) (“California’s 26 long-arm statute . . . is coextensive with federal due process requirements, so the jurisdictional 27 analyses under state law and federal due process are the same.”). “For a court to exercise personal 1 certain minimum contacts with the relevant forum such that the maintenance of the suit does not 2 offend traditional notions of fair play and substantial justice.” Id. (quoting Int’l Shoe Co. v. 3 Washington, 326 U.S. 310, 316 (1945)) (internal quotation marks omitted); see also Walden v. 4 Fiore, 571 U.S. 277, 286 (2014) (“Due process requires that a defendant be haled into court in a 5 forum State based on his own affiliation with the State, not based on the random, fortuitous, or 6 attenuated contacts he makes by interacting with other persons affiliated with the State.”) (internal 7 quotations omitted). 8 A plaintiff may invoke either general or specific personal jurisdiction. Ranza v. Nike, Inc., 9 793 F.3d 1059, 1068 (9th Cir. 2015). “[G]eneral jurisdiction requires affiliations so continuous 10 and systematic as to render the foreign corporation essentially at home in the forum State, i.e., 11 comparable to a domestic enterprise in that State.” Daimler, 571 U.S. at 133 n.11 (internal 12 quotations, citations, and alterations omitted). Specific jurisdiction exists if: (1) the defendant has 13 performed some act or consummated some transaction with the forum by which it purposefully 14 availed itself of the privilege of conducting business in California; (2) the plaintiff’s claims arise 15 out of or result from the defendant’s forum-related activities; and (3) the exercise of jurisdiction is 16 reasonable. Rio Properties, Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002) (citing 17 Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475–76 (1985)). In evaluating reasonableness, 18 courts must consider: 19 (1) the extent of the defendant’s purposeful injection into the forum; (2) the defendant’s burdens from litigating in the forum; 20 (3) the extent of conflict with the sovereignty of the defendant’s state; (4) the forum state’s interest in adjudicating the dispute; 21 (5) the most efficient judicial resolution of the controversy; (6) the importance of the forum to the plaintiff’s interest in convenient 22 and effective relief; and (7) the existence of an alternative forum. 23 Ziegler v. Indian River Cty., 64 F.3d 470, 475 (9th Cir. 1995). 24 B. Nationwide Jurisdiction Provision 25 Federal Rule of Civil Procedure 4(k)(2) “is not limited to the contours of a state longarm 26 statute,” Holland Am. Line Inc. v. Wartsila N. Am., Inc., 485 F.3d 450, 461 (9th Cir. 2007), and 27 provides a mechanism to establish personal jurisdiction over a defendant if “the defendant is not 1 subject to jurisdiction in any state’s courts of general jurisdiction.” Fed. R. Civ. P. 4(k)(2). Three 2 requirements must be met in order to establish personal jurisdiction under Rule 4(k)(2): 3 First, the claim against the defendant must arise under federal law. Second, the defendant must not be subject to the personal jurisdiction 4 of any state court of general jurisdiction. Third, the federal court’s exercise of personal jurisdiction must comport with due process. 5 Pebble Beach, 453 F.3d at 1159. “The due process analysis under Rule 4(k)(2) is nearly identical 6 to traditional personal jurisdiction analysis with one significant difference: rather than considering 7 contacts between [the defendant] and the forum state, [the Court] consider[s] contacts with the 8 nation as a whole.” Axiom Foods, Inc. v. Acerchem Int’l, Inc., 874 F.3d 1064, 1072 (9th Cir. 9 2017) (quoting Holland Am. Line, 485 F.3d at 462). 10 III. DISCUSSION 11 A. California General and Specific Jurisdiction 12 Alya Skin’s principal place of business is located in Victoria, Australia. See Mot. at 6. 13 Thus, as Plaintiff concedes, the Court does not have general jurisdiction over Alya Skin. See Mot. 14 at 9–10. 15 Nor does the Court have specific personal jurisdiction over Alya Skin. Plaintiff contends 16 that under the “effects” test from Calder v. Jones, 465 U.S. 783 (1984), Defendant has 17 purposefully availed itself to conduct business in the forum state. “[T]he ‘effects’ test requires 18 that the defendant allegedly have (1) committed an intentional act, (2) expressly aimed at the 19 forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state.” 20 Dole Food Co. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002). Plaintiff fails to show that any 21 conduct was expressly aimed at California. 22 Plaintiff argues that Defendant’s operation of its website, which allows for the shipping 23 and sale of products to California, and its use of social media influencers show that Defendant was 24 directly targeting the forum. Opp. at 13–17. While “operating even a passive website in 25 conjunction with ‘something more’—conduct directly targeting the forum—is sufficient to confer 26 personal jurisdiction,” Rio Properties, Inc., 284 F.3d at 1020, Plaintiff’s allegations do not 27 constitute “something more.” “In determining whether a nonresident defendant has done 1 something more, we have considered several factors, including the interactivity of the defendant’s 2 website, . . . the geographic scope of the defendant’s commercial ambitions, . . . and whether the 3 defendant individually targeted a plaintiff known to be a forum resident.” Mavrix Photo, 647 F.3d 4 at 1229 (citations omitted). 5 Defendant argues that its website “is standard for any modern website—it simply allows 6 for reviews of products and permits consumers to make online purchases.” Mot. at 15 (citing Dkt. 7 No. 37 ¶ 9). Plaintiff attempts to present conflicting facts, which generally the Court must weigh 8 in Plaintiff’s favor, by noting the website also has a messaging system and that consumers may 9 sign up for marketing materials, including “access to deals, information on product launches, and 10 beauty tips.” Opp. at 14. The Court notes, however, that these are still features of a standard, 11 modern website, and not features that reflect any targeting of California consumers. Many district 12 courts have declined to find express aiming based on alleged sales of products that infringe 13 intellectual property rights through commercial, interactive websites accessible to California 14 consumers. See, e.g., Inventors Row Inc. v. Blankenship, No. CV 17-2387 WBS EFB, 2018 WL 15 2064795, at *4 (E.D. Cal. May 3, 2018); DFSB Kollective Co. v. Bourne, 897 F. Supp. 2d 871, 16 883 (N.D. Cal. 2012); Sanho Corp. v. Cimo Techs., Inc., No. C 11-2473 PJH, 2012 WL 3075094, 17 at *5 (N.D. Cal. July 30, 2012).1 18 Defendant’s sales in California constitute less than 2% of all sales (where all purchases are 19 made online). This de minimis amount cannot show express aiming when the “overwhelming 20 majority” of sales occur in “Australia, New Zealand, China, and Canada.” Dkt. No. 44-1 ¶ 20. 21 Finally, a plaintiff does not show express aiming by alleging injuries that are “entirely personal to 22 him and would follow him wherever he might choose to live or travel” and “not tethered to 23 California in any meaningful way.” Picot v. Weston, 780 F.3d 1206, 1215 (9th Cir. 2015). Had 24 Plaintiff filed this action in any other state, the evidence would be almost identical (with the caveat 25 that total sales may be less than 1% in other states). This includes Plaintiff’s allegations regarding 26 1 Plaintiff’s hiring of investigators to purchase and receive the products in California does not 27 change the outcome. See Clarus Transphase Sci., Inc. v. Q-Ray, Inc., No. C06-3450 JF-RS, 2006 1 social media influencers who are located worldwide and have followers that similarly reflect their 2 transnational reach. The Court concludes that Plaintiff fails to allege facts showing that Defendant 3 engaged in conduct expressly aimed at California. Because this ground is sufficient to conclude 4 that Plaintiff has not established specific personal jurisdiction, the Court need not address the 5 remaining factors. 6 B. Nationwide Jurisdiction 7 Finally, Plaintiff contends the Court has jurisdiction under the national jurisdiction 8 provision, Rule 4(k)(2). Opp. at 24–29. The Court agrees that Plaintiff easily meets the first and 9 second requirements—the claim arises under federal law (trademark infringement under 15 U.S.C. 10 § 1114) and Defendant is not subject to the general jurisdiction of any other state. See Holland 11 Am. Line, 485 F.3d at 462 (“absent any statement from [defendant] that it is subject to the courts 12 of general jurisdiction in another state, the second requirement of Rule 4(k)(2) is met.”). The only 13 question that remains is whether exercise of personal jurisdiction comports with due process. As 14 noted above, the Court’s inquiry is the same as the traditional personal jurisdiction analysis, but its 15 focus must be on the Defendant’s contacts with the United States as a whole. Axiom, 874 F.3d at 16 1072. 17 In support of its position that Defendant has purposefully availed itself of jurisdiction in 18 the United States, Plaintiff points to Defendant’s filing of an application with the United States 19 Patent and Trademark Office (“PTO”), operation of a website accessible to all U.S. consumers, 20 use of “Black Friday” (traditionally a large shopping day in the United States) marketing 21 materials, use of U.S. dollars on its website, promotion of its products by U.S.-based social media 22 influencers, being featured in U.S. based publications, placement on the People for the Ethical 23 Treatment of Animals (“PETA”) “Don’t Test” list, and shipment of products from a U.S. facility. 24 See Opp. 26–29. Plaintiff argues that these facts compel the conclusion that Defendant has 25 substantial contacts with the United States, such that exercising personal jurisdiction over Alya 26 Skin is appropriate. Id. 27 Plaintiff fails to make the required prima facie showing that Defendant has purposefully 1 Defendant has “engaged with social media influencers across the U.S. to promote its products . . . 2 [and] likely . . . has entered into some sort of agreement or contractual relationships with these 3 various individuals.” Opp. at 27–28 (citing Dkt. No. 43 Ex. 10–12 and Dkt. No. 41 ¶ 3). 4 However, social media influencers’ followers—the consumers relevant for the jurisdictional 5 analysis—do not necessarily reside in the same locale as the influencer. That Plaintiff can point to 6 a handful of influencers based in the United States from the allegedly hundreds of influencers that 7 have promoted Defendant’s products, see Reply at 13, does not amount to meaningful contacts 8 with the United States where there is no evidence that those influencers’ followers are based in the 9 United States. Additionally, the Court notes that “no court has ever held that an Internet 10 advertisement alone is sufficient to subject the advertiser to jurisdiction.” Cybersell, Inc. v. 11 Cybersell, Inc., 130 F.3d 414, 418 (9th Cir. 1997). 12 Plaintiff alleges that Defendant has an agreement with a U.S. based retailer, Urban 13 Outfitters, while Defendant denies any such agreement. Dkt. No. 43 Ex. 15, Dkt. No. 44-1 ¶ 4. 14 Although the Court must resolve conflicts between the facts contained in the parties’ affidavits in 15 Plaintiff’s favor, Plaintiff provides no evidence of sales or any other evidence that a contract 16 actually exists. In light of the international presence of this retailer, the Court cannot say that this 17 single, bare allegation establishes minimum contacts with the United States. Cf. Ebates Inc. v. 18 Cashbag.co.za, No. 18-CV-02884-EDL, 2018 WL 6816113, at *5 (N.D. Cal. Oct. 30, 2018), 19 report and recommendation adopted, No. C 18-2884 SBA, 2019 WL 1095820 (N.D. Cal. Jan. 14, 20 2019) (finding jurisdiction where defendants worked with U.S. based retailers to target U.S. based 21 customers, but relying in large part on a published Whitepaper setting forth defendants’ strategy to 22 target the United States). 23 As to Plaintiff’s allegation regarding Defendant’s application with the PTO, that fact does 24 not establish minimum contacts that would justify bringing a foreign company into federal court. 25 See Fumoto Giken Co. v. Mistuoka, No. CV149797DMGMRWX, 2015 WL 12766167, at *5 26 (C.D. Cal. Apr. 16, 2015) (“Particularly given the Ninth Circuit’s cautious application of Rule 27 4(k)(2), this Court is not persuaded that the mere registration of a trademark with the PTO, 1 defendant into federal court.”); Platinum Performance, Inc. v. Pro Dev., GmbH, No. CV 07-4610- 2 GW(VBKX), 2009 WL 10676261, at *7 (C.D. Cal. June 3, 2009) (“it could be argued as a matter 3 of public policy, that the act of seeking to register a trademark with the PTO should not thereby 4 subject the seeker to the jurisdiction of every state forum where there is a person who believes that 5 the seeker’s trademark is similar to its own.”); but see Monster Cable Prod., Inc. v. Euroflex 6 S.R.L., 642 F. Supp. 2d 1001, 1010 (N.D. Cal. 2009) (finding an “application to the PTO to gain 7 trademark protection in the United States for its . . . mark constitutes a substantial contact.”). 8 Importantly, Defendant has now abandoned its trademark application, and any past application is 9 not relevant to the Court’s jurisdictional analysis. See Dkt. No. 48-1 ¶ 3, 48-2. 10 Plaintiff’s remaining allegations also fail. PETA is a global organization, and Defendant’s 11 placement on its “Don’t Test” list establishes no U.S. contacts. Additionally, having a shipping 12 facility in the United States from which Defendant ships products throughout the world does not 13 indicate that it has targeted consumers within the United States. Although Plaintiff alleges that 14 “[t]he default currency on Defendant’s website is U.S. dollars,” Opp. at 27, it is a standard feature 15 of websites to prompt a default currency that matches the location of the individual attempting to 16 access the website. As Defendant notes, “if an individual with a French Internet Provider (“IP”) 17 address accesses the Alya Skin’s website, the default currency will be the Euro, while if the 18 individual is in Australia, the default currency on the website will be in Australian dollars.” Reply 19 at 12. Defendant’s being featured in publications and use of Black Friday sales promotion also do 20 not constitute significant contacts where the features and sales were targeted internationally. See 21 Dkt. 44-1 Ex. G, H; see also Holland Am. Line, 485 F.3d at 462 (“unspecified advertising in 22 various . . . publications hardly constitute significant contacts.”). In sum, Plaintiff’s allegations do 23 not amount to sufficient contacts to show that Defendant has purposefully availed itself of 24 jurisdiction in the United States. 25 Moreover, even if Plaintiff had shown purposeful availment, the Court finds that 26 exercising jurisdiction would not be reasonable in this case. Defendant’s contacts with the United 27 States are very limited. Defendant’s marketing strategy is global in nature, reaching customers 1 does not establish purposeful injection, especially when the influencers’ followers are not 2 necessarily from any specific region. Further, the burden on Defendant of litigating in this district 3 would be great: most individuals with information related to Defendant’s alleged infringement of 4 Plaintiff’s trademark claims reside in Australia. See Dkt. No. 37 ¶ 12–13; see also Bristol-Myers 5 Squibb Co. v. Superior Court of California, San Francisco Cty., 137 S. Ct. 1773, 1776 (2017) 6 (“The ‘primary concern’ in assessing personal jurisdiction is ‘the burden on the defendant.’”) 7 (quoting World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (2004)). Defendant also 8 has suggested the availability of trademark protection in Australia, given that nation’s membership 9 in the World Trade Organization. See Mot. at 18. Plaintiff has not refuted this allegation, nor 10 proven the unavailability of that forum. As “[t]he plaintiff bears the burden of proving the 11 unavailability of an alternative forum,” there appears to be an alternative forum for Plaintiff to 12 bring its claims. Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1490 (9th Cir. 1993). 13 Finally, the Ninth Circuit has urged cautious application of Rule 4(k)(2). See Holland Am. 14 Line, 485 F.3d at 462 (noting that the Ninth Circuit has never countenanced jurisdiction under 15 Rule 4(k)(2), and that the “few cases in which [] sister circuits have concluded that Rule 4(k)(2) 16 conferred jurisdiction have involved defendants with much more extensive contacts to this 17 country.”). The Holland court cited Mwani v. bin Laden, 417 F.3d 1, 13 (D.C. Cir. 2005) 18 (upholding jurisdiction where defendants had engaged in numerous conspiracies to bomb the 19 World Trade Center, the United Nations, and the Lincoln and Holland Tunnels), and Adams v. 20 Unione Mediterranea Di Sicurta, 364 F.3d 646, 651 (5th Cir. 2004) (upholding personal 21 jurisdiction where the defendant had directly insured hundreds of claims in the United States), as 22 the rare cases finding jurisdiction under Rule 4(k)(2). Plaintiff’s allegations do not come close to 23 establishing the level of contacts shown in those cases, making the exercise of jurisdiction in this 24 case unreasonable. 25 // 26 // 27 // IV. CONCLUSION For the reasons stated above, the Court GRANTS Defendant’s motion to dismiss for lack 2 of personal jurisdiction. The Court DIRECTS the clerk to terminate the case. 3 IT IS SO ORDERED. 4 Dated: 11/13/2019

6 tooo S. GILLIAM, JR. i 7 United States District Judge 8 9 10 11 12

© 15 16

= 17

Z 18 19 20 21 22 23 24 25 26 27 28