Symbolstix, LLC v. Smarty Ears, LLC

152 F. Supp. 3d 1027, 2015 U.S. Dist. LEXIS 172098, 2015 WL 9460223
CourtDistrict Court, N.D. Ohio
DecidedDecember 28, 2015
DocketCase No. 3:14CV1850
StatusPublished
Cited by1 cases

This text of 152 F. Supp. 3d 1027 (Symbolstix, LLC v. Smarty Ears, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Symbolstix, LLC v. Smarty Ears, LLC, 152 F. Supp. 3d 1027, 2015 U.S. Dist. LEXIS 172098, 2015 WL 9460223 (N.D. Ohio 2015).

Opinion

James G. Carr, Sr., United States District Judge

ORDER

This is a copyright infringement, case between two publishers of pictogram stick-figure symbols that speech therapists use in their work with speech-impaired children.

Plaintiff Symbolstix, LLC (Symbolstix) is an Ohio limited liability company. (Doc. ■1 ¶ 1). Defendants are Smarty Ears, LLC [1031]*1031(Smarty Ears), a Texas limited liability company, and its Manager and Director, Barbara Fernandes, a resident of Texas. (Id. ¶¶ 1-3).

Pending is defendants’ motion to dismiss for want of personal jurisdiction or, alternatively, to transfer venue. (Doc. 44). For the reasons that follow, I grant the motion to dismiss for want of personal jurisdiction as to Fernandes, but deny it as to Smarty Ears. I also deny defendants’ motion'-to transfer venue.

Background

Symbolstix is the developer and owner of a collection of thousands of two-dimensional pictorial images and symbols (the “Library”) used for communication in special education instruction and speech pathology treatment. (Doc. 1 ¶ 8). According to Symbolstix, “[t]he images are particularly useful for communicating with special needs children who have difficulty understanding written words but who can understand a pictorial image which stands for or represents a written word.” (Id.).

Symbolstix is the exclusive copyright owner of the Library under United States law. (Id. ¶¶ 9-11). Among the exclusive rights Symbolstix owns are the rights to reproduce the Library, to create works derivative of the Library, and to distribute the Library to the public. (Id. ¶ 12).

Smarty Ears sells educational mobile device applications (“apps”), which, as do the Symbolstix materials, use stick symbol pictograms to improve speech and language skills. (Id. ¶ 16; Doc. 44-1 ¶ 3). According to defendants, parents, teachers and speech therapists “worldwide” use the apps to help children with speech and developmental impairments. (Doc. 44-1 ¶ 3). Smarty Ears sells its products exclusively through Apple’s iTunes App Store • (the “App Store”).1(M at 3).

In May 2011, Fernandes, on behalf of Smarty Ears, purchased a one-year limited online subscription to the Library. (Doc. 1 ¶ 14). The license restricted use of the Library to noncommercial communication purposes. (Id.). Once the license expired, Fernandes’ right to use or reproduce the Library terminated. (Id.' ¶ 15).

Symbolstix alleges defendants nonetheless converted the Library’s images for use in their own product, a comprehensive symbol set called “Smarty Symbols.” (Doc. 45 at 1; Doc. 1 ¶¶ 18-20). Defendants used Smarty Symbols to create apps. (Doc. 45 at 7). Ohio residents. (in, addition to residents of every other state) could, and did, purchase Smarty Ears apps through, the App Store.2 (Id. at 8).

According to Symbolstix, defendants began specifically to target the Ohio market shortly after obtaining its license from plaintiff. (Id. at 1). In -2012, Smarty Ears approached Jenna Rayburn, a speech pathologist in Columbus, Ohio, to ask that she review Smarty Ears apps on her nationally-popular speéch- therapy blog. (Id.). Rayburn agreed, and periodically over the next three years wrote favorable reviews of numerous Smarty Ears apps.3 (Id: at-2-6); Smarty Ears did not pay Rayburn for her reviews; instead, it gave her free copies of Smarty Ears apps to use with her [1032]*1032students. (Id. at 6). Occasionally, Smarty Ears also provided Rayburn with free apps to raffle off to speech therapists who visited her blog, including speech therapists in Ohio. (Doc. 48-2 at 46:2-47:11, 26:2-27:5).

Smarty Ears also licensed Smarty Symbols to Rayburn so she could create her own speech and language therapy apps. (Doc. 45 at 3-5). Smarty Ears did so because “[w]e are hoping that by allowing you to use the symbols, it will raise awareness of our symbol set.”4(Doc. 45 at 3). Smarty Ears hoped such increased awareness would convince more app developers to obtain licenses from Smarty Symbols. (Id).

Finally, Smarty Ears appointed Julie Vogt, another Columbus-based speech therapist, to its “Advisory Board.” (Id; at 6-7). As a board member, she received free copies of Smarty Ears apps and provided Smarty Ears with feedback for improving them. (Id.). Like Rayburn, she used the apps Smarty Ears gave her with her students. (Id.).

Symbolstix brought this action in August 2014. (Doc; 1). Its- primary allegations regarding personal jurisdiction state Smarty Ears “regularly transacts business in the State of Ohio,” and Fernandes, as “founder and. controlling member” of Smarty Ears, “supervised and participated in the unlawful conduct” alleged in the complaint. (Doc. 1 ¶¶ 2-3).

Defendants promptly filed a motion to dismiss for want of personal jurisdiction (Doc. 9), which I ordered them to withdraw so Symbolstix could conduct jurisdictional discovery. (Doc. 22). On completion of that discovery, defendants filed the instant motion. (Doc. 49).

In support of their motion, defendants assert, inter alia: 1) Smarty Ears sells its products exclusively through the App Store, a third-party, worldwide distributor; 2) Smarty Ears’ limited sales to Ohio residents were random and fortuitous; 3) Smarty Ears does not request the App Store to sell its products specifically in .Ohio, nor does the App Store give Smarty Ears the option not to sell its apps in Ohio; 4) Smarty Ears does not specifically target Ohio, on its website; 5) Smarty Ears provided Rayburn and Vogt with apps free of charge, just as it does for hundreds of other speech therapists, bloggers and news sources around the world; 6) Fernandes acted strictly in her fiduciary and representative capacity on behalf of Smarty Ears, apd never on her own behalf, with respect to Symbolstix’s allegations against her; and 7) Fernandes has never visited Ohio. (Doc. 44).

Standard of Review

“The. procedural scheme which guides the district court in disposing of Rule 12(b)(2) motions is well-settled.” Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991). The court decides jurisdictional disputes before proceeding to trial, Welsh v. Gibbs, 631 F.2d 436, 438 (6th Cir.1980), relying on one of three procedural alternatives to make this determination. Theunissen, 935 F.2d at 1458. It may: 1) “decide the motion.upon the affidavits alone”; 2) “permit discovery in aid of deciding, the motion”; or 3) “conduct an evidentiary hearing to resolve any apparent factual questions.” Id.

Plaintiffs burden varies based on the court’s chosen method. CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir.1996); Serras v. First Tennessee Bank Nat. Ass’n, 875 F.2d 1212, 1214 (6th Cir.1989). If the court elects to rule without an evidentiary hearing, as I do here, plaintiff need only present a

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Bluebook (online)
152 F. Supp. 3d 1027, 2015 U.S. Dist. LEXIS 172098, 2015 WL 9460223, Counsel Stack Legal Research, https://law.counselstack.com/opinion/symbolstix-llc-v-smarty-ears-llc-ohnd-2015.