United States District Court, W.D. Washington, Seattle
L. ROBART UNITED STATES DISTRICT JUDGE
the court are (1) Red.com, Inc. and Red.com, LLC's
(collectively, “Defendants” or “RED”)
motion to dismiss under Federal Rules of Civil Procedure
12(b)(2), 12(b)(3), and 12(b)(6), or in the alternative, to
transfer venue to the district court for the Central District
of California (MTD (Dkt. # 15)); and (2) Jinni Tech Ltd
(“Jinni Tech”) and Bruce Royce's
(collectively, “Plaintiffs”) surreply to strike
Defendants' reply in its entirety (Surreply (Dkt. # 29)).
The court has considered the parties' submissions in
support of and in opposition to the motion to dismiss, the
relevant portions of the record, and the applicable law.
Being fully advised,  the court GRANTS in part and DENIES in
part Defendants' motion to dismiss and STRIKES the
portions of Defendants' reply that advance the forum
selection clause argument.
case stems from the competing products manufactured and sold
by the parties in the filmmaking equipment
industry. (See FAC (Dkt. # 10) ¶¶
3-6.) RED manufactures and sells high-end, digital
cameras-the RED digital cameras-which are widely used by the
filmmaking community. (See Id. ¶¶ 42-44.)
As part of their business, Defendants also sell the RED
Mini-Mag-a memory storage device, known as a solid state
drive (“SSD”), that is compatible with the RED
digital cameras. (Id. ¶¶ 41-42.)
Defendants' President, Jarred Land, owns and operates a
website called reduser.net, which hosts a forum for
individual RED camera owners and others active in the
cinematography industry to “share information about RED
cameras and accessories.” (Id. ¶¶
Tech also manufactures cinematography equipment. (See
Id. ¶ 34.) Its founder, Mr. Royce, is an engineer
who has worked in the television industry, and he formed
Jinni Tech to manufacture and sell high-quality products for
professional cameras and computer systems used in film
production. (Id. ¶¶ 18-19, 34-36.) Jinni
Tech introduced its competing SSD media accessory called the
JinniMag, which it marketed as “an affordable
third-party media accessory that is compatible with RED
cameras.” (Id. ¶ 38; see Id.
¶¶ 34-37.) Jinni Tech introduced the JinniMag on
July 31, 2016. (Id. ¶¶ 37, 66-67.)
claims arise from the events occurring after Jinni Tech
unveiled the JinniMag: (1) a series of allegedly false
statements made or encouraged by Defendants after the
introduction of the JinniMag; and (2) a separate patent
infringement suit regarding the JinniMag filed by Defendants
in the Central District of California. (See Id.
¶¶ 107-88.) The court recites the relevant facts as
to each category of claims below.
Statements Regarding Plaintiffs After the Introduction of
31, 2016-the same day that the JinniMag was introduced-Mr.
Land posted on a Facebook group of RED consumers that the
JinniMag “is not legit . . . not certified . . . not
endorsed . . . . Even if this was real there are too many
inaccuracies and violations going on here to list.”
(Id. ¶ 68.) This post was subsequently
republished on other Facebook groups of RED camera users.
(See Id. ¶ 70.) Many Facebook users
subsequently “warned RED customers and other users that
Mr. Land identified JinniMag as a ‘scam' and
‘IP theft' and ‘a fake.'”
(Id. ¶ 71.)
The same day, Mr. Land posted a message on the reduser.net
forum about the introduction of the JinniMag:
For some random company to hack and duplicate our IP and our
firmware (which is the only way they could do this) is
exactly like someone stealing your films and calling them
their own and selling them to others.
I don't know where this company is from. I assume the UK
cover is just bullshit. Someone said China but I really hope
this is not the case as China has made such significant
improvements over the last decade turning around their
attitude towards Copyright infringement, Trademark
violations, and IP theft (which it appears this company has
broken all three in one swoop)[.]
I will shut RED completely down . . . I am not kidding . . .
If stealing each other's [product] suddenly is deemed
(Id. ¶ 75.) Like the Facebook post above, Mr.
Land's message on reduser.net was republished and
repeated by other users. One user stated that “cheap
knock off SSDs” like JinniMag “are clearly
engaging in criminal behavior.” (Id. ¶
77a.) Another user accused Jinni Tech of having “stolen
someone else's fruit of their [sic] hard labor and
financial commitment.” (Id. ¶ 77d.)
users would “express appreciation for Jinni
Tech's lower-priced JinniMag alternative, ” but Mr.
Land would “shout them down with intimidating messages
aimed at inflaming RED's users against Jinni Tech.”
(Id. ¶ 79.) For example, on August 1, 2016, a
user shared that he or she would be interested in
“pick[ing] up a few [JinniMags]” because RED
prices are “incredibly over-inflated.”
(Id. ¶ 80.) Mr. Land responded the same day,
We invented something. Someone is saying they have stole[n]
it. And you are sitting there telling everyone that is ok.
It is the same as if you saved up or borrowed $10, 000,
000[.00] and went and wrote and directed and shot your film.
[Y]ou edit it together and finish it and put it up on Itunes
for $9.99 to get your money back.
But someone from [C]hina looks at your film and . . . just
download[s] this guy[']s film, steal[s] it, change[s] the
opening credits with [his or her] logo and reupload[s] it on
Itunes and only charge[s] $1.00. That's not right.
(Id. ¶ 81.) Later in the same thread, Mr. Land
Lawyers will deal with these guys doing this . . . but it is
you guys that think that this is OK that have me way way way
more pissed off.
(Id. ¶ 82.)
Mr. Land's postings, other users continued to discuss
Jinni Tech and the JinniMag in a disparaging light. One user
suggested that Mr. Land “try to take them down through
the FBI” (id.¶ 85a); others proposed that
RED sue Jinni Tech, block its product, or void the warranties
of customers who chose to use JinniMag (id. ¶
85c). In December, when a user promoted the JinniMag on the
forum, others responded immediately that it was “[n]ot
a good idea to be promoting that around here.”
(Id. ¶ 86a.) Another user concurred:
“[Mr. Land] had some very stern warnings when this came
up in the past. Basically it's IP theft. I would take the
warnings seriously.” (Id. ¶ 86b.)
online postings escalated as users on reduser.net began to
share personal information about Mr. Royce. On August 1,
2016, one user posted Mr. Royce's name, personal email
address, and phone number on reduser.net. (Id.
¶ 90.) Defendants did not remove this information or
warn users to refrain from posting personal identifying
information. (Id. ¶ 91.) Other users personally
attacked Mr. Royce on various online // forums. (See
Id. ¶ 94.) Defendants did not discourage these
users from doing so and took no action to prevent any such
attacks in the future. (Id. ¶ 95.)
result of these postings, Plaintiffs allege that Mr. Royce
and his family suffered “serious emotional distress,
anxiety, and stress, resulting in harm to Mr. Royce's
emotional and physical health, including severe physical pain
and a sleep disorder.” (Id. ¶ 98.)
Moreover, the comments have caused “serious damage to
Mr. Royce's professional reputation.” (Id.
these disparaging comments, Plaintiffs noticed that
“many potential customers who expressed an interest in
buying [its] products declined to do so.” (Id.
¶ 87.) For instance, one consumer had ordered the
JinniMag but canceled her order after seeing the Facebook
comments, explicitly explaining that she was “not
touching these” because they were “[b]ad
mojo.” (Id. ¶ 87b.) Another user posted
that he or she was “excited by [JinniMags] when they
were first announced, but now that it turns out that
they've got no permissions to create them I'm
steering well clear.” (Id. ¶ 87a.)
filed suit on February 10, 2017. (See Compl. (Dkt. #
1).) Their complaint alleges that Defendants falsely
advertised its products and engaged in unfair competition, in
violation of the Lanham Act, 15 U.S.C. § 1125(a).
(Id. ¶¶ 90-108.) It also asserted various
violations of Washington law, including product disparagement
and trade libel (id. ¶¶ 109-15); tortious
interference (id. ¶¶ 116-22); intentional
and negligent infliction of emotional distress (id.
¶¶ 136-43); defamation (id. ¶¶
144-52); and portraying Plaintiffs in a false light
(id. ¶¶ 153-61). Finally, the complaint
alleged that Defendants violated the Washington Consumer
Protection Act by engaging in unfair competition in violation
of RCW 19.86 (id. ¶¶ 123-28) and violating
Mr. Royce's right of privacy in contravention of RCW
9.73.060 (id. ¶¶ 129-35).
Patent Infringement Claims
later, on March 2, 2017, Red.com, Inc. brought suit against
Jinni Tech and Mr. Royce in the Central District of
California, alleging patent infringement, trademark
infringement, and various other violations of federal and
state law. See generally Red.com, Inc. v. Jinni Tech,
Ltd., No. 8:17-cv-00382-CJC-KES, Dkt. # 1
(“Compl.”) (C.D. Cal.) (hereinafter, “the
patent infringement suit”). The complaint describes the
'385 patent, owned by RED, which covers the RED SSD
accessories. Id., Compl. ¶ 14. It asserts that
Jinni Tech and Mr. Royce “have in the past infringed
and are currently infringing the '385 patent.”
Id., Compl. ¶ 43.
Tech and Mr. Royce moved to dismiss the patent infringement
suit on various grounds, including lack of personal
jurisdiction and improper venue, and alternatively, to
transfer the action to this district. Id., Dkt. # 30
(“Order on MTD”) at 1-2. The District Court
denied the motion. See generally id., Order on MTD.
First, the court found that it has personal jurisdiction over
Jinni Tech and Mr. Royce because they “committed
intentional acts directed at the forum which they
knew would have a direct effect on [Red.com, Inc.] in the
forum.” Id., Order on MTD at 9. Moreover,
the court concluded that venue is proper because the
“alleged acts of infringement were directed at
[Red.com, Inc.] whose principal place of business and website
servers are located in this judicial district.”
Id., Order on MTD at 15. Lastly, the court declined
to transfer venue. Id., Order on MTD at 17.
23, 2017, Jinni Tech and Mr. Royce filed an amended complaint
in this suit, adding two claims seeking declaratory judgments
of noninfringement and invalidity of the '385 Patent-the
same patent at issue in the patent infringement suit
currently pending in the Central District of California.
(See FAC ¶¶ 183-88.)
move to dismiss Plaintiffs' claims under Federal Rules of
Civil Procedure 12(b)(2) for lack of personal jurisdiction,
12(b)(3) for improper venue, and 12(b)(6) for failure to
state a claim. (MTD at 5-6.) Plaintiffs oppose the motion and
move to strike Defendants' reply brief. (See
Surreply at 1.) The court first addresses Plaintiffs'
motion to strike and then turns to each basis for dismissal.
Motion to Strike
move this court pursuant to Local Civil Rule 7(g) to strike
Defendants' reply brief in its entirety for
“add[ing] new facts and arguments which were not raised
in its [m]otion.” (Surreply at 1.) Specifically,
Plaintiffs challenge Defendants' argument that Plaintiffs
are subject to exclusive personal jurisdiction in California
because of “four adhesion agreements” that each
include a “forum selection clause.” (Id.
arguments may not be introduced in a reply brief, ”
United States v. Puerta, 982 F.2d 1297, 1300 n.1
(9th Cir. 1992), and a court “need not consider
arguments raised for the first time in a reply brief, ”
Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007).
If new facts or arguments are introduced in a reply, the
nonmoving party may file a surreply requesting that the court
strike the material. Local Rules W.D. Wash. LCR 7(g).
introduce both new facts and new arguments in their reply.
For the first time, Defendants introduce various contracts
that Mr. Royce allegedly agreed to, including the Red Website
License Agreement, and the RedlinkTM SDK License
Agreement, all of which contain forum selection clauses.
(See Reply at 3-5.) They did not, however, raise any
of these contractual agreements in the motion to dismiss.
(See generally MTD.) Defendants then rely on these
newly introduced facts to argue that the forum selection
clauses deprive this court of jurisdiction. (Reply at 6-7.)
Defendants again did not raise this argument in the motion to
dismiss. (See generally MTD.) Because the forum
selection argument was not raised until Defendants'
reply, the court will not consider this argument and strikes
the portions of the reply advancing this new argument.
the court does not agree that it must strike the reply in its
entirety, as Plaintiffs urge. (See Surreply at 1.)
Certain portions of the reply deal with arguments that
previously raised, such as the impact of Red.com, Inc.'s
conversion to Red.com, LLC (Reply at 8-9); Plaintiffs'
failure to dispute that Defendants could not be held liable
for the posts of unaffiliated individual users (id.
at 10-11); and Defendants' contention that Mr. Land was
acting outside the scope of his employment (id. at
11-12). These portions of the reply do not introduce new
facts or arguments, and the court declines to strike them.
the court strikes only the parts of the reply that advance
the argument involving the forum selection clauses. The
remainder of the reply stands as filed.
Motion to Dismiss for Lack of Personal Jurisdiction
argue that the amended complaint fails to establish personal
jurisdiction over them, and they therefore move to dismiss
all claims on that basis. (MTD at 8-18.) Plaintiffs disagree.
(Resp. at 6-9.) For the reasons stated below, the court
concludes that it has personal jurisdiction over Defendants.
Rule of Civil Procedure 12(b)(2) allows a defendant to move
to dismiss for lack of personal jurisdiction. See
Fed. R. Civ. P. 12(b)(2). “In opposing a
defendant's motion to dismiss for lack of personal
jurisdiction, the plaintiff bears the burden of establishing
that jurisdiction is proper.” CollegeSource, Inc.
v. AcademyOne, Inc., 653 F.3d 1066, 1073 (9th Cir.
2011). However, in the absence of an evidentiary hearing,
“the plaintiff need only make ‘a prima facie
showing of jurisdictional facts to withstand the motion to
dismiss.'” Wash. Shoe Co. v. A-Z Sporting
Goods, Inc., 704 F.3d 668, 671-72 (9th Cir. 2012)
(quoting Pebble Beach Co. v. Caddy, 453 F.3d 1151,
1154 (9th Cir. 2006)). Although a plaintiff cannot simply
rest on the bare allegations of her complaint, the court must