Airwair Int'l Ltd. v. Schultz

• Decision Date: 12 November 2014
• Docket Number: Case No.: 5:13–CV–01190–LHK
• Citation: 73 F.Supp.3d 1225
• Court: U.S. District Court — Northern District of California
• Parties: AirWair International Ltd., a company of the United Kingdom, Plaintiff, v. Matthew K. Schultz, an individual doing business as Calceus, a fictitious business name; NPS (Shoes) Ltd., a British Limited Company; and Does 1–50, Defendants.

73 F.Supp.3d 1225

AirWair International Ltd., a company of the United Kingdom, Plaintiff

v.Matthew K. Schultz, an individual doing business as Calceus, a fictitious business name; NPS (Shoes) Ltd., a British Limited Company; and Does 1–50, Defendants.

Case No.: 5:13–CV–01190–LHK

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA San Jose Division

Signed November 12, 2014

Marcy J. Bergman, Robert James Esposito, Stephanie Ann Blazewicz, Bryan Cave LLP, San Francisco, CA, for Plaintiff.

ORDER DENYING MOTION TO DISMISS

LUCY H. KOH, United States District Judge

Plaintiff AirWair International Ltd. (“AirWair”), brings this action against defendant NPS (Shoes) Ltd. (“NPS”) and defendant Matthew K. Schultz, an individual doing business as Calceus (“Calceus”), for federal trademark infringement, federal false designation of origin, trademark dilution, California statutory unfair competition, common law unfair competition, and California statutory trademark dilution. ECF No. 28 (“First Am. Compl.”). Before the Court is NPS's motion to dismiss for lack of personal jurisdiction. ECF No. 30 (“Mot.”).

Pursuant to Civil Local Rule 7–1(b), the Court finds this matter appropriate for resolution without oral argument and hereby VACATES the hearing scheduled for November 13, 2014. The case management conference set for November 13, 2014 at 1:30 p.m. remains as set. Having considered the submissions of the parties and the relevant law, and for good cause shown, the Court hereby DENIES NPS's motion to dismiss.

I. BACKGROUND

A. Factual Background

The following background is drawn from AirWair's operative complaint, as well as declarations submitted in conjunction with NPS's motion to dismiss.

AirWair, a company based in the village of Wollaston, England, designs, manufactures, markets, and sells footwear under the Dr. Martens trademark. First Am. Compl. ¶¶ 1, 11. AirWair holds several registrations with the U.S. Patent and Trademark Office for the trade dress of Dr. Martens footwear, including “the combination of yellow stitching and a two-tone grooved sole edge”; yellow “welt stitch located around the perimeter of footwear”; longitudinal ribbing and a dark color band over a light color in the sole edge; and “longitudinal ribbing and a dark color band over a light color on the outer sole edge, welt stitching, and a tab at the top back heel of footwear.” Id. ¶ 14 (internal quotation marks omitted). According to AirWair, these trademarks have been in use for 50 years, and have been used in the United States since 1984. Id.

NPS, a British Limited Company also located in Wollaston, England, manufactures, advertises, distributes, and sells Solovair footwear. Id. ¶ 3. AirWair has alleged that several of NPS's Solovair products are sold in the United States, including California, and has further alleged NPS's products infringe the trade dress of AirWair's Dr. Martens footwear. Id. ¶¶ 6, 18–25, 51.

At issue in the instant motion is the degree of contact NPS has with the state of California. According to NPS, the company is not licensed or registered to do business in California; has no property or subsidiaries here; and has no office, employees or registered agents, phone or mailing address in-state. Declaration of Christian Castle in Support of NPS' Motion to Dismiss, ECF No. 30–1, (“Castle Decl.”), ¶¶ 5–13. NPS has further alleged that it does not individually direct advertisements or knowingly target marketing emails to consumers in California. Id. ¶ 10, 16.

Co–defendant Matthew K. Schultz is the owner and principal of Calceus, LLC, a California limited liability company based in Poway, California. First Am. Compl. ¶ 4. According to AirWair's First Amended Complaint, sometime on or before 2012 Calceus negotiated with NPS to be NPS's official and exclusive authorized importer, distributor and reseller of Solovair footwear in the United States. Id. ¶¶ 5, 27, 28. Pursuant to the agreement between the two businesses, NPS licensed to Calceus Solovair-related intellectual property owned by NPS. Id. ¶ 29. Thereafter, NPS sold over 500 units of infringing footwear to Calceus between January 2012 to January 2013. Id. at ¶ 41. The infringing footwear was allegedly delivered in six shipments that journeyed from NPS's factory in England to Calceus in California. Id. Calceus then resold the Solovair footwear to consumers and retailers throughout California, as well as the rest of the United States, between January 2012 and April 2013. Id. Calceus shipped returns from its U.S. sales back to NPS in England. Id. ¶ 26. According to AirWair, Calceus operated as “a central location to store Solovair footwear intended for the U.S. market,” and “significant payments flow between Calceus and NPS” based on shipments from NPS to Calceus. Id. at ¶¶ 26, 43.

According to AirWair, Calceus operates a commercial, interactive website, www.solovairdirect.com (“Solovair Direct”) for the advertising, promotion, and sale of Solovair footwear. First Am. Compl. ¶ 31. NPS has worked closely with Calceus in the design of Solovair Direct by, among other things, sharing images of Solovair footwear and historical images of NPS's factory and workers, both for use on Solovair Direct. Id. ¶ 31–32. NPS also allegedly directed Calceus to make Solovair Direct as similar as possible to NPS's own website, www.solovair.co.uk. Id. For example, Calceus's website contains an “About Us” page that is entitled “History of Solovair and NPS.” Id. ¶ 33. The page is allegedly very similar to the “About Us” webpage from NPS's own websites. Id. NPS also allegedly directed Calceus to add the language, “We are the official Solovair representative for Canada as well as the US” to Calceus's website. Id. ¶ 34. Calceus' Facebook page similarly contains NPS's Solovair logo, as well as the blurbs “Official U.S. Partner” and “Exclusive North American Retailer for Solovair Boots, Shoes and Accessories.” Id. ¶ 37. NPS's own website, www.solovair.co.uk, has a “Where To Buy” webpage that directs U.S. consumers to, among other retailers, the Calceus website. Id. ¶ 37–38.

AirWair has alleged that NPS and Calceus have “continuously re-negotiated, added and/or removed terms to, and renewed [their] Agreement as necessitated by business operations in the United States.” Id. ¶ 29. AirWair has also alleged that NPS provided ongoing support and oversight to Calceus regarding Calceus's website, Solovair Direct. Id. ¶ 40. NPS's alleged support included: (1) coordination of orders, import/export controls, invoices, customs, and tariffs; (2) selection of styles, sizes, quantities, pricing, and packaging for the U.S. market; (3) support regarding the sales performance of Solovair Direct; (4) the provision of promotional materials to Calceus for events in California and elsewhere in the United States; (5) the supply of product images for use in advertising and marketing; (6) assistance with U.S. trade shows; (7) strategy for new promotional opportunities in California and elsewhere in the United States; and (8) assistance in responding to customer complaints and return requests. Id.

Finally, AirWair has alleged that NPS, or Calceus operating at NPS's behest, established relationships with retailers in San Francisco and Berkeley, California, as well as Lancaster, Pennsylvania to sell Solovair footwear.Id. ¶ 45. Calceus has continued to seek out additional retailers to sell Solovair footwear in the United States, also at NPS's alleged behest. Id. ¶ 46.

B. Procedural History

On March 3, 2013, AirWair filed a complaint against NPS and defendant Matthew K. Schultz. ECF No. 1. On April 10, 2014, since AirWair had not yet served the defendants, the Court ordered service, ECF No. 9, and AirWair shortly thereafter obtained a waiver of service from each defendant, ECF Nos. 13 & 16. On July 7, 2014, The Court approved a consent judgment between Plaintiff and defendant Matthew K. Schultz/Calceus. ECF No. 20.

On July 18, 2014, NPS filed its first motion to dismiss for lack of personal jurisdiction. ECF No. 23. In response, on July 29, 2014, Plaintiff filed a First Amended Complaint naming NPS, Matthew K. Schultz, and Calceus LLC as defendants. ECF No. 28. In its First Amended Complaint, AirWair alleged trademark infringement, federal unfair competition, trademark dilution, unfair competition under California Business & Professions Code §§ 17200, et seq. , common law unfair competition, and trademark dilution under California Business & Professions Code §§ 14330, et seq. First Am. Compl. ¶¶ 49–74. AirWair also alleged that NPS's promotion, advertising, offering for sale, and sale of Solovair footwear is likely to cause and has caused confusion between AirWair's footwear and NPS's footwear. Id. ¶ 47. AirWair further alleged that NPS's activity has caused and continues to cause damage to Plaintiff in California in the form of lost sales and profits, and damage to its reputation and goodwill in California. FAC ¶ 48. AirWair requested injunctive relief and monetary damages. Id. at 14–15.

On August 20, 2014, the Court approved an amended consent judgment between Plaintiff and defendants Matthew K. Schultz and Calceus, LLC. ECF No. 32.

On August 12, 2014, responding to the First Amended Complaint, NPS filed the instant motion to dismiss for lack of personal jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2). ECF No. 30. On August 26, 2014, AirWair filed its opposition to the motion. ECF. No. 33. On September 2, 2014, NPS filed a reply in support of its motion. ECF No. 34.

II. LEGAL STANDARD

When a defendant moves to dismiss a complaint for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that jurisdiction is appropriate. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir.2004). Where, as here, the defendant's motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts to withstand a motion to dismiss for...