Fraserside IP, L.L.C. v. Youngtek Solutions, Ltd.

• Decision Date: 10 January 2013
• Docket Number: No. C11-3005-MWB,C11-3005-MWB
• Parties: FRASERSIDE IP, L.L.C., Plaintiff, v. YOUNGTEK SOLUTIONS, LTD, d/b/a EMPFLIX, d/b/a WWW.EMPFLIX.COM, d/b/a TNAFLIX.COM AND WWW.TNAFLIX.COM, JOHN DOES 1100, and JOHN DOE COMPANIES 1100, Defendant.
• Court: U.S. District Court — Northern District of Iowa

FRASERSIDE IP, L.L.C., Plaintiff,

v. YOUNGTEK SOLUTIONS, LTD, d/b/a EMPFLIX, d/b/aWWW.EMPFLIX.COM, d/b/a TNAFLIX.COM AND WWW.TNAFLIX.COM,JOHN DOES 1100, and JOHN DOE COMPANIES 1100, Defendant.

No. C11-3005-MWB

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF IOWA CENTRAL DIVISION

DATED: January 10, 2013

MEMORANDUM OPINION AND

ORDER REGARDING DEFENDANT

YOUNGTEK SOLUTIONS, LTD.'S

MOTION TO DISMISS FOR LACK

OF PERSONAL JURISDICTION

TABLE OF CONTENTS

I. INTRODUCTION AND BACKGROUND .............................................. 2

A. Procedural Background ........................................................... 2

B. Factual Background ............................................................... 3

II. LEGAL ANALYSIS ........................................................................ 6

A. Proper Motion For Challenging Personal Jurisdiction ...................... 6

B. Rule 12(b)(2) And Personal Jurisdiction Standards ......................... 8

C. Personal Jurisdiction Analysis ................................................. 13

1. General jurisdiction ...................................................... 13

2. Specific jurisdiction ...................................................... 18

D. Federal Long-Arm Statute ...................................................... 21

1. Claims arising under federal law ...................................... 23

2. No state with personal jurisdiction over defendants ............... 23

3. Due process ................................................................ 26

III. CONCLUSION ............................................................................ 29

Plaintiff, the owner of copyrights and trademarks for adult motion pictures, alleges that defendant, a Cyprus corporation, has willfully violated plaintiff's copyright and trademarks by offering plaintiff's motion pictures on Internet websites it operates. However, the merits of plaintiff's claims are not presently before me. Rather, I must resolve, inter alia, whether plaintiff has made a prima facie showing that defendant has sufficient minimum contacts with Iowa to satisfy due process and permit the exercise of personal jurisdiction over it under Iowa's long-arm statute, or whether its contacts with the United States as a whole, as distinct from contacts with Iowa, are sufficient to permit the exercise of personal jurisdiction over it under the federal long-arm statute.

I. INTRODUCTION AND BACKGROUND

A. Procedural Background

On February 17, 2011, plaintiff Fraserside IP L.L.C. ("Fraserside") filed a complaint against Youngtek Solutions, Ltd. ("Youngtek"), John Does, and John Doe Companies, alleging the following causes of action: copyright infringement, in violation of 17 U.S.C. §§ 106 and 501 et seq.; contributory copyright infringement, in violation of 17 U.S.C. §§ 106 and 501 et seq.; vicarious copyright infringement, in violation of 17 U.S.C. §§ 106 and 501 et seq.; inducing copyright infringement, in violation of 17 U.S.C. §§ 106 and 501 et seq.; trademark infringement, in violation of 15 U.S.C. § 1114; contributory trademark infringement, in violation of 15 U.S.C. § 1114; vicarious trademark infringement, in violation of 15 U.S.C. § 1114; false designation of origin, in violation of 15 U.S.C. § 1125(a); and, dilution of trademark, in violation of 15 U.S.C. § 1125(c).

On April 19, 2012, Youngtek filed its Motion For Summary Judgment On Personal Jurisdiction (docket no. 47). Youngtek claims that it lacks connections with Iowa or the United States which would subject it to jurisdiction in the Northern Districtof Iowa. In response to Youngtek's motion, Fraserside requested an extension of time to take additional discovery, pursuant to Federal Rule of Civil Procedure 56(d)(2). Fraserside's request was granted. On December 5, 2012, Fraserside filed its resistance to Youngtek's motion. Fraserside initially argues that a motion for summary judgment for lack of personal jurisdiction is not theoretically possible and that I should consider Youngtek's motion a motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil procedure 12(b)(2). On the merits, Fraserside argues that Youngtek's internet activities establish a sufficient basis for specific personal jurisdiction under Iowa's long-arm statute. Fraserside, alternatively, argues that, even if it did not make a prima facie showing of personal jurisdiction under Iowa's long-arm statute, personal jurisdiction exists under the federal long-arm statute found in Federal Rule of Civil Procedure 4(k)(2). On December 10, 2012, Youngtek filed its reply brief.

B. Factual Background

I set out only those facts, disputed and undisputed, sufficient to put in context the parties' arguments concerning Youngtek's motion. Unless otherwise indicated, the facts recited here are undisputed. I will discuss additional factual allegations, and the extent to which they are or are not disputed or material, if necessary, in my legal analysis.

Plaintiff Fraserside is a wholly owned subsidiary of Fraserside Holdings, Ltd. ("Fraserside Holdings"), a Cyprus based company. Fraserside Holdings is a wholly owned subsidiary of Private Media Group, a publicly traded company, incorporated in Nevada with its corporate headquarters in Barcelona, Spain. Fraserside was incorporated in Iowa on October 20, 2010.

Defendant Youngtek is also a Cyprus based company. Youngtek does not have, and has never had, offices in Iowa or the United States. Youngtek does not have, andhas never had, a telephone number in Iowa or the United States. Youngtek does not have, and has never had, any employees in Iowa or the United States. Youngtek did hire David Sierra, a Florida contractor, to perform "minor development work" for it in 2009 in Florida. Youngtek's App. at 126; Youngtek's Answer to Interrog. 16(e). The record does not disclose the details of Sierra's work. Youngtek does not have, and has never had, an agent for service of process in Iowa or the United States. Youngtek does not maintain, and has never maintained, servers in Iowa or the United States. No Youngtek officer or director has ever visited Iowa.

In February 2011, at the time the alleged copyright and trademark infringements occurred, the publicly available records listed the Cyprian entity, Fraserside Holdings, as the owner of the copyrights at issue, and Cine Craft, Ltd., a Private Media Group subsidiary located in the United Kingdom, as the owner of the trademarks at issue. On the date this lawsuit was filed, searches of both the United States Copyright Office and United States Patent and Trademark Office showed that Fraserside had no registered copyrights or trademarks.

Fraserside currently is the owner of copyrights in adult films. Fraserside is engaged in the business of distributing, and/or licensing the rights to copy, distribute, transmit, and exhibit those adult films. Fraserside and/or its parent company expend significant time, money and other resources to produce high quality products, develop supply chains and distribution systems, and build premium brand recognition for their products. Fraserside is the current holder of certain trademarks, including a depiction of two female silhouettes, the Private and Private Gold Labels, and the Private Life.

Fraserside directly, or through affiliates or licensees, distributes its copyrighted works in various forms including over the internet, pay-per-view, video on demand, and DVD's by direct and indirect sales to the home viewing market, and through internet streaming and download services.

Youngtek owns and operates the websites TNAflix.com and empflix.com. Visitors to the two websites can upload, download, and watch movies. When videos are uploaded, they go from the user to storage on the host site which is in the Netherlands. TNAflix.com and empflix.com both offered premium memberships. The user could purchase a three-day trial premium membership for $1.00, a one-month premium membership for $29.99, or a one-year premium membership for $87.49. The websites stated that users "become part of our growing community" and that a user could get "thousands of DVD high quality streaming videos as downloads, thousands of new scenes, multiview player free, one pass for all our videos at no extra cost, what you see is what you get, download manager, and 100% confidential." After making payment, the user was permitted to view premium content. Premium members could also interact with other users on Youngtek's websites. A member could send a message to another member, with that member picking up the message when logging onto the site. All of these interactions occurred entirely on the website. One person with an Iowa IP address purchased a three-day premium membership for one of Youngtek's websites for one dollar.¹ Youngtek sent e-mails about premium memberships to individuals who were already premium members. Premium memberships are no longer offered on either website. Youngtek's websites are offering, displaying, and distributing Fraserside's films to the websites' users.

During the two year span between February 17, 2009 and February 17, 2011, the TNAflix.com website had 2,197,104 visits from Iowa users. This number represents 0.14% of all visits to the site during that time period. During this same time, the empflix.com website had 1,248,098 visits from Iowa users. This number reflects 0.17% of all visits to the site during that time period. These numbers reflectonly the gross number of visits to the websites. The number of users making the visits is not in the record.

II. LEGAL ANALYSIS

A. Proper Motion For Challenging Personal

Jurisdiction

Arguing that the court lacks personal jurisdiction over it, Youngtek has styled its motion as a motion for summary judgment. Fraserside argues that a motion for summary judgment for lack of personal jurisdiction is not theoretically possible and that I should consider Youngtek's motion as a motion to dismiss for lack of personal jurisdiction under Federal Rule of...