Group One Ltd. v. GTE GmbH

• Decision Date: 03 February 2021
• Docket Number: 20-CV-2205 (MKB)
• Citation: 523 F.Supp.3d 323
• Parties: GROUP ONE LTD., Plaintiff, v. GTE GMBH and Ralf Weigel, Defendants.
• Court: U.S. District Court — Eastern District of New York

523 F.Supp.3d 323

GROUP ONE LTD., Plaintiff,

v.GTE GMBH and Ralf Weigel, Defendants.

20-CV-2205 (MKB)

United States District Court, E.D. New York.

Signed February 3, 2021

Jonathan David Ball, Greenberg Traurig LLP, New York, NY, for Plaintiff.

Karl Geercken, Neal J. McLaughlin, Alston & Bird LLP, New York, NY, for Defendants.

GTE GmbH, Pro Se.

MEMORANDUM & ORDER

MARGO K. BRODIE, United States District Judge:

Plaintiff Group One Ltd. ("Group One") commenced the above-captioned action on May 15, 2020, against Defendants GTE GmbH ("GTE") and Ralf Weigel, alleging that Defendants infringed on Plaintiff's patents for tennis let detection systems¹ and knowingly spread malicious falsehoods about the capabilities of Plaintiff's systems in order to retain their customers. (Compl. ¶ 1, Docket Entry No. 1.) Plaintiff alleges that Defendants violated section 43(a) of the Lanham Act, 15 U.S.C. §§ 1125(a) and (c), the New York General Business Law §§ 349(h) and 350(e)(3) (the "NYGBL"), and the Patent Act, 35 U.S.C. §§ 271(a) – (c), and also asserts claims for unfair competition and deceptive trade practices under New York common law, tortious interference with business relations, and trade libel. (Id. ¶¶ 41–139.) Plaintiff seeks permanent injunctive relief, an accounting, damages, and attorneys’ fees and costs. (Id. ¶¶ 27–29.)

On July 6, 2020, Plaintiff filed an ex parte motion for a temporary restraining order ("TRO"), (Pl.’s Mot. for TRO, Docket Entry No. 6), and on July 8, 2020, the Court granted the TRO, granted alternate service by email, and issued an Order to Show Cause to Defendants to show why a preliminary injunction should not be granted, (Min. Entry dated July 8, 2020; Order to Show Cause dated July 8, 2020, Docket Entry No. 8). On July 30, 2020, the Court granted the parties’ request to adjourn the preliminary injunction hearing sine die in light of Plaintiff's withdrawal of its motion for a preliminary injunction, (Order dated July 30, 2020; Pl.’s Letter to Adjourn dated July 30, 2020, Docket Entry No. 16), and on September 23, 2020, Defendant filed a motion to dismiss for lack of personal jurisdiction and insufficient service of process pursuant to Rules 12(b)(2), 12(b)(4), and 12(b)(5) of the Federal Rules of Civil Procedure,² which Plaintiff opposes.³

For the reasons explained below, the Court grants the motion to dismiss the case against Weigel pursuant to Rule 12(b)(2) for lack of personal jurisdiction and denies the motion to dismiss the claims against GTE pursuant to Rule 12(b)(5) for insufficient service of process.

I. Background

"Weigel is the [Chief Executive Officer (‘CEO’)], sole employee, and sole [o]wner of GTE." (Compl. ¶ 6.) Plaintiff and GTE⁴ are "direct competitors that provide [let detection] systems to major tennis tournaments, events, leagues, sanctioning bodies, and/or organizations for [tennis] matches which include the let rule."⁵ (Id. ¶ 15.) Frederic Goldstein invented "a more accurate and reliable wireless let detection system," which included "net tension regulation, an electronic ball mark inspection sensor, a vibration feature as a signal to chair umpires to indicate a let, and tennis's first integrated shot clock control feature." (Id. ¶ 16.) "Goldstein applied for several patents covering this system and Group One, as the assignee, began marketing these let detection systems." (Id. )

In or around January of 2015, the Association of Tennis Professionals entered into a five-year contract with Plaintiff to "provide [let detection] systems for its tour events" and replace "an older version of [Defendants’] ‘Trinity’ system" (the "Old Trinity System") with Plaintiff's New System. (Id. ¶ 17.) The contract was renewed for another five-year term in 2019. (Id. ¶ 18.)

In early 2019, due to market pressure from Plaintiff's Net System, Defendants "changed the Old Trinity System to the present infringing Trinity System" (the "New Trinity System") to "avoid losing additional clients" such as the United States Tennis Association (the "USTA")⁶ to Plaintiff. (Id. ¶ 20.) Defendants "knowingly misrepresent[ed] the features and capabilities" of the Net System — including the product's battery life, charging system, setup process, quality, and functionality — to Plaintiff's potential customers, including the USTA. (Id. ¶¶ 22–25, 27.) Defendants also "falsely stated that, unlike the [New Trinity System], [the Net System] is vulnerable to ‘data manipulation,’ inferring that the [latter] could be disabled during gameplay," (id. ¶ 24), and portrayed misleading facts about the New Trinity System's net tension, (id. ¶ 26).

Plaintiff contends that the New Trinity System was "made, used, imported, sold or offered for sale, leased or otherwise made the subject of a commercial contract for Defendant[s’] financial gain at the 2019 U.S. Open," (id. ¶ 21), and that as a result of Defendants’ misrepresentations, USTA entered into contract with Defendants to supply the New Trinity System for use at the 2020 U.S. Open, (id. ¶¶ 28–29). Plaintiff further asserts that Defendants’ misrepresentations to "major tennis sanctioning bodies and/or organizations has ... caused [Plaintiff] to lose other prospective customers as well as other business opportunities related to [Plaintiff's] other patented and patent-pending inventions in tennis," which "has caused serious and substantial financial and reputational harm to [Plaintiff's] business." (Id. ¶ 30.)

On April 18, 2019, Plaintiff's counsel "sent correspondence to [Defendants] notifying it of the impending issuance of U.S. Patent No. 10,272,307 (‘the ’307 patent’), providing notice that the Trinity System infringes the ’307 patent, and requesting a response concerning [Defendants’] contemplated use of the infringing Trinity System at the 2019 U.S. Open and other ... events." (Id. ¶ 31.) Defendants did not respond to the letter. (Id. )

On April 30, 2019, the United States Patent and Trademark Office (the "USPTO") "issued the ’307 patent, titled ‘Tennis Net Tension System Including Service Let Indication Feature,’ for an invention directed to, inter alia , determining if a service let occurs via the detection and measurement of a force exerted by the net." (Id. ¶ 32.) The patent also "included the feature of the first integrated shot clock control in tennis, anticipating the new rule in tennis requiring an on court shot clock display." (Id. )

In or around November of 2019, Plaintiff's counsel sent Defendants a letter stating that the use of the New Trinity System at the "2020 Australian Open infringed an Australian patent whose parent patent is the ’307 patent," and Defendants "did not respond to this letter either." (Id. ¶ 33.) On November 26, 2019, Plaintiff's counsel "sent a letter to Tennis Australia's senior legal counsel informing it that the [New Trinity System] it intended to use at the 2020 Australian Open infringed the Australian patent related to the ’307 patent." (Id. ¶ 34.) "After receiving correspondence from Tennis Australia and an email from ... Weigel — who stated that his patent attorneys would take contact within days — [Plaintiff] filed a complaint for patent infringement of the foreign patent related to the ’307 patent in Australia," which is pending before a federal court in Australia. (Id. ¶ 35.)

On February 26, 2020, Plaintiff's counsel sent correspondence to Defendants "notifying it of the impending issuance of U.S. Patent No. 10,583,341 (‘the ’341 patent’), another U.S. patent related to the ’307 patent, [and] asserting that the [New] Trinity System would infringe this patent as well." (Id. ¶ 36.) On March 4, 2020, Defendants "responded via a German patent prosecution firm, who stated that it represented [Defendants] and that it had no information about the issued claims of the ’341 patent" and therefore was incapable of filing a "substantial response." (Id. ¶ 37 (quoting Emails dated Mar. 4, 2020, annexed to Compl. as Ex. H, Docket Entry No. 1-8).) The same day, Plaintiff's counsel provided the claims to Defendants’ counsel, "stated that the patent ‘will issue in six days,’ " and noted "that the claims are ‘readily accessible on the USPTO's website.’ " (Id. ¶ 38 (quoting Emails dated Mar. 4, 2020).)

On March 10, 2020, the USPTO "issued the ’341 patent, titled ‘Tennis Net Tension System Including Service Let Indication Feature,’ for an invention directed to, inter alia , a system for determining if a service let occurs via the detection and measurement of a force exerted by the net." (Id. ¶ 40.) The patent "also included the feature of the first integrated shot clock control in tennis, anticipating the new rule in tennis requiring an on court shot clock display." (Id. )

On May 15, 2020, Plaintiff commenced this action alleging direct and induced infringement of the ’307 and ’341 patents in violation of the Patent Act, 35 U.S.C. §§ 271(a)– (c), section 43(a) of the Lanham Act, 15 U.S.C. §§ 1125(a) and (c), and NYGBL §§ 349(h) and 350(e)(3), and also asserting claims for unfair competition and deceptive trade practices under New York common law, tortious interference with business relations, and trade libel. (Id. ¶¶ 41–139.) Plaintiff seeks a permanent injunction, damages, an accounting, and attorneys’ fees and costs. (Id. at 28.)

On July 6, 2020, Plaintiff filed an ex parte motion for a TRO, (Pl.’s Mot. for TRO), and on July 8, 2020, the Court granted the TRO, granted alternate service by email, and issued an Order to Show Cause to Defendants to show why a preliminary injunction should not be granted, (Min. Entry dated July 8, 2020; Order to Show Cause dated July 8, 2020). The Court directed that Plaintiff serve copies of the Order, Complaint, Summons, and documents in support of a motion for preliminary injunction on Defendants "via the email addresses used to communicate with Plaintiff previously, or other email addresses associated with Defendants’ business that are known to Plaintiff." (Order to Show Cause dated July 8, 2020, at 3.)

On July 28, 2020, Defendan...