Guava Family, Inc. v. Guava Kids, LLC

• Decision Date: 23 April 2013
• Docket Number: CASE NO. 12CV2239 WQH (BGS)
• Parties: GUAVA FAMILY, INC., Plaintiff, v. GUAVA KIDS, LLC, Defendant.
• Court: U.S. District Court — Southern District of California

GUAVA FAMILY, INC., Plaintiff,

v.GUAVA KIDS, LLC, Defendant.

CASE NO. 12CV2239 WQH (BGS)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

DATED: April 23, 2013

ORDER

HAYES, Judge:

The matter before the Court is the Motion to Dismiss and in the Alternative to Transfer Venue ("Motion to Dismiss") filed by Defendant Guava Kids, LLC. (ECF No. 5)

BACKGROUND

I. Procedural History

On September 13, 2012, Plaintiff Guava Family, Inc. initiated this action by filing a Complaint against Defendant Guava Kids, LLC. (ECF No. 1).

On November 7, 2012, Defendant filed the Motion to Dismiss on the grounds that (1) the Court lacks personal jurisdiction over Defendant; (2) venue is improper in this district; and (3) the case should be transferred to the District of Oregon pursuant to 28 U.S.C. § 1404 and the doctrine of forum non conveniens. (ECF No. 5). On November 26, 2012, Plaintiff filed an opposition. (ECF No. 8). On December 3, 2012, Defendant filed a reply. (ECF No. 9).

II. Allegations of the Complaint

Plaintiff Guava Family is a California corporation, having a principal place of business in San Diego, California.

On information and belief Defendant Guava Kids LLC ('Guava Kids') is an Oregon company with its principal place of business in Beaverton, Oregon.

Jurisdiction is vested in this Court by virtue of 28 U.S.C. §§1331, 1338, and 1367. This action arises under the Lanham Act, Title 15, United States Code, Sections 1051-1127.

Venue is proper under 28 U.S.C. §§1391(b).

Guava Kids sells, offers to sell, distributes, and advertises its products using the infringing trademark throughout the State of California, including the Southern District of California, and is subject to personal jurisdiction in this Court.

Guava Family has continuously advertised and promoted its GoCrib children's travel crib product for sale under the Guava Family trademark since no later than September 13, 2009.

Guava Family is the owner of U.S. Trademark Registration No. 3,846,252 for the trademark 'Guava Family' for cribs in International Class 20, which registered based on an application originally filed on the basis of intent to use on June 19, 2009.

Guava Family owns the registration for the internet domain www.guavafamily.com, which it registered on August 14, 2008. Guava Family has used the www.guavafamily.com domain for the promotion of products under the Guava Family trademark continuously since at least September of 2009.

On December 8, 2009, Guava Kids filed an application to register the trademark Guava Kids based on intent to use for 'Baby layettes for clothing; Booties; Children's and infant's apparel, namely, jumpers, overall sleepwear, pajamas, rompers and one-piece garments; Children's and infants' cloth bibs; Children's cloth eating bibs; Children's headwear; Hats for infants, babies, toddlers and children; Infant and toddler one piece clothing; Mittens; Shirts for infants, babies, toddlers and children; Swaddling clothes' in International Class 25.

Guava Kids first used the Guava Kids trademark in commerce on March 5, 2012.

On July 17, 2012, U.S. Trademark Registration No. 4,176,029 issued to Guava Kids for the trademark Guava Kids for mittens and swaddling clothes in International Class 25.

Guava Kids uses the trademark Guava Kids in connection with the sale of its only product, children's mittens which it calls 'guavamitts.'

Guava Kids has never sold swaddling clothes.

Guava Kids has never sold baby layettes for clothing; booties; children's and infant's apparel, namely, jumpers, overall sleepwear, pajamas, rompers and one-piece garments; children's and infants' cloth bibs; children's cloth eating bibs; children's headwear; hats for infants, babies, toddlers and children; infant and toddler one piece clothing; or shirts for infants, babies, toddlers and children.

(ECF No. 1 at 1-3). The Complaint alleges that Defendant sells "guavamitts" and uses thename "Guava Kids," which allegedly infringe upon Plaintiff's registered trademark, "Guava Family." The Complaint purports to assert the following claims for relief: (1) trademark infringement in violation of 15 U.S.C. § 1114; (2) false designation of origin in violation of 15 U.S.C. § 1125; and (3) unfair competition in violation of California Business and Professions Code § 17200. Id. at 3-4. The Complaint requests preliminary and permanent injunctive relief, monetary damages, and reasonable costs and attorneys' fees. Id. at 4.

III. Evidence Submitted by the Parties

"Guava Kids is a small company founded by Lili and [Linsey Ebuen] in Beaverton, Oregon in 2009." (Ebuen Decl. ¶ 1, ECF No. 5-3). "[O]n December 8, 2009, Lili and [Ebuen] without an attorney, filed an application to register the Guava Kids mark with the Trademark Office. We first used a slightly different version of the mark, Guavakids (no space), beginning in July 2011. Our first use of the Guava Kids mark in commerce was on March 5, 2012." Id. ¶ 6. On February 12, 2010, "[w]e filed to register Guava Kids, LLC as a business entity in Oregon." Id. "Our company has very limited contacts with California. We formed our company in Oregon and our company primarily does business from Oregon. Guava Kids is not registered or licensed to do business in California, does not pay taxes in California, has no bank accounts in California, and has no offices or staff in California." Id. ¶ 15. From August of 2011 to January of 2012, Guava Kids used the services of a Vista, California public relations agency, which "did not direct any marketing efforts at California, but rather just put together some general campaigns for us, as well as Oregon-specific campaigns." Id. ¶ 16. "[T]o date, we have had no marketing campaigns expressly targeted at California residents." Id. "Guava Kids also maintains a website, www.guavakids.com, that is accessible by anyone with an internet connection, including people in California. However, our website does not specifically target California residents." Id. ¶ 17. The goods that are sold on the website, mittens, "are not ... unique to California." Id. "[O]ur sales into California have been very limited. Up to the date Guava Family sued us, we had only made 4.35% of our total sales in California. Only 2.13% of our total sales were made to retailers located in Southern California. And only 0.072% - or $81 - of our sales were made in San Diego or Imperial Counties, ... thecounties that are served by this court." Id. ¶ 18; see also Ebuen Decl. No. 2 ¶ 2, ECF No. 11 ("Up to the date Guava Family sued us, we had sold four two-packs of mittens in San Diego and Imperial Counties, which I understand are the counties that are served by this court.").

On October 1, 2012, Guava Kids filed a suit against Guava Family in the District of Oregon after Defendants were threatened with being served with the Complaint filed by Guava Family in this Court. See id. ¶ 11-12.¹ "One of the reasons we filed the Oregon suit after it appeared to us that Guava Family was [] going to make good on its threat to proceed in this court was the simple logistics of being sued in such a distant forum." Id. ¶ 13. "As a small start-up, we do not have a lot of money to be paying lawyers, and we had a hard time finding an attorney in California who did not want a large sum of money to help us out." Id. "In contrast, we were able to secure lawyers in Oregon without having to make a large, upfront payment...." Id. "We don't have the money to fly down to San Diego for things like depositions and hearings, nor do we have the money to put our lawyers on a plane to San Diego. And as mothers of young children, attempting to get our business off the ground, having to go to San Diego is a significant interruption to our business and our family obligations." Id. "Prior to us filing the Oregon suit, to the best of our knowledge, Guava Family had not attempted to serve Guava Kids with the California complaint. In fact, apparently when Guava Family found out we were trying to serve them, Guava Family started trying to serve us. They eventually seemed to serve us through a mailing from California that was dated October 10, 2012." Id. ¶ 14.

Defendant submits screenshots, purportedly taken from the Guava Family website on December 3, 2012, showing a list of four stores selling Gauva Family goods within a 25-mile radius of Portland, Oregon (ECF No. 10-3), and a list of two stores selling Guava Family goods within a 25-mile radius of San Diego, California. (ECF No. 10-4). Defendant submitsscreenshots, purportedly taken from the REI website on December 3, 2012, showing a list of 18 stores "near Portland, OR" selling the "Guava Family GoCrib Portable Travel Crib." (ECF No. 10 at 2, 10-5).

"Guava Family is a small company founded by Asa Griffin and [Scott Crumrine] in San Diego, California." (Crumrine Decl. ¶ 2, ECF No. 8-1). "Guava Family has no corporate presence in Oregon. Guava Family is not licensed or registered to do business in Oregon, does not pay taxes in Oregon, no bank accounts, no physical presence in the state, no boutique retailers, no unique sales relationships, and none of our major retailers has a warehouse in the state of Oregon." Id. ¶ 17.

Plaintiff submits screenshots, purportedly taken from the Guava Kids website on November 25, 2012, showing a list of stores that sell Guava Kids products, including 30 stores located in California. (Hangartner Decl. at Exh. A, ECF No. 8-3). In response, Ebuen states: "The California stores listed on [the Guava Kids] website are not 'authorized retailers.' The website listings merely provide locations where a consumer can locate our products." (Ebuen Decl. No. 2 ¶ 3, ECF No. 11). "As of September 12, 2012, Nordstrom did not appear on Guava Kids' website store locator function. Our arrangement with Nordstrom did not launch until September 21, 2012." Id. ¶ 4.

PERSONAL JURISDICTION

Defendant moves to dismiss this action for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). "In opposition to a...