Impossible Foods Inc. v. Impossible X LLC

• Decision Date: 16 November 2021
• Docket Number: 21-cv-02419-BLF
• Parties: IMPOSSIBLE FOODS INC., Plaintiff, v. IMPOSSIBLE X LLC, Defendant.
• Court: U.S. District Court — Northern District of California

IMPOSSIBLE FOODS INC., Plaintiff,
v.
IMPOSSIBLE X LLC, Defendant.

No. 21-cv-02419-BLF

United States District Court, N.D. California, San Jose Division

November 16, 2021

ORDER GRANTING IN PART MOTION TO DISMISS; DISMISSING CASE WITHOUT PREJUDICE FOR LACK OF PERSONAL JURISDICTION

[RE: ECF NO. 11]

BETH LAB SON FREEMAN, UNITED STATES DISTRICT JUDGE.

This declaratory judgment action involves a dispute between Plaintiff Impossible Foods Inc. (“Impossible”) and Defendant Impossible X LLC (“IX”) over trademarks held by both entities. Impossible seeks a declaration that its uses of its IMPOSSIBLE mark, which is related to recipes, food ingredients, and cooking information, do not infringe or dilute IX's marks; that its rights in the IMPOSSIBLE mark are superior to IX's rights in those fields; and that certain of IX's marks be cancelled for abandonment and non-use. IX has moved to dismiss for lack of subject matter jurisdiction and lack of personal jurisdiction. See ECF No. 11 (“Motion”); see also ECF No. 36 (“Reply”). Impossible opposes. See ECF No. 35 (“Opp.”). The Court held a hearing on the Motion on October 28, 2021. For the reasons stated on the record and explained below, the Court finds that it possesses subject matter jurisdiction over this case but lacks personal jurisdiction over IX. Accordingly, IX's motion will be GRANTED IN PART and the case DISMISSED WITHOUT PREJUDICE to refiling in a forum where IX is subject to personal jurisdiction.

I. BACKGROUND

A. The Parties and Their Marks

As alleged in the Complaint, Plaintiff Impossible Foods Inc. develops and distributes

1

plant-based substitutes for meat products. ECF No. 1 (“Compl.”) ¶ 1. The company's signature product, the Impossible Burger, is available in grocery stores and restaurants across the country. Id. ¶¶ 11-12. Impossible has since expanded to other food products and services, including the Impossible Sausage, Impossible Pork, and Impossible Taste Place and to free recipes available on its website. Id. ¶¶ 13-14. In conjunction with its products and services, Impossible says that it has filed 49 applications for trademarks. Id. ¶ 16. Impossible owns two federal trademark registrations for IMPOSSIBLE: (1) Registration No. 5, 370, 337, first use in commerce November 3, 2016 (“providing of food and drink via mobile truck; catering services”); and (2) Registration No. 5, 459, 255, first use in commerce June 27, 2016 (“substitutes for foods made from animals or animal products, namely, vegetable-based burger patties; meat substitutes”). Id; ECF No. 1-1 at 2, 4. Impossible also alleges that it holds common-law rights to the presentation of the IMPOSSIBLE mark depicted below, which it began to use as early as 2016:

IMPOSSIBLE^TM

Id. ¶ 17.

Defendant Impossible X, a Texas limited liability company, ^[1] holds itself out as a marketing consulting company that specializes in search engine optimization. Compl. ¶ 2. It also offers exercise, fitness, and recipe information on its website and claims to have developed a meal and nutrition business. Id. ¶ 3; Motion at 2. IX allegedly owns 10 trademark registrations and one pending application related to its brand, none of which relate to food or cooking, but which it claims have been in use since 2010. Id. ¶¶ 23-24, 27.

B. IX's Founder and California Contacts

The sole member of IX is its founder and principal, Joel Runyon. ECF No. 35-7 (“Runyon Dep.”) at 61:18-20. The company has no employees or outside investors. Id. at 60:25-61:17, 113:21-114:8. Mr. Runyon says that he is a “digital nomad” who performs work from locations across the United States and other countries. Id. at 29:16-18, 46:9-16, 102:16-19. Impossible has

2

identified several links between California, Mr. Runyon, and IX, that it claims support exercise of personal jurisdiction:

• IX identified San Diego as its corporate headquarters on its LinkedIn page. ECF No. 35-8

• Mr. Runyon rented an office at a CrossFit facility in San Diego from 2014-16 and described it as his “hub” of operations, his “home base ” and “base point” where he began “building” IX's meal and nutrition business, including its Paleo.io software application and website. Runyon Dep. at 58:16-18; ECF Nos. 35-9 at 2-18 (Instagram photos of the office), 22-27 (article regarding office space); 35-10 at 2 (article mentioning building paleo projects during the time at the San Diego office); 35-11 (articles and tweets during the time at the San Diego office).

• Mr. Runyon kept a car and personal possessions in San Diego until December 2018. Runyon Dep. at 60:1-14. Between August 2018 and 2019, he traveled to California at least eight times for business meetings. Id. at 112:5-17, 113:1-16, 115:4-116:7, 117:5-13; ECF No. 35-12.

• Social media accounts operated by Mr. Runyon and IX have posted from or tagged California locations at least 30 times, mostly prior to 2017 but as recently as last year. ECF Nos. 35-9, 35-11.

• IX has worked “both internationally & domestically with businesses & customers in every state in the U.S. including California, Texas & Illinois since 2010.” ECF No. 35-13.

• IX was at the time of filing in discussions with a California apparel manufacturer to source its branded apparel. Runyon Dep. at 105:9-16; ECF No. 35-15.

• Mr. Runyon serves as a business advisor to a California calendaring company, which he has promoted in conjunction with the IX name through 2021. Runyon Dep. at 66:19-67:14, 68:19-69:7; ECF No. 35-14.

• IX or Mr. Runyon agreed to Terms of Service for LinkedIn, Instagram, Twitter, YouTube, Reddit, and Pinterest, each of which had forum selection clauses specifying California as the forum for legal disputes. Runyon Dep. at 91:2-11, 117:20-118:1, 118:8-10, 118:14-19; ECF No. 35-16.

C. Trademark Dispute

On November 10, 2020, IX sent a demand letter to Impossible (via its Seattle, Washington-based counsel Perkins Coie) that accused Impossible of “encroachment into spaces either occupied by or closely related to goods and services offered by [IX]” and creating confusion between the two brands. Compl. ¶ 20; ECF No. 35-3. IX demanded that Impossible cease using the IMPOSSIBLE mark in certain contexts, such as when not accompanied by “FOODS, ” and limit its use to use in association with plant-based food substitutes. Compl. ¶ 21; ECF No. 35-3 at 2. Two weeks later, IX filed with the Trademark Trial and Appeal Board of the United States Patent and Trademark Office (“TTAB”) in Virginia a notice of opposition to Impossible's trademark

3

application for IMPOSSIBLE covering its use for “providing information about recipes, ingredients and cooking information” and associated consumer-facing databases of the same. Compl. ¶ 22; ECF No. 35-4.^[2] Impossible made a coexistence offer to IX, which it declined. ECF No. 35-5.

D. This Case

Impossible filed this case on April 2, 2021, asserting a single claim for declaratory relief. Compl. ¶¶ 28-35. It requests that the Court declare that:

• Impossible's use and registration of IMPOSSIBLE with services related to recipes, food ingredients, and cooking information do not infringe upon, dilute, or otherwise violate any of IX's rights;

• Impossible's rights in IMPOSSIBLE are superior to IX's rights in the field of recipes, food ingredients, and cooking information;

• Impossible's activities have not caused harm to IX or unjust enrichment to Impossible;

• Impossible is not liable to IX; and

• Three of IX's trademark registrations be cancelled, in whole or in part, on grounds of abandonment or non-use of the trademarks in commerce.

Id. at Prayer for Relief. Impossible also seeks costs, disbursements, and attorneys' fees. Id. IX filed this Motion on June 11, 2021, challenging subject matter jurisdiction and personal jurisdiction.

II. SUBJECT MATTER JURISDICTION - RULE 12(B)(1)

On a motion to dismiss pursuant to Rule 12(b)(1), the burden is on the plaintiff to establish subject-matter jurisdiction. See, e.g., Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Under the Declaratory Judgment Act, a dispute must present a “case of actual controversy” for a court to have subject matter jurisdiction. 28 U.S.C. § 2201(a). A “case of actual controversy” is one that presents a case or controversy justiciable under Article III. MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007). Subject matter jurisdiction exists if “the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the

4

issuance of a declaratory judgment. Id. (quoting Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941)). Declaratory judgment actions involving trademarks satisfy this requirement if the plaintiff has “a real and reasonable apprehension that he will be subject to liability if he continues to manufacture his product.” Rhoades v. Avon Prods., Inc., 504 F.3d 1151, 1157 (9th Cir. 2007).

Several features of the dispute between the parties make this a “case of actual controversy.” 28 U.S.C. § 2201(a). First, IX's cease-and-desist letter-sent to Impossible through its trademark counsel-accuses Impossible of “[i]nfringement of [IX]'s [t]rademark [r]ights.” ECF No. 35-3. IX states that Impossible must “cease use of all of its confusingly similar IMPOSSIBLE designs” and limit the use of the IMPOSSIBLE mark to certain contexts because of IX's superior trademark rights. Id. If Impossible did not do so, the letter stated that IX would “take all appropriate action to protect its rights, ” including action before the TTAB. Id. Indeed, IX followed through with that threat-it filed a notice of opposition to one of Impossible's trademark applications. ECF No. 35-4. That notice of opposition, as Impossible points out, claimed to...