WEATHER UNDERGROUND v. NAVIGATION CATALYST SYS.

Decision Date13 November 2009
Docket NumberCase No. 09-10756.
Citation688 F. Supp.2d 693
PartiesWEATHER UNDERGROUND, INC., a Michigan corporation, Plaintiff, v. NAVIGATION CATALYST SYSTEMS, INC., a Delaware corporation; Basic Fusion, Inc., a Delaware corporation; Connexus Corp., a Delaware corporation; and Firstlook, Inc., a Delaware corporation, Defendants.
CourtU.S. District Court — Eastern District of Michigan

Anthony P. Patti, Hooper, Hathaway, Ann Arbor, MI, Brian A. Hall, Enrico Schaefer, Traverse Legal, Traverse City, MI, for Plaintiff.

John P. Jacobs, John P. Jacobs Assoc., Detroit, MI, for Defendant.

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(b)(6) OR, IN THE ALTERNATIVE, TRANSFER

MARIANNE O. BATTANI, District Judge.

Before the Court is Defendant's Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(2) or in the Alternative, Transfer (Doc. # 15). The Court heard oral argument, and at the conclusion of the hearing took this matter under advisement. For the reasons that follow, the motion is GRANTED in part and DENIED in part.

I. STATEMENT OF FACTS

Plaintiff, Weather Underground, Inc. ("Weather Underground"), is incorporated and maintains its principal place of business in Ann Arbor, Michigan. (Compl. ¶ 1.) Weather Underground is a commercial weather service, acting as an index for the information provided to it by multiple weather stations. (Id. ¶¶ 11-13.) Its primary sources of revenue are subscriptions (id. ¶ 14) and the sale of advertisements on its Web site, (id. ¶ 22). Plaintiff's trademarks include, but are not limited to, "Weather Underground," "Wund," "Wunderground," "Weather Sticker," "Wundersearch," "Wundermarp," and "Wunderradio." (Id. ¶¶ 26-35.) Plaintiff owns approximately 125 Web addresses, or domain names, the majority of which integrate its trademarks and service marks. (Id. ¶ 24.)

Defendants in this case, Navigation Catalyst Systems, Inc. ("NCS"), Basic Fusion, Inc. ("Basic Fusion"), Connexus Corp. ("Connexus"), and Firstlook, Inc. ("Firstlook"), are incorporated in Delaware. (Def.'s Br. 4.) Connexus is the parent company of Firstlook, which, in turn, is the parent company of both NCS and Basic Fusion. (Id.) NCS is a "domain name holding company which acquires generic and descriptive domain names in bulk." (Id.) Basic Fusion is a domain name registrar.1 (Id.) After NCS registers domain names through Basic Fusion, the names are submitted to First Look, and First Look creates automatically generated Web pages based on the text of the domain name. (Id. at 5.) The Web pages contain hyperlinks to third party advertisers, who pay on a pay-per-click basis. According to the Complaint, the links redirect users to Plaintiff's competitors, such as Weather-Bug, Top-Weather.net, A LOT Weather, and DTN Meteorlogix. (Compl. ¶ 66.)

NCS profits from "direct navigation." (Id. at ¶ 42.) When an Internet user enters a word or phrase in a Web browser's address bar, instead of the search field of a search engine, the user would be taken to a Web site with information relevant to the search. (Decl. of Seth Jacoby, at ¶ 4.) For example, if a user looking for parties supplies types www.partysupplies.org in the address bar, he would reach NCS's Web page, which contains "hyperlinks to products and services that a visitor might be interested in based on the domain name itself." (Id. at ¶ 7.) Each Web page also contains a search box that allows the visitor to input a search. (Id. at ¶ 9.)

Plaintiff alleges that Defendants' business model capitalizes on Internet users' errors in typing the Web addresses to businesses whose Web sites they intend to visit. Plaintiff characterizes Defendants' business as "typosquatting." (Compl. ¶¶ 44, 45.) Weather Underground alleges that Defendants infringed its trademarks by registering domain names with various misspellings of Plaintiff's Web properties, , and (Pl.'s Br. 3.) in order to redirect Plaintiff's customers to competitors and third-party advertisers (id. at 2). A few of the identified 41 domains alleged to infringe include the following: Qwundergoound.com, Swunderground.com, Udergroundweather.com, Undegroundweather.com, Undergroudweather.com, Undergroundwaether.com, Undergroundwweather.com. (Comp. ¶ 77.)

Plaintiff filed suit against Defendants, alleging cybersquatting under the Anti-Cybersquatting Consumer Protection, 15 U.S.C. § 1125(d), trademark infringement under the Lanham Act, 15 U.S.C. § 1114(1), false designation of origin under the Lanham Act, 15 U.S.C. § 1125(a), and dilution by blurring and tarnishment under the Lanham Act, 15 U.S.C. § 1125(c). Under Michigan common law, Plaintiff advances claims of unfair competition and trademark infringement, civil conspiracy, contributory trademark infringement, and vicarious trademark infringement. Plaintiff seeks a declaratory judgment, injunctive relief, damages, and attorneys' fees.

Defendants ask the Court to dismiss Plaintiff's suit for lack of personal jurisdiction pursuant to FED. R. CIV. P. 12(b)(2), or in the alternative, to transfer this case to the United States District Court for the Central District of California pursuant to 28 U.S.C. § 1404(a) based on the convenience of the parties and the interests of justice.

II. STANDARD OF REVIEW
A. Dismissal for Lack of Personal Jurisdiction

A motion to dismiss under Fed.R.Civ.P. 12(b)(2) challenges the sufficiency of the jurisdictional facts regarding the existence of personal jurisdiction over a defendant. The plaintiff has the burden of establishing the existence of personal jurisdiction. Chandler v. Barclays Bank PLC, 898 F.2d 1148, 1151 (6th Cir.1990). When a court decides whether it has personal jurisdiction on the basis of written submissions alone, the plaintiff "may not rest on his pleadings to answer the movant's affidavits, but must set forth, by affidavit or otherwise ... specific facts showing that the court has jurisdiction." Serras v. First Tennessee Bank National Ass'n, 875 F.2d 1212, 1214 (6th Cir.1989). If a plaintiff's pleadings and affidavits state the facts with sufficient particularity, a court must ignore contrary assertions by a defendant. Id. at 1215. "Dismissal is proper only if all the specific facts which the plaintiff ... alleges collectively fail to state a prima facie case for jurisdiction." Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991).

B. Transfer Venue

District courts have "broad discretion to transfer an action pursuant to 28 U.S.C. § 1404 to avoid unnecessary delay and to protect parties, witnesses, and the public from undue expenses and inconvenience." Wayne County Employees' Ret. Sys. v. MGIC Inv. Corp., 604 F.Supp.2d 969, 974 (E.D.Mich.2009); see generally Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964); Norwood v. Kirkpatrick, 349 U.S. 29, 75 S.Ct. 544, 99 L.Ed. 789 (1955). The Supreme Court has said that section 1404 "is intended to place discretion in the district court to adjudicate motions for transfer according to an `individualized, case-by-case consideration of convenience and fairness.'" Stewart Or., Inc. v. Ricoh Corp. 487 U.S. 22, 29, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988) (quoting Van Dusen, 376 U.S. at 622, 84 S.Ct. 805).

The party who brings a motion to transfer venue bears the burden of proving by a preponderance of the evidence that "fairness and practicality strongly favor the forum to which transfer is sought." Amphion, Inc. v. Buckeye Elec. Co., 285 F.Supp.2d 943, 946 (E.D.Mich.2003) (quoting Thomas v. Home Depot U.S.A., Inc., 131 F.Supp.2d 934, 936 (E.D.Mich.2001)); see also Stanifer v. Brannan, 564 F.3d 455, 460 n. 1 (6th Cir.2009) (holding that where plaintiff responded to a motion to dismiss with a motion to transfer venue, plaintiff had the burden of proving grounds for transfer). District courts have considerable discretion in deciding whether to grant or deny motions to transfer. See Zomba Enters., Inc. v. Panorama Records, Inc., 491 F.3d 574, 588 (6th Cir.2007).

III. ANALYSIS
A. May the Court Exercise Personal Jurisdiction over the Defendants?

The parties contest whether the exercise of personal jurisdiction is proper. In its brief, Plaintiff does not distinguish the actions of each Defendant relative to contact with Michigan. Instead, Plaintiff raises the conspiracy theory of jurisdiction; however, it advances no binding authority for this expansive view of jurisdiction. Therefore, the Court declines to endorse the theory in this case. Regardless of whether Defendants are intertwined, their actions may not be imputed to each other. Accordingly, Plaintiff's failure to address each Defendants' contacts with the state of Michigan individually contravenes the well-established law of personal jurisdiction.

Specifically, the plaintiff bears the burden of establishing personal jurisdiction for each defendant individually. Calder v. Jones, 465 U.S. 783, 790, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984) ("Petitioners are correct that their contacts with the forum state are not to be judged according to their employer's activities there....Each defendant's contacts with the forum State must be assessed individually"); Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th Cir.2002) (the party seeking to assert personal jurisdiction bears the burden of demonstrating that such jurisdiction in fact exits). Because Plaintiff has not met its burden relative to Connexus, Basic Fusion, and First Look, the Court limits its discussion to whether NCS may be subjected to personal jurisdiction in this Court.

Where a federal court's subject matter jurisdiction over a case stems from the existence of a federal questions, two requirements must be met for the court to exercise personal jurisdiction over a defendant: (1) the defendant must be amenable to service of process under the forum state's long-arm statute, and (2) the exercise of personal jurisdiction must not deny the defendant due process. Bird v. Parsons, 289 F.3d...

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