Wargaming.Net Limited v. Blitzteam LLC et al

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION [Dkt. 35] by Judge Cormac J. Carney. For the foregoing reasons, Defendant's motion to dismiss under Rule 12(b)(2) for lack of personal jurisdiction is GRANTED. (MD JS-6. Case Terminated)

Central District of California, cacd-2:2020-cv-02763

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3 Page ID #:1453 JS-6 1 2 1/20/2021 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 WARGAMING.NET LIMITED,) Case No.: CV 20-02763-CJC(MRWx)) 12) Plaintiff,) 13) v.) 14)) 15 BLITZTEAM LLC a/k/a PRESS FIRE) ORDER GRANTING DEFENDANT'S) MOTION TO DISMISS FOR LACK OF GAMES LLC and DOES 1–10,) PERSONAL JURISDICTION [Dkt. 35] 16) 17) Defendants.) 18)) 19)) 20) 21 22 I. INTRODUCTION 23 24 Plaintiff Wargaming.net Limited brings this action for copyright and trademark 25 infringement against Defendant Blitzteam LLC a/k/a Press Fire Games LLC and 26 unnamed Does. Now before the Court is Defendant's motion to dismiss for lack of 27 28 -1- 3 Page ID #:1454 1 personal jurisdiction. (Dkt. 35 [hereinafter "Mot."].) For the following reasons, 2 Defendant's motion is GRANTED.1 3 4 II. BACKGROUND 5 6 Plaintiff and Defendant are both foreign companies that create and distribute video 7 games online and on mobile applications or "apps." (Dkt. 22 [First Amended Complaint, 8 hereinafter "FAC"] ¶¶ 1, 8.) Plaintiff is a Cyprus company that has developed several 9 video games including "World of Tanks Blitz" and "World of Warships Blitz." (Id. ¶¶ 10 14, 17, 30.) Plaintiff owns trademarks in both games and a copyright for the source code 11 used to develop these games. (Id. ¶¶ 43, 120.) Plaintiff's games are available online, on 12 gaming consoles, and through mobile app platforms like Google Play and Apple's App 13 Store. (Id. ¶ 15.) 14 15 Defendant is a Belarusian company that Plaintiff alleges was created by Plaintiff's 16 former employees in April 2018. (Id. ¶ 50.) Defendant, which was originally named 17 Blitzteam LLC before changing its name to Press Fire Games LLC, developed a video 18 game called "Battle Prime" that it distributes through its websites as well as Google's and 19 Apple's app stores. (Id. ¶ 64.) Plaintiff alleges that Defendant developed Battle Prime 20 using Plaintiff's copyrighted source code and that Defendant's use of the term "Blitz" 21 infringed Plaintiff's trademarks. (Id. ¶ 120.) Defendant does not have any offices or 22 employees in the United States, (Dkt. 35-1 [Declaration of Kiryl Paliakou, hereinafter 23 "Paliakou Decl."] ¶¶ 4–6), and United States consumers have accounted for 24 approximately ten percent of Defendant's total Battle Prime downloads, (Id. ¶ 9; Dkt. 42- 25 10 [Opposition to Mot., hereinafter "Opp."] at 4). 26 27 1 Having read and considered the papers presented by the parties, the Court finds this matter appropriate 28 for disposition without a hearing. See Fed. R. Civ. P. 78; Local Rule 7-15. Accordingly, the hearing set for February 1, 2021 at 1:30 p.m. is hereby vacated and off calendar. -2- 3 Page ID #:1455 1 Plaintiff's FAC alleges seven causes of action against Defendant for (1) trademark 2 infringement, (2) false designation of origin and association, (3) common law trademark 3 infringement, (4) violation of California's Unfair Competition Law, (5) common law 4 unfair competition, (6) cancellation of Defendant's trademark applications, and (7) 5 Copyright Infringement. Before filing this case, Plaintiff filed seven other actions against 6 Defendant or its members in Belarus and Cyprus. (Paliakou Decl. ¶ 10; FAC ¶¶ 62–63.) 7 The suits filed in Belarus concern the allegedly unlawful use of Plaintiff's source code, 8 (FAC ¶¶ 62–63), and the suit filed in Cyprus involves the trademarks at issue in this 9 action, (Paliakou Decl. ¶ 10). 10 11 III. LEGAL STANDARD 12 13 A party may move to dismiss an action for lack of personal jurisdiction under 14 Federal Rule of Civil Procedure 12(b)(2). "The general rule is that personal jurisdiction 15 over a defendant is proper if it is permitted by [] statute and if the exercise of that 16 jurisdiction does not violate federal due process." Pebble Beach Co. v. Caddy, 453 F.3d 17 1151, 1154 (9th Cir. 2006). Plaintiff argues that personal jurisdiction over Defendant is 18 authorized by Federal Rule of Civil Procedure 4(k)(2), also known as the federal long- 19 arm statute. 20 21 Under Rule 4(k)(2), personal jurisdiction over a defendant is proper if three 22 requirements are met: (1) "the claim against the defendant must arise under federal law"; 23 (2) "the defendant must not be subject to the personal jurisdiction of any state court of 24 general jurisdiction"; and (3) "the federal court's exercise of personal jurisdiction must 25 comport with due process." Pebble Beach, 453 F.3d at 1159. "The due process analysis 26 under Rule 4(k)(2) is nearly identical to traditional personal jurisdiction analysis with one 27 significant difference: rather than considering contacts between the [defendant] and the 28 forum state, [courts] consider contacts with the nation as a whole." Holland Am. Line -3- 3 Page ID #:1456 1 Inc. v. Wartsila N. Am., Inc., 485 F.3d 450, 462 (9th Cir. 2007). Constitutional due 2 process concerns are satisfied when a nonresident defendant has "certain minimum 3 contacts" with the forum "such that the maintenance of the suit does not offend 4 traditional notions of fair play and substantial justice." Doe v. Unocal Corp., 248 F.3d 5 915, 923 (9th Cir. 2001) (quoting Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)). 6 The plaintiff bears the burden of demonstrating that jurisdiction is appropriate. Id. at 7 922. 8 9 The plaintiff's burden "varies according to the nature of the pre-trial proceedings 10 in which the jurisdictional question is decided." Forsythe v. Overmyer, 576 F.2d 779, 11 781 (9th Cir. 1978). "Where, as here, a motion to dismiss is based on written materials 12 rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of 13 jurisdictional facts." Love v. Associated Newspapers, Ltd., 611 F.3d 601, 608–09 (9th 14 Cir. 2010). "Uncontroverted allegations in the complaint must be taken as true, and 15 conflicts over statements contained in affidavits must be resolved in [the plaintiff's] 16 favor." Id.; see also Pebble Beach, 453 F.3d 1154. However, "mere 'bare bones' 17 assertions of minimum contacts with the forum or legal conclusions unsupported by 18 specific factual allegations will not satisfy a plaintiff's pleading burden." Swartz v. 19 KPMG LLP, 476 F.3d 756, 766 (9th Cir. 2007) (per curiam). 20 21 IV. DISCUSSION 22 23 Plaintiff argues that personal jurisdiction over Defendant is authorized by Rule 24 4(k)(2), the federal long-arm statute. The Court disagrees because the exercise of 25 personal jurisdiction over Defendant would not "comport with 'fair play and substantial 26 justice.'" See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985). 27 28 -4- 3 Page ID #:1457 1 Under Rule 4(k)(2), personal jurisdiction over a defendant is proper if three 2 requirements are met: (1) "the claim against the defendant must arise under federal law"; 3 (2) "the defendant must not be subject to the personal jurisdiction of any state court of 4 general jurisdiction"; and (3) "the federal court's exercise of personal jurisdiction must 5 comport with due process." Pebble Beach, 453 F.3d at 1159. It is undisputed that the 6 first two requirements are met as Plaintiff's claims arise under federal law and Defendant 7 is not subject to the general jurisdiction of any state. (Mot. at 21; Opp. at 7.) 8 Accordingly, the Court considers only whether its exercise of personal jurisdiction over 9 Defendant would comport with due process. Under this analysis, personal jurisdiction 10 may be either general or specific. Id. Because neither party contends that general 11 jurisdiction exists, the Court considers whether Defendant's contacts with the United 12 States give rise to specific jurisdiction. 13 14 "[F]or a court to have specific jurisdiction over a defendant, 'the defendant's suit- 15 related conduct must create a substantial connection with the forum State.'" Williams v. 16 Yamaha Motor Co., 851 F.3d 1015, 1022–23 (9th Cir. 2017) (quoting Walden v. Fiore, 17 571 U.S. 277, 284 (2014)). In tort cases like this one, the Ninth Circuit employs a three- 18 part test for assessing whether a defendant has sufficient contacts with the forum state to 19 be subject to specific personal jurisdiction: (1) "the nonresident defendant must 20 purposefully direct his activities or consummate some transaction with the forum or 21 resident thereof"; (2) "the claim must be one which arises out of or relates to the 22 defendant's forum-related activities"; and (3) "the exercise of jurisdiction must comport 23 with fair play and substantial justice, i.e., it must be reasonable." Picot v. Weston, 780 24 F.3d 1206, 1211 (9th Cir. 2015). "The plaintiff bears the burden of satisfying the first 25 two prongs of the test." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 26 (9th Cir. 2004). "If the plaintiff succeeds in satisfying both of the first two prongs, the 27 burden then shifts to the defendant to 'present a compelling case' that the exercise of 28 jurisdiction would not be reasonable." Id. While Plaintiff has satisfied the first two -5- 3 Page ID #:1458 1 prongs, Defendant has presented a compelling case that the exercise of jurisdiction would 2 be unreasonable. Accordingly, the Court declines to exercise personal jurisdiction over 3 Defendant. 4 5 A. Purposeful Direction 6 7 Defendant purposefully directed its conduct at the United States. "In tort cases, 8 [courts] typically inquire whether a defendant 'purposefully direct[ed] his activities' at 9 the forum [], applying an 'effects' test that focuses on the forum in which the defendant's 10 actions were felt, whether or not the actions themselves occurred within the forum." 11 Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1228 (9th Cir. 2011). To 12 establish purposeful direction, a plaintiff must demonstrate that the defendant "(1) 13 committed an intentional act, (2) expressly aimed at the forum [], (3) causing harm that 14 the defendant knows is likely to be suffered in the forum []." Id. Neither party disputes 15 that Defendant committed an intentional act, so the Court analyzes only the second and 16 third elements. 17 18 For the second element, Defendant expressly aimed its conduct at the United 19 States. Express aiming occurs when a defendant has "continuously and deliberately 20 exploited" a certain forum for its own commercial gain. Mavrix, 647 F.3d at 1230 (citing 21 Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 781 (1984)) (noting that the Keeton 22 Court allowed specific jurisdiction over Hustler Magazine, an Ohio corporation, when it 23 was sued for libel by a New York citizen "in New Hampshire based on the circulation in 24 New Hampshire of copies of the magazine that contained the allegedly libelous 25 material")). The Ninth Circuit has also held that "operating even a passive website in 26 conjunction with 'something more'—conduct directly targeting the forum—is sufficient" 27 to establish personal jurisdiction. Id. at 1229. 28 -6- 3 Page ID #:1459 1 Here, Defendant exploited the United States market for its commercial gain. 2 Defendant chose to make its game, Battle Prime, available to the United States through 3 Apple's and Google's app stores. See Goes Int'l, AB v. Dodur Ltd., 2015 WL 5043296, 4 at *10 (N.D. Cal. Aug. 26, 2015) ("It is significant that an infringing game is being 5 distributed in a marketplace that includes U.S. players, even if the means for distribution 6 is selecting the default of "worldwide" distribution."). More importantly, Plaintiff 7 provides evidence that Defendant ran advertisements specifically targeted at the United 8 States. These ads were not merely part of a general, international advertising campaign. 9 Rather, from December 2019 through September 2020, Defendant purchased nine 10 advertising campaigns through Facebook that specifically targeted United States' 11 consumers, and these campaigns resulted in thousands of Battle Prime downloads in the 12 United States. (Dkt. 42-5 [Exhibit J]);