Jinni Tech Ltd v. Red.com Inc
2:17-cv-00217
W.D. Wash.
Oct 20, 2017

Background

  • RED (Red.com, Inc.; later converted to Red.com, LLC) manufactures RED digital cameras and RED Mini‑Mag SSDs; Jinni Tech and founder Bruce Royce developed a competing SSD called the JinniMag and launched it July 31, 2016.
  • RED’s president Jarred Land posted on RED user forums and Facebook that JinniMag was "not legit" and accused Jinni Tech of IP theft; other forum users republished and expanded on those allegations, including posting Royce’s personal contact information.
  • Plaintiffs allege resulting reputational harm, lost sales, emotional distress, Lanham Act false‑advertising and multiple Washington state tort claims; Plaintiffs later added declaratory judgment claims of noninfringement/invalidity of RED’s ’385 patent.
  • RED filed a separate patent infringement suit in the Central District of California against Jinni Tech and Royce before the declaratory patent counts were added here; the California court denied defendants’ jurisdiction/venue motion in that action.
  • RED moved to dismiss here for lack of personal jurisdiction, improper venue, failure to state a claim, and alternatively to transfer; Plaintiffs moved to strike parts of RED’s reply. The district court struck RED’s new forum‑selection clause argument, denied dismissal for lack of personal jurisdiction, denied transfer of the non‑patent claims, and dismissed the patent declaratory claims under the first‑to‑file rule.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether portions of RED’s reply raising forum‑selection clauses may be considered Plaintiffs asked to strike new arguments raised only in reply RED relied on forum‑selection clauses in website/license agreements attached first in reply Court struck only the forum‑selection portions of the reply as improper new argument
Personal jurisdiction over RED entities Jinni Tech: Plaintiffs argued sufficient contacts; RED conversion does not defeat jurisdiction RED argued lack of contacts and that Red.com, Inc. dissolution/conversion prevents jurisdiction over Red.com, LLC Court found general jurisdiction: Red.com, Inc. was incorporated in Washington; conversion statute made Red.com, LLC successor and consenting to jurisdiction
Venue and whether patent declaratory claims may proceed here given pending California infringement suit Plaintiffs contended venue proper and declaratory claims appropriate here RED argued patent venue improper for Red.com, LLC and first‑to‑file favors California infringement suit Court held patent declaratory claims dismissed under first‑to‑file rule; venue for non‑patent claims proper in W.D. Wash.; denied transfer of non‑patent claims
Failure to state claims based on (a) Mr. Land’s statements and (b) third‑party user posts Plaintiffs alleged vicarious liability for Land’s posts and that RED incited third‑party harassment RED argued Land’s and unaffiliated users’ statements cannot be imputed to corporation Court held Plaintiffs plausibly pled vicarious liability for Land’s statements (within scope of employment) and plausible claims that RED incited/encouraged third‑party posts; denied 12(b)(6) dismissal of non‑patent claims

Key Cases Cited

  • International Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (minimum contacts due process standard for personal jurisdiction)
  • Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (U.S. 2011) (general jurisdiction inquiry—corporation is "at home" where incorporated or principal place of business)
  • Daimler AG v. Bauman, 571 U.S. 117 (U.S. 2014) (confirmation that place of incorporation/principal place of business are paradigmatic bases for general jurisdiction)
  • TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (U.S. 2017) (patent‑venue statute: corporate residence for §1400(b) means state of incorporation)
  • Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222 (U.S. 1957) (§1400(b) governs venue in patent cases)
  • Pebble Beach Co. v. Caddy, 453 F.3d 1151 (9th Cir. 2006) (prima facie burden and standards on jurisdictional showing)
  • CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066 (9th Cir. 2011) (plaintiff bears burden to establish jurisdiction; prima facie showing absent evidentiary hearing)
  • Washington Shoe Co. v. A–Z Sporting Goods, Inc., 704 F.3d 668 (9th Cir. 2012) (Washington long‑arm statute extends to fullest extent of due process)
  • Merial Ltd. v. Cipla Ltd., 681 F.3d 1283 (Fed. Cir. 2012) (first‑to‑file rule between infringement and declaratory relief actions)
  • Futurewei Techs., Inc. v. Acacia Research Corp., 737 F.3d 704 (Fed. Cir. 2013) (application of first‑to‑file rule to stay/dismiss declaratory patent actions)
  • Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standard: factual allegations must plausibly state a claim)
  • Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility pleading standard)
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