2:24-cv-00609
D. Ariz.
Feb 7, 2025

Bаd Dragon Enterprises Incorporated v. SinSaint Incorporated

No. CV-24-00609-PHX-SRB

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

February 07, 2025

NOT FOR PUBLICATION

ORDER

Before the Court is Defendant SinSaint Inc.‘s (“SinSaint“) Motion to Dismiss (“Motion“) Plaintiff Bad Dragon Enterprises Inc.‘s (“Bad Dragon“) Complaint. (Doc. 20, (“Mot.“).) The Court will grant the Motion.

I. BACKGROUND

This case arises out of SinSaint‘s alleged copyright infringement of Bad Drаgon‘s products. (See generally Doc. 1, Compl.) Bad Dragon is a Nevada corporation with its principal place of business in Arizona that develops, manufactures, and sells sex toys. (Id. ¶¶ 1, 3.) SinSaint is a New York Corporation with its principal place of business in New York that also sеlls sex toys. (Id. ¶ 4; Doc. 20-1, Decl. of Oleg Semenenko (“Semenenko Decl.“) ¶¶ 3, 5-7.)

According to the Complaint, SinSaint marketed and sold thirteen products (collectively, “Accused Products“) through its website, SinSaint.com, which directly copied the “unique, original sculptural design elements” of thirteen prоducts marketed and sold by Bad Dragon. (Compl. ¶ 10; id. ¶¶ 9, 12, 14-16.) Bad Dragon owns valid and enforceable copyrights in each of the thirteen products SinSaint allegedly copied (collectively, “Copyrighted Products“). (Id. ¶ 11.) On January 31, 2024, Bad Dragon sent SinSaint a demand letter notifying it of Bad Dragon‘s ownership of the Copyrighted Products аnd demanding that SinSaint cease manufacturing, marketing, and selling the Accused Products by April 1, 2024. (Id. ¶¶ 19-20.) SinSaint responded with a letter dated February 16, 2024, which stated that it had “started the process of removing some of the allegedly infringing listings for product redesign.” (Id. ¶ 21.)

Bad Dragon filed the Complaint in this Court on March 20, 2024, alleging thirteen counts of direct copyright infringement under the Copyright Act, 17 U.S.C. § 101, et seq. (Id. ¶¶ 23-129.) On August 14, 2024, SinSaint filed the Motion, seeking to dismiss the Complaint for lack of personal jurisdiction and improper venue, or to transfer the case to the United States District Court for the Eastern District of New York. (Mot. at 1.) Bad Dragon filed its Response on September 13, 2024, to which SinSaint replied on September 30, 2024. (Doc. 21, Resp. in Opp‘n to Mot. (“Resp.“); Doc. 22, Reply.)

II. LEGAL STANDARD & ANALYSIS

The plaintiff has the burden of establishing personal jurisdiction. . Where a court resolves the question of personal jurisdiction by relying on the pleadings and supporting exhibits without conducting ‍‌‌‌‌‌​​​​‌‌​‌‌‌​​​‌‌​​‌​‌​​‌​‌‌‌‌​‌​​‌‌​‌​​​‌​‌​‍an evidentiary hearing, a plaintiff must make only a “prima facie showing of jurisdictional facts” to avoid dismissal. (citation omitted). In determining whether a plaintiff has met that burden, the “[u]ncontroverted allegations in the plaintiff‘s complaint must be taken as true.” (citation omitted). “Conflicts between parties over statements contained in affidavits must be resolved in the plaintiff‘s favor.” . However, “disputed allegations in the complaint that are not supported with evidence or affidavits cannot establish [personal] jurisdiction.” .

Personal jurisdiction over a nоnresident defendant requires a plaintiff to show that the forum state‘s long-arm statute confers jurisdiction and that the exercise of jurisdiction comports with constitutional principles of due process. See . Arizona‘s long-arm statute permits the exercise of personal jurisdictiоn to the same extent as the U.S. Constitution. (citing Ariz. R. Civ. P. 4.2(a)). Due process requires that a non-resident defendant have sufficient minimum contacts with the forum state so that “maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.‘” (quoting ). The scope of a defendant‘s contacts with a forum are measured “at the time of the events underlying the dispute.” (citation omitted); see (“Only contacts occurring prior to the event causing the litigation may be considered.“).

Courts recognize two bases for personal jurisdiction within thе confines of due process: (1) general jurisdiction, under which a defendant‘s contacts with the state allow the state to exercise jurisdiction over the defendant in all matters; and (2) specific jurisdiction, which arises out the defendant‘s contacts with the forum state giving rise to the litigatiоn. . Because Bad Dragon does not assert that the Court has general jurisdiction, the Court will analyze only whether it has specific jurisdiction over SinSaint. (See Resp. at 7-12.)

A. Specific Jurisdiction

“The inquiry whether a forum State may assert specific jurisdiction over a nonresident defendant focuses on the relаtionship among the defendant, the forum, and the litigation.” (citation omitted). The Ninth Circuit employs a three-part test to evaluate whether a non-resident defendant has sufficient minimum contacts with the forum state for specific jurisdiction:

(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act ‍‌‌‌‌‌​​​​‌‌​‌‌‌​​​‌‌​​‌​‌​​‌​‌‌‌‌​‌​​‌‌​‌​​​‌​‌​‍by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;

(2) the claim must be one which arises out of or relates to the defendant‘s forum-related activities; and

(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.

(quoting ). All three requirements must be met for jurisdiction to comport with federal due process. . If a plaintiff meets the first two requirements, the burden shifts to the defendant to set forth a compelling case that exercising jurisdiction would be unreasonable. . “But if the plaintiff fails at the first step, the jurisdictional inquiry ends and the case must be dismissed.” .

The first requirement is analyzed under either the “purposeful direction” test or the “purрoseful availment” test, which are two distinct standards. . Courts apply the purposeful direction test to copyright infringement claims. . The purposeful direction test, also known as the ”Calder effects” test, “asks whether the defendant: (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to bе suffered in the forum state.” (cleaned up); see .

Bad Dragon analogizes this case to Herbal Brands and argues that each purposeful direction element is satisfied because SinSaint 1) continued to market the Accused Products after receiving a demand letter from Bad Dragon; 2) operates an interactive website through which Arizona residents can purchase its products for shipment to Arizona; and 3) contracted with Arizona-based companies for domain registration and privacy services and agreed to resolve certain disputes regarding its domain name in Arizona. (Resp. at 3-4, 10-11.) These actions are insufficient to show purposeful direction under Herbal Brands.

In that case, an Arizona manufacturer of health and wellness products alleged that online sellers based in New York had made unauthorized sales of its products on Amazon, in violation of the Lanham Act and state law. . The online sellers moved to dismiss fоr lack of personal jurisdiction, and plaintiff argued that jurisdiction existed because the sellers “actually sold infringing products via an interactive website and caused them to be delivered to forum residents.” . The Ninth Circuit agreed, holding that “if a defendant, in its regular course of business, sells a physical product via an interactive website and causes that product to be delivered to the forum, the defendant ‘expressly aimed’ its conduct at that forum.” .

Unlike Herbal Brands, however, Bad Dragon does not allege or provide evidence that SinSaint sold any allegedly infringing products to Arizonа residents via an interactive website.1 (See Resp. at 3-6, 9-12; see generally Doc. 21-1, Ex. 1, Decl. of Michael Sullivan (“Sullivan Decl.“); Doc. 21-2, Ex. 2, Decl. of Michael Everest (“Everest Decl.“).) Instead, Bad Dragon explains that after SinSaint removed the Accused Products from SinSaint.com, a non-party purchased two non-infringing products from the website on July 25, 2024, which were shipped to the non-party‘s home in ‍‌‌‌‌‌​​​​‌‌​‌‌‌​​​‌‌​​‌​‌​​‌​‌‌‌‌​‌​​‌‌​‌​​​‌​‌​‍Arizona. (Resp. at 3; Everest Decl. ¶¶ 4-7, 16.) Though this test purchase demonstrates that SinSaint generally transacts with Arizona customers via its own website—which satisfies the first and second elements of the purposeful direction test—it fails to show that SinSaint‘s Arizona-related conduct “caus[ed] harm that the defendant [knew was] likely to be suffered in the forum state.” .2 Moreover, Bad Dragon‘s allegation that SinSaint continued to market some of the Accused Products on its website after recеiving the demand letter does not, without more, constitute express aiming. (Compl. ¶ 21; see Resp. at 10); (“[O]peration of an interactive website does not, by itself, establish express aiming.“).

Bad Dragon‘s arguments related to SinSaint‘s domain services are similarly unpersuasive. (See Resp. at 4.) First, SinSaint has produced evidence appearing to support its claim that it did not register the SinSaint.com domain name. (Reply at 9; Doc. 22-1, Suppl. Decl. of Oleg Semenenko (“Semenenko Suppl. Decl.“) ¶¶ 7-8; Doc. 22-1, Ex. D, (“Domain Registration Receipt“).) Second, while registering a domain namе and purchasing domain privacy services are intentional acts, those acts bear no relationship to the alleged conduct that gave rise to this lawsuit. See (explaining that “purchasing a domain name and purchasing domain privacy services” are “intentional аcts“); see, e.g., (finding that defendant‘s decision to register its domain name with an Arizona company was insufficient to confer specific jurisdiction because the domain name registration was “not a ‘but for’ cause of th[e] lawsuit“).

Because Bad Dragon has failed to demоnstrate purposeful direction, “the jurisdictional inquiry ends” and the Court need not consider the remaining prongs for minimum contacts. See .

B. Jurisdictional Discovery

Bad Dragon argues that SinSaint made misrepresentations and omissions regarding its sales revenue and requests jurisdictional discovery to uncover “what othеr jurisdictional facts Defendant may have omitted or withheld,” including sales of Accused Products to Arizona residents. (Resp. at 13-14.)

“Jurisdictional discovery ‘should ordinarily be granted where pertinent facts bearing on the question of jurisdiction are controverted or where a more satisfactory showing of the facts is necessary.‘” (citation omitted). “But a mere ‘hunch that [discovery] might yield jurisdictionally relevant facts,’ or ‘bare allegations in the face of specific denials,’ are insufficient reasons for a court to grant jurisdictional discovery.” (alteration in original) (citations omitted); see (denying jurisdictional discovеry where “[p]laintiff‘s request appear[ed] to be a fishing expedition for jurisdictional facts“).

In the Motion, SinSaint states that it had “less than $5,000 in revenue over the last year” and attaches documents that purportedly reflect the company‘s “complete order history for the relevant timeframe.” (Mot. at 13 (citing Semenenko Decl. ¶¶ 3-4); Semenenko Decl. ¶ 28; see Doc. 20-1, Ex. A.) Bad Dragon disputes the accuracy of the revenue figure and sales record based on a declaration from its chief financial officer, Michael Sullivan. (Resp. at 5-6.) In the declaration, Sullivan describes his experience in the adult products industry and explains that, considering several factors—including SinSaint‘s online product reviews, social media presence, influencer engagement, and its attendance at the “2024 AVN awards”3 in Las Vegas—it is “very likely” SinSaint made аdditional sales that its president, Oleg Semenenko, did not disclose. (Sullivan Decl. ¶¶ 13, 23; see id. ¶¶ 10-12, 14-22.)

According to Bad Dragon, SinSaint‘s counsel also stated in an April 2024 letter that “[t]here are records of only seven completed orders in the company‘s entire history, excluding test orders by the ownеr. Of those seven orders, just one involved an accused product (Lao), and that order was canceled and refunded.” (Resp. at 5-6 (quoting Sullivan Decl. ¶ 18); see also Semenenko Decl. ¶ 27.) Two months later, SinSaint‘s counsel sent an e-mail stating that the company had identified “cash sales to individuals at the AVN show,” including two sales of Accused Products. (Resp. at 6 (quoting Sullivan Decl. ¶ 20); see Reply at 2, 7.) The e-mail included screenshots which allegedly showed that SinSaint made additional revenue through Etsy.com, which was not disclosed by Semenenko.4 (Id. (citing Sullivan Decl. ¶ 21).) Bad Dragon argues that thеse “inconsistent and contradictory ‍‌‌‌‌‌​​​​‌‌​‌‌‌​​​‌‌​​‌​‌​​‌​‌‌‌‌​‌​​‌‌​‌​​​‌​‌​‍assertions” further justify jurisdictional discovery. (Resp. at 5-6.)

The Court disagrees. First, Sullivan‘s claims are entirely speculative and amount to

“a mere ‘hunch that [discovery] might yield jurisdictionally relevant facts,‘” which is insufficient. . Second, the fact that SinSaint later discovered and voluntarily disclosed in-person sales made at the AVN awards does not discredit Semenenko‘s declaration, which reviews the company‘s sales history in the context of its online marketplace on SinSaint.com.5 (See, e.g., Semenenko Decl. ¶¶ 19-21 (explaining that SinSaint offered the Accused Products on SinSaint.com from May 2023 to early April 2024 and did not market the Accused Products on any other website); id. ¶ 27 (stating that during the period it offered the Accused Products, SinSaint “had less than ten orders of any products (excluding test transactions made by me)” (emphasis added)).) The same is true as to SinSaint‘s revenue from Etsy.com, which appears to stem from the single sale of a non-infringing product that occurred after Bad Dragon filed the Complaint. (See Semenenko Suppl. Decl. ¶¶ 4-6 (explaining that SinSaint made a single Etsy sale between February and June 2024, which occurred оn May 30, 2024); Doc. 22-1, Ex. C.)

Because Bad Dragon‘s request is little more than “a fishing expedition for jurisdictional facts,” the Court will not permit jurisdictional discovery. .

III. CONCLUSION

The Court grants SinSaint‘s Motion to Dismiss because Bad Dragon has not established that this Court has personal jurisdiction over SinSaint. The Court denies Bad Dragon‘s request for jurisdictional discovery.

IT IS ORDERED granting Defendant‘s Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 20).

IT IS FURTHER ORDERED denying as moot Defendant‘s alternative requests for dismissal for improper venue or to transfer (Doc. 20).

. . .

. . .

. . .

IT IS FURTHER ORDERED directing the Clerk to enter judgment dismissing this case without prejudice.

Dated this 7th day of February, 2025.

Susan R. Bolton

United States District Judge

Notes

1
SinSaint claims it nevеr sold or shipped any of the Accused Products to Arizona residents. (Mot. at 4 (citing Semenenko Decl. ¶¶ 21-26).)
2
The test purchase, which was made four months after Bad Dragon filed the Complaint, also falls outside the relevant jurisdictional period, which is “at the time of the events underlying the dispute.” ; (see Compl.)
3
According to Sullivan, the AVN awards is the “premier sales convention and award show” for the United States adult industry. (Sullivan Decl. ¶ 13.)
4
Bad Dragon did not attach the screenshots ‍‌‌‌‌‌​​​​‌‌​‌‌‌​​​‌‌​​‌​‌​​‌​‌‌‌‌​‌​​‌‌​‌​​​‌​‌​‍to its Response. (See generally Resp.)
5
The in-person sales, which were made in Nevada, are also irrelevant to the jurisdictional analysis of SinSaint‘s contacts with Arizona. (See Sullivan Decl. ¶ 13.)
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