JFXD TRX ACQ LLC v. trx.com et al

Filing 103

ORDER that the Motion for Attorney Fees and Non-Taxable Expenses 95 is GRANTED. Defendant is awarded $39,746.50 in attorneys' fees and $1,352.27 in non-taxable expenses. The Clerk of Court shall enter a judgment in favor of Defendant Loo Tze Ming in the amount of $41,098.77. See document for complete details. Signed by Senior Judge Roslyn O Silver on 5/8/2024. (KLG)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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JFXD TRX ACQ LLC,

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Plaintiff,

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v.

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trx.com, et al.,

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No. CV-23-02330-PHX-ROS
ORDER

Defendants.

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Hoping to obtain ownership of the domain name <trx.com>, Plaintiff JFXD TRX

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ACQ LLC filed this case in the Eastern District of Virginia. That court concluded it lacked

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personal jurisdiction over Defendant Loo Tze Ming and transferred the case to Arizona.

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Once in Arizona, the Court gave Plaintiff multiple opportunities to plead a viable claim.

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Plaintiff was unable to do so, and the Court dismissed Plaintiff’s complaint with prejudice.

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Ming now seeks an award of attorneys’ fees and non-taxable expenses. Ming is entitled to

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such an award.

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I.

Standard for Awarding Fees and Costs

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JFXD sued Ming under 15 U.S.C. § 1125(d) hoping to obtain ownership of

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<trx.com>. The type of claim JFXD brought meant the court could “award reasonable

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attorney fees to the prevailing party” after concluding the case was “exceptional.” 15

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U.S.C. § 1117(a). Determining whether a case qualifies as “exceptional” requires looking

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“to the totality of the circumstances” and assessing whether the case “stands out from

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others with respect to the substantive strength of a party’s litigating position (considering

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both the governing law and the facts of the case) or the unreasonable manner in which the

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case was litigated.” SunEarth, Inc. v. Sun Earth Solar Power Co., 839 F.3d 1179, 1180

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(9th Cir. 2016). In making this assessment a court should consider factors such as

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“frivolousness, motivation, objective unreasonableness (both in the factual and legal

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components of the case) and the need in particular circumstances to advance considerations

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of compensation and deterrence.” Id.

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Understanding why the present case qualifies as “exceptional” requires looking to

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events that occurred long before this suit was filed as well as the proceedings in a separate

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case. Those background facts, combined with the weakness of JFXD’s arguments and

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positions asserted in this case, render this case exceptional.
II.

Events Before Present Suit

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The domain name <trx.com> was first registered in 1999 by an unknown third party.

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Approximately four years after that registration, nonparty Randal Hetrick invented “the

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famous gym product called TRX.” (Doc. 68 at 3). Mr. Hetrick began selling that gym

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product through a company known as Fitness Anywhere LLC. Over the following years,

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Fitness Anywhere obtained and used numerous trademarks involving the letters “TRX.”

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(Doc. 68 at 3). In 2018, attorney Alain Villeneuve began providing “IP legal services” to

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Fitness Anywhere. (Doc. 95-7 at 5). In June 2022, Fitness Anywhere filed for Chapter 11

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reorganization. (CV-22-2042, Doc. 11-1).

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On June 16, 2022, Fitness Anywhere and a related company filed an application

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with the bankruptcy court for permission to employ Mr. Villeneuve as special intellectual

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property counsel while the bankruptcy proceeded.

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application, Mr. Villeneuve would provide Fitness Anywhere with “general IP advice,

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patent and trademark prosecution, brand enforcement, IP litigation, management of foreign

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IP counsel, and maintenance of IP assets.” (Doc. 95-7 at 5). Mr. Villeneuve submitted a

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declaration in support of that application where he explained his appointment was

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appropriate because of his “deep understanding and familiarity with [Fitness Anywhere],

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[its] IP and the issues that arise concerning [Fitness Anywhere’s] IP.” (Doc. 95-7 at 11).

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(Doc. 95-7).

According to that

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The application was granted, and Mr. Villeneuve provided legal services to Fitness

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Anywhere beginning on June 8, 2022. The record does not disclose when Mr. Villeneuve

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stopped providing services, but it is undisputed Mr. Villeneuve was still providing services

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as of late August 2022. (Doc. 95-8 at 4 n.1).

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On August 26, 2022, JFXD purchased all of Fitness Anywhere’s assets, including

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its intellectual property such as trademarks. (Doc. 23-2330 Doc. 74-3). Mr. Villeneuve’s

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name does not appear on the asset purchase agreement, but it is difficult to believe Fitness

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Anywhere’s “special intellectual property counsel” would have been unaware that his

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client had agreed to sell all its intellectual property. Despite Fitness Anywhere no longer

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owning any intellectual property, Mr. Villeneuve continued to work for Fitness Anywhere

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in some capacity.

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In the fall of 2022, Fitness Anywhere asked Mr. Villeneuve to file a domain name

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dispute regarding ownership of <trx.com>.1 (Doc. 68-2). Mr. Villeneuve prepared the

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necessary paperwork and on October 19, 2022, filed the dispute with a nongovernmental

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entity. In that dispute Mr. Villeneuve stated, “Fitness Anywhere LLC is the owner of the

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famous trademark TRX.” (Doc. 68-2 at 4). That was false. As of October 2022, JFXD,

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not Fitness Anywhere, owned “the famous trademark TRX.”

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As of 2022, Defendant Ming had owned <trx.com> for approximately four years.

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Ming had purchased the domain name from a nonparty for $138,000. Despite owning

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<trx.com>, Ming claims he did not receive notice of the domain name dispute proceeding

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initiated by Mr. Villeneuve. Thus, Ming did not respond in that proceeding. In November

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2022, a decision was issued by the nongovernmental entity concluding <trx.com> should

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be transferred to Fitness Anywhere unless Ming filed suit in Arizona. (CV-22-2042 Doc.

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1). Ming received notice of that decision and on November 30, 2022, filed suit in Arizona.

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Ming’s complaint sought a determination he was entitled to remain the owner of

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<trx.com>. That case was assigned to Judge Logan. After filing his complaint, Ming

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Mr. Villeneuve has not identified who at Fitness Anywhere asked him to file that dispute
and, again, it is difficult to believe Fitness Anywhere would have made such a request
given that Fitness Anywhere did not own the intellectual property.
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obtained a waiver of service from Fitness Anywhere, signed by Mr. Villeneuve. (CV-22-

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2042 Doc. 8). Despite waiving service, Fitness Anywhere did not respond to the complaint.

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Instead, on February 3, 2023, Mr. Villeneuve emailed Judge Logan’s chambers stating

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Fitness Anywhere had declared bankruptcy in June 2022. Mr. Villeneuve’s email also

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stated he was “the general counsel of JFXD . . . the purchaser of the Chapter 11 assets” and

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he was unable to determine “the optimal way” to file notice of Fitness Anywhere’s

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bankruptcy. (CV-22-2042 Doc. 11-1). Given that Mr. Villeneuve was general counsel for

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JFXD, it is not clear why he waived service on behalf of Fitness Anywhere. Nor is it clear

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why Mr. Villeneuve believed he was responsible for filing notice regarding Fitness

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Anywhere’s bankruptcy.

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Anywhere pending resolution of the bankruptcy.

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III.

At any rate, Judge Logan stayed the case against Fitness

Activities in Present Suit

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Shortly after Mr. Villeneuve emailed Judge Logan’s chambers, JFXD filed the

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present suit in the Eastern District of Virginia. Mr. Villeneuve was involved as counsel for

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JFXD from the beginning. (Doc. 6-1). JFXD’s complaint asserted a cybersquatting claim

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against <trx.com> and Ming.

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confusingly similar to or dilutive of the TRX marks.” (Doc. 1 at 12). As for Ming, he was

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identified as “the registrant of <trx.com>” and allegedly had a “bad faith intent to profit

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from” misusing <trx.com>. (Doc. 1 at 2, 12). JFXD’s complaint sought transfer of

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<trx.com> to JFXD as well as an award of statutory damages. When the Virginia court

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asked JFXD why it believed the Virginia court had personal jurisdiction over Ming, JFXD

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responded by arguing Ming was not a proper party because Ming did not own <trx.com>.

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Of course, it had been JFXD’s own decision to identify Ming as the owner of <trx.com>

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and to name him as a defendant. JFXD did not offer any explanation to the Virginia court

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why it had sued Ming if JFXD believed Ming was not the owner of <trx.com>.

According to JFXD, <trx.com> is “identical to or

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Ming appeared in Virginia to contest personal jurisdiction. Ming conceded he was

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subject to personal jurisdiction in Arizona, and he requested the case be transferred to

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Arizona. (Doc. 42 at 8). JFXD opposed transfer by arguing, again despite its own

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allegations that Ming was the owner of <trx.com>, that there was no “evidence of

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ownership of the domain by [Ming].” (Doc. 39 at 6).

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The Eastern District of Virginia did not address JFXD’s shifting positions regarding

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Ming. Instead, that court concluded personal jurisdiction over Ming was lacking and

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transferred the case to Arizona. (Doc. 59). After the case arrived in Arizona, Mr.

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Villeneuve, as counsel for JFXD, filed a motion for preliminary injunction. (Doc. 68). The

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motion sought an order requiring the immediate transfer of <trx.com> to JFXD. That

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motion did not discuss or cite GoPets Ltd. v. Hise, the Ninth Circuit authority most

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pertinent to JFXD’s cybersquatting claim. 657 F.3d 1024, 1032 (9th Cir. 2011). Ming

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filed an opposition, discussing the applicability of GoPets and why, under that precedent,

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JFXD’s cybersquatting claim was doomed. According to Ming, <trx.com> was first

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registered years before the TRX gym product was invented and, therefore, GoPets

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established JFXD’s cybersquatting claim had no chance of success.

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acknowledged GoPets but argued, for indecipherable reasons, the Court should not follow

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GoPets. It was unreasonable for JFXD to file a reply that did not contain any plausible

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argument that GoPets did not bar the cybersquatting claim.

JFXD’s reply

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The Court denied the request for preliminary injunction by pointing out it was

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undisputed “<trx.com> was initially registered in 1999 and the TRX-related marks did not

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exist until years later.” (Doc. 82 at 4). Based on that sequence of events and the rule set

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forth in GoPets, the Court concluded JFXD had “no likelihood of success.” (Doc. 82 at 3).

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Instead of requiring Ming file a motion to dismiss making the same arguments he had made

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in opposing the motion for preliminary injunction, the Court ordered JFXD to file a

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document explaining how GoPets did not require dismissal of the complaint. JFXD was

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also ordered to explain Mr. Villeneuve’s contradictory statements regarding ownership of

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the TRX-related marks. (Doc. 82 at 5). That is, the Court instructed Mr. Villeneuve to

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explain why he had stated Fitness Anywhere owned the TRX-related marks in filing the

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domain name dispute despite Fitness Anywhere having sold those marks months earlier.

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JFXD’s response addressing the viability of its claim in light of GoPets was

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exceptionally difficult to understand. It appeared JFXD misunderstood basic aspects of

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litigating a cybersquatting claim. For example, JFXD titled one section of its response

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“Further Evidence a Registrar Owns this URL.” (Doc. 83 at 8). A “registrar” is a company

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that registers “domain names with registries on behalf of those who own the names.” Off.

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Depot Inc. v. Zuccarini, 596 F.3d 696, 699 (9th Cir. 2010). It was undisputed <trx.com>

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was not currently owned by a “registrar.” Thus, JFXD’s statement that <trx.com> was

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owned by a “registrar” was inexplicable.

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JFXD’s response also recounted a sequence of events it described as “worthy of a

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fiction book.” (Doc. 83 at 8). JFXD allegedly attempted to buy <trx.com> through

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GoDaddy, a nonparty brokerage that connects buyers with sellers of domain names. JFXD

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claims it was contacted by a GoDaddy agent and “[t]here was the smell of money in the

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air, the same vibe as entering a used car showroom.” The agent “was forceful . . . and tried

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to bully [JFXD] in giving an initial seven number initial offer” to purchase <trx.com>.”

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(Doc. 83 at 8). JFXD refused to do so. These events had no relevance to the current

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dispute. GoDaddy is not a party nor is there any connection between GoDaddy and Ming.

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The fact that JFXD believed it had been mistreated by GoDaddy was irrelevant to the claim

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JFXD was pursuing in this case.

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On the merits, and as best as the Court could determine, JFXD’s response was

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attempting to argue GoPets did not preclude its cybersquatting claim because <trx.com>

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had been “re-registered” after the TRX-related marks came into existence. While unsure

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whether that was the position JFXD wished to pursue, the Court granted JFXD leave to

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amend its complaint to allege facts supporting that argument. (Doc. 85).

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For unknown reasons, JFXD and Mr. Villeneuve ignored the Court’s Order

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requiring an explanation of Mr. Villeneuve’s contradictory statements regarding ownership

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of the TRX-related marks. Identifying the proper owner of the TRX-related marks was

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crucial for this case to continue. If Mr. Villeneuve’s statement in October 2022 that Fitness

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Anywhere still owned the TRX-related mark was accurate, JFXD would not have standing

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to bring the current case. The decision to ignore the Court’s Order requiring an explanation

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addressing ownership was unreasonable.

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JFXD filed an amended complaint but, as the Court later observed, those

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“allegations appear[ed] to be based on a misunderstanding of how the domain name system

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operates.”

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<trx.com> had lapsed and Ming had purchased the domain name from “the public domain.”

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It was not clear what JFXD meant by “public domain.” More importantly, JFXD’s position

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had always been that Ming purchased <trx.com> for $138,000 through an “internet

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brokerage.” (Doc. 74 at 3). JFXD appeared to believe registration with a registrar was the

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same as purchasing a domain name through an “internet brokerage.” Those are very

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different events. Because JFXD had not alleged any facts establishing the registration of

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<trx.com> had lapsed and Ming had “re-registered” it, the complaint was dismissed

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without leave to amend.

(Doc. 88 at 2).

JFXD’s amended complaint alleged the registration of

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At the same time JFXD filed its amended complaint, Mr. Villeneuve submitted a

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statement addressing his contradictory statements. That statement was submitted ex parte

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via email to the Court. (Doc. 87). The Court noted it was improper to submit such ex parte

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statements and instructed Mr. Villeneuve not to send future communications via email. As

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for the contents, the email was “largely indecipherable.” (Doc. 88 at 4). The Court could

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not determine why Mr. Villeneuve had made conflicting statements and submitting an

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indecipherable statement attempting to explain his behavior was unreasonable.

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A few weeks after judgment was entered against JFXD, Ming filed a motion for

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attorneys’ fees. The governing statute allows for awards of attorney’s fees to prevailing

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parties in “exceptional cases.” 15 U.S.C. § 1117(a). Ming argues that requirement is met

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here because JFXD “had no chance of success” and engaged in inappropriate behavior

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throughout this case, such as presenting baseless legal arguments and attempting ex parte

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communications with the Court. Ming seeks an award of $39,746.50 in attorneys’ fees and

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$1,352.27 in non-taxable expenses. JFXD filed an opposition but, as with many of its

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previous filings, that document is very hard to understand. JFXD’s opposition does not

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contain any objections to the hourly rates of Ming’s counsel or the number of hours that

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counsel spent on this case.

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JFXD’s improper behavior continued in opposing the request for attorneys’ fees.

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The following is a partial list of JFXD’s misstatements or unreasonable arguments made

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in that opposition:

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• JFXD argues a plaintiff is entitled to fees only upon showing the defendant

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“engaged in malicious, fraudulent, deliberate or willful infringement.” (Doc.

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99 at 2). That test was overruled in SunEarth, Inc. v. Sun Earth Solar Power,

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Co., 839 F.3d 1179 (9th Cir. 2016). JFXD cites SunEarth but fails to apply

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its holding.

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• JFXD argues Ming “cites a bizarre lower standard” regarding entitlement to

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fees. (Doc. 99 at 3). However, JFXD is the party that cites the incorrect

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standard.

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• JFXD repeatedly argues the Court should have applied “2nd Circuit law”

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because the case was transferred from Virginia. (Doc. 99 at 3, 4). Virginia

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is in the Fourth Circuit, not the Second Circuit.

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• JFXD argues the Court should not have applied Ninth Circuit law. JFXD did
not make this argument while the case was pending.

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• JFXD argues “extreme poor lawyering in GoPets misled the 9th Circuit to

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ignore the relevant portion of the ACPA.” (Doc. 99 at 3). JFXD appears to

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believe “poor lawyering” is a basis to ignore binding precedent. It is not.

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• JFXD argues it will request GoPets be overruled and that argument “is not

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frivolous litigation but a public service.” (Doc. 99 at 5). Before judgment,

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JFXD never argued GoPets was incorrect.

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maintained, without explanation, that GoPets did not apply in this case

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because of factual differences.

Rather, JFXD consistently

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• JFXD argues GoPets should not apply because “[t]he 9th Circuit’s own jury

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instructions no [sic] not include GoPets.” (Doc. 99 at 6). The contention

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that model jury instructions should control over a published opinion is

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frivolous.

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• JFXD argues the Court required he file an amended complaint by February

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21, 2024, despite the fact that Mr. Villeneuve was “leaving on February 14,

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2024 to return on February 27, 2024 for a romantic anniversary.” (Doc. 99

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at 7). JFXD did not seek an extension of the February 21 deadline and it is

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unreasonable to argue the Court should have considered Mr. Villeneuve’s

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undisclosed “romantic anniversary” plans in setting a briefing schedule.

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• JFXD presents a strange argument that, despite naming Ming as a defendant,

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JFXD continues to believe Ming is a “fraud.” (Doc. 99 at 1). JFXD allegedly

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attempted to investigate Ming and what it found was “chilling.” (Doc. 99 at

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9). JFXD cites postings on an Internet message board allegedly discussing

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fraud committed by Ming. The Court cannot understand what JFXD is

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attempting to establish through this argument because it was JFXD’s

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decision to sue Ming. Any argument from JFXD that Ming is not a proper

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party is frivolous.

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That partial list of arguments in a single filing is representative of JFXD’s behavior

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throughout this case. JFXD and its counsel were unable to present intelligible factual or

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legal arguments, leaving Ming and the Court to guess as to why JFXD believed its

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cybersquatting claim was viable. Many cases involve one or two bad arguments or

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positions, but this case was unique in the number of unintelligible assertions made by JFXD

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and its counsel.

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IV.

Award and Amount

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Given the behavior outlined above, this case is “exceptional.” This case stands out

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from others in both the frivolousness and objective unreasonableness of JFXD’s behavior.

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It would be unjust to require Ming bear the cost of litigating against unintelligible factual

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and legal positions. Moreover, awarding fees might dissuade JFXD from pursuing such

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tactics in the future.

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Having determined this is an exceptional case such that Ming should be awarded

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costs and fees, the final issue is determining the amount to award. Local Rule 54.2(f)

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required JFXD “identify with specificity all disputed issues of material fact and . . .

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separately identify each and every disputed time entry or expense item.” JFXD chose not

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to comply with this rule. In fact, JFXD did not make any objection to the hourly rate or

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the number of hours set forth in Ming’s motion for fees. The Ninth Circuit has instructed

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that when an opposing party “cannot come up with specific reasons for reducing the fee

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request that the district court finds persuasive, [the district court] should normally grant the

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award in full, or with no more than a haircut.” Moreno v. City of Sacramento, 534 F.3d

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1106, 1116 (9th Cir. 2008). Defense counsel’s hourly rates are reasonable, the number of

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hours expended in defending this case was reasonable, and the non-taxable expenses were

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reasonable. Therefore, not even a “haircut” would be appropriate. Id. The Court will

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award the full amount requested.

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Accordingly,

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IT IS ORDERED the Motion for Attorney Fees and Non-Taxable Expenses (Doc.

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95) is GRANTED. Defendant is awarded $39,746.50 in attorneys’ fees and $1,352.27 in

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non-taxable expenses. The Clerk of Court shall enter a judgment in favor of Defendant

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Loo Tze Ming in the amount of $41,098.77.

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Dated this 8th day of May, 2024.

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Honorable Roslyn O. Silver
Senior United States District Judge

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