j2 Global, Inc. et al v. Integrated Global Concepts, Inc.

Filing 23

ORDER GRANTING IN PART DEFENDANT'S MOTION TO DISMISS OR STAY PROCEEDINGS by Judge Dean D. Pregerson: The court hereby GRANTS IN PART Defendant's Motion. This matter is stayed pending the outcome of Defendant's action against Plaintiff in the Northern District of California 9 15 . (bp)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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j2 GLOBAL, INC., and
ADVANCED MESSAGING
TECHNOLOGIES, INC.,

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Plaintiffs,

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v.
INTEGRATED GLOBAL CONCEPTS,
INC.,

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Defendant.
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___________________________

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Case No. CV 12-03439 DDP (PLAx)
ORDER GRANTING IN PART
DEFENDANT’S MOTION TO DISMISS OR
STAY PROCEEDINGS
[Docket Nos 9, 15]

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Presently before the court is Defendant Integrated Global

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Concepts, Inc.’s Motion to Dismiss Pursuant to Rule 12(b)(3) or in

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the Alternative, to Stay Proceedings (“Motion”).

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the parties’ moving papers and heard oral argument, the court

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grants the Motion in part and adopts the following Order.

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I.

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Having reviewed

BACKGROUND
Prior to 2000, Defendant Integrated Global Concepts, Inc.

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(“IGC”) designed and operated a fax-to-email system on behalf of

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eFax.com (“eFax”).

In 2000, Plaintiff j2 Global, Inc. (“j2”)

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acquired eFax.1

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into an Agreement of Understanding (“Agreement”).

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Agreement, j2 and eFax agreed to release IGC from any and all

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claims “arising from or related to any past services, equipment,

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software or other assets provided by IGC to [j2 or eFax]” (“claims

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release”).2

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clause, providing that all disputes will be heard in the Northern

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District of California.

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During the acquisition, j2, eFax, and IGC entered
As part of the

The Agreement also contains a broad forum selection

Following an initial transition period, during which j2

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licensed the use of IGC’s software, j2 and IGC ended their business

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relationship.

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directly to consumers, in competition with j2.

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filed the present action, alleging that IGC is infringing various

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patents.

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time of the Agreement, but the patents had not yet issued.

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also filed its own action in the Northern District of California,

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alleging that j2’s suit here breaches the Agreement’s forum

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selection clause and claims release.

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Motion, arguing that this court should dismiss j2’s suit for

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improper venue because of the forum selection clause, or in the

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alternative, stay proceedings pending the outcome of the Northern

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District action.

IGC then began selling its Internet fax services
Accordingly, j2

The applications for these patents were pending at the
IGC

IGC then filed the present

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These prior events actually involved j2’s predecessor,
JFAX. Because this distinction is not relevant to the present
Motion, the court will refer to both j2 and its predecessor as
“j2.”
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The Agreement also contains a similar covenant not to sue.
Further, the parties agreed to waive any unknown or unsuspected
claims, as well as any protections provided by California Civil
Code section 1542.
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II.

DISCUSSION
The parties agree that the critical legal question here is

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whether the claims release applies to j2’s present action, thereby

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triggering the forum selection clause.

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current infringement claims do “aris[e] from” or are “related to”

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IGC’s “past services, equipment, software, or other assets,”

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because IGC is providing “the same services as it did at the time

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[of] the Agreement . . ., using the same software, equipment, and

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other assets.”

(Mot. at 5.)

According to IGC, j2’s

In other words, IGC contends that the

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release must apply because IGC’s “MaxEmail internet fax and

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voicemail service” is the only service that it provided then, the

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only service that it provides now, and the only basis for j2’s

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infringement claims.

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relevant patents and the nature of IGC’s service, at the time of

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the Agreement.

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already pending and j2 had access and training as to IGC’s system.

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To the contrary, j2 argues that its suit is for IGC’s present

IGC also emphasizes that j2 was aware of the

As IGC explains, the patent applications were

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infringement of patents not yet issued at the time of the

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Agreement, not for any past services.

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the release “was intended solely to govern IGC’s provision of . . .

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services to [j2] during a limited transition period after the

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acquisition, and to resolve outstanding disputes about payment for

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services IGC had rendered to eFax.”3

Further, j2 contends that

(Opp’n to Mot. at 1.)

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j2 also cites to a Northern District of Georgia decision in
a prior action against IGC by j2’s subsidiary, Catch Curve.
Although the case involved different patents, IGC similarly argued
that Catch Curve had breached the Agreement’s claims release and
related contracts between the parties. The court, however,
rejected this argument, in granting a motion by Catch Curve to
dismiss IGC’s breach of contract counterclaim. As j2 notes, the
(continued...)
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In light of these reasonable arguments by both sides, the

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court finds that the best approach is to stay this case while the

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Northern District of California determines whether the Agreement’s

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claims release and forum selection clause apply to j2’s present

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claims.

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affirmative, the case here must, of course, be dismissed.

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the other hand, the Northern District finds that the Agreement does

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not cover j2’s claims, then the stay will be lifted.

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agrees with IGC that j2 will not be unduly prejudiced by this

If the Northern District answers these questions in the
If, on

The court

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course of action or any resulting delay.

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the Agreement and selected the Northern District as the forum for

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all relevant litigation.

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after its patents had issued before bringing this infringement

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action.

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It was j2 that drafted

Further, j2 waited a number of years

For all of these reasons, the court hereby GRANTS IN PART

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Defendant’s Motion.

This matter is stayed pending the outcome of

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Defendant’s action against Plaintiff in the Northern District of

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California.

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IT IS SO ORDERED.

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Dated: August 7, 2012
DEAN D. PREGERSON
United States District Judge

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(...continued)
court found that the release covered only a subset of claims: those
arising from IGC’s past relationship with j2 and eFax. The court
also emphasized, however, that IGC had failed to allege that Catch
Curve’s claims arose from or were related to IGC’s past services.
Here, to the contrary, IGC clearly maintains that j2’s claims are
connected to these past services. Accordingly, the Northern
District of Georgia decision does not resolve the present dispute.
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