Athletic Training Innovations LLC v. eTAGZ, Inc

Filing 15

ORDER AND REASONS denying as moot 9 Motion to Dismiss for Lack of Jurisdiction. Signed by Judge Nannette Jolivette Brown on 1/30/2013. (cms, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ATHLETIC TRAINING INNOVATIONS, LLC

CIVIL ACTION

VERSUS

NO. 12-2540

eTAGZ, inc.

SECTION: “G”(2)

ORDER AND REASONS
Before the Court is Defendant eTagz’s (“Defendant”) Motion to Dismiss for Lack of
Personal Jurisdiction and Failure to State a Claim.1 Having considered the motion, the opposition,
the record, and the applicable law, for the following reasons, the Court will deny the motion as moot.
I. Background
A. Factual Background
Plaintiff Athletic Training Innovations, LLC (“Plaintiff”) is a Louisiana limited liability
company that sells athletic equipment and specially designed training shoes “almost exclusively on
the internet and by phone.”2 When Plaintiff ships shoes to a purchaser, it accompanies the product
with a DVD that demonstrates how to perform certain exercises. This film was produced by
Plaintiff’s predecessors since as early as 1991.3
Defendant eTagz, a Utah corporation with its principal place of business in Provo, Utah,
owns U.S. patents nos. 6,298,332, 7,503,502, and 7,703,686 (“the patents”). These patents concern
the use of a hangtag having a computer-readable medium that is attached to a product by a vendor

1

Rec. Doc. 13.

2

Rec. Doc. 1 at ¶¶ 6-7.

3

Id. at ¶¶ 8-9.

and removed therefrom by purchaser.4 According to Plaintiff, the “broadest claims of
aforementioned patents limit Defendant’s scope of protection to: 1) hangtags or labels that are
secured to and removed from a vendor’s product; 2) the hangtag or label including a computerreadable medium thereon and 3) the medium including computer-readable instructions executable
on a purchaser’s computer.”5 Plaintiff claims, therefore, that its practice of placing a DVD in the
shipping container does not infringe on the patents.6
However, on September 7, 2012, Plaintiff received a letter from Defendant, alleging that it
believed Plaintiff’s products infringed the patents, and that it might take legal action.7 Plaintiff
claims that after receiving this letter, it discovered on Defendant’s website that it has made many
other similar threats against other companies that have included CDs or DVDs with their products.8
In addition, Plaintiff avers that Defendant’s website claims that its patents encompass the attachment
of media for products at retail, and that “attachment” is defined as mere “inclusion.” Plaintiff argues
that these statements essentially make infringement allegations against Plaintiff that are objectively
false and in bad faith.9 Therefore, Plaintiff seeks (1) a declaratory judgment of non-infringement of
the patents; (2) a declaratory judgment of invalidity of the patents; (3) a judgment that Defendant

4

Id. at ¶ 10.

5

Id. at ¶ 11 (emphasis in original).

6

Id. at ¶ 13.

7

Id. at ¶¶ 15-16.

8

Id. at ¶ 17.

9

Id. at ¶¶ 19-20.

2

has violated the Sherman Antitrust Act; (4) relief for violations of Louisiana’s antritrust statutes; and
(5) relief for violations of Louisiana’s unfair competition laws.10
B. Procedural Background
Plaintiff filed the initial complaint in this matter on October 18, 2012, invoking this Court’s
federal question and diversity jurisdiction.11 On January 9, 2013, Defendant filed the pending motion
to dismiss.12 On January 22, 2013, Plaintiff made two filings. First, it filed a first amended
complaint,13 and then an opposition to the pending motion.14
II. Parties’ Arguments
In support of the pending motion, Defendant argues that this cause of action should be
dismissed pursuant to Federal Rule of Civil Procedure 12(b)(2) because this Court lacks personal
jurisdiction over it. Defendant explains that because this is a suit involving patent law, Federal
Circuit law governs the determination of personal jurisdiction and due process.15 Defendant also
points out that under Federal Circuit precedent, when a defendant disputes personal jurisdiction
before the parties have conducted discovery, the plaintiff must make a prima facie showing in the

10

Id. at ¶¶ 22-47.

11
Id. at ¶ 4. The Court notes that while Plaintiff has invoked this Court’s diversity jurisdiction, it has not
properly alleged its own citizenship. Plaintiff claims it “is a Louisiana Limited Liability company authorized to do
business in the State of Louisiana with its principal place of business in Kenner, Louisiana.” Id. at ¶ 1. However, the
citizenship of a limited liability company is determined by the citizenship of each of its constituent members. See Harvey
v. Grey Wolf Drilling Co., 542 F.3d 1077, 1078 (5th Cir. 2008). However, because Plaintiff has also invoked federal
question jurisdiction, this deficiency is inconsequential at this time.
12

Rec. Doc. 9.

13

Rec. Doc. 12.

14

Rec. Doc. 13.

15

Rec. Doc. 9-1 at p. 4 (citing Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d `324, 1328 (Fed Cir. 2008))
(“Personal jurisdiction is a matter of law that we review de novo. Moreover, we apply Federal Circuit law because the
jurisdictional issue is “intimately involved with the substance of the patent laws.”) (internal citations omitted)

3

complaint that the defendant is subject to personal jurisdiction.16 Defendant claims that Plaintiff’s
assertion of why this Court has jurisdiction over it in the initial complaint does not satisfy its burden
to show why jurisdiction is proper.17 In addition to Plaintiff’s alleged pleading deficiencies,
Defendant also argues that it in fact is not subject to the general or specific personal jurisdiction of
this Court, and moreover, that to exercise personal jurisdiction over Defendant would be unjust and
violate due process.18
In the alternative, Defendant argues that Plaintiff’s claim should be dismissed pursuant to
Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be
granted.19 In short, Defendant argues that Plaintiff has failed to satisfy Federal Rule of Civil
Procedure 8 because it has not included a short plain statement of why it is entitled to relief.20
In opposition to the pending motion, Plaintiff argues that the motion is now moot because
it filed an amended complaint after the filing of the pending motion.21 Defendant explains that it
filed the amended complaint in accordance with Federal Rule of Civil Procedure 15(a)(2). Defendant
cites Hensley v. Redi-Med of Mandeville,22 where this Court dismissed a defendant’s Rule 12(b)(6)
motion at moot, because after the motion to dismiss was filed, the plaintiff permissibly filed an
amended complaint in compliance with Rule 15. Plaintiff claims that the amended complaint “now
16

Id (citing Avocent, 552 F.3d at 1328-29).

17

Id at pp. 6-7.

18

See id. at pp. 7-10. While Defendant makes more substantive arguments, for reasons that will be explained
later, it is not necessary for the Court to discuss those arguments at this time.
19

Id. at p. 10.

20

Id. Again, the Court need not discuss in depth Defendant’s arguments. See supra note 18.

21

Rec. Doc. 13 at p. 4.

22

No. 09-47, 2009 WL 1418126 (E.D. La. May 19, 2009).

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includes additional allegations that clearly invoke the [personal] jurisdiction of this [C]ourt [over
Defendant].”23 Therefore, Plaintiff requests that the Court dismiss the pending motion as moot and
require Defendant to either file a responsive pleading or another motion to dismiss within the time
allowed under the Federal Rules of Civil Procedure.24
III. Law and Analysis
Federal Rule of Civil Procedure 15(a)(1) reads:
A party may amend its pleading once as a matter of course within:
(A) 21 days after serving it, or
(B) if the pleading is one to which a responsive pleading is required, 21 days
after service of a responsive pleading or 21 days after service of a motion
under Rule 12(b), (e), or (f), whichever is earlier.
Defendant’s Rule 12(b) motion was filed on January 9, 2013, and Plaintiff amended the pleadings
on January 22, 2013, well within the 21 days allowed. Therefore, Plaintiff has permissibly amended
its pleadings.
As Defendant’s correctly acknowledged, because this case involves patent law, Federal
Circuit precedent controls the analysis of personal jurisdiction.25 Even when there are noninfringement claims in the suit, the Federal Circuit will “apply [its] law to all of the claims where
‘the question of infringement is a critical factor in determining liability under the non-patent
claims.’”26

23

See Rec.. Doc. 13 at pp. 5-6.

24

Id. at p. 7.

25

See Avocent, 552 F.3d at 1328.

26

Id. (quoting Breckenridge Pharm., Inc. v. Metabolite Labs., Inc., 444 F.3d 1356, 1362 (Fed. Cir.2006)).

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Before discovery, a plaintiff need only make a prima facie showing that the defendant is
subject to personal jurisdiction.27 “[T]he pleadings and affidavits are to be construed in the light
most favorable to [the plaintiff].”28 “In the procedural posture of a motion to dismiss, a district court
must accept the uncontroverted allegations in the plaintiff's complaint as true and resolve any factual
conflicts in the affidavits in the plaintiff's favor.”29
Here, Defendant’s arguments concerning personal jurisdiction attack the initial complaint.
This pleading has been superseded by an amended complaint, and it is upon these pleadings that
Plaintiff must make a prima facie showing of personal jurisdiction over Defendant. The amended
complaint contains different and additional allegations regarding personal jurisdiction. Therefore,
if Defendant wishes to challenge personal jurisdiction, it must file another motion to dismiss that
addresses the allegations in the amended complaint. As such, Defendant’s current arguments in
response to personal jurisdiction are moot.
For similar reasons, Defendant’s argument that this action should be dismissed pursuant to
Rule 12(b)(6) for failure to state a claim must also be denied as moot. On a Rule 12(b)(6) motion,
all allegations in the complaint are assumed true.30 However, a defendant may attack the sufficiency
of these pleadings.31 Here, Defendant has attacked the sufficiency of the allegations in the original
complaint. Again, because of the amended complaint, these arguments are now moot, and if

27

Id. at 1328-29.

28

Id. at 1329.

29

Elecs. for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1349 (Fed. Cir. 2003).

30

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007).

31

Id.

6

Defendant wishes to attack the sufficiency of the amended complaint, it must file another motion
specifically addressing the amended complaint. Therefore, the pending motion must be dismissed.
IV. Conclusion
Both of Defendant’s alleged grounds for dismissal depend upon allegations in the original
complaint. Understandably, Defendant addressed the initial complaint in the pending motion,
because at that time no amendment had been made. However, the pending motion was made moot
by Plaintiff’s timely amended complaint. Accordingly,
IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss32 is DENIED AS MOOT.
NEW ORLEANS, LOUISIANA, this ____ day of January, 2013.
30th
_________________________________
NANNETTE JOLIVETTE BROWN
UNITED STATES DISTRICT JUDGE

32

Rec. Doc. 9.

7