Cisco Systems, Inc. v. Dexon Computer, Inc.

Background

Cisco Systems, Inc. and Cisco Technology, Inc. sued Dexon Computer, Inc. for federal trademark infringement, trademark counterfeiting, false designation of origin, unfair business practices under California law, and unjust enrichment. Cisco alleged that Dexon had trafficked in counterfeit Cisco products for roughly fifteen years. The amended complaint identified sales of allegedly counterfeit Cisco products and software licenses to California customers, including at least 40 products and 20 software licenses sold in California from 2017 to 2020. Cisco also alleged that Dexon purchased counterfeit products from a California company.

Dexon is a Minnesota corporation with its headquarters and sole office in Bloomington, Minnesota. After Dexon moved to dismiss the original complaint for lack of personal jurisdiction, the court allowed Cisco to conduct limited jurisdiction-related discovery. Cisco then filed an amended complaint. Dexon moved to dismiss the amended complaint for lack of personal jurisdiction and alternatively asked the court to transfer the case to the District of Minnesota. The court denied the motion to dismiss the original complaint as moot because Cisco had filed the amended complaint.

Personal Jurisdiction

The court focused on specific personal jurisdiction, which allows a court to hear claims connected to a defendant’s contacts with the forum state. Applying the Ninth Circuit’s three-part test, the court considered whether Dexon purposefully directed its conduct at California, whether Cisco’s claims arose from or related to that conduct, and whether exercising jurisdiction would be reasonable.

The court held that Cisco’s allegations satisfied the purposeful-direction requirement. It reasoned that Dexon intentionally and repeatedly sold allegedly counterfeit Cisco products directly to California customers. The court rejected Dexon’s argument that its California sales were too small a percentage of its overall sales, explaining that repeated and direct sales were not random, isolated, or accidental. The court did not need to decide whether Dexon’s purchases from California entities independently supported jurisdiction.

The court also held that Cisco’s claims arose from or related to Dexon’s California contacts because the claims were based on Dexon’s sales of allegedly counterfeit Cisco products, including sales in California. Finally, the court concluded that Dexon had not shown that exercising jurisdiction in California would be unreasonable. Although some witnesses and evidence were likely in Minnesota, other witnesses and evidence were in California, and Dexon did not deny that it routinely conducted business there.

Transfer

Under the federal transfer statute, a court may transfer a civil case for the convenience of the parties and witnesses and in the interest of justice. Dexon argued that Minnesota was the better forum because its witnesses and transaction documents were there and its sales were negotiated there.

The court denied the transfer request. It noted that many transactions underlying Cisco’s claims were completed in California, Cisco asserted claims under federal and California law rather than Minnesota law, and the court was more familiar with the governing law. Cisco’s headquarters were in California, Dexon also had meaningful California contacts, and witnesses and evidence appeared likely to be located in both states. The cost and evidence factors therefore did not clearly favor either forum.

Disposition

The court denied Dexon’s motion to dismiss and denied Dexon’s request to transfer the case to the District of Minnesota. The opinion addressed personal jurisdiction and venue; it did not resolve the merits of Cisco’s trademark or other claims.