Tangle, Inc. v. Buffalo Games, LLC

Background

Tangle, Inc. sued Buffalo Games, LLC, asserting four claims: trademark infringement under 15 U.S.C. § 1114; false designation of origin under 15 U.S.C. § 1125(a); copyright infringement under 17 U.S.C. § 501(a); and unfair competition under California Business and Professions Code § 17200. Tangle alleged that Buffalo Games sold a product containing a “Twist & Tangle” toy that infringed Tangle’s rights. The alleged product was available through Target stores and Target’s website in California.

Buffalo Games moved to dismiss for lack of personal jurisdiction and improper venue. It alternatively moved to transfer the case to the Western District of New York. Tangle sought limited discovery concerning personal jurisdiction if the court found its jurisdictional allegations insufficient.

Personal Jurisdiction

Personal jurisdiction is a court’s authority to exercise power over a defendant. The court considered only specific personal jurisdiction, which requires a connection between the defendant’s forum-related conduct and the claims. For infringement claims, the court applied a test requiring Tangle to show that Buffalo Games committed an intentional act expressly aimed at California and caused harm it knew was likely to occur there.

The court found the intentional-act requirement satisfied because Tangle alleged that Buffalo Games knowingly and deliberately sold allegedly infringing products. But the court found that Tangle failed to show express aiming. Tangle’s theory that Buffalo Games targeted California by knowing Tangle was located there was insufficient under the Supreme Court’s rule that jurisdiction must rest on the defendant’s own contacts with the forum, not merely the defendant’s knowledge of the plaintiff’s connection to the forum.

Tangle also argued that Buffalo Games expressly aimed its conduct at California because a disproportionate share of the allegedly infringing toys was sold through Target stores and Target’s website in California. The court rejected that theory. The allegations showed sales by a third-party retailer, but did not show that Buffalo Games itself sold products to California customers or supplied Target because Target would sell specifically in California. Because Tangle failed to satisfy the express-aiming requirement, the court did not reach the remaining question of whether exercising jurisdiction would be reasonable.

Venue

Venue concerns the proper federal district for a case. The court held that venue was not proper under the copyright-specific statute, 28 U.S.C. § 1400(a), because Tangle had not established personal jurisdiction over Buffalo Games in the district. However, the court held that venue was proper under the general venue statute, 28 U.S.C. § 1391(b). Tangle’s allegations supported an inference that consumers in the district could be confused by encountering both Tangle’s products and the allegedly infringing toy.

Transfer

The court denied Buffalo Games’ request to transfer the case to the Western District of New York. Although that district was a proper venue because Buffalo Games was incorporated and had its principal place of business in Buffalo, the court found that the convenience and interests-of-justice factors did not outweigh Tangle’s choice of forum. The court noted alleged harm to Tangle’s reputation and goodwill in California, as well as witnesses and consumers located there.

Jurisdictional Discovery and Disposition

The court held that limited jurisdictional discovery was warranted because the record did not establish that further discovery would be futile, and Buffalo Games did not argue that jurisdictional discovery was improper. The parties were ordered to meet and confer about that discovery and submit a joint discovery letter if disputes remained.

Judge Jacquelyn Scott Corley granted Buffalo Games’ motion to dismiss Tangle’s Complaint for lack of personal jurisdiction without prejudice. The court denied the motion to dismiss for improper venue and denied the motion to transfer to the Western District of New York based on convenience.