AutoRABIT Holding, Inc. v. Copado, Inc.

Background

AutoRABIT Holding, Inc. alleged trademark infringement and cybersquatting concerning the registration and use of the domain name autorabbit.com. AutoRABIT owns the AUTORABIT trademark and operates autorabit.com.

The opinion states that Copado Solutions, S.L., which later became Copado Holdings, Inc., registered autorabbit.com in 2016 and redirected users to copado.com. Copado, Inc., the defendant seeking dismissal, was formed in 2018. Copado, Inc. stated that it did not register the domain or participate in redirecting it, and that its parent company had been Copado Solutions, S.L. or Copado Holdings, Inc.

Motion and Legal Standard

Copado, Inc. moved to dismiss under Federal Rule of Civil Procedure 12(b)(2), which requires dismissal when the court lacks personal jurisdiction over the defendant. The court explained that personal jurisdiction requires sufficient contacts with the forum state to make the lawsuit fair under the Constitution. It considered both general jurisdiction, which permits a court to hear any claim against a defendant, and specific jurisdiction, which requires a connection between the defendant’s forum-related conduct and the lawsuit.

General Jurisdiction

The parties agreed that Copado, Inc. was registered in Delaware and headquartered in Chicago, Illinois, so California was not one of the usual places where the company would be considered legally “at home.” AutoRABIT argued that California was an exceptional case because Copado, Inc. held itself out as a San Francisco company, used California choice-of-law language in a customer agreement, employed 48 of its 453 worldwide employees in California, attended California conferences, had 113 California business customers generating $37 million in sales, and obtained customers through its website.

The court held that these contacts were insufficient for general jurisdiction. It noted that Copado, Inc.’s physical presence in California was temporary and concluded that its California revenue, customers, contract terms, employees, and conference participation were not substantial enough to make the company subject to general jurisdiction there.

Specific Jurisdiction

The court treated the registration and redirection of autorabbit.com as the intentional conduct relevant to specific jurisdiction. Copado, Inc. asserted that Copado Solutions, S.L., its parent company, was responsible for those actions, and Copado, Inc. stated that it was not involved. AutoRABIT did not dispute that Copado, Inc. itself had not registered or redirected the domain. Instead, AutoRABIT relied on individuals who held leadership positions at both Copado, Inc. and Copado Holdings, Inc. and allegedly controlled operations in a way that benefited Copado, Inc.

The court explained that one company’s contacts generally cannot be attributed to another company unless the companies are alter egos—that is, unless they have such unity of ownership and interests that they are not genuinely separate and respecting their separate identities would cause fraud or injustice. The court held that AutoRABIT had described overlapping executives but had not tied its allegations to that legal test or cited authority showing that overlapping executives were enough. The court therefore concluded that it also lacked specific jurisdiction over Copado, Inc.

Ruling and Effect

The court granted Copado, Inc.’s motion to dismiss for lack of personal jurisdiction, with leave to amend the deficiencies identified in the order. AutoRABIT could file an amended complaint within 21 days. The court directed any amended complaint to provide facts showing unity of ownership and interests between Copado, Inc. and Copado Holdings, Inc., and to explain why respecting their separate identities would cause fraud or injustice. The court did not decide Copado, Inc.’s separate argument that AutoRABIT failed to state a claim. The order states that failure to amend could result in dismissal with prejudice.