AutoRABIT Holding, Inc. v. Copado, Inc.

Background

AutoRABIT Holding, Inc. provides software development, backup, and recovery services for the Salesforce platform and owns the AUTORABIT trademark and the website autorabit.com. The complaint alleged that autorabbit.com was registered and redirected to copado.com in connection with trademark infringement and cybersquatting claims.

The opinion states that Copado Solutions, S.L. registered and redirected autorabbit.com in 2016. In 2021, that entity changed its name and jurisdiction of incorporation and became Copado Holdings, Inc. Copado, Inc., the moving defendant, was formed in 2018, is registered in Delaware, and is headquartered in Chicago, Illinois. Copado, Inc. argued that it did not register the domain or participate in redirecting it.

AutoRABIT sued Copado, Inc. and Copado Solutions, S.L. Copado, Inc. moved to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and also argued that AutoRABIT failed to state a claim. The court granted the parties’ request for jurisdictional discovery before deciding the motion.

Personal Jurisdiction

Personal jurisdiction is the court’s authority to exercise legal power over a defendant. The court analyzed both general jurisdiction and specific jurisdiction.

For general jurisdiction, AutoRABIT relied on Copado, Inc.’s contacts with California, including its representation as a “San Francisco, California” company, a California choice-of-law provision in its customer agreement, California employees, participation in California conferences and trade shows, California customers and sales, and customers’ use of Copado’s website.

The court held that these contacts were insufficient. Copado, Inc. was registered in Delaware and headquartered in Chicago, and its physical presence in California was temporary. The court concluded that its California revenues, customers, contracts, employees, conferences, and other contacts did not make Copado, Inc. essentially “at home” in California. The court therefore found no general jurisdiction.

For specific jurisdiction, the court focused on whether the claims arose from Copado, Inc.’s own contacts with California. Copado, Inc. argued that the relevant conduct—the registration and redirection of autorabbit.com—was performed by Copado Solutions, S.L., not Copado, Inc. AutoRABIT argued that overlapping leaders at Copado, Inc. and Copado Holdings, Inc. controlled operations in a way that benefited Copado, Inc.

The court explained that a parent company’s conduct generally cannot be attributed to a subsidiary, or a subsidiary’s conduct to a parent, unless the entities have an alter-ego relationship. To make that showing, a plaintiff must allege facts indicating both a unity of interest and ownership that eliminates the entities’ separate identities and that respecting those separate identities would cause fraud or injustice. The court stated that overlapping executives alone were not enough. It concluded that it lacked specific jurisdiction over Copado, Inc.

Because it resolved the motion on personal-jurisdiction grounds, the court did not decide whether AutoRABIT adequately stated its trademark-infringement and cybersquatting claims.

Disposition

The court granted Defendant Copado, Inc.’s motion to dismiss. AutoRABIT may file an amended complaint within 21 days, but only to allege facts supporting the required unity of interest and ownership between Copado, Inc. and Copado Holdings, Inc., and facts showing why respecting their separate identities would result in fraud or injustice. The order states that failure to file an amended complaint will result in dismissal with prejudice.