Twitch Interactive, Inc. v. Fishwoodco GmbH

Background

Twitch Interactive, Inc. provides streaming services and owns rights in the TWITCH trademark and the “Glitch Logo.” Twitch alleged that Fishwoodco GmbH operated an advertising platform called Loots, used Twitch marks, and had agreed to Twitch’s terms of service and a developer services agreement. Twitch later initiated arbitration in Santa Clara County, California, asserting claims under the Lanham Act, for breach of contract, and for tortious interference with contractual relationships.

The arbitration tribunal entered a default judgment against Fishwoodco, awarding $1,488,000 in damages and issuing an injunction. The tribunal later amended the injunction to include Loots Media GmbH, Fuehnen Holding GmbH, Marc Fuehnen, and operators of certain websites. Twitch then petitioned this court to confirm the arbitration awards. Fishwoodco did not appear, but the three Intervenors intervened to challenge the court’s personal jurisdiction over them.

The jurisdiction dispute

The Intervenors argued that the court lacked both general and specific personal jurisdiction. Twitch argued that the court could confirm the injunction under Federal Rule of Civil Procedure 65(d)(2), that the Intervenors had sufficient California contacts, and, alternatively, that Twitch should receive limited discovery concerning those contacts.

The court concluded that Rule 65(d)(2), which can bind certain nonparties who act in concert with a party and receive actual notice of an injunction, did not clearly allow the court to bypass the personal-jurisdiction analysis when the injunction was issued by an arbitrator. Although the court found that the Intervenors had received actual notice of the injunction, it proceeded to analyze personal jurisdiction.

For specific personal jurisdiction, the court applied a three-part test: whether the Intervenors purposefully engaged in activities connected to California, whether Twitch’s claims arose from those activities, and whether exercising jurisdiction would be reasonable. Twitch presented evidence concerning a California corporation associated with Fishwoodco’s business, the Intervenors’ websites and business partners, users in the United States, and payment processing through California corporations. The Intervenors disputed that evidence and asserted that they had no California business connections.

The court found that the existing record did not establish that the Intervenors purposefully availed themselves of the privilege of doing business in California. But the court also was not convinced that the evidence necessarily ruled out personal jurisdiction. Because important jurisdictional facts were disputed and additional evidence might establish a jurisdictional basis, the court found limited jurisdictional discovery appropriate.

The court allowed discovery concerning the Intervenors’ use of Twitch or other streaming entities based in or connected to California; contractual partners in California; California users; the migration among the Loots websites; and disclosure of user information and financial transactions involving institutions in California.

The court also found that Twitch’s claims appeared to arise from forum-related activity because Marc Fuehnen initially participated in the arbitration, the arbitration formed the basis for the confirmation proceedings, and Twitch presented evidence concerning the apparent movement between the Loots websites. The court reserved judgment on that issue and on whether exercising jurisdiction would be reasonable until after discovery.

The court rejected Twitch’s remaining jurisdictional arguments on the current record. It did not find that Marc Fuehnen’s agreement to arbitrate on behalf of Fishwoodco was enough to establish consent to personal jurisdiction over the Intervenors, particularly because the Intervenors disputed signing the arbitration agreement and argued that they were third parties. The court also declined to extend personal jurisdiction based solely on an aiding-and-abetting theory without a more developed record concerning the Intervenors’ California contacts.

Disposition

The court granted Twitch’s request for limited jurisdictional discovery as described in the order. It denied the Intervenors’ motion to dismiss without prejudice to renew the motion after Twitch had a full and fair opportunity to complete the jurisdictional discovery. The court referred disputes about the scope of discovery to the magistrate judge.