Donnelly v. Anand

Background

Brian Donnelly, who works professionally under the name KAWS, and KAWS, Inc. sued Jonathan Anand, Dylan Jovan Leong Yi Zhi, The Penthouse Theory, The Penthouse Collective, and other defendants. The complaint asserted counterfeiting, trademark infringement, and trademark dilution under the Lanham Act, as well as copyright infringement under the Copyright Act. Plaintiffs alleged that the defendants sold counterfeit versions of KAWS works.

Leong, The Penthouse Theory, and The Penthouse Collective—the Singapore defendants—moved to dismiss under Federal Rules of Civil Procedure 12(b)(2), 12(b)(3), and 12(b)(5). They argued that service of process was defective, that the court lacked personal jurisdiction over them, and that the case should be dismissed under the doctrine of forum non conveniens because Singapore would be a more appropriate forum.

Service of Process

The Singapore defendants pointed to a discrepancy between the date in the affidavit of service and the date in an attached notarial certificate. The affidavit stated that it was affirmed on January 12, 2022, while the certificate referred to December 12, 2021.

The court denied the motion under Rule 12(b)(5), which permits dismissal for insufficient service of process. It treated the conflicting date as a technical clerical error, not an error that invalidated service. Supplemental statements from the process server and notary supported the conclusion that the affidavit was affirmed on January 12, 2022. The defendants did not claim that the discrepancy resulted from fraud, prejudiced them, or failed to satisfy the applicable foreign-service rule. The affidavit also made an initial showing that The Penthouse Theory and The Penthouse Collective were separately served at corporate addresses.

Personal Jurisdiction

The court denied the Rule 12(b)(2) motion. It concluded that plaintiffs had made a prima facie showing—an initial showing sufficient at this stage—that New York could exercise personal jurisdiction under New York Civil Practice Law and Rules section 302(a)(1), the state’s long-arm statute.

The record indicated that plaintiffs’ counsel ordered an allegedly counterfeit item from The Penthouse Theory’s website and had it delivered to a Manhattan office. The website accepted orders and payments from New York customers, collected billing and shipping information, and arranged shipments. Leong’s declaration also stated that sales to New York customers generated $1,830.95 in sales profit. The court concluded that these contacts showed that The Penthouse Theory transacted business in New York and that plaintiffs’ claims arose from or were substantially related to those transactions.

The court also found a prima facie basis for jurisdiction over Leong because his declaration described him as the owner and operator of The Penthouse Theory and showed his control over the allegedly infringing activity. The court concluded that exercising jurisdiction over The Penthouse Theory and Leong was consistent with due process because they deliberately accepted and fulfilled orders from New York customers, and the claims related to those contacts.

The complaint did not allege separate New York transactions by The Penthouse Collective. However, Leong’s declaration described The Penthouse Collective as taking over The Penthouse Theory’s online business and stated that the two were “essentially one and the same website.” The court therefore found a prima facie basis to treat The Penthouse Collective as an alter ego—a closely controlled entity treated as the same entity for jurisdictional purposes—of The Penthouse Theory and Leong. The court concluded that The Penthouse Collective was also subject to personal jurisdiction in New York.

Forum Non Conveniens

The court denied the motion to dismiss on forum non conveniens grounds. That doctrine allows a court, in limited circumstances, to dismiss a case even when it has jurisdiction and venue if another forum is substantially more appropriate.

The court gave substantial weight to plaintiffs’ choice of New York. The opinion stated that Donnelly and KAWS, Inc. had connections to New York, that relevant witnesses and evidence were likely available there, and that the case involved alleged infringing activity connected to New York.

The Singapore defendants argued that Singapore was an adequate alternative forum, but the court found that their conclusory statement did not show that Singapore’s courts would hear the dispute or exercise jurisdiction over all relevant defendants. Because they failed to establish an adequate alternative forum, the forum non conveniens motion could be denied on that basis. The court additionally stated that expense, efficiency, convenience, and public-interest considerations favored keeping the case in New York.

Disposition

The court denied the Singapore defendants’ motion to dismiss. The ruling denied their requests based on insufficient service of process, lack of personal jurisdiction, and forum non conveniens. The court did not decide the underlying trademark, counterfeiting, or copyright claims.