Well-Made Toy M'Fg. Corporation v. Wal-Mart Stores, Inc.

Motion to Dismiss for Failure to State a Claim , MOTION to Dismiss for Lack of Jurisdiction , MOTION to Dismiss Pursuant to the Courts Power under 28 U.S.C. § 1367

E.D.N.Y.November 30, 2016

-1- UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK Case No. 1:16-cv-03107-NGG-RER NOTICE OF DEFENDANT WAL- MART STORES, INC.’S MOTION TO DISMISS COMPLAINT PLEASE TAKE NOTICE that Defendant, Wal-Mart Stores, Inc., by and through its counsel SHEPPARD MULLIN RICHTER & HAMPTON LLP, hereby moves before the Honorable Nicholas G. Garaufis, U.S.D.J., at the United States Courthouse, 225 Cadman Plaza East, Room 1416 S, Brooklyn, NY 11201, for the entry of an order (1) dismissing the Complaint of Plaintiff Well-Made Toy M’fg. Corporation pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, the Court’s power under 28 U.S.C. § 1367(c), and the doctrine of forum non conveniens, and (2) for such other relief as is just and proper. WELL-MADE TOY M’FG. CORPORATION, Plaintiff, v. WAL-MART STORES, INC., Defendant. Case 1:16-cv-03107-NGG-RER Document 22 Filed 11/30/16 Page 1 of 2 PageID #: 115 -2- PLEASE TAKE FURTHER NOTICE that pursuant to the Court’s Minute Entry dated August 2, 2016 following the pre-motion conference held the same day, any memoranda in opposition to this motion shall be served on or before September 19, 2016, any reply memoranda in further support of this motion shall be served on or before September 26, 2016, and the fully briefed motion shall be electronically filed with the Court on or before September 26, 2016. SHEPPARD MULLIN RICHTER & HAMPTON, LLP Dated: New York, New York /s/ Tyler E. Baker August 29, 2016 Tyler E. Baker 30 Rockefeller Plaza New York, NY 10112-0015 Tel.: (212) 653-8700 Fax: (212) 653-8701 tbaker@sheppardmullin.com Attorneys for Defendant Case 1:16-cv-03107-NGG-RER Document 22 Filed 11/30/16 Page 2 of 2 PageID #: 116 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK Case No. 1:16-cv-03107-NGG-RER MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT ORAL ARGUMENT REQUESTED MOTION WITH MEMORANDUM SERVED AUGUST 29, 2016 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 30 Rockefeller Plaza New York, NY 10112 Telephone: (212) 653-8700 Facsimile: (212) 653-8701 Four Embarcadero Center Seventeenth Floor San Francisco, CA 94111 Telephone: (415) 434-9100 Facsimile: (415) 434-3947 Attorneys for Defendant Wal-Mart Stores, Inc. WELL-MADE TOY M’FG. CORPORATION, Plaintiff, v. WAL-MART STORES, INC., Defendant. Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 1 of 31 PageID #: 117 i TABLE OF CONTENTS Page(s) I. INTRODUCTION ........................................................................................................... 1 II. RELEVANT FACTS ....................................................................................................... 2 III. ARGUMENT .................................................................................................................. 4 A. The Complaint Must Be Dismissed Because the Sole Named Defendant, Wal-Mart Stores, Inc., Did Not Engage in Any Prohibited Activities ................... 4 1. The Claims Fail Because the Defendant Did Not Sell the Accused Product ..................................................................................................... 4 B. Dismissal Is Also Warranted Because the Product at Issue Was Sold in Mexico, Not in the United States .......................................................................... 6 1. This Motion May Be Made Under Rule 12(b)(1) or Rule 12(b)(6) ............ 6 2. Legal Standard Under Rule 12(b)(1) Dismissal for Lack of Subject Matter Jurisdiction .................................................................................... 8 3. Legal Standard Under Rule 12(b)(6) Dismissal for Failure to State a Claim ..................................................................................................... 8 4. The Claims Pursuant to the U.S. Copyright Act Must Be Dismissed Either Under Rule 12(b)(1) or 12(b)(6) ..................................................... 9 a. The U.S. Copyright Act Does Not Have Any Extraterritorial Effect .................................................................... 9 b. The Complaint Fails to Plead Any Facts of Allegedly Infringing Acts in the United States............................................. 12 c. Even Though Plaintiff Apparently Alleges That Authorization to Sell Had Been Given in the U.S., There Can Be No Liability Since the Sale Occurred Only Outside of the U.S. ................................................................................... 13 d. Alternatively, the U.S. Copyright Claims Must Be Dismissed Because Plaintiff Has Failed to Adequately State a Claim ....................................................................................... 15 5. The Claims Under the UCC and the Berne Convention Must Also Be Dismissed Under Rule 12 Because They Do Not Create a Separate Cause of Action ........................................................................ 16 Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 2 of 31 PageID #: 118 ii 6. The Claims Under Mexican Law Should Be Dismissed .......................... 17 a. Dismissal Is Warranted Under Rule 12(b)(1) For Lack of Subject Matter Jurisdiction .......................................................... 17 b. Alternatively, The Claims Under Mexican Law Should Be Dismissed Under the Doctrine of Forum Non Conveniens........... 18 IV. CONCLUSION ............................................................................................................. 22 Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 3 of 31 PageID #: 119 iii TABLE OF AUTHORITIES Page(s) FEDERAL CASES Achtman v. Kirby, McInerney & Squire, LLP 150 F. App’x 12 (2d Cir. 2005) ............................................................................................. 9 Aguinda v. Texaco, Inc. 303 F.3d 470 (2d Cir. 2002) ................................................................................................ 21 Alexander v. Murdoch No. 10 CIV. 5613, 2011 WL 2802899 (S.D.N.Y. May 27, 2011) ........................................... 5 Allarcom Pay Television, Ltd. v. Gen. Instrument Corp. 69 F.3d 381 (9th Cir. 1995) ................................................................................................. 14 Allstate Life Ins. Co. v. Linter Grp., Ltd. 994 F.2d 996 (2d Cir. 1993) ................................................................................................ 21 Arbaugh v. Y & H Corp. 546 U.S. 500 (2006) .............................................................................................................. 9 Armstrong v. Virgin Records, Ltd. 91 F. Supp. 2d 628 (S.D.N.Y. 2000) .............................................................................. 13, 14 Ashcroft v. Iqbal 556 U.S. 662 (2009) .............................................................................................................. 8 Aurecchione v. Schoolman Transp. Sys., Inc. 426 F.3d 635 (2d Cir. 2005) .................................................................................................. 8 Bell Atlantic Corp. v. Twombly 550 U.S. 544 (2007) .............................................................................................................. 8 Bisnews AFE (Thail.) Ltd. v. Aspen Research Grp. Ltd. 2011 U.S. Dist. LEXIS 99047 (S.D.N.Y. Aug. 26, 2011), aff’d, 437 Fed. App’x. 57 (2d Cir. 2011) ..................................................................................................... 11 Blanco v. Banco Indus. de Venezuela 997 F.2d 974 (2d Cir. 1993) .......................................................................................... 20, 21 Bridgeman Art Library, Ltd. v. Corel Corp. 25 F. Supp. 2d 421 (S.D.N.Y. 1998) .................................................................................... 17 Capitol Records, LLC v. Escape Media Grp., Inc. No. 12-CV-06646 (AJN)(SN), 2014 U.S. Dist. LEXIS 183098 (S.D.N.Y. May 28, 2014) ............................................................................................................................... 4 Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 4 of 31 PageID #: 120 iv FEDERAL CASES (Cont'd) Counter Terrorist Grp. US v. Australian Broad. Corp. No. 08 Civ. 2356 (DAB), 2009 U.S. Dist. LEXIS 48754 (S.D.N.Y. June 9, 2009) ...................................................................................................... 11 Creative Tech., Ltd. v. Aztech Sys. PTE 61 F.3d 696 (9th Cir. 1995) ........................................................................................... 16, 18 De Bardossy v. Puski 763 F. Supp. 1239 (S.D.N.Y. 1991) ..................................................................................... 16 Foreign Imported Prods. & Pub., Inc. v. Grupo Indus. Hotelero, S.A. No. 07-22066-CIV, 2008 WL 4724495 (S.D. Fla. Oct. 24, 2008) .......................................... 6 Forties B LLC v. Am. West Satellite, Inc. No. 09 Civ. 8583 (JSR), 2010 U.S. Dist. LEXIS 50481 (S.D.N.Y. May 19, 2010) .................................................................................................... 11 Fun-Damental Too, Ltd. v. Gemmy Indus. Corp. No. 96 CIV. 1103 (MBM), 1996 WL 724734 (S.D.N.Y. Dec. 17, 1996) .......................... 7, 14 Geophysical Servs., Inc. v. TGS-Nopec Geophysical Servs. No. CIV.A. 14-1368, 2015 WL 6869733 (S.D. Tex. Nov. 9, 2015) ........................................ 7 Gershwin Publ’g Corp. v. Columbia Artists Mgmt., Inc. 443 F.2d 1159 (2d Cir. 1971)................................................................................................. 5 Gulf Oil Corp. v. Gilbert 330 U.S. 501 (1947) .......................................................................................... 18, 19, 20, 21 Hirsch v. Arthur Andersen & Co. 72 F.3d 1085 (2d Cir. 1995) .................................................................................................. 8 Hoopla Sports & Entm’t v. Nike, Inc. 947 F. Supp. 347 (N.D. Ill. 1996) ........................................................................................ 16 In Touch Concepts, Inc. v. Cellco P’ship 788 F.3d 98 (2d Cir. 2015) .................................................................................................... 9 ITSI T.V. Prods., Inc. v. California Auth. of Racing Fairs 785 F. Supp. 854 (E.D. Cal. 1992), aff’d in part, rev’d in part on other grounds, 3 F.3d 1289 (9th Cir. 1993) .................................... 12, 18, 20 Iverson v. Grant 946 F. Supp. 1404 (D.S.D. 1996) aff’d, 133 F.3d 922 (8th Cir. 1998) .............................. 7, 11 Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 5 of 31 PageID #: 121 v FEDERAL CASES (Cont'd) Jacobs v. Carnival Corp. No. 06 CIV. 0606 (DAB), 2009 WL 856637 (S.D.N.Y. Mar. 25, 2009) ......................... 11, 12 James W. Newton v. Diamond 204 F. Supp. 2d 1244 (C.D. Cal. 2002) ................................................................................ 16 Keiler v. Harlequin Enters. 751 F.3d 64 (2d Cir. 2014) ................................................................................................ 2, 8 KVOS, Inc. v. Associated Press 299 U.S. 269 (1936) .............................................................................................................. 8 Levitin v. Sony Music Entm’t 101 F. Supp. 3d 376, 384 (S.D.N.Y. 2015) .................................................................... 10, 19 Litecubes, LLC v. N. Light Prods., Inc. 523 F.3d 1353 (Fed. Cir. 2008) .............................................................................................. 7 Mars Inc. v. Kabushiki-Kaisha Nippon Conlux 24 F.3d 1368 (Fed. Cir. 1994).............................................................................................. 20 Medgraph, Inc. v. Medtronic, Inc. 111 F. Supp. 3d 346, 353 (W.D.N.Y. 2015) ........................................................................... 5 Mercier v. Sheraton Int’l, Inc. 981 F.2d 1345 (1st Cir. 1992) .............................................................................................. 20 Metzke v. May Dep’t Stores Co. 878 F. Supp. 756 (W.D. Pa. 1995) ....................................................................................... 14 MLC Fishing, Inc. v. Velez 667 F.3d 140 (2d Cir. 2011) .................................................................................................. 8 Murray v. British Broad. Corp. 81 F.3d 287 (2d Cir. 1996) ........................................................................................... passim Murray v. British Broad. Corp. 906 F. Supp. 858 (S.D.N.Y. 1995), aff’d, 81 F.3d 287 (2d Cir. 1996) ............................ 18, 20 Nat’l Football League v. PrimeTime 24 Joint Venture No. 98-cv-3778, 1999 U.S. Dist. LEXIS 3592, 1999 WL 163181 (S.D.N.Y. Mar. 24, 1999) ........................................................................ 14 Omega S.A. v. Costco Wholesale Corp. 541 F.3d 982 (9th Cir. 2008) ............................................................................................... 11 Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 6 of 31 PageID #: 122 vi FEDERAL CASES (Cont'd) Perfect 10, Inc. v. Yandex N.V. 962 F. Supp. 2d 1146 (N.D. Cal. 2013) ................................................................................ 14 Piper Aircraft Co. v. Reyno 454 U.S. 235 (1981) ............................................................................................................ 18 Quantitative Fin. Software, Ltd. v. Infinity Fin. Tech., Inc. No. 97 Civ. 7879 (LMM), 1998 U.S. Dist. LEXIS 11575 (S.D.N.Y. July 27, 1998) ..................................................................................................... 16 R.F.M.A.S., Inc. v. So 619 F. Supp. 2d 39 (S.D.N.Y. 2009) ...................................................................................... 4 Raima, Inc. v. Myriad France, SAS No. C12-1166JLR, 2012 WL 6201709 (W.D. Wash. Dec. 11, 2012) ............................. 11, 12 Rhapsody Sols., LLC v. Cryogenic Vessel Alternatives, Inc. No. CIV.A. H-12-1168, 2013 WL 820589 (S.D. Tex. Mar. 5, 2013) .................................... 11 Robert Stigwood Grp., Ltd. v. O’Reilly 530 F.2d 1096 (2d Cir. 1976), cert. denied, 429 U.S. 848 (1976) ................................... 10, 15 Roberts v. Keith No. 04 CV 10079 (LAP), 2009 U.S. Dist. LEXIS 101412 (S.D.N.Y. Oct. 23, 2009) ................................................................................................. 7, 15 Rodriguez v. Casa Salsa Rest. 260 F. Supp. 2d 413 (D.P.R. 2003) ...................................................................................... 16 Rundquist v. Vapiano SE 798 F. Supp. 2d 102 (D.D.C. 2011) ............................................................................... 10, 14 Scalisi v. Fund Asset Mgmt., L.P. 380 F.3d 133 (2d Cir. 2004) .................................................................................................. 8 Scottish Int’l, Inc. v. British Caledonian Group, PLC 81 F.3d 1224 (2d Cir. 1996) ................................................................................................ 20 Shropshire v. Canning 809 F. Supp. 2d 1139 (N.D. Cal. 2011) .................................................................................. 7 Sinochem Int’l Co. Ltd. v. Malaysia Int’l Shipping Corp. 549 U.S. 422 (2007) ............................................................................................................ 19 Star Pac. Corp. v. Star Atl. Corp. 574 Fed. App’x. 225 (3d Cir. 2014) ................................................................................... 4, 5 Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 7 of 31 PageID #: 123 vii FEDERAL CASES (Cont'd) Starr v. Sony BMG Music Entm’t 592 F.3d 314 (2d Cir. 2010) .................................................................................................. 8 Subafilms, Ltd. v. MGM-Pathe Commc’ns Co. 24 F.3d 1088 (9th Cir. 1994) ............................................................................... 5, 10, 14, 15 Tire Eng’g & Distribution, LLC v. Shandong Linglong Rubber Co., Ltd. 682 F.3d 292 (4th Cir. 2012) ............................................................................................... 10 United Dictionary Co. v. G & C Merriam Co. 208 U.S. 260 (1908) ............................................................................................................ 10 Update Art, Inc. v. Modiin Pub., Ltd. 843 F.2d 67 (2d Cir. 1988) ...................................................................................... 10, 13, 15 Well-Made Toy Mfg. Corp. v. Lotus Onda Indus. Co. Ltd. & Lillian Vernon Corp. No. 9605 (DFE), 2002 WL 72930 (S.D.N.Y. Jan. 16, 2002) .............................................. 1, 4 Well-Made Toy Mfg. Corp. v. Lotus Onda Indus. Co. No. 02-cv-1151, 2003 U.S. Dist. LEXIS 68 (S.D.N.Y. Jan. 3, 2003).................................... 14 FEDERAL STATUTES & RULES 17 U.S.C. § 104(c) .................................................................................................................... 16 17 U.S.C. § 501 ........................................................................................................................... 4 17 U.S.C. § 602(a) .................................................................................................................... 10 28 U.S.C. § 1331 ....................................................................................................................... 18 28 U.S.C. § 1338 ....................................................................................................................... 18 28 U.S.C. § 1338(a) .................................................................................................................... 9 28 U.S.C. § 1367(c) .................................................................................................................... 1 Federal Rules of Civil Procedure Rule 12 ................................................................................................................................ 16 Rule 12(b)(1) ................................................................................................................ passim Rule 12(b)(6) ................................................................................................................ passim U.S. Copyright Act............................................................................................................. passim U.S. CONSTITUTION U.S. Constitution ................................................................................................................... 9, 17 OTHER AUTHORITIES 1 P. Goldstein, Copyright: Principles, Law & Practice § 6.1 (1989) ............................................ 5 Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 8 of 31 PageID #: 124 viii 3 NIMMER ON COPYRIGHT § 12.04[D][1] (2016) .......................................................................... 5 5 NIMMER ON COPYRIGHT §§ 17.01, 17.04 (2016) ..................................................................... 16 9 NIMMER ON COPYRIGHT, App. 27-5 (2016) ............................................................................. 17 6 PATRY ON COPYRIGHT § 21:46 ................................................................................................ 14 7 PATRY ON COPYRIGHT § 25:86 ................................................................................................ 10 7 PATRY ON COPYRIGHT § 25:87 .......................................................................................... 13, 14 The Berne Convention .......................................................................................................... 2, 16 The Berne Convention, Article 5 ......................................................................................... 16 Mexico, Ley Federal del Derecho de Autor (“Federal Law on Copyright”) tit. X- XII (as amended up to Jan. 14, 2016)................................................................................... 19 Universal Copyright Convention .................................................................................... 3, 16, 17 Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 9 of 31 PageID #: 125 -1- Defendant Wal-Mart Stores, Inc. (“Walmart”), by and through its undersigned counsel, and pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure Rule (“Rule” or “FED. R. CIV. P.”), the doctrine of forum non conveniens, and the power granted to this Court under 28 U.S.C. § 1367(c), hereby moves to dismiss the Complaint, Dkt. No. 1 (the “Complaint” or “Compl.”), of Plaintiff Well-Made Toy M’fg. Corporation (“Well-Made”). I. INTRODUCTION This action alleges copyright infringement over the sale of dolls. The Complaint must be dismissed for two reasons. First, the sole named defendant, Wal-Mart Stores, Inc., did not sell the dolls or engage in any act that is actionable as copyright infringement. Dismissal is warranted for this reason alone. Second, the complaint alleges that allegedly infringing acts (i.e., sale of the dolls at issue) occurred in Mexico; not in the U.S. The U.S. Copyright Act does not have extraterritorial application and allegedly infringing acts committed outside of the U.S. are not actionable under U.S. law. Plaintiff also alleges infringement under two international treaties; those claims also fail because the treaties do not create any cause of action and depend on a finding of infringement under U.S. law, which does not exist here because the accused products were not sold in the U.S. Finally, Plaintiff alleges infringement under Mexican law. That claim should be dismissed because, as explained above, the only named defendant, Wal-Mart Stores, Inc. did not sell the dolls at issue, and, further, the Mexican law claim should not be litigated in the U.S., if at all. If this motion is granted, as it should be, it would not be the first time that this court has dismissed claims for copyright infringement brought by the Plaintiff when the allegedly infringing acts did not occur in the U.S. In Well-Made Toy Mfg. Corp. v. Lotus Onda Indus. Co. Ltd. & Lillian Vernon Corp., No. 9605 (DFE), 2002 WL 72930, at *1 (S.D.N.Y. Jan. 16, 2002), Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 10 of 31 PageID #: 126 -2- this Court dismissed claims against the defendant in that case because it “cannot be found liable for direct infringement given the absence of a predicate act in the U.S.” This case should also be dismissed. II. RELEVANT FACTS1 According to the Complaint, Plaintiff “is involved in the design and marketing of toys, including sculptural dolls.” (Compl., ¶ 6.) Plaintiff further alleges that “[t]he designs created by or for Well-Made are copyrighted under the laws of the United States, and international law including the various copyright conventions and treaties the United States is a party to, such as the Universal Copyright Convention and The Berne Convention.” Id. Plaintiff claims it “designed and created” the design for the Boots doll, which is allegedly registered in the U.S. Copyright Office, U.S. Copyright Registration No. Vau 548-358 for the “facial artwork and the soft body sculpture of the doll.” (Id. ¶¶ 7.) The Complaint further alleges that Defendant acquired the Boots doll from Plaintiff for sale in Defendant’s stores in the United States, that employees and representatives of Defendant “were well aware the Boots doll of Well Made was copyrighted and a proprietary product of Well Made,” and that sometime prior to 2014, Defendant ceased purchasing the Boots doll from Plaintiff for sale in the U.S. (Id. ¶ 12.) Plaintiff claims that Defendant “has formed a global sourcing organization known as Walmart Global Sourcing” to “acquire the products it sells domestically within the United States and internationally.” (Id. ¶ 11.) “Walmart Global Sourcing” is not named as a defendant in this action. Employees and representatives of “Walmart Global Sourcing” are alleged to have met 1 In this circumstance, a motion to dismiss pursuant to Rule 12(b)(6) or 12(b)(1) assumes that all facts pled in the Complaint are true. Keiler v. Harlequin Enters., 751 F.3d 64, 68 (2d Cir. 2014). Defendant does not concede the truth or accuracy of any of the facts pled in the Complaint. Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 11 of 31 PageID #: 127 -3- with representatives of Plaintiff in early 2014, at which time they “inquired about obtaining the Boots doll from Well Made, and were directed to send samples of the Well Made Boots doll to agents in Mexico for purchase.” (Id. ¶ 13.) Plaintiff claims that the “[e]mployees and representatives of Walmart Global Sourcing were advised the Well Made Boots dolls was copyrighted,” and “the Boots doll at all times had a copyright notice affixed thereto.” (Id.) Plaintiff next alleges that it was advised that “the buyer for the retail stores in Mexico had selected the Well Made Boots doll for purchase.” (Id. ¶ 14.) However, apparently in April 2014, Plaintiff was told that the Boots doll “had been dropped due to limited budget” and the purchase of the Boots doll by Walmart Global Sourcing “was not finalized.” (Id. ¶ 15.) According to the Complaint, after Defendant’s representatives selected the Boots doll for sale in Mexico, and after sending a sample of the Boots doll to Defendant’s representatives in Mexico, the only named defendant, Wal-Mart Stores, Inc., “infringed upon the copyright of Well Made in its Boots doll by causing to be produced, and acquiring for sale in Mexico and elsewhere soft sculpted dolls that have been copied directly from and are substantially similar in appearance to the copyrighted design of the Boots doll of Well Made.” (Id. ¶ 16; see also id. ¶¶ 3, 17.) Plaintiff also alleges that this defendant “induc[ed] [unnamed] others to manufacture and/or market products having unauthorized copies of the Well Made designs” and that “such inducement was done willingly, knowingly, and maliciously.” (Id. ¶¶ 27-28.) Based on these facts, Plaintiff alleges one cause of action for direct copyright infringement and one for induced copyright infringement in violation of the U.S. Copyright Act, the Universal Copyright Convention (“UCC”), the Berne Convention for the Protection of Literary and Artistic Works (“Berne Convention”) and Mexican law. (Id. ¶¶ 5, 19-22, 26-28.) Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 12 of 31 PageID #: 128 -4- The named defendant, Wal-Mart Stores, Inc., does not sell the accused products in Mexico. (Declaration of Geoff Edwards in Support of Defendant’s Motion to Dismiss the Complaint, dated Aug. 24, 2016 (“Edwards Decl.”) ¶ 2.) Rather, Wal-Mart de Mexico, S.A. de C.V. (“Walmart de Mexico”), a publicly traded Mexican corporation formed under Mexican law, sells products in Mexico. (Id. ¶ 3.) Walmart de Mexico does not do business in the U.S. (Id.) In a prior case Plaintiff filed against other defendants not related to the case at bar, Well- Made Toy Mfg. Corp. v. Lotus Onda Indus. Co., No. 00 CIV. 9605 (DFE), 2002 WL 72930 (S.D.N.Y. Jan. 17, 2002), this Court dismissed Plaintiff’s U.S. Copyright Act claims for direct and indirect copyright infringement against the defendant Lotus Onda Industrial Co., Ltd. (“Lotus Onda”). The court held that because Lotus Onda did not sell the accused products in the U.S., it could not be found liable for copyright infringement under U.S. copyright law “given the absence of a predicate act in the U.S.” Id. at *1. III. ARGUMENT A. The Complaint Must Be Dismissed Because the Sole Named Defendant, Wal- Mart Stores, Inc., Did Not Engage in Any Prohibited Activities 1. The Claims Fail Because the Defendant Did Not Sell the Accused Product Plaintiff alleges one count of direct copyright infringement and one count of induced copyright infringement. (Compl., Dkt. No. 1, ¶¶ 5, 19-22, 26-28.) To be held liable for direct infringement under the Copyright Act, a party must be found to have violated one of the copyright owners’ exclusive rights, 17 U.S.C. § 501, which, at issue here, is the right to reproduce the copyrighted work. R.F.M.A.S., Inc. v. So, 619 F. Supp. 2d 39, 69 (S.D.N.Y. 2009) (citing 17 U.S.C. § 106); Capitol Records, LLC v. Escape Media Grp., Inc., No. 12-CV-06646 (AJN)(SN), 2014 U.S. Dist. LEXIS 183098, at *66 (S.D.N.Y. May 28, 2014); see also Star Pac. Corp. v. Star Atl. Corp., 574 Fed. App’x. 225, 230 (3d Cir. 2014) (“Direct Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 13 of 31 PageID #: 129 -5- copyright infringement requires . . . a showing of volitional conduct-specifically, the act constituting infringement-by the defendant himself.”) (internal quotations omitted). The only defendant named in the Complaint is Wal-Mart Stores, Inc., which has not sold the dolls that plaintiff accuses of infringement. Wal-Mart Stores, Inc. therefore cannot be liable for any act or omission alleged in the Complaint. Id. In particular, there can be no liability on the first claim for relief alleging direct copyright infringement. Id. Moreover, absent liability for direct infringement, there can be no basis for Plaintiff’s second claim for indirect infringement, and thus, Plaintiff’s claim for induced infringement must also be dismissed. See Alexander v. Murdoch, No. 10 CIV. 5613, 2011 WL 2802899, at *17 (S.D.N.Y. May 27, 2011) (“Neither contributory nor vicarious copyright infringement can exist without an underlying finding of direct infringement.”) (dismissing claims for contributory and vicarious copyright infringement where plaintiff failed to allege direct infringement); cf. Medgraph, Inc. v. Medtronic, Inc., 111 F. Supp. 3d 346, 353 (W.D.N.Y. 2015) (patent case).2 2 For this reason, theories of secondary or third party liability, namely, vicarious liability or contributory liability, are unavailable to Plaintiff because such theories also require an underlying infringing activity, which is wholly absent here because the named Defendant did not sell the accused product, and because the accused products were not sold in the U.S, and thus, there is no direct infringement under the U.S. Copyright Act. See Subafilms, Ltd. v. MGM-Pathe Commc'ns Co., 24 F.3d 1088, 1092 (9th Cir. 1994) (stating there is no third party liability for infringement “unless the authorized or otherwise encouraged activity itself could amount to infringement.”) (emphasis added); Gershwin Publ’g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971) (“one may be vicariously liable if he has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities[, and] one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a ‘contributory’ infringer.”) (emphasis added); see generally 3 NIMMER ON COPYRIGHT § 12.04[D][1] (2016) (“third-party liability, as its name implies, may exist only when direct liability, i.e., infringement, is present.”); 1 P. Goldstein, Copyright: Principles, Law & Practice § 6.1 (1989) (“It is definitional that, for a defendant to be held contributorily . . . liable, a direct infringement must have occurred.”). Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 14 of 31 PageID #: 130 -6- In addition to seeking relief under U.S. copyright law, both claims for relief pleaded in the complaint also invoke international treaties and foreign copyright laws. Plaintiff’s alleged claims under international treaties and foreign law fail for the same reason-the only named defendant did not engage in the act alleged, i.e., sale of the dolls at issue. The Complaint should be dismissed in its entirety. B. Dismissal Is Also Warranted Because the Product at Issue Was Sold in Mexico, Not in the United States3 The Complaint clearly alleges that the only infringing activity is sale of a doll in Mexico. For the reasons explained below, that allegation is fatally defective. 1. This Motion May Be Made Under Rule 12(b)(1) or Rule 12(b)(6) Federal courts, including district courts within the Second Circuit Court of Appeals, are split as to whether failure to plead infringing activity in the United States in a copyright case is a subject matter jurisdiction defect that can be addressed on a motion to dismiss under Rule 12(b)(1), or in a motion to dismiss under Rule 12(b)(6) for failure to state a claim. In the following cases, courts held that the failure to plead alleged acts of copyright infringement within the U.S. as an issue of subject matter jurisdiction that can be challenged pursuant to Rule 12(b)(1). Foreign Imported Prods. & Pub., Inc. v. Grupo Indus. Hotelero, S.A., No. 07-22066-CIV, 2008 WL 4724495, at *3 & n.2 (S.D. Fla. Oct. 24, 2008) (“Federal copyright law has no extraterritorial effect, and therefore ‘it is only where an infringing act occurs in the United States that the infringement is actionable under the federal Copyright Act, giving the 3 Defendant does not concede that the facts pleaded in the Complaint are accurate or true. However, even if the facts pled in the Complaint are taken as true, and all favorable inferences are made in Plaintiff’s favor, the Complaint still fails. To the extent that the Court ultimately disagrees and discovery proceeds with respect to Plaintiff’s claims, Defendant reserves all rights and remedies available to defend against the copyright claims, including any and all jurisdictional and fact-based defenses not raised here. Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 15 of 31 PageID #: 131 -7- federal courts jurisdiction over the action.’”) (quoting Palmer v. Braun, 376 F.3d 1254, 1258 (11th Cir. 2004)), Iverson v. Grant, 946 F. Supp. 1404, 1410 (D.S.D. 1996) aff’d, 133 F.3d 922 (8th Cir. 1998) (dismissing copyright claims for lack of subject matter jurisdiction under extraterritorial principle); Fun-Damental Too, Ltd. v. Gemmy Indus. Corp., No. 96 CIV. 1103 (MBM), 1996 WL 724734, at *6 (S.D.N.Y. Dec. 17, 1996) (dismissing claim for lack of subject matter jurisdiction because extraterritorial infringements are not violations of the Copyright Act applies and are not within court’s jurisdiction). Other courts have treated the issue as a failure to state a claim under Rule 12(b)(6). See Litecubes, LLC v. N. Light Prods., Inc., 523 F.3d 1353, 1368 (Fed. Cir. 2008) (“we hold that the issue is properly treated as an element of the claim which must be proven before relief can be granted, not a question of subject matter jurisdiction”); Geophysical Servs., Inc. v. TGS-Nopec Geophysical Servs., No. CIV.A. 14-1368, 2015 WL 6869733, at *7 (S.D. Tex. Nov. 9, 2015) (“[Defendant] properly advanced this argument in the context of a Rule 12(b)(6) motion for failure to state a claim.”); Shropshire v. Canning, 809 F. Supp. 2d 1139, 1143-44 (N.D. Cal. 2011) (addressing split of authority and ruling on dismissal as element of claim rather than issue of subject matter jurisdiction); Roberts v. Keith, No. 04 CV 10079 (LAP), 2009 U.S. Dist. LEXIS 101412, at *5-6 (S.D.N.Y. Oct. 23, 2009) (“Because Congress never indicated whether ‘the extraterritorial limitations on the scope of the Copyright Act [] limit the subject matter jurisdiction of the federal courts,’ this Court will treat the issue as an element of Plaintiff’s claim.”) (quoting Litecubes, 523 F.3d at 1367). Because courts are split on whether Rule 12(b)(1) or 12(b)(6) is the applicable Rule, Defendant moves under both. Either way, the claims here fail. Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 16 of 31 PageID #: 132 -8- 2. Legal Standard Under Rule 12(b)(1) Dismissal for Lack of Subject Matter Jurisdiction FED. R. CIV. P. 12(b)(1) provides for dismissal of a claim when the federal court “lacks jurisdiction over the subject matter.” Id. The plaintiff “bears the burden of proving subject matter jurisdiction by a preponderance of the evidence.” Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005) (citing Luckett v. Bure, 290 F.3d 493, 497 (2d Cir. 2002)); MLC Fishing, Inc. v. Velez, 667 F.3d 140, 141 (2d Cir. 2011) (“The burden of demonstrating subject-matter jurisdiction lies with the party asserting it.”) (quoting Mathirampuzha v. Potter, 548 F. 3d 70, 85 (2d Cir. 2008); cf. KVOS, Inc. v. Associated Press, 299 U.S. 269, 278 (1936) (party seeking to invoke the jurisdiction of the federal court has the burden of establishing that jurisdiction exists). 3. Legal Standard Under Rule 12(b)(6) Dismissal for Failure to State a Claim To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); accord Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). When considering a motion to dismiss pursuant to Rule 12(b)(6), while the court must accept as true all well-pleaded factual allegations in the complaint and view them in the light most favorable to the plaintiff, Keiler v. Harlequin Enters., 751 F.3d 64, 68 (2d Cir. 2014), the court is not obliged to accept plaintiff’s “legal conclusions or unwarranted deductions of fact.” Scalisi v. Fund Asset Mgmt., L.P., 380 F.3d 133, 137 (2d Cir. 2004); see also Starr v. Sony BMG Music Entm’t, 592 F.3d 314, 321 (2d Cir. 2010); Hirsch v. Arthur Andersen & Co., 72 F.3d 1085, 1088, 1092 (2d Cir. 1995). Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 17 of 31 PageID #: 133 -9- 4. The Claims Pursuant to the U.S. Copyright Act Must Be Dismissed Either Under Rule 12(b)(1) or 12(b)(6) a. The U.S. Copyright Act Does Not Have Any Extraterritorial Effect The Complaint should be dismissed for lack of subject matter jurisdiction pursuant to Rule 12(b)(1). It is fundamental that the federal courts are of limited subject matter jurisdiction. Achtman v. Kirby, McInerney & Squire, LLP, 150 F. App’x 12, 14 (2d Cir. 2005) (citing Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005)). As such, this Court only possesses the jurisdiction authorized by the U.S. Constitution and by federal statute. Id. Where this Court lacks subject matter jurisdiction over an action, the Court shall dismiss the action. Arbaugh v. Y & H Corp., 546 U.S. 500, 506-07 (2006)); In Touch Concepts, Inc. v. Cellco P’ship, 788 F.3d 98, 101 (2d Cir. 2015) (“That is because the limited subject-matter jurisdiction of the federal courts is a restraint on judicial power: ‘Without jurisdiction the court cannot proceed at all in any cause.’”) (quoting Ex Parte McCardle, 74 U.S. 506, 514 (1868)). Here, because Plaintiff has not adequately pleaded jurisdictional facts establishing the subject matter jurisdiction of this Court over Plaintiff’s claims for direct and induced copyright infringement pursuant to the U.S. Copyright Act, these claims must be dismissed pursuant to Rule 12(b)(1). Plaintiff’s copyright infringement claims must be dismissed because Plaintiff has failed to allege that any allegedly infringing activity occurred within the United States, a requirement to invoke the protections of the U.S. Copyright Act. The jurisdictional statute for copyright claims, 28 U.S.C. § 1338(a), provides a district court with original jurisdiction over any civil action arising under federal copyright law. 28 U.S.C. § 1338(a) (“The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trademarks.”). Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 18 of 31 PageID #: 134 -10- However, “[t]he U.S. Copyright Act does not have extraterritorial application, and district courts do not have subject matter jurisdiction over infringement occurring outside of the United States.” Levitin v. Sony Music Entm’t, 101 F. Supp. 3d 376, 384 (S.D.N.Y. 2015).4 Indeed, the U.S. Supreme Court, Second Circuit Court of Appeals, and numerous federal appellate and district courts have all made clear that it is “well established that copyright laws generally do not have extraterritorial application.” Update Art, Inc. v. Modiin Pub., Ltd., 843 F.2d 67, 73 (2d Cir. 1988); Robert Stigwood Grp., Ltd. v. O’Reilly, 530 F.2d 1096, 1101 (2d Cir. 1976), cert. denied, 429 U.S. 848 (1976) (“Copyright laws do not have extraterritorial operation.”); see also United Dictionary Co. v. G & C Merriam Co., 208 U.S. 260, 264-66 (1908) (Holmes, J.); Tire Eng’g & Distribution, LLC v. Shandong Linglong Rubber Co., Ltd., 682 F.3d 292, 306 (4th Cir. 2012) (“As a general matter, the Copyright Act is considered to have no extraterritorial reach.”); Subafilms, Ltd. v. MGM-Pathe Commc’ns Co., 24 F.3d 1088, 1095-96 (9th Cir. 1994) (describing that the “undisputed axiom” is “that the United States’ copyright laws have no application to extraterritorial infringement predates the 1909 Act” and “the principle of territoriality consistently has been reaffirmed”).5 4 As one noted copyright treatise states, “[e]very court to have examined the issue has held that Congress did not intend the Copyright Act to be applied extraterritorially, beginning with the Supreme Court in 1908.” 7 Patry on Copyright § 25:86 (emphasis in original). Moreover, the only instance in which Congress chose to expand the “extraterritorial” application of the Act occurred in 1976, when an amendment was enacted declaring that the unauthorized importation of copyrighted works constitutes infringement even when the copies lawfully were made abroad. Subafilms, Ltd. v. MGM-Pathe Commc’ns Co., 24 F.3d 1088, 1095-96 (9th Cir. 1994) (citing 17 U.S.C. § 602(a)). “Accordingly, the presumption against extraterritoriality, ‘far from being overcome here, is doubly fortified by the language of [the] statute,’ as set against its consistent historical interpretation.” Id. (quoting Smith v. United States, 507 U.S. 197, 204 (1993)). 5 Courts have dismissed copyright claims where a plaintiff has similarly failed to sufficiently and specifically plead that an infringing act occurred within the United States. See, e.g., Rundquist v. Vapiano SE, 798 F. Supp. 2d 102, 122-23 (D.D.C. 2011) (“The Amended Complaint . . . fails to allege with sufficient specificity that Vapiano SE committed any predicate infringing acts inside Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 19 of 31 PageID #: 135 -11- Indeed, there is a “presumption against extraterritorial operation of the Copyright Act.” Iverson v. Grant, 946 F. Supp. 1404, 1413 (D.S.D. 1996), aff’d, 133 F.3d 922 (8th Cir. 1998) (dismissing copyright claims for lack of subject matter jurisdiction under extraterritorial principle) (citing Subafilms, 24 F.3d at 1095-98; see also Omega S.A. v. Costco Wholesale Corp., 541 F.3d 982, 988 (9th Cir. 2008) (“[re]cognizing the importance of avoiding international conflicts of law in the area of intellectual property, however, we have applied a more robust version of this presumption to the Copyright Act, holding that the Act presumptively the United States . . . . Accordingly, allegations contained in Count I of the Amended Complaint that Vapiano SE is liable for direct infringement under the Copyright Act for foreign acts of infringement are dismissed.”); Rhapsody Sols., LLC v. Cryogenic Vessel Alternatives, Inc., No. CIV.A. H-12-1168, 2013 WL 820589, at *7 (S.D. Tex. Mar. 5, 2013) (granting motion to dismiss) (“Plaintiff’s First Amended Complaint, unlike its Response to INOX’s motion [to dismiss], does not allege INOX’s conduct with regard to CVA’s Texas-based server or make other straightforward factual allegations of INOX having engaged in at least some acts of infringement in the United States.”); Raima, Inc. v. Myriad France, SAS, No. C12-1166JLR, 2012 WL 6201709, at *3 (W.D. Wash. Dec. 11, 2012) (“[Plaintiff]’s complaint contains no allegations of any infringing acts inside the United States. . . . This is fatal to [Plaintiff]’s copyright claims, and as such the court GRANTS with prejudice [Defendant]’s motion to dismiss this claim.”) (citations omitted); Bisnews AFE (Thail.) Ltd. v. Aspen Research Grp. Ltd., 2011 U.S. Dist. LEXIS 99047, at *18-19 (S.D.N.Y. Aug. 26, 2011), aff’d, 437 Fed. App’x. 57 (2d Cir. 2011) (granting motion to dismiss because “[s]uch foreign sales do not support subject matter jurisdiction in this Court.”); Forties B LLC v. Am. West Satellite, Inc., No. 09 Civ. 8583 (JSR), 2010 U.S. Dist. LEXIS 50481, at *3 (S.D.N.Y. May 19, 2010) (“Because it is axiomatic that ‘copyright laws do not have extraterritorial application, the Court hereby dismisses Count I to the extent it is predicated on infringing acts that took place entirely outside the United States.”) (citations omitted); Counter Terrorist Grp. US v. Australian Broad. Corp., No. 08 Civ. 2356 (DAB), 2009 U.S. Dist. LEXIS 48754, at *7-9 (S.D.N.Y. June 9, 2009) (dismissing complaint because plaintiff did not make any factual allegations of infringing acts occurring within the U.S., and “[h]ow or why the Court is to infer that any [infringing act] occurred within the territory of the United States is far beyond the four corners of the Complaint.”); Jacobs v. Carnival Corp., No. 06 CIV. 0606 (DAB), 2009 WL 856637, at *4, *5-6 (S.D.N.Y. Mar. 25, 2009) (“Ordinarily, where the alleged infringements took place is not an issue, but because this Court is dependent on the applicability of the Copyright Act for subject matter jurisdiction and the Copyright Act has no extraterritorial application, it is incumbent upon the Plaintiffs to allege where the specific infringements took place as well. . . . Plaintiffs failed to submit with any specificity where the alleged performances took place; that is, where, literally in the world, the ships were at sea when the performances occurred.”). Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 20 of 31 PageID #: 136 -12- does not apply to conduct that occurs abroad even when that conduct produces harmful effects within the United States.”).6 b. The Complaint Fails to Plead Any Facts of Allegedly Infringing Acts in the United States Here, Plaintiff fails to plead that any allegedly infringing activity by Defendant occurred in the United States. To the contrary, the allegations of the Complaint indicate that the allegedly infringing activity took place, if anywhere, in Mexico. Those two paragraphs read as follows: Well Made is informed and believes, and therefore avers, that subsequent to the selection of the Well Made Boots doll by representatives of Wal Mart for sale in Mexico, and the sending of sample of the Well Made Boots doll to Wall Mart representatives in Mexico, the Walmart Global Sourcing organization of defendant Wal-Mart infringed upon the copyright of Well Made in its Boots doll by causing to be produced, and acquiring for sale in Mexico and elsewhere soft sculpted dolls that have been copied directly from and are substantially similar in appearance to the copyrighted design of the Boots doll of Well Made. Attached hereto as Exhibit B is a true and correct copy of an image of the Boots doll created and marketed by Well Made, and attached hereto as Exhibit C is a true and correct copy of an image of the copied doll acquired by Wal Mart and sold at least in Mexico. (Compl., Dkt. No. 1, ¶ 16-17) (emphasis added). 6 In light of this presumption, the case law makes clear that “[i]t is incumbent on Plaintiffs to provide enough detail about Defendants’ allegedly infringing acts and activities, including the time period and place in which they are alleged to have occurred, to provide a sufficient basis for maintaining Plaintiffs’ own copyright claims before this Court.” Jacobs v. Carnival Corp., No. 06 CIV. 0606 (DAB), 2009 WL 856637, at *4, *5-6 (S.D.N.Y. Mar. 25, 2009) (dismissing complaint for failure to plead infringement within the United States); see also Raima, Inc. v. Myriad France, SAS, No. C12-1166JLR, 2012 WL 6201709, at *3 (W.D. Wash. Dec. 11, 2012) (“A claim of copyright infringement under the Copyright Act requires, at a minimum, some allegation of infringing acts that took place inside the United States. . . .”) (granting motion to dismiss copyright claim with prejudice). Indeed, “in order for the [C]ourt to exercise subject matter jurisdiction over plaintiff’s claims, [P]laintiff bears the burden of alleging and proving that the defendant is liable ... for an act of infringement committed in the United States.” ITSI T.V. Prods., Inc. v. California Auth. of Racing Fairs, 785 F. Supp. 854, 863-64 (E.D. Cal. 1992), aff’d in part, rev’d in part on other grounds, 3 F.3d 1289 (9th Cir. 1993) (emphasis added). Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 21 of 31 PageID #: 137 -13- Plaintiff has failed to aver that any of these acts in general, or any supposedly infringing acts in particular, occurred in the United States; to the contrary, the allegations demonstrate that the alleged infringement occurred in Mexico. The allegations in the paragraphs above are insufficient to plausibly allege acts of copyright infringement within the United States. See 7 PATRY ON COPYRIGHT § 25:87 (“all acts-of direct and contributory infringement-must occur in the United States to be actionable.”). On its face, the Complaint fails to meet Plaintiff’s burden of establishing this Court’s jurisdiction over the copyright claim. As demonstrated above, there is no allegation within the Complaint that identifies any purportedly infringing act that occurred inside the United States. For this reason alone, this Court has no subject matter jurisdiction over the U.S. copyright claims and therefore, they should be dismissed. c. Even Though Plaintiff Apparently Alleges That Authorization to Sell Had Been Given in the U.S., There Can Be No Liability Since the Sale Occurred Only Outside of the U.S. A finding of copyright infringement under the U.S. Copyright Act must be based, at least in part, on a predicate infringing act within the U.S., because it is “well established that the copyright laws generally do not have extra-territorial application.” Update Art, Inc. v. Modiin Publ'g, Ltd., 843 F.2d 67, 73 (2d Cir. 1988). Therefore, alleged acts of infringement that occur entirely outside of the U.S. are not actionable under U.S. copyright law. E.g., Armstrong v. Virgin Records, Ltd., 91 F. Supp. 2d 628, 634 (S.D.N.Y. 2000). In this case, the only infringing act alleged in the Complaint is the sale of a doll in Mexico. Plaintiff alleges that the named Defendant, Wal-Mart Stores, Inc. infringed Plaintiff’s purportedly copyrighted work “by causing to be produced, and acquiring for sale in Mexico” allegedly infringing dolls. Plaintiff’s claims fail because there is no violation of U.S. copyright law if the allegedly infringing act (i.e., sale of accused product) occurs entirely outside of the Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 22 of 31 PageID #: 138 -14- U.S., even if the authorization for the allegedly foreign infringing act occurs within the U.S. Subafilms, Ltd. v. MGM-Pathe Commc’ns Co., 24 F.3d 1088 (9th Cir. 1994) (en banc); Allarcom Pay Television, Ltd. v. Gen. Instrument Corp., 69 F.3d 381, 387 (9th Cir. 1995); Perfect 10, Inc. v. Yandex N.V., 962 F. Supp. 2d 1146, 1157 (N.D. Cal. 2013); Rundquist v. Vapiano SE, 798 F. Supp. 2d 102, 127 (D.D.C. 2011); Well-Made Toy Mfg. Corp. v. Lotus Onda Indus. Co., No. 02- cv-1151, 2003 U.S. Dist. LEXIS 68, at *14-15 (S.D.N.Y. Jan. 3, 2003); Armstrong v. Virgin Records, Ltd., 91 F. Supp. 2d 628, 634 (S.D.N.Y. 2000); Nat'l Football League v. PrimeTime 24 Joint Venture, No. 98-cv-3778, 1999 U.S. Dist. LEXIS 3592, 1999 WL 163181, at *4 (S.D.N.Y. Mar. 24, 1999); Fun-Damental Too, Ltd. v. Gemmy Indus. Corp., No. 96-cv-1103, 1996 U.S. Dist. LEXIS 18653, 1996 WL 724734, at *6 (S.D.N.Y. Dec. 17, 1996) (“[M]ere authorization and approval of copyright infringements taking place outside the United States is not a copyright violation”); Metzke v. May Dep't Stores Co., 878 F. Supp. 756, 760 (W.D. Pa. 1995); 7 PATRY ON COPYRIGHT § 25:87 (“an act of authorization in the United States to commit acts overseas is not and can never be an infringement of U.S. law”). This is the rule because the act of authorizing (in the U.S.) a reproduction of a copyrighted work (outside of the U.S.) does not violate the copyright owner’s “exclusive rights to reproduce” the work in the U.S., and therefore, does not violate the U.S. Copyright Act. Rundquist v. Vapiano SE, 798 F. Supp. 2d 102, 128 (D.D.C. 2011) (“because acts of infringement taking place wholly outside of the United States are not actionable under the Copyright Act, authorization to commit acts that are not illegal under domestic copyright law cannot result in liability.”). And because the sale of dolls in Mexico does not qualify as a direct infringement under the U.S. Copyright Act, any alleged authorization in the U.S. by definition cannot be a contributory infringement under the U.S. Copyright Act. See 6 PATRY ON Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 23 of 31 PageID #: 139 -15- COPYRIGHT § 21:46 (“without direct infringement, there can be no contributory infringement since there is no infringement to which to contribute. This principle is particularly important where the claim of direct infringement occurs wholly overseas: since an act occurring wholly overseas cannot violate U.S. copyright law, a claim of contributory infringement based on contributory conduct that occurs in the U.S. fails as a matter of law.”) (emphasis added). Plaintiff’s claim that any allegedly infringing act is actionable under Mexican law does not change the outcome of dismissal. See, e.g., Subafilms, Ltd. v. MGM-Pathe Commc'ns Co., 24 F.3d 1088, 1094 (9th Cir. 1994) (“Even assuming arguendo that the acts authorized in this case would have been illegal abroad, we do not believe the distinction offered by Appellees is a relevant one.”); Robert Stigwood Grp., Ltd. v. O’Reilly, 530 F.2d 1096, 1101 (2d Cir. 1976), cert. denied, 429 U.S. 848 (1976) (holding that no damages could be obtained under the Copyright Act for public performances in Canada when preliminary steps were taken within the United States and stating that “[t]he Canadian performances, while they may have been torts in Canada, were not torts here”). d. Alternatively, the U.S. Copyright Claims Must Be Dismissed Because Plaintiff Has Failed to Adequately State a Claim In the alternative, Defendant moves to dismiss Plaintiff’s copyright claims pursuant to Rule 12(b)(6) for failure to adequately plead a claim for federal copyright infringement because Plaintiff has failed to plead that the infringing activity occurred within the United States. Update Art, Inc. v. Modiin Publ’g, Ltd., 843 F.2d 67, 73 (2d Cir. 1988); Robert Stigwood Grp. Ltd. v. O’Reilly, 530 F.2d 1096, 1101 (2d Cir. 1976); Roberts v. Keith, No. 04 CV 10079 (LAP), 2009 U.S. Dist. LEXIS 101412, 5-6 (S.D.N.Y. Oct. 23, 2009) As explained above, whether the failure to plead infringing activity in the United States is construed as an issue relating to whether a copyright claim is adequately stated or whether it is construed as a subject matter Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 24 of 31 PageID #: 140 -16- jurisdiction issue, Plaintiff’s claims for direct and induced copyright infringement under the U.S. Copyright Act should be dismissed for the reasons explained above. 5. The Claims Under the UCC and the Berne Convention Must Also Be Dismissed Under Rule 12 Because They Do Not Create a Separate Cause of Action Well-Made also appears to attempt to state a claim for direct and indirect infringement under the UCC and the Berne Convention.7 However, neither the UCC nor the Berne Convention creates a cause of action. 17 U.S.C. § 104(c); Rodriguez v. Casa Salsa Rest., 260 F. Supp. 2d 413, 421-22 (D.P.R. 2003); Hoopla Sports & Entm’t v. Nike, Inc., 947 F. Supp. 347, 355 (N.D. Ill. 1996). Moreover, neither the UCC nor the Berne Convention confer subject matter jurisdiction for an action asserting copyright infringement outside of the U.S. Quantitative Fin. Software, Ltd. v. Infinity Fin. Tech., Inc., No. 97 Civ. 7879 (LMM), 1998 U.S. Dist. LEXIS 11575, at *6-7 (S.D.N.Y. July 27, 1998); De Bardossy v. Puski, 763 F. Supp. 1239, 1245 (S.D.N.Y. 1991); see also James W. Newton v. Diamond, 204 F. Supp. 2d 1244, 1259 (C.D. Cal. 2002) (“at least one alleged act of infringement must be completed entirely within the United States’ that would subject the defendant to liability under the Copyright Act.”). Importantly, the UCC and the Berne Convention implicate a rule of territoriality in which “the applicable law is the copyright law of the state in which the [alleged] infringement occurred.” Creative Tech., Ltd. v. Aztech Sys. PTE, 61 F.3d 696, 700-01 (9th Cir. 1995). As the Second Circuit explained in Murray v. British Broad. Corp., 81 F.3d 287 (2d Cir. 1996), “[t]he 7 The UCC and the Berne Convention are international treaties that govern the international recognition of copyrights. Under these two treaties, a member country provides the same treatment to a work that it would provide to its own citizens. U.C.C., art. II; Berne, art. 5. The U.S. and Mexico, the two countries potentially at issue here as alleged in the Complaint, are both members to both treaties. See 5 NIMMER ON COPYRIGHT §§ 17.01, 17.04 (2016). Generally, U.S. authors may rely on the UCC and the Berne Convention to obtain protection for their works in foreign nations, while foreign authors may seek protection of their foreign works in the U.S. Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 25 of 31 PageID #: 141 -17- [Berne] Convention provides in pertinent part that ‘the extent of protection, as well as the means of redress afforded to the author to protect his rights, shall be governed exclusively by the laws of the country where protection is claimed.’” Id. at 290 (citing Berne Convention for the Protection of Literary and Artistic Works, Paris Text, July 24, 1971, Art. V ¶ 2, S. TREATY DOC. NO. 27, 99th Cong., 2d Sess. 40 (1986), reprinted in 9 NIMMER ON COPYRIGHT, App. 27-5 (2016)). Here, to the extent Plaintiff is claiming protection of its alleged U.S. copyright registration under U.S. copyright laws under the UCC and the Berne Convention, Plaintiff’s claims under the UCC and the Berne Convention fail and must be dismissed because its U.S. claims fail and must be dismissed, as explained above.8 For these reasons, Plaintiff’s claims for direct and induced copyright infringement under the UCC and the Berne Convention should be dismissed. 6. The Claims Under Mexican Law Should Be Dismissed a. Dismissal Is Warranted Under Rule 12(b)(1) For Lack of Subject Matter Jurisdiction The claims under Mexican law should also be dismissed under Rule 12(b)(1). There is no independent basis of federal subject matter jurisdiction over Plaintiff’s claims of copyright infringement under Mexican law, because as previously explained, U.S. federal courts are of limited jurisdiction and can only hear matters that arise under the U.S. Constitution and under “any Act of Congress,” and the laws of Mexico are obviously neither of these. See Bridgeman 8 To the extent Plaintiff is claiming protection of its alleged U.S. copyright registration under Mexican copyright law pursuant to the UCC and the Berne Convention, Plaintiff’s claim should be dismissed because such a claim should be litigated, if at all, in Mexico, not the U.S., as explained below. Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 26 of 31 PageID #: 142 -18- Art Library, Ltd. v. Corel Corp., 25 F. Supp. 2d 421, 430 (S.D.N.Y. 1998) (Sections 1331 and 1338 both unavailing as source of jurisdiction for foreign copyright infringement claims). Just as legions of courts have dismissed a claim under U.S. copyright law for an allegedly infringing act committed outside of the U.S. as explained above, other courts have dismissed claims under foreign copyright law for an allegedly infringing act committed in a foreign country. See Murray v. British Broad. Corp., 906 F. Supp. 858, 865 (S.D.N.Y. 1995), aff’d, 81 F.3d 287, 293 (2d Cir. 1996) (“[T]he need to apply foreign law to this case militates in favor of dismissal.”); ITSI T.V. Prods., Inc. v. Cal. Auth. of Racing Fairs, 785 F. Supp. 854, 866 (E.D. Cal. 1992) (declining to “enter the bramble bush of ascertaining and applying foreign law without an urgent reason to do so.”). This court should follow this line of cases and dismiss Plaintiff’s claims under Mexican copyright law. b. Alternatively, The Claims Under Mexican Law Should Be Dismissed Under the Doctrine of Forum Non Conveniens Under the common-law doctrine of forum non conveniens, the district court “may decline to exercise its jurisdiction … when it appears that the convenience of the parties and the court and the interests of justice indicate that the action should be tried in another forum.” Piper Aircraft Co. v. Reyno, 454 U.S. 235, 250 (1981). Forum non conveniens is a “flexible” doctrine. Id. at 249 (“each case turns on its facts.”) Typically, an action should be dismissed for forum non conveniens when (1) there is an adequate alternative forum, and (2) the balance of relevant private and public interest factors favor dismissal. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508- 09 (1947); Murray v. BBC, 81 F.3d 287, 293 (2d Cir. 1996). (1) An Alternative Forum Exists The Court may take judicial notice of the authority of a foreign court to offer Plaintiff an adequate remedy under foreign law. See Creative Tech., Ltd. v. Aztech Sys. PTE, 61 F.3d 696, Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 27 of 31 PageID #: 143 -19- 701 (9th Cir. 1995) (“We conclude that the Singapore Copyright Act offers [plaintiff] an adequate alternative remedy independent of United States copyright law. Even if it did not, we further conclude that the High Court of Singapore would be free to apply United States copyright law … should the need arise.”).9 Mexico has a legal system that includes courts that adjudicate civil actions, including actions for copyright infringement. Mexico, Ley Federal del Derecho de Autor (“Federal Law on Copyright”) tit. X-XII (as amended up to Jan. 14, 2016), available at http://www.wipo.int/edocs/lexdocs/laws/en/mx/mx003en.pdf; see also Levitin v. Sony Music Entm’t, 101 F. Supp. 3d 376, 392 (S.D.N.Y. 2015) (finding alternative forum exists in Mexico because it “provides a robust copyright regime”). (2) The Public Interests Favor Dismissal The public interest factors include: (1) the burden on local courts and juries; (2) local interest in the lawsuit; and (3) the avoidance of unnecessary problems in conflict of laws or in the application of foreign law. Gilbert, 330 U.S. at 508-09. In cases such as here, where the dispute involves events taking place exclusively in a foreign country-namely, sales of allegedly infringing products in Mexico-courts have dismissed the action for forum non conveniens. Murray, 81 F.3d at 293-94 (where dispute involved events taking place exclusively in the United Kingdom and where British law governed, “In virtually all respects, the connection of this case to the United States is as tenuous as its connection to the United Kingdom is strong. . . . The United States thus has virtually no interest in resolving the truly disputed issues.”). 9 Ordinarily, the requirement for an adequate alternative forum may be satisfied if the defendant is amenable to service of process in the foreign forum. Id.; Sinochem Int’l Co. Ltd. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 429 (2007). However, that ordinary scenario does not apply here because, as explained above, Wal-Mart Stores, Inc. did not sell the accused product or engage in any allegedly infringing act. Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 28 of 31 PageID #: 144 -20- The interpretation and application of foreign law “militates in favor of dismissal.” Gilbert, 330 U.S. at 509 (more appropriate to have case heard in a forum “at home with the . . . law that must govern the case”); Scottish Int’l, Inc. v. British Caledonian Group, PLC, 81 F.3d 1224, 1234 (2d Cir. 1996) (public interest factors point toward dismissal when American court would be required to “untangle problems in conflict of laws, and law foreign to itself”); Blanco v. Banco Indus. de Venezuela, 997 F.2d 974, 983 (2d Cir. 1993) (district court entitled to conclude that “questions of Venezuelan substantive and procedural law are better addressed by Venezuelan courts”); Mars Inc. v. Kabushiki-Kaisha Nippon Conlux, 24 F.3d 1368, 1376 (Fed. Cir. 1994) (that district court would be required to resolve complex issues of Japanese law relating to Japanese patent favored dismissal on forum non conveniens grounds); Mercier v. Sheraton Int’l, Inc., 981 F.2d 1345, 1357 (1st Cir. 1992) (district court properly considered difficulty of applying Turkish law as one factor favoring dismissal); Murray v. British Broad. Corp., 906 F. Supp. 858, 865 (S.D.N.Y. 1995); ITSI T.V. Prods., Inc. v. Cal. Auth. of Racing Fairs, 785 F. Supp. 854, 866 (E.D. Cal. 1992) (declining to “enter the bramble bush of ascertaining and applying foreign law without an urgent reason to do so.”). Here, the Court would be asked to interpret Mexican copyright law based on a purported U.S. copyright registration and allegedly infringing products sold in Mexico. On this basis alone, the connections this dispute has with the U.S. is tenuous, and the need for this Court to interpret foreign law based on a U.S. copyright registration all weigh in favor of dismissal. Further, there should be no concern regarding enforcement of a judgment issued in a Mexican forum because a Mexican court would have no issue enforcing a judgment in Mexico. (3) The Private Interests Favor Dismissal The relevant private interests include: (1) residence of the parties and witnesses; (2) the availability of compulsory process for attendance of witnesses; (3) the cost of obtaining Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 29 of 31 PageID #: 145 -21- attendance of willing witnesses and parties to the place of trial; (4) access to physical evidence and other sources of proof; (5) the enforceability of judgments; and (6) “all other practical problems that make trial of a case easy, expeditious, and inexpensive.” Gilbert, 330 U.S. at 508; Murray, 81 F.3d at 294. Where the bulk of the witnesses, physical and documentary evidence are located in the foreign forum, dismissal is favored. Murray, 81 F.3d at 293 (in action alleging copyright infringing arising out of parties’ contractual relationship in England, most of witnesses and evidence located in England and thus private interests favored dismissal). Where expenses will be incurred in obtaining the presence of witnesses located in a foreign forum, dismissal is favored. Blanco, 997 F.2d at 982 (obtaining presence of Venezuelan witnesses at trial in New York “would entail considerable expense” weighed in favor of dismissal); Allstate Life Ins. Co. v. Linter Grp., Ltd., 994 F.2d 996, 1001 (2d Cir. 1993) (dismissal upheld when, inter alia, “[t]he cost of bringing witnesses to the United States for trial . . . would be prohibitive”). Likewise, the cost of transporting documents located outside of the United States, or translating documents into English weighs in favor of dismissal. Id.; Aguinda v. Texaco, Inc., 303 F.3d 470, 479 (2d Cir. 2002) (factor favored Ecuadorian forum when it would be onerous for U.S. court to manage translation difficulties arising from cases with 55,000 putative class members of different indigenous groups speaking various dialects); Blanco, 997 F.2d 974. Here, relevant witnesses with knowledge of the sale, marketing, and promotion of the allegedly infringing products sold in Mexico are located in Mexico. (Edwards Decl., ¶ 4.) Evidence is also located there. (Id.) These factors weigh in favor of dismissal. Here, a Mexican court is an alternative forum available for adjudicating any claim by Well-Made under Mexican law and the public and private interest factors weigh in favor of Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 30 of 31 PageID #: 146 -22- dismissal of this action for it to be tried, if at all, in a forum court in Mexico. Thus, Well-Made’s claims under Mexican law should be dismissed for forum non conveniens. IV. CONCLUSION For the foregoing reasons, the Court should dismiss all of Plaintiff’s causes of action and grant Defendant’s motion to dismiss the Complaint. Respectfully submitted, SHEPPARD MULLIN RICHTER & HAMPTON, LLP Dated: New York, New York /s/ Tyler E. Baker August 29, 2016 Tyler E. Baker 30 Rockefeller Plaza New York, NY 10112-0015 Tel.: (212) 653-8700 Fax: (212) 653-8701 tbaker@sheppardmullin.com Laura L. Chapman (admitted pro hac vice) Four Embarcadero Center Seventeenth Floor San Francisco, CA 94111 Tel.: (415) 434-9100 Fax: (415) 434-3947 lchapman@sheppardmullin.com Attorneys for Defendant Case 1:16-cv-03107-NGG-RER Document 22-1 Filed 11/30/16 Page 31 of 31 PageID #: 147 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK WELL-MADE TOY M'FG. CORPORATION, Plaintiff, v. WAL-MART STORES, INC., Defendant. I, Geoff Edwards, declare as follows: CaseNo.1:16-cv-03107-NGG-RER DECLARATION OF GEOFF EDWARDS IN SUPPORT OF DEFENDANT'S MOTION TO DISMISS THE COMPLAINT 1. I am the Sr. Associate General Counsel, Corporate Governance, for Wal-Mart Stores, Inc., the defendant in this action. I have personal knowledge of the facts stated in this declaration. 2. Wal-Mart Stores, Inc. directly and indirectly through its U.S. operating subsidiaries operates retail stores and clubs and retail internet websites within the United States and does not operate retail stores and clubs or websites within Mexico. Neither Wal-Mart Stores, Inc. nor its U.S. operating subsidiaries sell products to consumers in Mexico and therefore Wal-Mart Stores, Inc. did not sell the dolls shown in the image in Exhibit C attached to the Complaint. 3. Wal-Mart de Mexico, S.A. de C.V. ("Walmart de Mexico"), a publicly-traded Mexican corporation formed under Mexican law, and its Mexican subsidiaries do not operate retail stores or clubs in the United States and only sell product to customers in Mexico. SMRH:478673829.I -1- Case 1:16-cv-03107-NGG-RER Document 22-2 Filed 11/30/16 Page 1 of 2 PageID #: 148 4. Witness with information regarding the sale of products in Mexico would be located in Mexico. Documents and data related to the sale of products in Mexico would be located in Mexico. I declare under penalty of perjury that the foregoing is true and correct. Executed in Bentonville, Arkansas on the 7.fil'aay of August, 2016. ~-GeoffEdwards SMRH:478673829. l -2- Case 1:16-cv-03107-NGG-RER Document 22-2 Filed 11/30/16 Page 2 of 2 PageID #: 149 Joseph A. Dunne Gerard F. Dunne Law Office of Gerard F. Dunne, P.C. 41 Union Square West Suite 1125 New York, NY 10003 (212) 645-2410 Attorneys for the Plaintiff UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK -----------------------------------------------------------X WELL-MADE TOY M'FG. CORPORATION : a corporation of the State of New York : : Plaintiff, : Civil Action No.: : 16-cv-03107 v. : : WAL-MART STORES, INC. : a corporation of Delaware : -----------------------------------------------------------X PLAINTIFF’S RESPONSE IN OPPOSITION TO DEFENDANT’S MOTION TO DISMISS Case 1:16-cv-03107-NGG-RER Document 22-3 Filed 11/30/16 Page 1 of 9 PageID #: 150 -1- I. PRELIMINARY STATEMENT Plaintiff, Well-made Toy M'fg. Corporation, (hereinafter “Plaintiff” or “WMT”) hereby opposes Defendant, Wal-Mart Stores., Inc.’s (hereinafter “Defendant” or “Wal-Mart”) Motion to Dismiss the above captioned suit. Plaintiff’s First Amended Complaint, filed on September 19, 2016 as Docket Entry No. 12, , alleges facts sufficient to establish that this court has Subject Matter Jurisdiction over the claims of copyright infringement under International and Mexican Copyright Law. Additionally, the facts as pled, and as supported in the accompanying Declaration of Maria Catapano, support that the current forum is proper. The Defendant Wal-Mart has formed a global sourcing organization known as Walmart Global Sourcing. Upon information and belief, Walmart Global Sourcing is an operating division of Wal-Mart, operating and controlled at least in part from Wal-Mart’s Bentonville, Arkansas offices. Wal-Mart, through Walmart Global Sourcing, has distributed unauthorized copies of WMT’s copyrighted Boots doll in Mexico, and has thereby violated Title 2, Chapter 3, Article 27 (IV) of the copyright laws of Mexico (Ley Federal del Derecho de Autor). As pled, upon information and belief, Wal-Mart, through Walmart Global Sourcing, did not merely authorize the acquisition of goods, but in fact acquired the infringing goods and distributed the infringing goods into Mexico for further distribution to the public by Wal- Mart Mexico. Accordingly, Wal-Mart, through the actions of Walmart Gloabl Soucing has violated the the copyright laws of Mexico. II. DISCUSSION A. The Amended Complaint Pleads Facts Sufficient to Establish That Diversity Jurisdiction Under 28 U.S.C.. § 1332 is Appropriate in the Current Case. It is well noted that “federal courts are courts of limited jurisdiction, and the validity of an order of a federal court depends upon that court's having jurisdiction over both the Case 1:16-cv-03107-NGG-RER Document 22-3 Filed 11/30/16 Page 2 of 9 PageID #: 151 -2- subject matter and the parties" and that the plaintiff bears the burden of proving subject matter jurisdiction by a preponderance of the evidence. See Int'l Diamond Imps., Inc. v. Oriental Gemco Ny, Inc., 64 F. Supp. 3d 494, 505 (S.D.N.Y. 2014)(quoting Al-Khazraji v. United States, 519 Fed. App'x 711, 713 (2d Cir. 2013)). 28 U.S.C. § 1332 confers subject matter jurisdiction on the federal district courts, giving them original jurisdiction over cases "where the matter in controversy exceeds $75,000, exclusive of interest and costs and is between . . . (2) citizens of a State and citizens or subjects of a foreign state[.]" and a corporation takes the citizenship of both the state in which it is incorporated and the state where "it has its principal place of business.” 28 U.S.C. § 1332(c)(1); Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 830, 109 S. Ct. 2218, 104 L. Ed. 2d 893 (1989); International Shipping Co., S.A., v. Hydra Offshore, Inc., 875 F.2d. Plaintiff is a resident corporation of New York and brought this action against Wal- Mart a resident corporation of Deleware (its place of incorporation) and Arkansas (the location of its principal place of business), and accordingly complete diversity is present in the current case. Further, in light of the direct infringement by Wal-Mart, Wal-Mart’s inducement of infringement by others, and the intentionally infringing conduct of Wal-Mart the amount in controversy exceeds $75,000. Accordingly, Jurisdiction is appropriate under 28 U.S.C. § 1332. B. Wal-Mart Has Sold the Accused Infringing Goods into Mexico for the Express Purpose of Further Distribution to the Public. Plaintiff notes that nowhere in its declarations or motion to dismiss has Wal Mart asserted that Walmart Global Sourcing is an independent entity separate form Wal-Mart. Nor has Wal Mart challenged the facts as pled in both the Complaint and Amended Complaint, that Walmart Global Sourcing is an operating division of Wal-Mart, operating and controlled Case 1:16-cv-03107-NGG-RER Document 22-3 Filed 11/30/16 Page 3 of 9 PageID #: 152 -3- at least in part from Wal-Mart’s Bentonville, Arkansas offices. Accordingly, the actions of Walmart Global Sourcing are appropriately attributed to Defendant, Wal-Mart. Walmart Global Sourcing, and thus Wal-Mart, has distributed the accused infringing goods into Mexico, in violation of Mexican Copyright law. Title 2, Chapter 3, Article 27 (IV) of the copyright laws of Mexico (Ley Federal del Derecho de Autor) explicitly prohibits the “the distribution of the work, including sale or other forms of transfer of the ownership of the physical material in which it is embodied.” Wal Mart has distributed infringing works into Mexico by distributing the accused infringing goods to Wal Mart Mexico. Further, Wal-Mart distributed the goods to Wal-Mart Mexico with the explicit intent that such good be further distributed to the Mexican public. United States courts have accepted that the definition of distribute is synonymous with the definition of "publication," and thus “the offer to distribute for the purpose of further distribution” constitutes distribution to the public.” See 17 U.S.C. § 101; In re Napster, Inc., 377 F. Supp. 2d at 802-05 (noting that plaintiff fell short of demonstrating either "the actual dissemination of a copyrighted work or an offer to distribute that work for the purpose of its further distribution...")(emphasis added). C. This Court Has Jurisdiction Over a Valid Cause of Action Brought Under the Copyright Laws of a Foreign Country. New York district courts have repeatedly held that the district court may exercise subject matter jurisdiction in cases of transnational copyright infringement. See Levitin v. Sony Music Entm't, 101 F. Supp. 3d 376, 386 (S.D.N.Y. 2015) (the court dismissed the actions under United States law, but denied the dismissal of the action under foreign copyright laws.); Well-Made Toy Mfg. Corp. v. Lotus Onda Indus. Co., 2003 U.S. Dist. LEXIS 68, at *31-32 (S.D.N.Y. Jan. 3, 2003); London Film Prods. Ltd. v. Intercontinental Case 1:16-cv-03107-NGG-RER Document 22-3 Filed 11/30/16 Page 4 of 9 PageID #: 153 -4- Communications, 580 F. Supp. 47, 48-50 (S.D.N.Y. 1984); Frink America, Inc. v. Champion Road Machinery Ltd., 961 F. Supp. 398, 404-05 (N.D.N.Y. 1997); see also 4 Nimmer § 17.03; 3 Paul Goldstein, Copyright § 16.2 (2000) ("Causes of action for copyright infringement are transitory and may be brought in any court that has jurisdiction over the defendant. Subject to jurisdiction requirements, a copyright owner may sue an infringer in United States courts even though the only alleged infringement occurred in another country.") Defendants have not challenged personal jurisdiction, and accordingly it is proper for this court to exercise jurisdiction over the current dispute under Mexican copyright law. D. Venue is Appropriate Under 28 U.S.C §§ 1391 (b), and New York is the Proper Forum This action has been brought in the home forum of Plaintiff, and the Supreme Court has stated that “when the home forum has been chosen, it is reasonable to assume that this choice is convenient.” See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255-256 (1981). Further, “[t]here is ordinarily a strong presumption in favor of the plaintiff's choice of forum.” Murray v. BBC, 81 F.3d 287, 290 (2d Cir. 1996)(citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255, 70 L. Ed. 2d 419, 102 S. Ct. 252 (1981). Defendant has not submitted substantial reason to overcome these two presumptions that the home forum, as chosen by Plaintiff, is a convenient and appropriate forum for this action. Wal-Mart relies heavily Murray v. BBC, 81 F.3d 287, 291-92 (2d Cir. 1996), affirming the District Court’s decision to dismiss a claim based on British law, however, importantly the Plaintiff was also a British resident, and not a resident of the United States. In affirming the decision the 2 circuit specifically relied on this fact, noting that the casend “involves a dispute between British citizens over events that took place exclusively in the United Kingdom” and holding that “the district court correctly accorded Murray's choice of Case 1:16-cv-03107-NGG-RER Document 22-3 Filed 11/30/16 Page 5 of 9 PageID #: 154 -5- forum less deference than that given to domestic plaintiffs.” Id. Wal Mart also cites Levitin v. Sony Music Entm't, 101 F. Supp. 3d 376, 392 (S.D.N.Y. 2015) for the purpose fo showing that an alternate forum exists, but as the Levitin court concluded, despite an alternate forum, the Plaintiff’s choice of forum was not disturbed. Id. When deciding on a choice of forum a court should weigh the parties interest versus the public interest. Id. The interest of the litigants includes the plaintiff's initial choice of forum; the convenience of the parties and the witnesses; the relative ease of access to sources of proof; the availability of compulsory process for the attendance of witnesses; the location of relevant documents and other tangible evidence; questions as to the enforceability of judgment if one is obtained; and “all other practical problems that make trial of a case easy, expeditious and inexpensive." Id.; see also Red Bull Assocs. v. Best Western Int'l, Inc., 862 F.2d 963, 966-67 (2d Cir. 1988); Calavo Growers of Cal. v. Generali Belgium, 632 F.2d 963, 966-67 (2d Cir. 1980); Jasol Carpet, Inc., 1997 WL 97831, at *3; Elite Parfums, Ltd. v. Rivera, 872 F. Supp. 1269, 1271 (S.D.N.Y. 1995). Importantly, convenience of the parties is a nil point when one party’s inconvenience is simply exchanged for the other’s. Beatie & Osborn LLP, 431 F. Supp. 367, 396 (S.D.N.Y 2006)(convenience of parties is neutral factor...if transfer of venue would merely shift the inconvenience from one party to another.) As made clear in the accompanying declaration of Maria Catapano, WMT and its employees are residents of this judicial district. All key document and witnesses on behalf of plaintiff, including all information regarding the development of the copyrighted Boots doll, are located on Long Island in this judicial district. Further, defendant is a Delaware corporation with its primary place of business in Arkansas, and there is no reason why Mexico would be a more convenient forum with respect to defendants. In fact, since both parties are Unites States citizens, it seem far more appropriate for the dispute to be in United Case 1:16-cv-03107-NGG-RER Document 22-3 Filed 11/30/16 Page 6 of 9 PageID #: 155 -6- States court, not Mexico. Accordingly, it is respectfully submitted that the parties interest weigh heavily in favor of this forum. “The public interests to be considered are "(1) the administrative difficulties associated with court congestion; (2) the unfairness of imposing jury duty on a community with no relation to the litigation; (3) the interest in having localized controversies decided at home; and (4) avoiding difficult problems in conflict of laws and the application of foreign law." Levitin, 101 F. Supp. 3d at 392 (citing Rio Tinto PLC v. Vale S.A., 2014 U.S. Dist. LEXIS 174336, 2014 WL 7191250, at * 15 (S.D.N.Y. Dec. 17, 2014)). Of these factors, Wal-Mart points to only two factors that support dismissing the case. First, Wal-Mart relies on the Murray v. BBC case noted above for the broad assertion that the courts will dismiss an action when the cause of the dispute (the sale of the infringing goods) occurred outside the Unites States, As noted above, Murray v. BBC does not stand for such a point, and the dismissal was based in large part on the fact that all of the litigants were British residents. Plaintiff was unable to locate any case where a resident plaintiff of a forum had its case dismissed or transferred simply because the acts giving rise to the dispute occurred outside of the forum. Second, Wal-Mart relies on the fact that this court would be forced to interpret Mexican copyright law. However, As the Levitin court noted "courts must guard against an excessive reluctance to undertake the task of deciding foreign law, a chore federal courts must often perform.” Levitin v. Sony Music Entm't, 101 F.at 392 (S.D.N.Y. 2015) (citing Augstein v. Leslie, 2012 U.S. Dist. LEXIS 2919, 2012 WL 77880, at *3 (S.D.N.Y. Jan. 10, 2012). Copyright infringement is not a complex legal issue, and, as in Levitin, Wal Mart has not provided any specific complexity or reason why this court would have difficult applying the basic standards of authorship and copying that will be at the heart of this dispute. Case 1:16-cv-03107-NGG-RER Document 22-3 Filed 11/30/16 Page 7 of 9 PageID #: 156 -7- As discussed above, plaintiff chose this forum, and the convenience of the parties is neutral at best in this case. Despite some public interest factors weighing against this forum, several factors also weigh in favor of New York, since this court certainly has an interest and relationship to the harm caused to a resident corporation of this forum, and the majority of Plaintiff’s evidence will come from Well Made’s records and employees, all located within this judicial district. And most importantly, this is plaintiff’s home forum, and the forum plaintiff has chosen to bring its action, and defendant has failed to provide sufficient reason to overcome the two very strong presumptions in favor of plaintiff’s choice of its home forum. Accordingly this forum is an appropriate forum for the current dispute. III. CONCLUSION Plaintiff’s Amended Complaint has withdrawn its claims under Unites States Copyright Law, however, diversity jurisdiction is present and this court has jurisdiction to hear cases involving foreign copyright infringement, providing personal jurisdiction is satisfied. Personal Jurisdiction has not been challenged, and accordingly the case should not be dismissed for lack of subject matter jurisdiction or a failure to state a claim. Plaintiff, a resident corporation of this judicial district and owner of the copyright infringed by Defendants has been harmed by the conduct of Defendant. Accordingly this judicial district, its home district, was chosen by Plaintiff and it is an appropriate Forum for the dispute. Defendants’ motion should be denied, and the case should not be dismissed. Case 1:16-cv-03107-NGG-RER Document 22-3 Filed 11/30/16 Page 8 of 9 PageID #: 157 -8- Dated: New York, New York Respectfully submitted, September 19, 2016 /s/ Joseph A. Dunne Joseph A. Dunne (JD 0674) Gerard F. Dunne (GD 3323) Law Office of Gerard F. Dunne, P.C. 41 Union Square West, Suite 1125 New York, NY 10003 212-645-2410 Attorneys for Plaintiff EnviroCare Technologies, LLC CERTIFICATE OF SERVICE I hereby declare under penalty of perjury that on September 19, 2016, the foregoing PLAINTIFF’S RESPONSE IN OPPOSITION TO DEFENDANT’S MOTION TO DISMISS was served on counsel for Defendant, Wal-Mart Stores. Inc., by email to Laura Chapman (lchapman@sheppardmullin.com) and Tyler E. Baker (tbaker@sheppardmullin.com) of Sheppard Mullin Richter & Hampton LLP, 30 Rockefeller Plaza, New York, New York 10112 Dated: September 19, 2016 Respectfully submitted, /s/ Joseph A. Dunne Joseph A. Dunne Case 1:16-cv-03107-NGG-RER Document 22-3 Filed 11/30/16 Page 9 of 9 PageID #: 158 1 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK -----------------------------------------------------------X WELL-MADE TOY M'FG. CORPORATION : a corporation of the State of New York : : Plaintiff, : Civil Action No.: : 16-cv-03107 v. : : WAL-MART STORES, INC. : a corporation of Delaware : -----------------------------------------------------------X DECLARATION OF MARIA CATAPANO IN OPPOSITION TO MOTION TO DISMISS I, Maria Catapano, hereby declare the folowing to be true and correct to the best of my knowledge and belief; and make the folowing statements with the knowledge that any false statements wilfuly made may subject me to criminal charges of perjury under the laws of the United States. 1. I am the Director of sales of of Wel-made Toy M'fg. Corporation (“WMT”), the plaintiff named in the above captioned mater. I make this declaration in opposition to Defendant’s motion to dismiss this mater. 2. WMT operates out of the State of New York with its place of business in this district, in Port Washington, NY 3. Al of WMT’s records and al individuals with knowledge concerning the creation, development and marketing of its copyrighted design for the Boots dol, registered in the United States Copyright Office, United States Copyright Registration No. Vau 548-358, are located on Long Island in the State of New York. Case 1:16-cv-03107-NGG-RER Document 22-4 Filed 11/30/16 Page 1 of 2 PageID #: 159 2 4. On behalf of WMT, I can state that al records and evidence available to WMT in this mater are located on Long Island in the State of New York, or at the office of our atorney, Mr. Gerard F. Dunne of New York, New York. Dated: September 19, 2016 _________________________ Maria Catapano Case 1:16-cv-03107-NGG-RER Document 22-4 Filed 11/30/16 Page 2 of 2 PageID #: 160 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK Case No. 1:16-cv-03107-NGG-RER REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT AND IN SUPPORT OF DISMISSAL OF PLAINTIFF’S FIRST AMENDED COMPLAINT ORAL ARGUMENT REQUESTED SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 30 Rockefeller Plaza New York, NY 10112 Telephone: (212) 653-8700 Facsimile: (212) 653-8701 Four Embarcadero Center Seventeenth Floor San Francisco, CA 94111 Telephone: (415) 434-9100 Facsimile: (415) 434-3947 Attorneys for Defendant Wal-Mart Stores, Inc. WELL-MADE TOY M’FG. CORPORATION, Plaintiff, v. WAL-MART STORES, INC., Defendant. Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 1 of 17 PageID #: 161 -i- TABLE OF CONTENTS Page(s) I. PRELIMINARY STATEMENT .........................................................................................1 II. ARGUMENT .......................................................................................................................2 A. The “International” Copyright Law Claim Should Be Dismissed ...........................2 B. This Court Lacks Subject Matter Jurisdiction Over Walmart .................................3 C. This Court Lacks Personal Jurisdiction Over Walmart ...........................................4 1. There Is No General Jurisdiction .................................................................4 2. There Is No Specific Jurisdiction .................................................................5 3. It Is Timely and Appropriate to Challenge Personal Jurisdiction At This Time .....................................................................................................6 D. Venue Is Not Proper.................................................................................................7 E. The Court Should Dismiss the FAC Based on The Doctrine of Forum Non Conveniens ...............................................................................................................8 III. CONCLUSION ..................................................................................................................10 Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 2 of 17 PageID #: 162 -ii- TABLE OF AUTHORITIES Page(s) FEDERAL CASES Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez 305 F.3d 120 (2d Cir. 2002).......................................................................................................5 Bridgeman Art Library, Ltd. v. Corel Corp. 25 F. Supp. 2d 421 (S.D.N.Y. 1998)..........................................................................................3 Clark St. Wine & Spirits v. Emporos Sys. Corp. 754 F. Supp. 2d 474 (E.D.N.Y. 2010) .......................................................................................7 Daimler AG v. Bauman 134 S. Ct. 746 (2014) .............................................................................................................4, 5 Diversapack LLC v. Elite Staffing, Inc. No. 11-CV-2482 SJF ETB, 2012 WL 1032687 (E.D.N.Y. Mar. 20, 2012) ..............................5 Gill v. Phoenix Energy Mgmt. No. 15-CV-1102 (DLI)(RML), 2016 U.S. Dist. LEXIS 138093 (E.D.N.Y. Sept. 30, 2016) ..........................................................................................................3 Holzsager v. Valley Hosp. 646 F.2d 792 (2d Cir. 1981).......................................................................................................6 Hoopla Sports & Entm’t v. Nike, Inc. 947 F. Supp. 347 (N.D. Ill. 1996) ..............................................................................................2 Info. Res., Inc. v. Dun & Bradstreet Corp. 127 F. Supp. 2d 411 (S.D.N.Y. 2000)......................................................................................10 ITSI T.V. Prods., Inc. v. California Auth. of Racing Fairs 785 F. Supp. 854 (E.D. Cal. 1992), aff’d in part, rev’d in part sub nom. ITSI T.V. Prods., Inc. v. Agric. Ass’ns, 3 F.3d 1289 (9th Cir. 1993) .................................................8 Levitin v. Sony Music Entm’t 101 F. Supp. 3d 376 (S.D.N.Y. 2015)....................................................................................8, 9 Lipton v. Cnty. of Orange 315 F. Supp. 2d 434 (S.D.N.Y. 2004)........................................................................................3 MacNeil v. Whittemore 254 F.2d 820 (2d Cir. 1958).......................................................................................................7 Overseas Media, Inc. v. Skvortsov 277 F. App’x 92 (2d Cir. 2008) ...........................................................................................9, 10 Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 3 of 17 PageID #: 163 -iii- FEDERAL CASES (Cont'd) Overton v. Wyeth, Inc. No. CA 10-0491-KD-C, 2011 WL 1343392 (S.D. Ala. Mar. 15, 2011) ...................................6 Peckio v. Shay 708 F. Supp. 75 (S.D.N.Y. 1989) ..............................................................................................9 Refco Grp. Ltd., LLC v. Cantor Fitzgerald, L.P. No. 13 CIV. 1654 RA, 2014 WL 2610608 (S.D.N.Y. June 10, 2014) ......................................5 Rodriguez v. Casa Salsa Rest. 260 F. Supp. 2d 413 (D.P.R. 2003) ............................................................................................2 Sonera Holding B.V. v. Cukurova Holding A.S. 750 F.3d 221 (2d Cir. 2014).......................................................................................................5 State Auto Ins. Cos. v. Whirlpool Corp. 62 F. Supp. 3d 857 n.5 (W.D. Wis. 2014) .................................................................................6 Sternkopf v. White Plains Hosp. No. 14-CV-4076 (CS), 2015 U.S. Dist. LEXIS 129996 (S.D.N.Y. Sept. 25, 2015) .................3 Thorn v. New York City Dept. of Social Servs. 523 F. Supp. 1193 (S.D.N.Y. 1981)...........................................................................................7 Torah Soft Ltd. v. Drosnin 136 F. Supp. 2d 276 (S.D.N.Y. 2001)......................................................................................10 FEDERAL STATUTES & RULES 17 U.S.C. § 104(c) ...........................................................................................................................2 28 U.S.C § 1331 ...............................................................................................................................1 28 U.S.C § 1332 ...............................................................................................................................1 28 U.S.C. § 1367(c) .........................................................................................................................1 28 U.S.C. § 1391 ..............................................................................................................................9 28 U.S.C. § 1391(b) .........................................................................................................................7 28 U.S.C. § 1391(b)(1) ....................................................................................................................7 28 U.S.C. § 1391(b)(2) ....................................................................................................................8 28 U.S.C. § 1391(b)(3) ....................................................................................................................8 28 U.S.C. § 1391(c)(2) .....................................................................................................................7 28 U.S.C. § 1404(a) .........................................................................................................................1 Federal Rules of Civil Procedure Rules and Commentary Rule 12 ............................................................................................6, 7 Rule 12(b)(1) ..............................................................................................................................1 Rule 12(b)(2) ..............................................................................................................................1 Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 4 of 17 PageID #: 164 -iv- FEDERAL STATUTES & RULES (Cont'd) Federal Rules of Civil Procedure (Cont'd) Rule 12(b)(3) ..........................................................................................................................1, 7 Rule 12(b)(6) ..............................................................................................................................1 U.S. Copyright Act ......................................................................................................................1, 3 OTHER AUTHORITIES International Copyright Law ........................................................................................................1, 2 Mexican Copyright Law ..............................................................................................................1, 2 Universal Copyright Convention (UCC) .....................................................................................2, 3 Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 5 of 17 PageID #: 165 -1- Defendant Wal-Mart Stores, Inc. (“Walmart”), by and through its undersigned counsel, and pursuant to Rules 12(b)(1), 12(b)(2), 12(b)(3), and 12(b)(6) of the Federal Rules of Civil Procedure, the doctrine of forum non conveniens, 28 U.S.C. § 1404(a), and the power granted to this Court under 28 U.S.C. § 1367(c), submits this reply in support of dismissing the First Amended Complaint, Dkt. No. 12 (the “FAC”). I. PRELIMINARY STATEMENT The opposition brief (“Opposition” or “Opp.”) of Well-Made Toy M’fg Corporation (“Plaintiff” or “Well-Made”) concedes that Well-Made never had any actionable claim for violation of the U.S. Copyright Act, despite that claim being the thrust of its entire initial Complaint. Indeed, at the August 2, 2016 conference before this Court, Well-Made insisted that it had a viable U.S. Copyright claim which it intended to continue to pursue, despite having reviewed Walmart’s written submission to the court explaining why that claim should be dismissed for failure to state a claim. In an about-face, Well-Made filed its FAC on September 19, 2016 after reviewing Walmart’s motion to dismiss. The FAC eliminates Well-Made’s claim for violation of United States law and any assertion that anything that could amount to a copyright infringement took place in the United States. The FAC asserts only claims for “copyright infringement under International and Mexican Copyright Law” (Opp. at 1)1 and now makes clear that all allegedly infringing dolls were marketed, imported, and distributed only into or in Mexico, and not the United States. 1 The FAC newly asserts jurisdiction under 28 U.S.C § 1331 pursuant to international treaties (as opposed to a federal question pursuant to the U.S. Copyright Act) and also newly asserts that diversity jurisdiction exists pursuant to 28 U.S.C § 1332 based on Well-Made’s New York corporate citizenship and Walmart’s Delaware corporate citizenship. See FAC ¶¶ 3-4. Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 6 of 17 PageID #: 166 -2- The claims in the FAC under “international” and Mexican law are the same as they appear in the original complaint. Both the initial Complaint (“Compl.”) and the FAC assert a cause of action for “violation of the applicable international conventions including the Universal Copyright Convention and the Berne Convention.” Compl. ¶ 6; FAC ¶ 6. However, the FAC eliminates the references to U.S. law. The claims in the FAC are either non-actionable or do not belong before this Court and should be dismissed. Addressing these defective claims now is appropriate because Well-Made addressed them in its Opposition, in which Well-Made argues incorrectly that its newly-filed FAC should survive a motion to dismiss,2 and because this Court issued an order at the parties’ stipulated request on September 26, 2016 permitting the filing of this brief to address the FAC and permitting Plaintiff the opportunity to file a sur-reply brief. See Dkt. No. 14 at 2. II. ARGUMENT A. The “International” Copyright Law Claim Should Be Dismissed As explained in Walmart’s opening brief (the “Opening Brief”), Well-Made’s claim of direct and indirect infringement under the UCC and the Berne Convention are not valid causes of action because neither the UCC nor the Berne Convention creates a cause of action. 17 U.S.C. § 104(c); Rodriguez v. Casa Salsa Rest., 260 F. Supp. 2d 413, 421-22 (D.P.R. 2003); Hoopla Sports & Entm’t v. Nike, Inc., 947 F. Supp. 347, 355 (N.D. Ill. 1996); see Opening Brief at 16. Walmart also explained that neither the UCC nor the Berne Convention confer subject matter 2 See Opp. at 1 (“Plaintiff, Well-made Toy M’fg. Corporation . . . hereby opposes Defendant, Wal-Mart Stores., Inc.’s . . . Motion to Dismiss the above captioned suit. Plaintiff’s First Amended Complaint, filed on September 19, 2016 as Docket Entry No. 12, , [sic] alleges facts sufficient to establish that this court has Subject Matter Jurisdiction over the claims of copyright infringement under International and Mexican Copyright Law.”). Well-Made did not simply file an FAC without an opposition to this motion. Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 7 of 17 PageID #: 167 -3- jurisdiction for an action asserting copyright infringement outside of the U.S. See Opening Brief at 16 (citing Quantitative Fin. Software, Ltd. v. Infinity Fin. Tech., Inc., No. 97 Civ. 7879 (LMM), 1998 U.S. Dist. LEXIS 11575, at *6-7 (S.D.N.Y. July 27, 1998); De Bardossy v. Puski, 763 F. Supp. 1239, 1245 (S.D.N.Y. 1991); see also James W. Newton v. Diamond, 204 F. Supp. 2d 1244, 1259 (C.D. Cal. 2002) (“at least one alleged act of infringement must be completed entirely within the United States’ that would subject the defendant to liability under the Copyright Act.”)); see also Bridgeman Art Library, Ltd. v. Corel Corp., 25 F. Supp. 2d 421 (S.D.N.Y. 1998). Well-Made has not refuted these arguments or attempted to distinguish any of these cases. Courts deem a plaintiff’s failure to address a defendant’s arguments as a concession. Gill v. Phoenix Energy Mgmt., No. 15-CV-1102 (DLI)(RML), 2016 U.S. Dist. LEXIS 138093, at *14-15 (E.D.N.Y. Sept. 30, 2016); Sternkopf v. White Plains Hosp., No. 14-CV-4076 (CS), 2015 U.S. Dist. LEXIS 129996, at *27 n.9 (S.D.N.Y. Sept. 25, 2015) (“Because Plaintiff failed to address Defendant’s exhaustion defense in his opposition, I could regard Plaintiff's silence as a concession with respect to that argument.”); Lipton v. Cnty. of Orange, 315 F. Supp. 2d 434, 446 (S.D.N.Y. 2004) (“This Court may, and generally will, deem a claim abandoned when a plaintiff fails to respond to a defendant’s arguments that the claim should be dismissed.”) (citing cases). This Court should therefore dismiss Well-Made’s claims asserted under “international law” as well as strike any reference to the UCC and the Berne Convention in the FAC. B. This Court Lacks Subject Matter Jurisdiction Over Walmart In its Opposition and in the FAC, Well-Made, for the first time, relies on diversity jurisdiction as the basis for this court to assert subject matter jurisdiction. See Opp. at 1-2; FAC ¶ 4. Previously, subject matter jurisdiction was based on a federal question presented by Well- Made’s claim under the U.S. Copyright Act. Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 8 of 17 PageID #: 168 -4- Diversity jurisdiction requires that the plaintiff show that the “amount in controversy” exceeds $75,000. See 28 U.S.C § 1332. In support of its claim of diversity jurisdiction, Well- Made makes the naked allegation that the amount in controversy in this action exceeds $75,000. Opp. at 1-2; FAC ¶ 4. However, there is no factual basis for this allegation because Walmart’s gross profits on the accused products are significantly less than $75,000, as explained in detail in the confidential declaration filed herewith under seal. The FAC should be dismissed for lack of subject matter jurisdiction. C. This Court Lacks Personal Jurisdiction Over Walmart Well-Made’s statements in its Opposition, and its new allegations in the FAC, make clear for the first time that Well-Made is not alleging any activity by Walmart that relates to, or could be considered a sufficient jurisdictional contact with, New York. As a result, personal jurisdiction is lacking. Well-Made’s initial Complaint vaguely alleged that “the Walmart Global Sourcing organization of defendant Wal-Mart infringed upon the copyright of Well Made in its Boots doll by causing to be produced, and acquiring for sale in Mexico and elsewhere, soft sculpted dolls that have been copied directly from and are substantially similar in appearance to the copyrighted design of the Boots doll of Well Made.” Compl. ¶ 16 (emphasis added). Well-Made’s Opposition and new allegations in the FAC allege that the only activity of which Well-Made is complaining took place exclusively in Mexico or Arkansas. Thus, both the Opposition and the FAC now clarify that Well-Made is alleging no activity by Walmart in, into, or having to do with New York. This Court thus lacks personal jurisdiction over Walmart. 1. There Is No General Jurisdiction A corporation is subject to general jurisdiction (1) in the state where it is incorporated, or (2) where it has its principal place of business. Daimler AG v. Bauman, 134 S. Ct. 746, 761 Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 9 of 17 PageID #: 169 -5- (2014) (systematic and continuous business in the forum state insufficient for general jurisdiction); Refco Grp. Ltd., LLC v. Cantor Fitzgerald, L.P., No. 13 CIV. 1654 RA, 2014 WL 2610608, at *8 (S.D.N.Y. June 10, 2014); Sonera Holding B.V. v. Cukurova Holding A.S., 750 F.3d 221, 225 (2d Cir. 2014). Walmart is a Delaware corporation with a principal place of business in Arkansas. Opp. at 2; FAC ¶ 4. General jurisdiction is therefore lacking. Daimler, 134 S. Ct. at 761. 2. There Is No Specific Jurisdiction Based on the statements in Well-Made’s Opposition and the new allegations in the FAC, it is now clear there is no specific jurisdiction over Walmart. Specific jurisdiction requires a sufficient link between the plaintiff’s cause of action and the defendant’s contacts with the forum state. See Daimler, 134 S. Ct. at 760; Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 127 (2d Cir. 2002) (specific jurisdiction exists where “the claim arises out of, or relates to, the defendant’s contacts with the forum.”). Plaintiff’s FAC alleges no contacts between Walmart and New York, other than the conclusory allegation that Walmart is “doing systematic and continuous business” in New York (which Daimler makes clear is insufficient), and alleges no cause of action relating to any New York contact; instead, the FAC alleges that the complained-of activity occurred in Mexico (and Arkansas). The Declaration of Maria Catapano, Director of sales of Well-Made, which Plaintiff submitted in support of its Opposition, merely establishes that Well-Made, not Walmart, has contacts with New York. That has no bearing on personal jurisdiction over Walmart. See Diversapack LLC v. Elite Staffing, Inc., No. 11-CV-2482 SJF ETB, 2012 WL 1032687, at *5 (E.D.N.Y. Mar. 20, 2012) (“plaintiff's own contacts with New York are not relevant to the issue of personal jurisdiction over defendant.”). Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 10 of 17 PageID #: 170 -6- By Plaintiff’s own recent admission in the Opposition and FAC, the products accused of infringement were sold in Mexico, not New York. That fact, and the lack of any allegation in the FAC linking the alleged causes of action to any contact by Walmart with the forum state, should result in the dismissal of the FAC for lack of personal jurisdiction. 3. It Is Timely and Appropriate to Challenge Personal Jurisdiction At This Time Walmart may raise personal jurisdiction now because this brief is part of Walmart’s first motion to dismiss. In addition, Well-Made will not be prejudiced, since it has the right under the Court’s order issued on September 26, 2016 to file a sur-reply brief to address any arguments raised in this reply. See Dkt. No. 14 at 2. Moreover, the issue of personal jurisdiction arose in connection with Plaintiff’s Opposition brief and newly-filed FAC, and therefore can be addressed now. See State Auto Ins. Cos. v. Whirlpool Corp., 62 F. Supp. 3d 857, 861 n.5 (W.D. Wis. 2014) (“a defendant may . . . bring a Rule 12 motion in response to an amended complaint that raises new claims or changes the nature of a suit.”); Federal Rules of Civil Procedure, Rules and Commentary Rule 12, February 2016 Update (“To the extent that the new material included in the amended complaint gives rise to a Rule 12 defense or objection not available based on the original complaint, a second Rule 12 pre-answer motion raising those newly-available defenses is permitted.”); cf. Holzsager v. Valley Hosp., 646 F.2d 792, 796 (2d Cir. 1981) (“a party cannot be deemed to have waived objections or defenses which were not known to be available at the time they could first have been made, especially when it does raise the objections as soon as their cognizability is made apparent.”); Overton v. Wyeth, Inc., No. CA 10-0491-KD-C, 2011 WL 1343392, at *4 (S.D. Ala. Mar. 15, 2011) (“[T]he new matter contained in the amended complaint not only clarifies and supplements the allegations in the original complaint, it gives rise to a new, Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 11 of 17 PageID #: 171 -7- previously inapplicable Rule 12 motion, and had it originally been in the complaint, it would have allowed the . . . Defendants to object by filing the current motion.”) (internal citations and quotation marks omitted).3 D. Venue Is Not Proper Well-Made argues that venue is appropriate under 28 U.S.C. § 1391(b). See Opp. at 4-7. However, the requirements for venue under 28 U.S.C. § 1391(b) are not met here. The action should therefore be dismissed for improper venue under Rule 12(b)(3). Under 28 U.S.C. § 1391(b), venue is only proper in the federal judicial district: (1) where the defendant “resides,” (2) where “a substantial part of the events or omissions giving rise to the claim occurred,” or (3) if there is no district in which an action may otherwise be brought, where the defendant is subject to personal jurisdiction with respect to the action. Id. Venue is improper under § 1391(b)(1) because Walmart, a corporation, does not “reside” in the Eastern District of New York. “A corporation is deemed to reside . . . in any judicial district in which such defendant is subject to the court’s personal jurisdiction with respect to the civil action in question.” 28 U.S.C. § 1391(c)(2). As explained above, there is no personal jurisdiction over Walmart here. 3 In the alternative, Walmart should be permitted to amend its motion to dismiss to address the personal jurisdiction issue, which would be permissible since (a) the Court has not yet ruled on Walmart’s motion to dismiss, (b) such an amended motion is not interposed for delay, and (c) its consideration would expedite the disposition of the case on the merits. Such amended motions are commonly made. See, e.g., MacNeil v. Whittemore, 254 F.2d 820, 821 (2d Cir. 1958) (dismissal after granting leave to amend motion to dismiss proper because the Rules do “not in any way prevent a judge in his discretion from permitting a party to expand the grounds of motion well in advance of a hearing.”); Clark St. Wine & Spirits v. Emporos Sys. Corp., 754 F. Supp. 2d 474, 480 (E.D.N.Y. 2010) (permitting successive motions to dismiss because new motion was not interposed for delay and its consideration would expedite the disposition of the case on the merits); Thorn v. New York City Dept. of Social Servs., 523 F. Supp. 1193, 1196 n. 1 (S.D.N.Y. 1981) (same). Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 12 of 17 PageID #: 172 -8- Moreover, venue is not proper under § 1391(b)(2) because, as explained previously, Walmart did not sell any allegedly infringing products in the U.S. (or in this district), and Plaintiff has not alleged that any part of the events giving rise to the claims occurred in this district. Nor is venue proper under § 1391(b)(3) because, as explained above, Walmart is not subject to the personal jurisdiction of this Court. For all of these reasons, this action should be dismissed for improper venue. E. The Court Should Dismiss the FAC Based on The Doctrine of Forum Non Conveniens As explained in Walmart’s Opening Brief, New York is not the proper forum for Well- Made’s claims under foreign law. Although Well-Made asserts the conclusory and unsupported statement that “[c]opyright infringement is not a complex legal issue” (Opp. at 6) as a reason for this Court to hear the Mexican law claim, that unsupported assertion is directly contradicted, at least with respect to Mexican copyright claims, by the findings of other federal courts assessing this very issue. See, e.g., ITSI T.V. Prods., Inc. v. California Auth. of Racing Fairs, 785 F. Supp. 854, 867 n.20 (E.D. Cal. 1992), aff’d in part, rev’d in part sub nom. ITSI T.V. Prods., Inc. v. Agric. Ass’ns, 3 F.3d 1289 (9th Cir. 1993) (“Even if subject matter jurisdiction did exist over plaintiff’s claim for violation of Mexican copyright law, the court would decline to exercise jurisdiction on forum non conveniens grounds, as codified at 28 U.S.C. § 1404(a), because exercise of jurisdiction over such a claim would work an extreme hardship on the court in discerning and applying Mexican law.”) (emphasis added). Well-Made relies heavily on a single case, Levitin v. Sony Music Entm’t, 101 F. Supp. 3d 376 (S.D.N.Y. 2015), where the court cautioned, in dictum, against the “excessive reluctance to Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 13 of 17 PageID #: 173 -9- undertake the task of deciding foreign law.” Opp. at 6. However, Levitin is easily distinguishable from the case at bar, as the court in Levitin emphasized that if the defendants were to prevail on certain contractual arguments in that case, it “would eliminate any need to apply foreign laws.” Levitin, 101 F. Supp. at 392. Here, Well-Made’s entire case hinges only on the interpretation and application of Mexican law, which, as other federal courts similarly situated have found, may indeed “work an extreme hardship” on this Court. Well-Made also argues that a substantial amount of its witnesses and documents are in New York, including “all information regarding the development of the copyrighted Boots doll[.]” Opp. at 5. The location of Well-Made’s records relating to those topics should not be considered because venue is not proper here. Any convenience to the plaintiff is irrelevant where, as here, the plaintiff’s choice of forum is improper under 28 U.S.C. § 1391. Peckio v. Shay, 708 F. Supp. 75, 76 (S.D.N.Y. 1989) (“because venue does not lie at all in the Southern District, the plaintiffs’ convenience and choice of venue are not relevant.”). Moreover, evidence that Defendant would use is in Mexico, as set forth in Walmart’s Opening Brief and supporting declaration and Well-Made has presented no evidence that Mexican courts are unsuited to hear the case; because the instant case presents issues of Mexican law, there is a Mexican interest in having the matter adjudicated in a Mexican forum. Well- Made’s Opposition ignores all these material realities, which counsel against litigating and hearing this dispute in New York. In Overseas Media, Inc. v. Skvortsov, 277 F. App’x 92 (2d Cir. 2008), the Second Circuit affirmed a grant of dismissal on forum non conveniens grounds where the private interest weighed in favor of dismissal because the witnesses and evidence were concentrated in Russia and because most of the documentary evidence would have to be translated from Russian to Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 14 of 17 PageID #: 174 -10- English. Id. at 97. The court also found that the public interest weighed in favor of dismissal because there was no evidence presented that Russian courts were particularly congested, and because the case presented issues of Russian law, there was “a Russian interest in having the matter adjudicated in a Russian forum.” Id. As in Overseas Media, Well-Made simply has “not shown how this forum would be more convenient for the parties. Indeed, . . . the ‘inconvenience of this forum is quite clear’ because the disputes . . . turn on . . . [Mexican] law, the witnesses and evidence are in [Mexico], and the relevant documents will have to be translated from [Spanish].” Id. 96-97. Further, there should be no concern regarding enforcement of a judgment issued in a Mexican forum because a Mexican court would have no issue enforcing a judgment in Mexico. Well-Made has dropped its claim for U.S. Copyright infringement. U.S. district courts have declined to exercise jurisdiction over copyright infringement claims arising solely under foreign law (including Mexican copyright law), out of the concern over complexity of deciding foreign law. See, e.g., Torah Soft Ltd. v. Drosnin, 136 F. Supp. 2d 276, 292 (S.D.N.Y. 2001) (declining to entertain copyright infringement claims arising under foreign law, including Mexican copyright claim, where U.S. Copyright claim had been dismissed); cf. Info. Res., Inc. v. Dun & Bradstreet Corp., 127 F. Supp. 2d 411, 418 (S.D.N.Y. 2000) (declining to exercise supplemental jurisdiction over foreign law claim because its application would present novel and complex issues of foreign law). All these factors strongly weigh in favor of adjudication in Mexico. III. CONCLUSION For the foregoing reasons, the Court should dismiss all of Plaintiff’s causes of action of both the Complaint and the FAC, and grant Defendant’s motion to dismiss the Complaint and the FAC. Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 15 of 17 PageID #: 175 -11- Respectfully submitted, SHEPPARD MULLIN RICHTER & HAMPTON, LLP Dated: New York, New York /s/ Tyler E. Baker October 28, 2016 Tyler E. Baker 30 Rockefeller Plaza New York, NY 10112-0015 Tel.: (212) 653-8700 Fax: (212) 653-8701 tbaker@sheppardmullin.com Laura L. Chapman (admitted pro hac vice) Four Embarcadero Center Seventeenth Floor San Francisco, CA 94111 Tel.: (415) 434-9100 Fax: (415) 434-3947 lchapman@sheppardmullin.com Attorneys for Defendant Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 16 of 17 PageID #: 176 -12- CERTIFICATE OF SERVICE I, Tyler E. Baker, hereby certify that, on October 28, 2016, in accordance with the Court’s September 26, 2016 Order [Dkt. No. 14], I caused true and correct copies of the annexed: (i) Reply Memorandum Of Law In Further Support Of Defendant’s Motion To Dismiss Plaintiff’s Complaint And In Support Of Dismissal Of Plaintiff’s First Amended Complaint; and (ii) the within Certificate of Service, to be served upon the following via electronic mail and U.S. Mail: Gerald F. Dunne Law Office of Gerard F. Dunne, P.C. 41 Union Square Suite 1125 New York, NY 10003 (212) 645-2410 Fax: (212) 654-2435 Email: jerry.dunne@dunnelaw.net DATED: New York, New York October 28, 2016 /s/ Tyler E. Baker_________________ TYLER E. BAKER Case 1:16-cv-03107-NGG-RER Document 22-5 Filed 11/30/16 Page 17 of 17 PageID #: 177 Case 1:16-cv-03107-NGG-RER Document 22-6 Filed 11/30/16 Page 1 of 1 PageID #: 178 EXHIBIT A (TO BE FILED UNDER SEAL) Case 1:16-cv-03107-NGG-RER Document 22-7 Filed 11/30/16 Page 1 of 1 PageID #: 179 EXHIBIT B (TO BE FILED UNDER SEAL) Case 1:16-cv-03107-NGG-RER Document 22-8 Filed 11/30/16 Page 1 of 1 PageID #: 180 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK -----------------------------------------------------------)( WELL-MADE TOY M'FG. CORPORATION Plaintiff, V. WAL-MART STORES, INC. -----------------------------------------------------------)( Civil Action No.: 16-cv-03107 NGG-RER DECLARATION OF GERARD F. DUNNE I, Gerard F. Dunne, hereby declare the following to be true and conect to the best of my knowledge and belief; and make the following statements with the knowledge that any false statements willfully made may subject me to criminal charges of pe1jury under the laws of the United States. 1. I am counsel for the Plaintiff Well-Made Toy M'fg. Corporation ("WMT") and attached hereto is a true and conect filing of the Defendant Wal-Mart Stores, Inc. For a license to do business I downloaded from the New York Dept. of State website. 2. Wal-Mart Stores, Inc. has filed for and received its license to do business in New York State, and identified Suffolk as its county. -"-~" J_:"~~\ ~ ~ '·X ,,.c-~ ,, , \~ ,.,--""''"''".,,.~'"'/ / ,,r" Dated: November 30, 2016 1 Case 1:16-cv-03107-NGG-RER Document 22-9 Filed 11/30/16 Page 1 of 3 PageID #: 181 NYS Department of State Division of Corporations Entity Information The information contained in this database is current through May 7, 2015. Selected Entity Name: WAL-MART STORES, INC. Selected Entity Status Information Current Entity Name: WAL-MART STORES, INC. DOS ID#: 1453447 Initial DOS Filing Date: JUNE 06, 1990 County: SUFFOLK Jurisdiction: DELAWARE Entity Type: FOREIGN BUSINESS CORPORATION Current Entity Status: ACTIVE Selected Entity Address Information DOS Process (Address to which DOS will mail process if accepted on behalf of the entity) CT CORPORATION SYSTEM 111 8TH AVE NEW YORK, NEW YORK, 10011 Chief Executive Officer DOUG MCMILLON 702 SW 8TH STREET BENTONVILLE, ARKANSAS, 72716 Principal Executive Office WAL-MART STORES, INC. 702 SW 8TH STREET BENTONVILLE, ARKANSAS, 72716 Registered Agent C T CORPORATION SYSTEM 111 EIGHTH A VENUE NEW YORK, NEW YORK, 10011 This office does not record information regarding the names and addresses of officers, shareholders or directors of nonprofessional corporations except the chief executive officer, if provided, which would be listed above. Professional corporations must include the name(s) and address( es) of the initial officers, directors, and shareholders in the initial certificate of incorporation, however this info1mation is not recorded and only available by viewing the certificate. *Stock Information # of Shares Type of Stock $ Value per Share No Information Available *Stock information is applicable to domestic business corporations. Name History Case 1:16-cv-03107-NGG-RER Document 22-9 Filed 11/30/16 Page 2 of 3 PageID #: 182 Filing Date Name Type Entity Name JUN 06, 1990 Actual WAL-MART STORES, INC. Case 1:16-cv-03107-NGG-RER Document 22-9 Filed 11/30/16 Page 3 of 3 PageID #: 183 1 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK -----------------------------------------------------------X WELL-MADE TOY M'FG. CORPORATION : : Plaintiff, : Civil Action No.: : 16-cv-03107 NGG-RER v. : : WAL-MART STORES, INC. : -----------------------------------------------------------X PLAINTIFF’S SUR-REPLY IN OPPOSITION TO DEFENDANT’S MOTION TO DISMISS I. Preliminary Statement Plaintiff, Well-Made Toy M'fg. Corporation, (hereinafter “plaintiff” or “WMT”) has asserted a viable claim under the copyright laws of Mexico, and Defendant Wal-Mart Stores, Inc.’s (hereinafter “defendant” or “Wal-Mart”) has filed a license to do business in the State of New York, and, therefore, personal jurisdiction of this court over Wal-Mart is proper under N.Y.C.P.L.R § 301. As noted in WMT’s initial reply, subject matter jurisdiction of this court over Wal-Mart’s essentially-conceded violation of Mexican copyright law is well plead and justified. Wal-Mart’s motion to dismiss should be denied. II. WMT Has Not Conceded Wal-Mart’s Violation of U.S. Copyright Law In its reply memorandum, Wal-Mart asserts WMT has conceded there had been no violation of the Copyright laws of the United States. 17 U.S.C. § 106 (3) establishes it is a violation of the Copyright laws of the United States for Wal-Mart to distribute copies of the copyrighted work to the public by sale or other transfer of ownership. The First Amended Complaint notes Defendant Wal-Mart formed a global sourcing organization known as Walmart Global Sourcing, and upon information and belief, Walmart Global Sourcing is an operating division of Wal-Mart, operating and Case 1:16-cv-03107-NGG-RER Document 22-10 Filed 11/30/16 Page 1 of 4 PageID #: 184 2 controlled at least in part from Wal-Mart’s Bentonville, Arkansas offices. Wal-Mart, through Walmart Global Sourcing, has distributed unauthorized copies of WMT’s copyrighted Boots doll in Mexico. WMT does not have knowledge as to whether Wal- Mart had possession of the accused dolls in the United States and thus distributed the accused dolls from the United States, and thus withdrew its claims under United States copyright laws. The United States claims have not been conceded, and information to support such claims will likely be forthcoming in discovery. Wal-Mart has not denied Walmart Global Sourcing is an operating unit of Wal- Mart, and did not deny Walmart Global Sourcing acquired the infringing dolls and from the United States distributed the infringing dolls into Mexico for further distribution to the public by Wal- Mart Mexico. Wal-Mart may well have violated 17 U.S.C. § 106 (3.) WMT does not now, however, consider it presently has grounds to support such a claim. III. Wal-Mart Has Filed A License to Do Business in New York And Personal Jurisdiction has been Conceded. As noted in the accompanying declaration of Gerard F. Dunne, Wal-Mart, not surprisingly has filed a license to do business in New York, actually designating Suffolk county as its choice of residence; and under N.Y. Bus. Corp. Law §§ 1301(a), 1304(a)(6); and Bagdon v. Phila. & Reading Coal & Iron Co., 217 N.Y. 432, 111 N.E. 1075 (1916) Wal-Mart has consented to personal jurisdiction under N.Y.C.P.L.R § 301, the general jurisdiction statute. Further, N.Y.C.P.L.R 302(a)3(i) provides jurisdiction for a tort committed outside New York causing injury in New York, if the defendant regularly “derives substantial revenue from goods used or consumed in the state. The injury to WMT for copyright infringement occurred in its home state of New York. Penguin Group (USA) Inc. v. Case 1:16-cv-03107-NGG-RER Document 22-10 Filed 11/30/16 Page 2 of 4 PageID #: 185 3 American Buddha, 640 F.3d 497, 500 (2nd Cir. 2011.) Wal-Mart surely derives substantial revenue from goods used or consumed in the state. IV. Wal-Mart’s Challenge to Personal Jurisdiction Is Not Timely Wal-Mart did not raise the defense of lack of personal jurisdiction in its motion to dismiss the Complaint, and the Complaint as originally filed did rely upon Mexican copyright law. Removing a claim under U.S. law does not change these facts. Rule 12 (g)(2) thus precludes raising the matter of personal jurisdiction under Rule 12(b)(2) at this time. V. Venue Is Proper Wal-Mart has designated its county in New York as “Suffolk” in its filing to do business in New York. Venue in this court is admitted. VI. Forum Is Proper The evidence of a valid copyright of WMT, its damages as to lost sales and harm are all in this Judicial District. The sales of the infringing goods in Mexico and the resulting receipts and profits are all readily obtainable computer records. This forum is certainly not inconvenient. Second, Wal-Mart relies on the fact that this court would be forced to interpret Mexican copyright law. However, "courts must guard against an excessive reluctance to undertake the task of deciding foreign law, a chore federal courts must often perform.” Levitin v. Sony Music Entm't, 101 F.at 392 (S.D.N.Y. 2015) (citing Augstein v. Leslie, 2012 U.S. Dist. LEXIS 2919, 2012 WL 77880, at *3 (S.D.N.Y. Jan. 10, 2012). Copyright infringement is not a complex legal issue, and, as in Levitin, Wal Mart has not provided any specific complexity or reason why this court would have difficult applying the basic standards of authorship and copying that will be at the heart of this dispute. WMT chose this forum, and the convenience of the parties is neutral at best in this Case 1:16-cv-03107-NGG-RER Document 22-10 Filed 11/30/16 Page 3 of 4 PageID #: 186 4 case. Despite some public interest factors weighing against this forum, several factors also weigh in favor of New York, since this court certainly has an interest and relationship to the harm caused to a resident corporation of this forum, and the majority of Plaintiff’s evidence will come from Well Made’s records and employees, all located within this judicial district. And most importantly, this is plaintiff’s home forum, and the forum plaintiff has chosen to bring its action, and defendant has failed to provide sufficient reason to overcome the two very strong presumptions in favor of plaintiff’s choice of its home forum. Accordingly this forum is an appropriate forum for the current dispute. Defendants’ motion should be denied, and the case should not be dismissed. Dated: New York, New York Respectfully submitted, November 30, 2016 /s/ Gerard F. Dunne Gerard F. Dunne (GD 3323) Law Office of Gerard F. Dunne, P.C. 41 Union Square West, Suite 1125 New York, NY 10003 212-645-2410 Attorney for Plaintiff CERTIFICATE OF SERVICE I hereby declare under penalty of perjury that on November 30, 2016, the foregoing and accompany declaration were served on counsel for Defendant, Wal-Mart Stores. Inc., by email to Laura Chapman (lchapman@sheppardmullin.com) and Tyler E. Baker (tbaker@sheppardmullin.com) of Sheppard Mullin Richter & Hampton LLP, 30 Rockefeller Plaza, New York, New York 10112 Dated: November 30, 2016 Respectfully submitted, /s/ Gerard F. Dunne Gerard F. Dunne Case 1:16-cv-03107-NGG-RER Document 22-10 Filed 11/30/16 Page 4 of 4 PageID #: 187