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Surface Supplied Inc. v. Kirby Morgan Dive Systems, Inc.

United States District Court, Ninth Circuit

May 29, 2013

SURFACE SUPPLIED INC., Plaintiff,
v.
KIRBY MORGAN DIVE SYSTEMS, INC., Defendant.

ORDER DENYING DEFENDANT'S MOTION TO DISMISS OR TO TRANSFER

MAXINE M. CHESNEY, District Judge.

Before the Court is defendant Kirby Morgan Dive Systems, Inc.'s ("Kirby Morgan") motion, filed April 5, 2013, to dismiss the above-titled action, or, in the alternative, to transfer venue to the District Court for the Central District of California ("Central District"). Plaintiff has filed opposition, to which defendant has replied. Having read and considered the papers filed in support of and in opposition to the motion, the Court rules as follows.

BACKGROUND

Plaintiff Surface Supplied Inc. ("Surface Supplied") is a California corporation, established on June 30, 2011, whose principal place of business is the Northern District of California, and whose three employees reside in said district. (See Van Der Schyff Decl. ¶ 2.) Surface Supplied "is engaged in the business of research, design, development and manufacture of digital gas analyzer and depth gauge products... for the commercial diving industry." (See First Amended Complaint ("FAC") ¶ 5.) Surface Supplied's products are "alpha stage products, " and, to date, none have been sold. (See Van Der Schyff Decl. ¶ 3.)

Surface Supplied maintains a website "on which it describes the external specifications of its products, " but through which it does not "sell or offer [them] for sale." (See Van Der Schyff Decl. ¶ 5.) On the home page of its website, Surface Supplied has used a "cropped version" of "a public domain and well known photograph of an underwater water diver against a backdrop of an American flag." (See id. ¶ 6.)[1] On three occasions in 2011, Surface Supplied used the cropped version in advertisements appearing in the national publication Underwater Magazine, and on one occasion in the national publication, Marine Technology Report, which publications were distributed to consumers in the Central District. (See id. ¶ 6.) Surface Supplied also "maintains a presence on the social media sites Facebook and Twitter" (see id. ¶ 5), on which it has used a photograph of "a fully outfitted diver standing on seaside rocks" (see id. ¶ 7).[2] Surface Supplied's products are engraved with a logo of a "highly fanciful abstract image of a helmet." (See FAC ¶ 6; Van Der Schyff Decl. ¶ 8.) Surface Supplied has also "digitally superimposed this logo over a picture of a tee shirt, which has been displayed on its website and social media sites, " but Surface Supplied "has never printed or distributed any tee shirt bearing this logo." (See Van Der Schyff Decl. ¶ 8.)

On January 22, 2013, Kirby Morgan, a corporation that sells commercial diving helmets and surface gas controllers and analyzers (see FAC ¶ 4), sent Surface Supplied a cease and desist letter, by which letter Kirby Morgan accused Surface Supplied of infringing its trademarks by "using images and representations of Kirby Morgan's helmets on its website, Facebook page, t-shirts, Twitter and on the panels of Surface Supplied's gas analyzer equipment" and demanded that Surface Supplied cease its use of the infringing images (see FAC Ex. C at 1). The letter also demanded an answer no later than February 1, 2013, and stated, "If Kirby Morgan does not receive a suitable response by the aforementioned date, the company will have no choice but to take appropriate legal action which may include immediately seeking a temporary restraining order...." (See FAC Ex. C at 3.)

Thereafter, Surface Supplied requested, and Kirby Morgan granted, a one week extension to February 8, 2013. (See Cislo Decl. ¶ 3, Ex. C.) In lieu of replying, however, Surface Supplied, on February 8, 2013, filed the instant action, seeking a declaration of non-infringement of Kirby Morgan's federally registered trademarks. (See FAC ¶ 1.) Thereafter, on March 15, 2013, Kirby Morgan filed an action in the Central District, alleging, inter alia, federal trademark infringement claims against Surface Supplied. See Kirby Morgan Dive Systems, Inc. V. Surface Supplied, Inc., No. 13-1862 (C.D. Cal. filed Mar. 15, 2013) ("Central District action").

DISCUSSION

Kirby Morgan moves for dismissal of the instant action pursuant to the Court's equitable powers under the Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202, or, in the alternative, for transfer of the action to the Central District pursuant to 28 U.S.C. § 1404(a).

I. Motion to dismiss

"The exercise of jurisdiction under... 28 U.S.C. § 2201(a), is committed to the sound discretion of the federal district courts[;] [e]ven if the district court has subject matter jurisdiction, it is not required to exercise its authority to hear the case." Huth v. Hartford Ins. Co. of the Midwest , 298 F.3d 800, 802 (9th Cir. 2002) (internal citations omitted). Kirby Morgan argues the instant action is an anticipatory suit that should be dismissed in light of Kirby Morgan's later-filed Central District action. In opposition, Surface Supplied argues venue is not proper in the Central District. This Court will not exercise its discretion to dismiss the instant action if the action in the Central District is not properly venued therein, and, consequently, the Court first addresses that issue. Venue is proper in:

(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court's ...

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