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LegalForce RAPC Worldwide P.C. v. GLOTRADE

United States District Court, N.D. California, San Jose Division

October 23, 2019

GLOTRADE, et al., Defendants.


          LUCY H. KOH, United States District Judge.

         LegalForce RAPC Worldwide, P.C. (“Plaintiff”) sued eighteen defendants, including Worldwide Mail Solutions, Inc. (“Defendant”), for alleged violations of the Lanham Act, California's False Advertising Law, and California's Unfair Competition Law, as well as a claim for intentional interference with prospective economic advantage. ECF No. 1. Before the Court is Defendant's motion to dismiss for lack of personal jurisdiction.[1] ECF No. 18. Having considered the submissions of the parties, the relevant law, and the record in this case, the Court GRANTS Defendant's motion to dismiss with leave to amend.

         I. BACKGROUND

         A. Factual Background

         Plaintiff is a California professional corporation that “offers services including trademark preparation and prosecution, patent preparation and prosecution, copyright registration and counseling, international trademark and patent filings, and corporate formation and stock and equity structuring.” ECF No. 1 at ¶¶ 18, 41 (“Compl.”). Plaintiff alleges that companies, termed “Mailer Defendants, ” “use publicly available trademark filer information to send targeted ‘solicitations' to . . . trademark applicants.” Id. ¶¶ 2, 43. The “‘solicitations' are constructed to [deceptively] make the trademark applicant believe that an official U.S. government agency or the [United States Patent & Trademark Office (USPTO)] itself is sending a letter to them, raising fear among the unsuspecting public that they must pay large amounts of money or forfeit trademark rights.” Id. ¶ 2. These “Mailer Defendants” provide no real services and “result in no value to trademark owners.” Id.

         As a result of the Mailer Defendants' actions, Plaintiff asserts that “significant business” was deceptively diverted to Mailer Defendants. Id. ¶ 198. Plaintiff also alleges that Plaintiff “received inquiries from its clients confused about the unsolicited actions by the Mailer Defendants and worried that [Plaintiff's] services to the clients were somehow deficient.” Id. ¶ 199. Plaintiff claims that it spent “valuable time and expenses to investigate the facts to appropriately advise its clients.” Id. ¶ 200.

         Plaintiff alleges that Mailer Defendants “appear to originate . . . [in] countries outside the United States (most frequently from eastern Europe).” Id. ¶ 3. As relevant to the instant motion to dismiss, Plaintiff asserts that “GLOTRADE” is one such “Mailer Defendant, ” operates out of the Czech Republic, and sends advertisements or mailers that falsely state that GLOTRADE protects a trademark from copyright infringement when GLOTRADE in fact provides no such services. Id. ¶¶ 78, 83-91. According to Plaintiff, GLOTRADE-because it operates out of the Czech Republic-must obtain a domestic U.S. mailing address in order to appear as a legitimate organization and to receive payments from its allegedly false advertisements. Id. ¶ 78-79. GLOTRADE relies on Defendant, who is in the business of “provid[ing] a U.S. street address to customers and allow[ing] them to receive mail at a U.S. address that can then be forwarded internationally.” Id. ¶ 80. Plaintiff alleges that Defendant, by allowing GLOTRADE to obtain a U.S. mailing address, helps GLOTRADE “mask[] its true identity from people sending the checks.” Id. ¶ 81. On this basis, Plaintiff claims that Defendant is liable as a “logistics enabler” of GLOTRADE. Id. ¶ 1.

         Furthermore, Plaintiff alleges that Defendant advertises its mail services to business owners in California. ECF No. 24-2, Exs. 4-5. According to Plaintiff, Defendant has multiple California customers who use Defendant's mailing services. Id. Defendant, however, is not a California corporation and has no employees in California. ECF No. 18-2 ¶ 11. Defendant is a corporation duly formed under the laws of the State of Texas with a principal place of business in Houston, Texas. Id. ¶¶ 4-5. Defendant has never owned, leased, possessed, or maintained any real or personal property in California, nor has Defendant maintained any bank, savings, or loan accounts in California. Id. ¶¶ 9-10. Finally, Defendant acknowledges that it provided GLOTRADE with a mailing address in Houston, Texas, but notes that Defendant never sent any mail to Plaintiff. Id. ¶¶ 13, 17.

         B. Procedural History

         On March 25, 2019, Plaintiff sued eighteen defendants and alleged the following causes of action: (1) violations of the Lanham Act, 15 U.S.C. § 1125(a); (2) violations of California's False Advertising Law, Cal. Bus. & Prof. Code § 17500; (3) violations of California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200; and (4) intentional interference with prospective economic advantage. Compl. ¶¶ 203-61. The eighteen defendants fell into two categories: “Mailer Defendants, ” which are entities that directly engaged in the allegedly false advertising; and “Logistics Enablers, ” which are companies that provided mailing addresses that facilitated the allegedly fraudulent conduct. Id. ¶ 1; see generally Id. ¶¶ 203-61.

         To date, Plaintiff has voluntarily dismissed six of the seven “Logistics Enablers” and three of the eleven “Mailer Defendants.” ECF Nos. 16, 25, 28, 33, 42, 48, and 72. Six of the “Mailer Defendants” were served but did not appear, and the Clerk entered default against them. See ECF Nos. 47, 64, and 66. Of the two other Mailer Defendants, one filed a motion to dismiss, and another filed an answer. ECF Nos. 51 and 78.

         As pertaining to the instant Order, on May 8, 2019, Defendant, who is the sole remaining “Logistics Enabler” Defendant, filed a motion to dismiss for lack of personal jurisdiction. ECF No. 18 (“Mot.”). Plaintiff filed an opposition on May 22, 2019, ECF No. 24 (“Opp.”), and Defendant filed a reply on May 28, 2019, ECF No. 26 (“Reply”). The motion to dismiss is now fully briefed and ripe for adjudication.


         A. Motion to Dismiss ...

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