Jekyll Island-State Park Auth. v. Polygroup Mac.

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JEKYLL ISLAND-STATE PARK AUTHORITY, Plaintiff, v. POLYGROUP MACAU LIMITED, Defendant.

No. 2:21-CV-8

United States District Court, S.D. Georgia, Brunswick Division

March 24, 2023

ORDER

LISA GODBEY WOOD, JUDGE

This action is before the Court on Defendant's renewed motion to dismiss for lack of personal jurisdiction. Dkt. No. 47. In its opposition to Defendant's motion, Plaintiff requests sanctions. Dkt. No. 51 at 22. For the reasons given below the Defendant's motion is GRANTED and Plaintiff's request for sanctions is DENIED.

BACKGROUND

This case involves a dispute over Defendant Polygroup Macau Limited's (“PML”) alleged use of Plaintiff Jekyll Island-State Park Authority's (“JISPA”) “SUMMER WAVES” (or “summer waves”) trademark.^[1]Dkt. No. 6. JISPA is a state-created entity entrusted with the care of Jekyll Island, Georgia. Dkt. No. 6 ¶¶ 2, 7. Since 1988, JISPA has operated the Summer Waves Water Park on the island and has continually used its Summer Waves trademark in commerce. Id. ¶¶ 17-25. JISPA has also owned and operated its website www.summerwaves.com, since approximately 2001. Id. ¶ 24. Through its website, JISPA advertises its park and sells summer-waves-branded merchandise nationally. Id. ¶ 24. JISPA also owns a federal trademark registration for summer waves in Class 41, Id. ¶ 26, which covers goods for use in education and entertainment,^[2]see, e.g., Get Ready to Search - Classification and Design Search Codes, USPTO https://www.uspto.gov/trademarks/search/get-ready-search-classification-and-design#Classification%20find%20trademarks%20 used%20on%20goods%20and%20services%20related%20to%20yours. JISPA registered its mark specifically for use in connection with “entertainment services, namely, providing recreational services at an amusement park featuring water rides at a public park.” Dkt. No. 6 ¶ 26.

PML is incorporated in the British Virgin Islands, and its registered office is in the British Virgin Islands. Dkt. No. 47-1 at 6:7-8, 12:17-133. PML is wholly owned by Polygroup Asia Pacific Limited, which is also a British Virgin Islands company. Id. at 10:25-11:5; Dkt. No. 47-2 at 6, 7. PML has two directors who both reside in Hong Kong. Dkt. No. 47-2 at 6. The parties dispute whether PML has any employees, but taking inferences in favor of JISPA as the Court must on a motion to dismiss, PML has an officer who serves as its Senior Vice President and Head of North American operations. Compare Dkt. No. 47 at 8 (“PML has no employees.” (citing Dkt. No. 47-1 at 7:18-22, 8:25-9:1; Dkt. No. 47-2 at 56)) with Dkt. No. 51 at 13 (noting that a man named “Eric Wong” signed a 2017 assignment contract on behalf of PML listing himself as the “SVP, Head of North American Operations” (citing Dkt. No. 51-21)). One of the individuals PML identifies as a director, dkt. no. 47-2 at 6, also traveled to the United States to execute a deal on behalf of PML, and he signed the agreement as PML's CEO, dkt. No. 51-23 at 5, dkt. no. 51 at 13.

PML is an intellectual property holding company that licenses other entities' use of its marks. Dkt. No. 47-1 at 37:1-4; Id. at 39:5-7. It has licensed and assigned various intellectual property holdings to multiple U.S.-based companies. Dkt. No. 51 at 5. PML “does not engage in any customer sales activity any place in the world.” Dkt. No. 47-1 at 25:25-26:1. PML is not registered to do business in any United States jurisdiction. Dkt. No. 47-1 at 24:7 9. The company does not import or distribute any items into the United States, nor does it hold a United States import license. Id. at 22:4-7. PML does not have any bank accounts in the United States, own any property in the United States, or lease any property in the United States. Dkt. No. 47-1 at 17:8-10, 17:2218:4. PML has also never paid taxes to any state or governmental body in the United States. Dkt. No. 47-1 at 21:23-25.

PML holds federal trademark registrations for “SUMMER WAVES,” “SUMMER WAVES 3D,” and “SUMMER WAVES ELITE” (“PML's summer waves marks”) in Class 28 (toys and sporting goods) for use on a variety of inflatable recreational pools and other similar pool-related products.^[3]Dkt. No. 6 ¶ 35; see also USPTO, supra. PML's summer waves marks were used in commerce in the United States in March of 2014. Dkt. No. 47-1 at 31:18-32:11; id. at 35:16-36:11.

PML has one subsidiary, Polygroup Limited Macao Commercial Offshore (“MCO”), which is incorporated in Macau. Dkt. No. 47-2 at 6, 8. MCO pays PLM an annual “management service fee.” Dkt. No. 51 at 5.

MCO sells products and transfers title to various global retailers. Dkt. No. 47-1 at 22:20-25. The global retailers then bring the product to the markets of their choice. Id.

Polygroup Services NA is a Delaware company and another Polygroup member company. Dkt. No. 47-1 at 23:10-19; Dkt. No. 472 at 9. Polygroup Services NA buys products, including products bearing PML's summer waves marks, from Polygroup Trading, another Polygroup Member Company. Dkt. No. 47-1 at 27:19-20. The parties dispute whether Polygroup Services NA imports and sells some of the summer-waves-branded product in the United States, pointing to conflicting testimony. Dkt. No. 47-1 at 30:18-20 (Q: “Does Polygroup Services NA import products to the United States bearing the Summer Waves trademark owned by PML? A: “Yes.”); Dkt. No. 471 at 27:19-23 (“I'm not aware of any of it being branded to Summer Waves.”); id. at 28:6-7 (explaining that Polygroup Services NA sells artificial Christmas Trees and decorations to a customer in the United States but stating “I do not believe that any of that is branded Summer Waves, no.”); id. at 28:8-22 (“Retailers in the United States buy [Summer Waves branded kiddie pools]. Whether they're buying them through [Polygroup Services NA], meaning [Polygroup Services NA] buys and then resells, you know, from a location in the United States or whether it's bought directly out of the Mexican factory, I'm-I'm not 100 percent sure, you know, of-of how that transaction flows”). Taking inferences in favor of JISPA, as the Court must when considering PML's motion to dismiss, Polygroup Services NA imports and sells summer waves branded product in the United States.

PML has been involved in multiple lawsuits in the United States, both as a plaintiff and defendant. Dkt. No. 65 at 6-7 (“Jekyll identified at least 34 actions in the United States courts or tribunals in which PML is or was a party.”). In four actions where PML was the sole plaintiff, it pled that it “marketed, distributed and sold” products in the United States. Dkt. No. 51 at 3. In one of those cases, when it filed suit against a particular party, PML asserted that it does market, distribute, and sell products in the United States; but then when the same party sued PML, PML denied that it sold, imported, or distributed products in the United States. Id. According to PML, all these statements were mistakes. Dkt. No. 52 at 15. The cases where PML stated it marketed, distributed, or sold products in the United States are no longer pending. Id.

In early 2021, through its Georgia counsel, PML asked JISPA if it could purchase JISPA's domain name. Dkt. No. 6 ¶ 34. As a result, JISPA learned about PML's summer waves marks. Id. ¶ 35. JISPA then initiated this suit against PML, alleging that PML infringed JISPA's summer waves mark by registering and licensing highly similar marks. Dkt. No. 1. Specifically, JISPA alleges that PML committed federal trademark infringement under 15 U.S.C. § 1114 (Count I), id. ¶¶ 55-63; federal unfair competition under 15 U.S.C. § 1125(a) (Count II), id. ¶¶ 64-70; common law trademark infringement and unfair competition (Count III), id. ¶¶ 71-79; and fraud that merits trademark registration cancellation under 28 U.S.C. §§ 1119, 1120 (Count IV), id. ¶¶ 80-92.

PML filed a motion to dismiss for lack of personal jurisdiction or, in the alternative, to partially dismiss for failure to state a claim for trademark cancellation. Dkt. No. 10. JISPA then filed a response in opposition or, in the alternative, a motion for limited discovery. Dkt. No. 17. The Court denied PML's motion and granted JISPA's request for a limited period of jurisdictional discovery. Dkt. No. 37 at 4. After the close of jurisdictional discovery, PML filed a renewed motion to dismiss for lack of jurisdiction or, in the alternative, to partially dismiss for failure to state a claim. Dkt. No. 47. JISPA opposes that motion and, in its opposition brief, requests sanctions. Dkt. No. 51 at 22. The issues are fully briefed, see dkt. nos. 47, 51, 52, 65, and thus ripe for review.

LEGAL STANDARD

“When a district court does not conduct a discretionary evidentiary hearing on a motion to dismiss for lack of jurisdiction, the plaintiff must establish a prima facie case of personal jurisdiction over a nonresident defendant.” Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990) (citing Morris v. SSE, Inc., 843 F.2d 489, 492 (11th Cir. 1988)). “A prima facie case is established if the plaintiff presents enough evidence to withstand a motion for directed verdict.” Id. When evidence is introduced to support or rebuff personal jurisdiction, “[w]here there are conflicts between the evidence, the court makes all reasonable inferences in favor of the plaintiff.” Websters Chalk Paint Powder, 2014 WL 4093669, at *3 (citing Diamond Crystal, 593 F.3d at 1257). When deciding Rule 12(b) motions to dismiss, the court must first resolve any personal jurisdiction challenges before deciding whether the plaintiff has stated a claim for relief. Madara, 916 F.2d at 1513-14.

DISCUSSION

First this case benefits from clarification of a few key concepts. This case implicates subject matter jurisdiction statecentered personal jurisdiction (both specific and general); and Rule 4(k)(2)...