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Inventel Products, LLC v. Li

United States District Court, D. New Jersey

August 13, 2019

INVENTEL PRODUCTS, LLC, Plaintiff,
v.
JIMMY LI, LIN AMY, GODADDY.COM, LLC, GODADDY INC., SHOPIFY USA INC., SHOPIFY INC., INTER CONNECTS, GOOGLE LLC, WU JINZHAO, JOHN DOE JANE DOE, ABC CORP. Defendants.

          OPINION

          WILLIAM J. MARTINI, U.S.D.J.

         Plaintiff InvenTel Products, LLC's ("InvenTel" or "Plaintiff) brings this action for various direct and contributory violations of its intellectual property rights. The matter comes before the Court on Defendants GoDaddy Inc., and GoDaddy.com, LLC's ("GoDaddy's") motion to dismiss. ECF Nos. 41-42. For the reasons set forth below, the motion is GRANTED IN PART and DENIED IN PART.

         I. BACKGROUND

         InvenTel sells a variety of consumer products in the United States via mail-order and online sales, including the HD MIRROR CAM® ("HD MIRROR CAM"). The HD MIRROR CAM is a security camera for automobiles. InvenTel holds patents, copyrights, and trademarks on HD MIRROR CAM technology and marketing materials.

         Defendants Jimmy Li, Lin Amy, and Wu Jinzhao ("Li Defendants") allegedly produce counterfeit HD MIRROR CAMs ("Counterfeit Products") in China and market them to U.S. customers online. The online sale of the Counterfeit Products is the subject of a related action ("Prior Action") brought by InvenTel against the Li Defendants, Google, GoDaddy, Shopify, and others (collectively, "Defendants"). See InvenTel Products, LLC v. Li, 18-cv-16590.

         After voluntarily dismissing GoDaddy from the Prior Action, InvenTel learned of a new website created by the Li Defendants to further market the Counterfeit Products: www.hdmirrorcambuy.com ("Website"). On April 2, 2019, InvenTel initiated this suit alleging similar acts of infringement to the Prior Action but occurring on the new Website. As relevant here, InvenTel alleges that despite knowledge of the Prior Action, GoDaddy registered the Website and continues to host it. Compl. ¶¶ 74-84, ECF No. 1.

         On April 16, 2019, the Court entered an order temporarily restraining Defendants from infringing on InvenTel's intellectual property rights. See Order, ECF No. 6 ("TRO"). After Google, GoDaddy, and Shopify submitted briefing and supporting material, the Court terminated the TRO and denied InvenTel's motion for a preliminary injunction. Op. & Order, ECF Nos. 18-19, 29-30. Now before the Court is GoDaddy's motion to dismiss pursuant to Federal Rule of Civil Procedure ("FRCP") 12(b)(6). ECF No. 41.

         II. STANDARD OR REVIEW

         FRCP 12(b)(6) provides for the dismissal of a complaint if the plaintiff fails to state a claim upon which relief can be granted. The movant bears the burden of showing that no claim has been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). "[A]ll allegations in the complaint must be accepted as true, and the plaintiff must be given the benefit of every favorable inference to be drawn therefrom." Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011). But the court is not required to accept as true "legal conclusions," and "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         To survive a 12(b)(6) motion, "a complaint must contain sufficient factual matter ... to 'state a claim to relief that is plausible on its face.'" Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id.

         III. DISCUSSION

         Plaintiff asserts six claims against GoDaddy stemming from its alleged hosting and registration of the Website: (1) federal trademark infringement, (2) copyright infringement, (3) patent infringement, (4) unfair competition, false advertising, and false designation of origin (due to alleged Lanham and Patent Act violations), (5) New Jersey trademark infringement, and (6) violations of the New Jersey Consumer Fraud Act ("CFA"). In its opposition papers, InvenTel "withdr[e]w the allegations without prejudice" regarding GoDaddy's hosting of the Website. Opp. at 2, ECF No. 48. Accordingly, the only facts alleged against GoDaddy are that it provided domain-name registration services to the Website despite being notified of the Li Defendants' infringing activity using other websites via the Prior Action. Id. at 8-9 (discussing non-hosting allegations against GoDaddy).

         A. Lanham Act Violations (Counts One and Four (in part))

         In Counts One and Four (in part), InvenTel asserts liability pursuant to the Lanham Act, specifically 15 U.S.C. 1125(a). Compl. ¶ 111, 129. GoDaddy argues that as a domain name registrar, it is immune from Lanham Act liability pursuant to 15 U.S.C. § 1114(2)(D)(iii). InvenTel argues "GoDaddy confuses 15 U.S.C. § 1125 and 15 U.S.C. § 1114(2)(D). Either GoDaddy does not realize these are two different statutes or they are trying to pretend they are [not] two different statutes." Opp. at 10. InvenTel is incorrect.

         15 U.S.C. §1114(2)(D) states:

Notwithstanding any other provision of this chapter, the remedies given to the owner of a right infringed under this chapter or to a person bringing an action under section 1125(a) or (d) of this title shall be limited as follows ... A domain name registrar, a domain name registry... shall not be liable for damages under this section for the registration or maintenance of a domain name for another absent a showing of bad faith intent to profit from such registration or maintenance of the domain name.

         Because Section 1114 provides the remedy for all Lanham Act violations, Section 1114(2)(D) limits liability for Section 1125 claims despite the "under this section" phraseology. Petroliam Nasional Berhad v. GoDaddy.com, Inc., 737 F.3d 546, 551 (9th Cir. 2013). Accordingly, GoDaddy is immune "absent a showing of bad faith intent to profit." 15 U.S.C. § 1114(2)(D).

         Plaintiff argues it "pled and established in detail through Declaration of Yasir Abdul [sic] and documentary evidence previously submitted to the Court that GoDaddy was provided with multiple notices of the infringement," and thus acted in bad faith in registering the Website.[1]Opp. at 13-15. The Court disagrees. The only pleaded basis for GoDaddy's knowledge that the Website would be used to infring is the Li Defendants' conduct using other websites and the Prior Action. See Compl. ¶¶ 76-83. But GoDaddy's domain name registration system is automatic. See May 7, 2019 Op. at 3, ECF No. 29 (discussing registration "computer systems"); McTernan., 577 F.3d 521, 530 (permitting findings and conclusions at preliminary injunction stage to have preclusive effect). Therefore, without a warning that the specific URL being registered would be used for an illicit purpose, GoDaddy did not have a "bad faith intent to profit" from the automatic registration of "www.hdmirrorcambuy.com."[2] 15 U.S.C. § 1114(2)(D). In other words, failing to prevent its computer system from registering the Website does not constitute "bad faith." Plaintiff provides no basis for the proposition that GoDaddy must predict which URLs will be used for infringement purposes and proactively stop them from being registered. Accordingly, Plaintiffs Lanham-Act based claims (Count One and part of Four) are DISMISSED.

         B. Copyright ...


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