Court rejects Zippo jurisdiction test but allows suit over alleged copying

Kindig It Design, Inc. v. Creative Controls, Inc., — F. Supp.
3d —-, 2016 WL 247574,  No.
2:14-cv-00867 (D. Utah Jan. 20, 2016)
 
Mostly a personal jurisdiction ruling in this
copyright/patent infringement/false advertising case brought by Kindig, which
customizes hot rods.  Creative Controls,
which customizes vehicles for accessibility purposes, is a Michigan corporation
with no place of business, property, employees, etc. in Utah.  Creative Controls did have a website allowing
Utah residents to order; it donated a custom parking brake for use on a car
Kindig was customizing in Utah; it sold a single door handle to a Utah
customer; and it allegedly copied photographs and contents from Kindig’s Utah-based
website.  (In return for the donated
brake, Kindig sent Creative Controls a disk with photos of the finished car,
and a letter indicating that it could use the photos for promotional purposes;
these are among the allegedly copied photos at issue.)   The door handle was ordered by a Kindig
employee’s relative, and the parties agreed that personal jurisdiction could
not be based on this plaintiff-generated contact.
 
The court found that it didn’t have personal jurisdiction
over Kindig’s patent claims, but did have personal jurisdiction over copyright
and related claims.  The court further
held that the patent claims weren’t so related as to justify the exercise of
pendent personal jurisdiction.  Among
other things, the court rejected the Zippo
website jurisdiction test as incompatible with modern internet practices,
holding that traditional tests were readily applicable to internet-based
conduct.  As the court pointed out, many now-ubiquitous
interactive features didn’t exist in 1997 when Zippo was decided, and also the
presence of intermediaries such as Facebook makes it hard to figure out how to
judge the “interactivity” of something like a Facebook page related to the
defendant’s own activity.  Moreover, the
traditional purposeful availment test doesn’t require that the purposeful
availment be for commercial purposes; without that limit, pretty much everybody
looks like they’re personally availing themselves of pretty much any
jurisdiction under Zippo.
 
The allegedly infringing copying of Kindig’s photos from its
Utah website, however, gave rise to personal jurisdiction over Creative
Controls on all claims related to the alleged copying.  Kindig sufficiently identified the works at
issue by including copyright registration information and date of first
publication.  By alleging that Creative
Controls’ website “contains photographs of customized automobiles which [sic]
are nearly identical to [the copyrighted] photographs of customized automobiles
found on the Kindig website,” the complaint provided sufficient notice of the
allegedly infringing works, even if it didn’t otherwise identified them.
 
Likewise, Kindig sufficiently pled false
advertising/deceptive trade practices. 
Creative Controls argued that the claims should be dismissed because the
photos weren’t materially misleading: it was implausible that any differences
in door handles displayed in photos of cars and actual Creative Controls door
handles would be material to consumers, given the small size of the
photos.  But the court found that it was
plausible that consumers would be influenced by the photos.  “Indeed, the reasonable inference is that
Creative Controls included the photographs of the unique customized cars with
the very intent of influencing potential customers.”
 
Nor would the court dismiss unjust enrichment or conversion
claims as preempted at this stage.  And
here the court just errs: it said that, because some of the photo copyrights
might be invalid, unjust enrichment and conversion claims might not be
preempted if based on invalid copyrights. 
But that’s backwards under §301, which was specifically designed to
prevent claims replicating the subject matter of copyright, whether or not the
work (or idea/fact) at issue was copyrightable. 
It should be immediately evident that §301 applies to an unjust
enrichment/conversion claim based on copying a work in the public domain due to
expiration of federal copyright protection; so too here.  (And that’s setting aside the issue that,
even if a registration is invalid for some reason, the copyright still exists if the work is copyrightable.  Only the details of federal
jurisdiction/availability of certain remedies turn on the validity of the
registration.)
 
The court did hold that Kindig failed to state a claim for
fraud.  There were no facts indicating
Creative Controls defrauded Kindig; a
fraud on the public at large didn’t allow Kindig to sue, and Kindig didn’t
allege it acted in reliance on Creative Controls’ misrepresentations.

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