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Zoya Co. v. Nios, Inc.

United States District Court, Sixth Circuit

August 23, 2013

Zoya Company et al., Plaintiff(s),
v.
NIOS, Inc., Defendant.

MEMORANDUM OPINION

DONALD C. NUGENT, District Judge.

This matter comes before the Court on Defendant Nios Inc.'s ("Nios") Motion to Dismiss on the basis of lack of personal jurisdiction and improper venue pursuant to Rules 12(b)(2) and 12(b)(3). ECF #11. For reasons discussed below, Defendant's Motion to Dismiss is GRANTED.

I. STATEMENT OF FACTS

Plaintiff Zoya is an Ohio based corporation with its principal place of business in Bedford Heights, Ohio. Compl. ¶ 2. Zoya sells products such as nail polish and lip gloss under the ZOYA mark throughout the United States and internationally. Compl. ¶¶ 9-12. Zoya has had a federal registration, U.S. Registration No. 1, 863, 005, for the ZOYA mark since November 15, 1994 and its ownership of the trademark cannot be challenged under 15 U.S.C. § 1065. Id. ¶¶ 13-14.

On April 9, 2013, Zoya filed suit against NIOS, Inc. alleging that Nios started selling cosmetic products using the "Noya" term, and that such use by Nios is likely to confuse others into thinking that NIOS is affiliated with, connected to, or associated with Zoya. Id. ¶¶ 15-25. As a result, Zoya is seeking relief for 1) trademark infringement under the Lanham Act 15 U.S.C. § 1114 and 1125; 2) Cyberpiracy under the Lanham Act 15 U.S.C. § 1125(d); 3) Violations of the Ohio Deceptive Trade Practices Act Ohio Revised Code § 4165.01, et seq; 4) Unfair competition; and 5) Unjust enrichment. Id. ¶¶ 26-50. Zoya seeks both monetary damages, including compensatory and punitive damages, and injunctive relief. Id. at 8.

Nios, Inc. is a New York corporation with a business address in New York City. Answer at 1. Nios admits that it has been using the Noya designation when selling cosmetic products, but denies the intent to mislead and confuse customers and trying to capitalize on the ZOYA brand recognition. Id. ¶ 1. Nios also raised six affirmative defenses in its answer, including that this Court lacks personal jurisdiction and is an improper venue. Answer at 4-6.

Prior to using the NOYA trademark, Nios sought a trademark legal opinion to determine infringement risk of adopting NOYA for cosmetics sales; the trademark opinion letter by attorney Michael Sheena did not identify the ZOYA trademark as an infringement risk. Affidavit of Joshua Gordon ¶¶ 20-21. Afterwards, on June 4, 2012, Nios filed an Intent-to-Use trademark application with the USPTO for "NOYA" (USPTO Serial Number 85642689). On October 10, 2012, the USPTO approved the NOYA trademark application for publication. Id. at ¶ 2. Pursuant to 15 U.S.C. § 1052(2) (d), the USPTO's approval included a determination that NOYA and ZOYA can co-exist for the sale of cosmetics. Id. at ¶ 4.

In November 2012, Nios began selling its NOYA lip balm products - to date, no other products have been sold under the NOYA brand in stores. Ex. A ¶ 5. NOYA products are currently sold in approximately 150 stores in New York State, 19 stores in New Jersey, 2 stores in Chicago, and 0 stores in Ohio. Id. at ¶ 6. Nios estimates that 87% of its revenue comes from sales in New York, and about.0004% of total revenue from Ohio. Id. at ¶ 7. Furthermore, approximately 99% of NOYA products are sold in brick-and-mortar stores, and less than 1% are sold online. Id. To date, Nios has only made three online sales, two of which were to individuals affiliated with Nios's employees, and one of which was to Plaintiffs' investigator in the amount of $15.96. Id. at ¶¶ 10-19.

Nios has a Terms and Conditions page on its website, which includes a clause that specifies New York as having exclusive jurisdiction for disputes arising with regard to Nios and its NOYA products. Id. at ¶¶ 12-13. Nios has never maintained an office in Ohio, and, with the exception of the singular online sale, has no other direct or persistent contact with Ohio. Id. at ¶¶ 10a-10m.

II. STANDARD OF REVIEW

Pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, a defendant may move to dismiss a case for lack of personal jurisdiction. Once the defendant makes such a motion, the plaintiff bears the burden of proof that the Court does indeed have personal jurisdiction over the defendant. Air Prods. and Controls, Inc. v. Safetech Intern., Inc., 503 F.3d 544, 549 (6th Cir. 2007). Furthermore, if the Court relies solely on written submissions to resolve a Rule 12(b)(2) motion, the plaintiff's burden is "relatively slight" - the plaintiff need only make a prima facie showing of personal jurisdiction in order to quash defendant's motion. Theunissen v. Matthews d/b/a Matthews Lumber Transfer, 935 F.2d 1454, 1458 (6th Cir. 1991).

The trial court must view the pleadings and affidavits in the "light most favorable" to the non-moving party, but the "defendant's undisputed factual assertions may be considered." Air Prods., 503 F.3d at 549. Finally, under Ohio law, "personal jurisdiction over non-resident defendants is available only if (1) the long-arm statute confers jurisdiction and (2) jurisdiction is proper under the Federal Due Process Clause." Conn v. Zakharov, 667 F.3d 705, 711 (6th Cir. 2012). Accordingly, Plaintiff Zoya must demonstrate that both due process and Ohio's long-arm statute are satisfied regarding Defendant Nios.

III. LAW AND ARGUMENT

This Court can establish personal jurisdiction over Defendant Nios if: 1) Ohio's long-arm statute, O.R.C. § 2307.382, permits jurisdiction; and 2) exercising jurisdiction does not deprive Nios of its due process rights under the Fourteenth Amendment. U.S. Sprint Communications Co. Ltd. ...


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