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ART LEATHER MFG. CO. v. ALBUMX CORP.

June 6, 1995

ART LEATHER MANUFACTURING CO., INC., Plaintiff,
v.
ALBUMX CORP., et al., Defendants.



The opinion of the court was delivered by: LOUIS L. STANTON

 Defendant HPI Corp. moves pursuant to Fed. R. Civ. P. 12(b)(2) to dismiss the claims against it. HPI, a South Carolina corporation, contends that this court does not have jurisdiction over it in this patent infringement action because it does not do business in New York and has not sold the product at issue to any New York customers.

 BACKGROUND

 The following facts are undisputed. HPI markets the "Marquise" line of wedding photograph albums, which it sells through distributors to professional photographers. Art Leather, which markets a competing album, claims that the Marquise albums infringe Art Leather's patent on a wedding album page. (See Twice Amended Complaint, PP 31-36; Mark Roberts Aff. PP 3, 5.)

 HPI has no office, showroom, factory, warehouse or other business facility in New York. (Peter Roberts Aff. P 3.) None of its employees resides or works in New York, and it has no salesperson, sales representative organization, or other entity in New York which is authorized to confirm orders, establish prices or make other business decisions concerning HPI's products. (Id. P 5.) HPI has never sold the Marquise albums to a New York customer or shipped it into New York. (Id. P 7.) It has not "directed or authorized any of its customers to sell or use the Marquise album pages within the State of New York." (Id. P 8.)

 HPI sells the Marquise album through a network of twelve distributors, one of which, Michel Co., sold the album to New York customers. (See Mark Roberts Aff. P 9.) Michel, which is located in Illinois, shipped Marquise albums to New York customers 84 times in 1994. (Dawn Harris Aff. PP 5-6.) Michel has advertised the Marquise albums in Professional Photographer magazine. (See Kerry Miller Aff. Exh. F.)

 DISCUSSION

 1. Standard

 In considering a motion to dismiss under Fed. R. Civ. P. 12(b)(6), "a court must accept the allegations contained in the complaint as true, and draw all reasonable inferences in favor of the non-movant; it should not dismiss the complaint "'unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Sheppard v. Beerman, 18 F.3d 147, 150 (2nd Cir.), cert. denied, 130 L. Ed. 2d 28, 115 S. Ct. 73 (1994) (citations omitted). Because discovery has been conducted on the question of jurisdiction, Art Leather must show by a preponderance of the evidence that there is jurisdiction over HPI. Reiss v. Steigrod, 866 F. Supp. 747, 748 (S.D.N.Y. 1994). *fn1"

 2. Jurisdiction Under New York's Long-Arm Statute

 Art Leather claims it has jurisdiction over HPI pursuant to N.Y. Civ. Prac. L. & R. § 302(a)(3) (McKinney 1995), *fn2" which provides:

 
As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent . . . commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he (i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce.

 a. Substantial Revenue From Goods Used in New York

 HPI concedes that it derives substantial revenues from goods that are used in New York. (HPI's Reply Memorandum, at 10.) Thus, section 302(a)(3)(i) is satisfied and jurisdiction is proper if HPI committed a tortious ...


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