The opinion of the court was delivered by: Scheindlin, District Judge.
In deciding a motion to dismiss pursuant to Rule 12(b)(2), a
"court must assume all of the plaintiff's factual allegations are
true, and all `doubts are resolved in the plaintiffs favor,
notwithstanding a controverting presentation by the moving
party.'" Nader v. Getschaw, No. 99 Civ. 11556, 2000 WL 1471553,
at *2 (S.D.N.Y. Sept. 29, 2000) (quoting A.I. Trade Fin., Inc.
v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993)). The plaintiff
bears the burden of establishing that the court has jurisdiction
over the defendants. See Bank Brussels Lambert v. Fiddler
Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999). However,
at this early stage in the proceedings, where no evidentiary
hearing has been held, the plaintiff need make only a prima facie
showing of jurisdiction. See Kernan v. Kurz-Hastings, Inc.,
175 F.3d 236, 240 (2d Cir. 1999). Moreover, a court may consider
matters outside the pleadings without converting the motion to
dismiss into a motion for summary judgment.*fn1 See Dan-Dee
Int'l, Ltd. v. KMart Corp., 99 Civ. 11689, 2000 WL 1346865, at
*2 (S.D.N.Y. Sept. 19, 2000); see also Bank Brussels Lambert,
171 F.3d at 784 (stating that prima facie showing of jurisdiction
can be satisfied with allegations in plaintiff's affidavits and
A. Allegations of the Amended Complaint
Hsin Ten is a New York corporation with its principal place of
business in Farmingdale, New York. See Amended Complaint ¶ 1.
Hsin Ten entered into an exclusive licensing agreement ("the
Licensing Agreement") with Skylite Industry Co. Ltd. ("Skylite"),
granting Hsin Ten the exclusive right to manufacture, use and
sell aerobic exercise machines under two patents issued to
Skylite.*fn2 See id. ¶ 10. Hsin Ten also owns the "The Chi
Machine" trademark and markets and sells an "electric massage
apparatus" bearing that mark. Id. ¶ 11-12. Plaintiff alleges
that because of its extensive sales and advertising, the "The Chi
Machine" mark is associated with plaintiff's electric massage
apparatuses. See id. ¶ 13.
Clark Enterprises ("Clark") is a Kansas company with its
principal offices in Salina, Kansas. See id. ¶ 2. It maintains
no established place of business anywhere other than Salina,
Kansas. See Clark Aff. ¶ 5. Clark is a sole proprietorship of
Clifford Clark, who resides in Salina, Kansas. See Amended
Complaint ¶¶ 2, 3. In or about January 2000, Clark began
marketing an aerobic exercise machine (the "Exercise Machine") in
direct competition with Hsin Ten's "The Chi Machine" brand
aerobic exercise machines. See 10/23/00 Acevedo Decl. ¶ 6.
Plaintiff alleges that Clark
calls its machine "The Chi Exerciser 2000."*fn3 See id.
Plaintiff asserts five claims against defendants. Claims I and
II allege that defendants' Exercise Machine infringes the two
patents for which plaintiff is the exclusive licensee. See
Amended Complaint ¶¶ 16-19. Claim III alleges that defendants'
use of the "Chi" trademark is likely to cause confusion as to the
source of the Exercise Machines, and therefore, constitutes
trademark infringement. See id. ¶ 21. Claims IV and V assert
that defendants' use of the "Chi" trademark constitutes unfair
competition under New York common law, and deceptive acts and
practices in violation of N.Y. Gen. Bus. §§ 349, 350 (McKinney
1988), respectively. See id. ¶¶ 23, 25.
B. Jurisdictional Allegations
Clark enlists representatives to promote and sell its Exercise
Machines. See 10/23/00 Acevedo Decl. ¶ 7. These representatives
appear at trade shows, fairs, mall locations and clinics
throughout the United States, and receive commissions for each
Exercise Machine sold. See id. Additionally, representatives
receive bonuses for each Exercise Machine sold by another
representative as a result of a referral. See id. This year,
Clark representatives have offered the Exercise Machine at two
New York trade shows — in Amherst, New York and Syracuse, New
York. See 10/19/00 Letter from John E. Gibson, counsel for
defendants, to plaintiff's counsel Martin G. Raskin ("10/19/00
Gibson Letter"), Ex. 8 to Raskin Decl., at 2.
Clark also utilizes Internet websites (the "Websites") to
market the Exercise Machine.*fn4 See 10/23/00 Acevedo Decl. ¶
8. The Exercise Machines may be purchased on the Websites either
by completing an order form online, or by printing an order form
and submitting it to Clark via mail or facsimile. See id. ¶ 9.
The Websites also provide customers a help service by which
customers may e-mail Clark with questions and receive responses
from an online representative. See id.
Furthermore, the Websites advertise Clark's affiliate referral
system. See id. ¶ 10. Once an individual purchases an Exercise
Machine, she may submit an application to become an "Independent
Affiliate". Clark has received five "Independent Affiliate"
applications from New York residents, none of whom reside within
the Southern District of New York. See 10/23/00 Letter from
John E. Gibson to Martin G. Raskin ("10/23/00 Gibson letter"),
Ex. 10 to Raskin Decl., at 1.
Of the 1,855 Exercise Machines Clark has sold since the product
was introduced on July 8, 1999, eighteen were sold to customers
in New York.*fn5 See id. These
sales occurred through referrals, the two New York trade shows,
and one Internet sale. See 10/18/00 Letter from John E. Gibson
to Martin G. Raskin ("10/18/00 Gibson Letter"), Ex. 5 to Raskin
Decl., at 2. One of Clark's customers resides in Plandome, New
York, within the Eastern District of New York. See 10/19/00
Gibson Letter, Ex. 8 to Raskin Decl. at 2; Order Forms, Ex. 4 to
Raskin Decl., at 15. None of Clark's customers are alleged to
reside in the Southern District of New York.
While neither plaintiff nor defendants have addressed whether
plaintiff, as an exclusive licensee of Skylite's patents, has
standing to sue for patent infringement, it is well-established
that "[a]s a general rule, . . . a patentee should be joined,
either voluntarily or involuntarily, in any infringement suit
brought by an exclusive licensee." Prima Tek II, L.L.C., v.
A-Roo Co., 222 F.3d 1372, 1377 (Fed. Cir. 2000); see also
Abbott Labs. v. Diamedix Corp., 47 F.3d 1128, 1130-31 (Fed.Cir.
1995) ("A licensee may obtain sufficient rights in the patent to
be entitled to seek relief from infringement, but to do so, it
ordinarily must join the patent owner."). "The policy underlying
the requirement to join the owner when an exclusive licensee
brings suit is to prevent the possibility of two suits on the
same patent against a single infringer." Vaupel Textilmaschinen
KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 875 (Fed.Cir.
However, this general rule is subject to an exception where the
patentee made an assignment of "all substantial rights under the
patent." Prima Tek II, 222 F.3d at 1377; Vaupel, 944 F.2d at
876; Adams v. Westminster Int'l Co., No. 98 Civ. 2489, 1999 WL
596272, at *1 (S.D.N.Y. Aug. 9, 1999). Transfer of the exclusive
right to sue for patent infringement is "particularly
dispositive" and will generally permit an exclusive licensee to
sue without joining the patentee as a co-plaintiff. Vaupel, 944
F.2d at 875-76.
In the Licensing Agreement, Skylite granted to Hsin Ten "the
exclusive right and license worldwide except for the country of
Japan to manufacture, use and sell the Exerciser covered by" the
two patents issued to Skylite. See Licensing Agreement, Ex. 1
to 12/27/00 Acevedo Decl., at 1. Additionally, the Licensing
Agreement contains a section concerning suits against infringers:
Each party shall notify the other party of any
suspected infringement of the letters patents in the
licensed territory and shall inform the other party
of any evidence of such infringement(s). LICENSEE
[Hsin Ten] shall have the first right to institute
suit for infringement(s) in the licensed territory so
long as this Agreement remains exclusive. LICENSOR
[Skylite] agrees to join as a party plaintiff in any
such lawsuit initiated by LICENSEE, if requested by
LICENSEE, with all costs, attorneys' fees, and
expenses to be paid by LICENSEE. LICENSEE shall be
entitled to any recovery of damages for infringement,
both past and present damages, of the letters patents
resulting from a lawsuit brought by LICENSEE or
LICENSOR. Neither party may settle with an infringer
without the prior approval of the other party if such
settlement would affect the rights of the other party
under the letters patents.
Personal jurisdiction in a federal court is determined by
looking to the law of the forum state. See Bensusan Restaurant
Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997). The relevant
statute here is New York's long-arm statute, N.Y.C.P.L.R. §
302(a) (McKinney's 1990).*fn7 If jurisdiction is appropriate
under state law, a court must then determine whether the exercise
of that jurisdiction satisfies the requirements of due process.
See Bank Brussels Lambert, 171 F.3d at 784.
Hsin Ten contends that this Court has jurisdiction over
defendants pursuant to sections 302(a)(1) and 302(a)(2). See
Pl. Opp. at 9. Because I conclude that jurisdiction is
appropriate under ...