United States District Court, S.D. New York
July 13, 2004.
AVECMEDIA, INC., Plaintiff,
EMILY GOTTSCHALK; THE GARR GROUP, LLC; TGG PACKAGING SOLUTIONS, LLC; PACKAGING SOLUTIONS, LLC; and ACQUIRE, INC., Defendants.
The opinion of the court was delivered by: BARBARA JONES, District Judge
Plaintiff, Avecmedia brought this diversity action against
defendants, Emily Gottschalk; The Garr Group, LLC; TGG Packaging
Solutions, LLC; Packaging Solutions, LLC; and Acquire, Corp. for
patent infringement and tortious interference with contract.
Defendants The Garr Group, TGG Packaging Solutions, Packaging
Solutions, and Emily Gottschalk ("The TGG Defendants") filed a
crossclaim against Acquire for defense costs and fees and
indemnification based on an Indemnification and Hold Harmless
Agreement between the TGG Defendants and Acquire. Defendant
Acquire has moved pursuant to Rule 12(b)(2) of the Federal Rules
of Civil Procedure to dismiss the complaint and the first amended
crossclaim for lack of personal jurisdiction. The Plaintiff bears the burden of establishing that the Court
has personal jurisdiction over the Defendant. Bank Brussels
Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d
Cir. 1999). In the absence of an evidentiary hearing and prior to
discovery, the Plaintiff need only establish a prima facie
showing of personal jurisdiction. CutCo Indus., Inc. v.
Naughton, 806 F.2d 361, 364 (2d Cir. 1986). The following facts
are drawn from the complaint, affidavits, and documents submitted
by the parties, and have been construed in the light most
favorable to the Plaintiff, and all doubts have been resolved in
its favor. CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 365
(2d Cir. 1986).
Avecmedia is a Connecticut corporation headquartered in
Norwalk, Connecticut. Avecmedia is the owner of several patented
packaging systems which enable CDs, CD-ROMs, DVDs and other game
discs to be packaged easily on high-volume consumer products,
such as drink lids, candy boxes, and mailing devices. (Compl. ¶
11). TGG is a multimedia (CD/DVD) promotion company located in
Voorhees, New Jersey. Acquire, an advertising agency, is a
California corporation with its principal place of business and
sole office located in California. (McInnis Decl. ¶ 2).
On November 11, 2001, Avecmedia personnel, Defendant Gottschalk
and other personnel and/or agents of Defendants Garr Group, TGG,
and Packaging Solutions had a meeting in New York City, the purpose of which was to explore a possible business
relationship between the companies. (Compl. ¶ 15). Following the
meeting, Gottschalk executed on behalf of the Garr Group a
Confidentiality/Non-Circumvention Agreement with Avecmedia
"whereby the parties agreed that they would engage in discussions
regarding Avecmedia's proprietary products and/or product ideas."
Each party agreed "not to use, sell, exploit, copy or further
develop or disclose to anyone else the other's Confidential
Information or to make such Confidential Information public or
common knowledge." (Compl. ¶ 16). Avecmedia claims that the TGG
Defendants misappropriated Avecmedia's confidential information
and used it to manufacture, distribute and sell their own line of
products using Avecmedia's technology. Specifically, they claim
the products TGG sold to Acquire as part of an advertising
campaign are a misappropriation of Avecmedia's patented
In May 2003, Acquire designed an advertising campaign on behalf
of Electronic Arts, Disney, MGM, Virgin Records, Zingy, and
Capitol Records. The purpose of the campaign, titled "Fun in the
Sun" ("FITS"), was to publicize various recordings by providing
free samples of client's work to the movie-going public on a
CD-ROM ("FITS CD") that was placed inside a see-through drink cup
lid ("FITS lids"). The FITS lids were to be distributed to the
public by a movie theater operator. Acquire's tasks included
creating the master CD-ROM, obtaining the necessary copyright and trademark rights for the CD-ROM content,
contracting a lid vendor, and arranging with a theater chain to
distribute the drink lids. (McInnis Decl. ¶ 13). Acquire avers
that the lids were never meant to be sold either to the theater
chain or the end users; they were to be given to the theaters for
further free distribution to theater customers. (McInnis Decl. ¶
In furtherance of the FITS advertising campaign, Acquire
entered into an agreement with Defendants TGG, a lid vendor. TGG
was to replicate the FITS CD-ROM, package the CD-ROMs into TGG's
CD lid, and ship the lid/CD-ROM combination to movie theaters.
(McInnis Decl. ¶ 14). The only sale of the allegedly infringing
lids took place between TGG and Acquire. Emily Gottschalk
negotiated the agreement on behalf of TGG. The negotiations were
conducted via telephone between TGG in New Jersey and Acquire in
California. (McInnis Decl. ¶ 16). As part of the overall
agreement, the parties entered into a written confidentiality
agreement and an Indemnification and Hold Harmless Agreement
requiring Acquire to indemnify The Garr Group. Acquire alleges
that it relied on statements by TGG in "concluding that TGG, as
the developer and seller of the lids, had the patent rights that
it needed to carry out its obligations under the contract
concerning the FITS campaign." (McInnis Decl. ¶ 15).
The FITS CD lids were to be distributed by Cinemark USA, Inc.,
the operator of a movie theater chain. Cinemark's home office is in Plano, Texas but Cinemark is registered to do
business in New York, and operates two movie theaters in New
York. (Warshavasky Decl. Ex. J). The theater agreed to distribute
the FITS CD-ROM's free to consumers with the purchase of a 44 oz.
fountain drink. On or about July 7, 2003 Cinemark began
distribution of the FITS lids to its theaters, but Acquire claims
that no lids were shipped to New York. (McInnis Decl. ¶ 18). On
or about July 11, 2003, the Convex Group, who is not a party to
this action, sent a cease and desist letter to Cinemark claiming
that TGG's lids infringed four of its US patents*fn1 and
demanded that Cinemark immediately cease and desist the
distribution of TGG's promotional lids. Cinemark immediately
refused to distribute the TGG lids; distribution was stopped
before a single lid was given to a theater patron. (McInnis Decl.
Acquire's Contacts with New York
Acquire does not have any offices, employees, or agents within
the State of New York; it does not have a telephone number,
assets, bank accounts, or real property within the State of New
York; nor does it have subsidiaries within the State of New York.
(McInnis Decl. ¶¶ 7-9). Acquire is not licensed to do business
within the State of New York nor does it direct advertisements or solicitations within the State of New York.
(McInnis Decl. ¶¶ 6, 10). Acquire has sent employees to New York
only twice during its six year existence. In March 2002, Ronald
McInnis, the President of Acquire, and Tom Taylor were in New
York for two days meeting with potential sponsors of a CD-ROM
advertising campaign that did not involve the use of a soft drink
lid. On June 18, 2003, Ronald McInnis and Rebecca Japsen traveled
to New York for three days on behalf of Acquire and had courtesy
meetings with the companies that had already agreed to sponsor
the FITS advertising campaign. They also met with William Plumb
and Alexandra Gordon of Avecmedia to discuss the possibility of
doing business. At the meeting, the parties discussed "the
possibility of Avecmedia supplying the AvecPAK CD Drink Lid to
Acquire for a promotion that Acquire was planning for later that
summer in which they were to distribute lids of fountain beverage
cups at motion picture theaters." (Gordon Decl. ¶ 3). Following
the June meeting Rebecca Japsen continued to be in telephone and
email contract with Avecmedia concerning the advertising
campaign. There is a disagreement between Avecmedia and Acquire
as to whether the advertising campaign discussed on June 20, 2003
was part of the FITS advertising campaign, which is the source of
this lawsuit. Avecmedia avers that the meeting concerned the FITS
campaign. Acquire's President, Ronald McInnis, counters that the
June meeting and subsequent communications with Avecmedia were in
connection with a future advertising campaign a promotion contemplated to take
place in August/September 2003 entitled "Back to School."
(McInnis Reply Decl. ¶ 2). McInnis claims that, by the time of
the meeting with Avecmedia on June 20, 2003, Acquire had already
reached an agreement with TGG to provide the soda lids for the
FITS promotion. (McInnis Reply Decl. ¶ 2). McInnis presented an
invoice Acquire received from Defendant TGG for the FITS soft
drink lids as evidence that the FITS campaign was completed by
June 20, 2003. The invoice, dated June 2, 2003, calls for partial
availability of the lids by June 18, 2003, before the meeting
with Avecmedia took place; the invoice also references payments
made on May 29, 2003 and June 3, 2003. Furthermore, McInnis
states in his declaration that distribution of the FITS lids
began on July 7, 2003 and was halted due to the cease and desist
letter that Cinemark received from the Convex Group on June 11,
2003. (McInnis Decl. ¶¶ 17-19, Ex. C). All of these events took
place prior to the June 20 meeting in New York. In addition,
electronic mail communication between Acquire and Avecmedia also
states that the time frame for the promotion was the end of
August or the beginning of September 2003.
Throughout the telephone and email communication between
Acquire and Avecmedia, Avecmedia alleges that its employees,
Alexandra Gordon and William Plumb, were working from their home
offices in New York state. McInnis and Japsen assert that they
did not know Avecmedia's employees were working from their home offices in New York and that they believed the employees were in
Connecticut, as Avecmedia is a Connecticut corporation and is
headquartered in Connecticut.
Personal jurisdiction over a defendant in a diversity action is
determined by reference to the law of the state where the court
sits. Savin v. Ranier, 898 F.2d 304, 306 (2d Cir. 1990).
Personal jurisdictional analysis involves a two-part inquiry.
First, a court must determine whether jurisdiction is proper
under the forum state's law in this case New York's long-arm
statue, CPLR § 302(a).*fn2 Second, if the forum state's law
supports jurisdiction, then a court must determine whether
jurisdiction comports with constitutional due process
requirements and does not violate traditional notions of "fair play and substantial justice."*fn3 Bank Brussels Lambert v.
Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999).
Avecmedia asserts that personal jurisdiction over Acquire is
proper pursuant to CPLR sections 302(a)(1) and 302(a)(3). The TGG
defendants argue for personal jurisdiction only under 302(a)(1).
A plaintiff must secure personal jurisdiction over a defendant
with respect to each claim [he or she] asserts." First Capital
Asset Mgmt., Inc. v. Brickellbush, Inc., 218 F. Supp.2d 369, 397
(S.D.N.Y. 2002). As stated above, Avecmedia's claims against
Acquire are for patent infringement and tortious interference
with contract and TGG's crossclaim is a claim for indemnification
based on an Indemnification and Hold Harmless Agreement. I. CPLR § 302(a)(1) Transaction of Business or Contract to
Supply Goods/Services in New York.
CPLR § 302(a)(1) provides for jurisdiction over a
non-domiciliary "who in person or through an agent . . . 
transacts any business within the state or  contracts anywhere
to supply goods and services within the state." Although either
of these two clauses can form the basis for the exercise of
personal jurisdiction, Avecmedia and the TGG defendants only
argue for jurisdiction under the first clause.*fn4
For personal jurisdiction to be sustained under the first
clause of § 302(a)(1), two requirements must be met: first, the
defendant must engage in a "transaction of business" and, second,
the claim against the non-domiciliary must arise out of that
business activity. CutCo Indus., Inc. v. Naughton,
806 F.2d 361, 365 (2d Cir. 1986); Agency Rent a Car Sys., Inc. v. Grand
Rent a Car Corp., 98 F.3d 25, 29 (2d Cir. 1996). Section
302(a)(1) is a "single act statute" and "proof of one transaction
in New York is sufficient to invoke jurisdiction, even though the
defendant never enters New York, so long as the defendant's
activities [in New York] were purposeful and there is a
substantial relationship between the transaction and the claim
asserted." Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467
(1988). The Second Circuit has noted that "a nondomiciliary transacts business under
CPLR 302(a)(1) when he purposefully avails [himself] of the
privilege of conducting activities within [New York], thus
invoking the benefits and protections of its laws." CutCo
Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986)
(quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). The
following factors are considered in determining whether a
nondomiciliary has transacted business: 1) whether the defendant
has an on-going contractual relationship with a New York
corporation; 2) whether the defendant negotiated or executed a
contract in New York, and whether the defendant visited New York
after executing the contract with the parties; 3) what the choice
of law is in any such contract; and 4) whether the contract
requires franchisees to send notices and payments into the forum
state or subjects them to supervision by the corporation in the
forum state. Agency Rent a Car Sys., Inc. v. Grand Rent a Car
Corp., 98 F.3d 25, 29 (2d Cir. 1996). While each of these
factors is important, none is dispositive. Id. To determine
whether a party has "transacted business" in New York a court
must consider "the totality of circumstances when determining the
existence of purposeful activity." SAS Group, Inc. v. Worldwide
Inventions, Inc., 245 F. Supp.2d 543, 548 (S.D.N.Y. 2003). A
defendant may not be subject to jurisdiction based on "random,"
"fortuitous," or "attenuated contacts." Id.; Burger King v.
Rudzewicz, 471 U.S. 462, 475 (1985). The contacts must provide a fair warning to defendant of the possibility of being haled into
court in the forum state. Spencer Trask Ventures, Inc. v. Archos
S.A., 2002 WL 417192, at *3, 2002 U.S. Dist. Lexis 4396, at *11
(S.D.N.Y. Mar. 18, 2003); Kreutter, 527 N.Y.S.2d at 198.
In addition to the "transacts business" requirement, the cause
of action must also "arise from" the defendant's contacts with
the forum state. For a cause of action to be deemed to "arise
from" a defendant's New York activities, the activities have to
be "substantially proximate to the allegedly unlawful acts."
Xedit Corp. v. Harvel Ind. Corp., 456 F. Supp. 725, 729
(S.D.N.Y. 1978). There must be an articulable nexus between the
business transacted and the cause of action sued upon; in other
words, the foreign defendant's transaction of business in New
York must "bear a substantial relationship to the transaction out
of which the instant cause of action arises." McGowan v. Smith,
52 N.Y.2d 268, 272 (1981).
Plaintiff Avecmedia alleges that its meeting with Acquire held
in New York on June 20, 2003 satisfies the "transacts business"
requirement of § 302(a)(1). The purpose of the meeting "was to
explore a possible business relationship under which Defendant
Acquire would utilize Avecmedia's patented packaging systems."
(Compl. ¶ 20). At the meeting the parties discussed "the
possibility of Avecmedia supplying the AvecPAK CD Drink Lid to
Acquire for a promotion that Acquire was planning for later that
summer in which they were to distribute lids of fountain beverage cups at motion picture theaters." (Gordon Decl. ¶ 3).
"Any contract negotiations which indicate a purposeful invocation
of the laws of New York State are transactions of business for
the purposes of New York's long arm statute," and a single
transaction of business in New York may be sufficient. SAS
Group, Inc. v. Worldwide Inventions, Inc., 245 F. Supp.2d 543,
548-49 (S.D.N.Y. 2003) citing Premier Lending Servs., Inc. v.
J.L.J. Assocs., 924 F. Supp. 13, 15-16 (S.D.N.Y. 1996). Acquire's
meeting with Avecmedia clearly falls short of "indicating a
purposeful invocation of the laws of New York." Acquire met with
Avecmedia, a Connecticut company, in New York City as a matter of
convenience. The purpose of the meeting was to explore a possible
business relationship; the meeting did not involve specific
contract negotiations nor did the parties execute an agreement.
Although "a long line of cases has established that § 302(a)(1)
permits the assertion of jurisdiction over a defendant who has
engaged in meetings or precontractual negotiations in New York,
so long as those negotiations significantly advance or are
essential to the formation of an agreement," Goldstein v. CTT
Mobile Mgmt. Serv., Inc., 1985 WL 321, at *4, 1985 U.S. Dist.
LEXIS 22289, at *11 (S.D.N.Y. Feb. 26, 1985), in the present case
the meeting between the parties did not involve precontractual
negotiations and an agreement was not formed subsequent to the
meeting; therefore personal jurisdiction cannot be based on this
isolated meeting in New York. Moreover, even if the single business meeting held in New York
satisfied the "transacts business" requirement of 302(a)(1), it
does not satisfy the "arise from" requirement of 302(a)(1).
Avecmedia alleges that the subject of the meeting was the FITS
advertising campaign and, as such, the present dispute arises out
of Acquire's business transaction in New York. However, as stated
above, the parties contest the subject of the meeting. Even if
this court were to assume that the FITS campaign was discussed at
the meeting, the present action does not "arise from" this single
contact with New York. The crux of this dispute is the sale of
infringing products from TGG to Acquire and the circumvention of
the confidentiality agreement between TGG and Avecmedia. The
meeting held in New York between Avecmedia and Acquire is
unrelated to these claims.*fn5
Avecmedia also asserts that the telephone and electronic mail
communication between Acquire and Avecmedia can serve as the
basis for personal jurisdiction over Acquire because Avecmedia's
employees were working out of their home offices in New York
state. However, Acquire clearly did not know that Avecmedia's personnel were working from New York, and Avecmedia did not
inform Acquire that its employees were working from New York home
offices. Avecmedia is a Connecticut corporation and is
headquartered in Connecticut; therefore, Acquire reasonably
believed that it was communicating with personnel also located in
Connecticut. (McInnis Repl. Decl ¶ 6). The business cards of the
two Avecmedia employees, Gordon and Plumb, indicated that their
addresses were in Norwalk, Connecticut. Since the location of
Avecmedia's personnel was unknown to Acquire, it did not provide
Acquire with a fair warning of being haled into court in New
York. See Spencer Trask Ventures, Inc. v. Archos, S.A., 2002
WL 417192, at *3, 2002 U.S. Dist. LEXIS 4396, at *11 (S.D.N.Y.
Mar. 18, 2003) (the requisite minimum contacts must provide a
fair warning to the defendant of a possibility of being subject
to the courts of the forum state). In addition, telephone calls
and mailings can serve as the basis for personal jurisdiction
only if the defendants "conducted these activities in such a
manner as to `project' themselves into New York in order to
`purposely avail' themselves of the benefits of doing business in
New York." Nat'l Tel. Directory Consultants, Inc. v. Bellsouth
Adver. & Publ'g Corp., 25 F. Supp.2d 192, 196 (S.D.N.Y. 1998)
(citing Jaisan, Inc. v. Sullivan, 1997 WL 86402, at *3, 1997
U.S. Dist. LEXIS 21907, at *5 (S.D.N.Y. Feb. 28, 1997). As stated
above, Acquire was not aware that it was communicating with
Avecmedia personnel working from their home offices in New York; therefore, Acquire cannot be said to have been "projecting"
itself into New York commerce. Furthermore, just as the claims in
this lawsuit do not arise out of the meeting between Acquire and
Avecmedia in New York, they also do not arise out of Acquire and
Avecmedia's telephone and email communications.
The TGG Defendants argue for personal jurisdiction based on
Acquire's business dealings with the record companies whose
content was to appear on the FITS CDs. TGG argues that this
satisfies the "transacts business" requirement of 302(a)(1). As
part of the FITS advertising campaign, Acquire entered into
business relationships with Electronic Arts, Disney, MGM, Virgin
Records, Zingy and Capitol Records, which are registered to do
business in New York. (Warshavsky Decl. Exs. A-G, J). McInnis
also had courtesy meetings with these companies in New York in
June 2003, after they had contracted to sponsor the FITS
advertising campaign. (McInnis Decl. ¶ 12). Furthermore, the TGG
Defendants claim that the licensing division of Virgin Records is
located within New York; therefore, "at least some of the
licensing issue must have occurred in New York, or, at least with
a New York company." (TGG Opp. at 5). Even assuming Acquire's
business relationship with New York based companies satisfies the
"transacts business requirement" of 302(a)(1), these contacts
fail to satisfy the "arise from" requirement.
The New York Court of Appeals has clearly stated that there
must be an articulable nexus between the business transacted and the cause of action sued upon. McGowan v. Smith, 52 N.Y.2d 268,
272 (1981). In McGowan, Mogi Trading Co., a Japanese exporter,
shipped a fondue pot to New York where it subsequently injured an
infant. The court held that visits by Mogi's representatives to
New York "for the purpose of doing general marketing and research
and ascertaining what type of products might be salable in New
York" were "purposeful" but they did not "bear a substantial
relationship to the transaction out of which the instant cause of
action arose." Id. at 272. While these visits did establish
Mogi's physical presence within the State, "physical presence
alone cannot talismanically transform any and all business
dealings into business transactions under CPLR 302(a)(1). Id.
at 272 (quoting Presidential Realty Corp. v. Michael Square
West, 44 N.Y.2d 672, 673 (1978)).
Here, the dispute at issue involves allegations of patent
infringement of Avecmedia's soft-drink lid packaging and tortious
interference with a Confidentiality and Non-Circumvention
Agreement. Although, Acquire's business relationship with the New
York based record companies was related to obtaining the
licensing for the music and movies to be placed on the infringing
products, the present suit does not arise out of these contacts.
Avecmedia's suit would still exist even if blank CDs had been
inserted into the drink lids and sold. Acquire's alleged
"transaction of business" with New York based companies falls
short of a "substantial relationship" as required by 302(a)(1). II. CPLR § 302(a)(3) Tort Outside New York/Injury Inside New
Avecmedia also argues for personal jurisdiction pursuant to
CPLR 302(a)(3), which provides in relevant part:
(a) [A] Court may exercise personal jurisdiction over
a non-domiciliary, or his executor, or administrator,
who in person or through an agent (3) commits a
tortious act without the state causing injury to the
person or property within the state, . . . 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 . . .
CPLR § 302(a)(3) (McKinney 2001).
To establish jurisdiction under CPLR 302(a)(3), the plaintiff
must make a prima facie showing of the following: 1) that
defendants committed a tortious act outside the state; 2) that
the cause of action arises from that act; 3) that the act caused
injury to a person or property within the State; 4) that
defendants expected or should reasonably have expected the act to
have consequences in the State; 5) that defendants derived
substantial revenue from interstate or international commerce.
See LaMarca v. Pak-Mor Mfg. Co., 95 N.Y.2d 210, 214 (2000).
In "determining whether the injury in New York is sufficient to
warrant § 302(a)(3) jurisdiction [courts] must generally apply a
situs-of-injury test, which asks them to locate the `original
event' which caused the injury." Bank Brussels Lambert v.
Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 791 (2d Cir. 1999). "The `original event' is, however, generally distinguished not
only from the initial tort but from the final economic injury and
the felt consequences of the tort." Id. It is of "paramount
importance that the exercise of personal jurisdiction must be
based on a direct injury within the state and a close expectation
of consequences within the state stemming from the tortious act."
Id. (internal quotations and citations omitted).
The original events underlying Avecmedia's claim of tortious
interference are the Non-Circumvention Agreement, the negotiation
of any agreement between TGG and Acquire, and the alleged
inducement by defendants TGG, Packaging Solutions, and Acquire to
induce breach of the Non-Circumvention Agreement. See Complaint,
¶¶ 32-35, 37-41. Plaintiff cannot establish that any of these
events took place in New York. The agreement between Acquire and
TGG was negotiated and entered into through communications via
telephone with Acquire in California and with TGG in New Jersey.
(McInnis Decl. ¶ 16). There is no allegation that any inducement
by Acquire for TGG to breach the Non-Circumvention Agreement
occurred in New York. Therefore, personal jurisdiction is not
proper under 302(a)(3).
Avecmedia's second claim is for patent infringement. In a
patent case, the Federal Circuit has held that the situs of the
injury is the place where the infringing products are sold.
Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558,
1571 (1994); see also Safe-Strap Co. v. RDN Int'l., 2002 WL 14360, *1, 2001 U.S. Dist. LEXIS 21907, at *5 (S.D.N.Y. Jan. 4,
2002). To meet its burden as to the situs of injury, Plaintiff
must prove that the infringing products were sold in New York.
Westvaco Corp. v. Viva Magnetics, Ltd., 2003 WL 21136729 at *2,
2003 U.S. Dist. LEXIS 8051 (S.D.N.Y. May 15, 2003). In the
present case, the FITS lids were sold by the TGG defendants,
located in New Jersey, to Acquire, located in California.
Plaintiff argues that even though the FITS lids were not sold in
New York, Acquire had given the lids to Cinemark theaters who
would in turn distribute the lids to customers; Cinemark had two
theaters in New York, therefore the lids were going to be
distributed to customers in New York. However, because the FITS
lids were never distributed to customers, no lids were ever
distributed or sold in New York. Even though lids were given to
Cinemark, as the Westvaco Court explained, distribution of an
infringing product to intermediaries is not enough to meet the
injury requirement of 302(a)(3). Here Cinemark is an
intermediary, thus personal jurisdiction is not proper under
For the above stated reasons personal jurisdiction is not
proper over Acquire. Therefore, Acquire's motion to dismiss the
complaint and the first amended crossclaim for lack of personal
jurisdiction is GRANTED.