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Kickstarter, Inc. v. Artistshare

April 10, 2012

KICKSTARTER, INC. PLAINTIFF,
v.
ARTISTSHARE, INC. AND FAN FUNDED, LLC, DEFENDANTS.



The opinion of the court was delivered by: Honorable Paul A. Crotty, United States District Judge:

USDC SDNY

DOCUMENT

ELECTRONICALLY FILED

DOC #:

OPINION & ORDER

Plaintiff Kickstarter, Inc. ("Kickstarter") seek a declaratory judgment that U.S. Patent No. 7,885,887 (the "'887 patent"), issued to ArtistShare, Inc. ("ArtistShare") and owned by Fan Funded, LLC (collectively, the "Defendants") is invalid, and that Kickstarter does not infringe the '887 patent through its website or other means. Defendants move to dismiss Kickstarter's complaint, pursuant to Fed. R. Civ. P. 12(b)(1), for lack of subject matter jurisdiction, arguing that there is no case or controversy here because the parties were in a business negotiation that did not involve a claim of infringement or threat of suit.

For the following reasons, Defendants' motion to dismiss is DENIED.

BACKGROUND

In or around 2003-2004, Brian Camelio ("Camelio") founded ArtistShare, an online platform for artists to seek funding from anyone interested in a project, which is referred to as a "crowdfunding" platform. (Feb. 3 Camelio Decl. ¶ 3.) In 2009, Kickstarter launched its own online crowdfunding platform, for those looking to raise money for creative projects. (Cohen Decl. ¶ 2.) Kickstarter has since become the largest (or one of the largest) crowdfunding platforms in the world. (Cohen Decl. ¶ 2.)

ArtistShare filed for a patent regarding its "invention relating to funding projects." (Feb. 3 Camelio Decl. ¶ 4.) On September 14, 2010, Camelio sent Kickstarter a letter, via Kickstarter's registered agent for service of process, regarding the "Availability of ArtistShare, Inc.['s] Patent Application for Licensing" explaining that "[u]pon review of [Kickstarter's] current website, we believe you may be interested in securing licensing rights to ArtistShare's software platform, which includes rights to U.S. Patent Application Publication No. 2004/0015427, a copy of which is attached." (Cheng Decl. Ex. A.)

On February 8, 2011, ArtistShare's '887 patent was issued, entitled "Methods and Apparatuses for Financing and Marketing a Creative Work." (Feb. 3 Camelio Decl. ¶ 5.)

On March 1, 2011, shortly after the '887 patent issued, Camelio sent a letter to Kickstarter executives, again via its registered agent for service of process, attaching a copy of the '887 patent and stating that he "will be contacting you in the immediate future to discuss ArtistShare's patent and software licensing terms for Kickstarter." (Cheng Decl. Ex. B.) On March 23, 2011, Camelio sent another letter to Kickstarter, also by its registered agent for service of process, "to discuss software licensing opportunities." (Compl. ¶ 11.) On April 13, 2011, Camelio personally visited, not the registered agent for service of process, but rather Kickstarter's corporate headquarters. He did so without an appointment and attempted, unsuccessfully, to meet with a co-founder of Kickstarter. (Compl. ¶ 12.)

On May 2, 2011, Kickstarter's outside counsel sent Camelio a letter asking whether "ArtistShare believes Kickstarter should license the '887 patent as a potential business opportunity or whether ArtistShare contends that Kickstarter is infringing the patent." (Cheng Decl. Ex. C.) On May 11, 2011, Camelio responded that "[y]es[,] ArtistShare has a patent which may or may not be relevant to your future business plans" and that "[a]s far as the patent infringement claims go, that I leave up to the attorneys." (Cheng Decl. Ex. D.) Camelio then stated that he "suggest[s] we look first to collaborate together before we get distracted by getting pulled into an analysis about patent infringement." (Id.)

On June 9, 2011, Kickstarter's General Counsel, Jared Cohen ("Cohen"), met with Camelio. (Cohen Decl. ¶ 13.) Camelio and Cohen's accounts of their conversation at this meeting and in subsequent conversations vary dramatically. Based on the meeting and what Camelio said, Cohen believed that Camelio "was going to use the patent to force Kickstarter to pay him for a license or other protection from suit." (Cohen Decl. ¶ 15.) Camelio claims that they discussed: ArtistShare's business model; ArtistShare's software; the possibility of Kickstarter ...


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