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Int'l Diamond Imps., Inc. v. Oriental Gemco (NY), Inc.

United States District Court, S.D. New York

November 24, 2014

INTERNATIONAL DIAMOND IMPORTERS, INC. d/b/a IDI DESIGN AND MEIRA T. DESIGNS, Plaintiffs, -
v.
- ORIENTAL GEMCO (NY), INC., ORIENTAL GEMCO HK CO., ORIENTAL GEMCO PVT. LTD., and N.K. NIGAM, Defendants

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For Plaintiff: Kalpana Nagampalli, Esq., Nupur Shah, Esq., Stephen Edward Feldman, Esq., Steven Michael Crosby, Esq., Feldman Law Group, New York, NY.

For Defendants: Michael Stuart Horn, Esq., Archer & Greiner, P.C., Hackensack, NJ; Patrick Papalia, Esq., Archer & Greiner, P.C (NJ2), Hackensack, NJ.

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OPINION AND ORDER

Shira A. Scheindin, United States District Judge.

I. INTRODUCTION

International Diamond Importers, Inc., d/b/a IDI Design and Meira T. Designs (" Meira T." or " Plaintiff') brings this action against Oriental Gemco (NY) Inc. (" Oriental NY" ), Oriental Gemco HK Co. (" Oriental Hong Kong" or " Oriental HK" ), Oriental Gemco Pvt. Ltd. (" Oriental India), and N.K. Nigam (collectively referred

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to as " Defendants" ).[1] Plaintiff brings claims for copyright infringement, federal trade dress infringement, federal unfair competition, state law deceptive business practice, and state law unfair competition.

Defendants move to dismiss all claims pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), 12(b)(5), and 12(b)(6). Alternatively, Defendants move to dismiss under the doctrine of forum non conveniens pursuant to 28 U.S.C. § 1404. Plaintiff cross-moves for jurisdictional discovery.

For the reasons set forth below, Defendants' motion is GRANTED in part and DENIED in part. Plaintiff's motion for jurisdictional discovery is GRANTED.

II. BACKGROUND

A. Facts

1. Plaintiff

Meira T. is a New York company that designs, manufactures, and sells " unique, high quality" jewelry in the United States and abroad.[2] Meira T.'s jewelry is sold in " prestigious stores in the United States, London, Japan, Hong Kong, and Singapore . . . such as Saks Fifth Avenue, Bloomingdales, Barneys, Harrods and Neiman Marcus," and in boutiques in New York and California.[3] Plaintiff also sells the Meira T. products at jewelry and gift shows nationally and abroad.[4] Plaintiff has " spent substantial sums of money" promoting Meira T. jewelry to the jewelry industry and consuming public through print advertisements, mail and email campaigns, and appearances at trade and trunk shows.[5]

Meira T. jewelry is made with gold, diamonds, and other precious stones and the collections feature necklaces, bracelets, and earrings.[6] The brand is known for pieces with " signature asymmetrical off-center designs." [7] Plaintiff owns three Copyright Registrations covering seven of the pieces included in the Complaint[8] and a pending Copyright Application for the Fall 2011 Earrings.[9] Plaintiff does not own any relevant registered trademark. However, Plaintiff claims Meira T. jewelry has a protectible trade dress which " incorporates an off-center design comprising a large center jewel or piece with the size and/or quantity of pendants on one side being greater than the other side." [10]

2. Defendants

Oriental N.Y. is a New York corporation founded in 1996,[11] whose business is to sell jewelry made with precious metals and stones.[12] Plaintiff claims Oriental N.Y.

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sells jewelry that infringes on its copyrights and trade dress to jewelry stores and individual customers in New York and across the United States.[13]

I will refer to Oriental HK and Oriental India collectively as the Foreign Defendants. Oriental HK is located in Hong Kong,[14] and is a " wholesaler of precious and semi precious stones." [15] According to Defendants, Oriental HK does not do business in New York or the United States, does not sell any goods directly or advertise or solicit business in New York or anywhere in the United States, and owns no real property in New York or anywhere in the United States.[16] Plaintiff claims that Oriental HK " manufactures and distributes" infringing products " to jewelry stores and directly to consumers," and markets the infringing products to customers in New York and across the United States.[17]

Oriental India is a company based in India, which started in the 1970s as a family business.[18] Defendants assert that Oriental India hand cuts stones and acts as a supplier of finished stones.[19] Defendants further claim that Oriental India does no business in New York or the United States, does not sell goods directly to customers in New York or the United States, does not advertise or solicit business in New York or the United States, and owns no real property in New York or in the United States.[20] Plaintiff claims that Oriental India " manufactures and distributes" infringing products " to jewelry stores and directly to consumers," and markets these products to customers in New York and across the United States.[21]

As discussed further below, the relationship between the three corporate entities is unclear and the subject of dispute. Plaintiff asserts that the three companies make up " one organization with manufacturing in Hong Kong and India and its sales office [is] in New York." [22] At various points, Plaintiff describes the three companies as " affiliates," [23] alleges that Oriental N.Y. is " controlled by Defendants, and [is] merely a sales representative of Oriental HK and Oriental India," [24] that Oriental N.Y. acts as the Foreign Defendants' " agent," [25] and Oriental N.Y. is a domestic subsidiary of the Foreign Defendants.[26]

Defendants assert a completely different relationship. They claim that the Oriental Gemco companies " are three separate companies which sell jewelry in different countries." [27] Despite their independence, they use the same name to " portray[] a

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global presence in the market of New York diamond companies." [28] Oriental N.Y. purchases jewelry from the Foreign Defendants, but not exclusively, as it purchases jewelry from other vendors in Hong Kong and India.[29] While the three companies are owned by members of the same extended family,[30] each has " different ownership structures" and " separate corporate affairs." [31]

Plaintiff alleges that N.K. Nigam is the " owner and principal officer" and " responsible for the control, management, operation, and maintenance of affairs of Oriental NY, Oriental HK, and Oriental India." [32] Nigam, in turn, claims he is " not associated with or involved in the business dealings" of the Foreign Defendants.[33]

B. Claims

Plaintiff claims that Defendants have created, displayed and sold jewelry products that " utilize similar or identical features" giving Defendants' jewelry " a confusingly similar look that is intended to mimic" Meira T. jewelry in violation of Plaintiff's rights.[34] Plaintiff's counsel " has repeatedly written Oriental NY" requesting it cease from manufacturing and selling infringing products,[35] but all three Oriental Gemco companies have continued their infringing activities.[36] Plaintiff specifically claims that " Defendants have been displaying and accepting orders at trade shows and at their stores and plan to display this jewelry at the JCK trade show from May 30 to June 2, 2014 in Las Vegas." [37] As a result of Defendants' infringing activities, Plaintiff has suffered irreparable harm and injury due to lost profits, and harm to its goodwill, reputation, and market share.[38]

C. Defendants' Motions to Dismiss and Plaintiff's Cross Motion for Jurisdictional Discovery

Defendants move to dismiss all claims. They argue that (1) the court lacks personal jurisdiction over the Foreign Defendants as they do not have the requisite contacts with New York and the United States, (2) the court lacks subject matter jurisdiction over the state law claims, (3) the Foreign Defendants were improperly served in violation of the Hague Convention, and (4) Plaintiff has failed to state a claim for relief for copyright infringement, trade dress infringement, unfair competition under the Lanham Act, unfair competition under New York state law, and for deceptive business practices under New York state law. Defendants also argue that (5) under the doctrine of forum non conveniens, New York is an inappropriate

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forum to litigate this case and it should therefore be dismissed.

Plaintiff opposes each motion. In addition, in response to Defendants' motions regarding the lack of personal jurisdiction over the Foreign Defendants and improper service, Plaintiff has moved for jurisdictional discovery.

III. LEGAL STANDARD

A. Rule 12(b)(2) Motion to Dismiss

A plaintiff has the burden of proving personal jurisdiction by a preponderance of the evidence.[39] When assessed on written submissions, " a plaintiff need only allege facts constituting a prima facie showing of personal jurisdiction to survive a Rule 12(b)(2) motion." [40] The plaintiff may make such a showing with " an averment of facts that, if credited, would suffice to establish jurisdiction over the defendant." [41] In this posture, the court must construe all allegations in the light most favorable to the plaintiff and resolve all doubts in the plaintiff's favor.[42] However, " a plaintiff may not rely on 'conclusory non-fact-specific jurisdictional allegations' to overcome a motion to dismiss." [43]

B. Rule 12(b)(1) Motion to Dismiss

Rule 12(b)(1) allows a party to assert the defense that the court lacks subject matter jurisdiction to hear a claim. " Federal courts are courts of limited jurisdiction, and '[t]he validity of an order of a federal court depends upon that court's having jurisdiction over both the subject matter and the parties.'" [44] " The plaintiff bears the burden of proving subject matter jurisdiction by a preponderance of the evidence." [45] Courts also have " an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party." [46]

" For the purpose of determining whether a district court has federal question jurisdiction pursuant to Article III and 28 U.S.C. § 1331, the jurisdictional inquiry 'depends entirely upon the allegations in the complaint' and asks whether the claim as stated in the complaint 'arises under the Constitution or laws of the United States.'" [47] " When . . . the defendant challenges the factual basis for the plaintiff's assertion of jurisdiction, '[j]urisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party

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asserting it.'" [48] " In deciding the motion, the court 'may consider affidavits and other materials beyond the pleadings to resolve the jurisdictional issue, but [it] may not rely on conclusory or hearsay statements contained in the affidavits.'" [49]

C. Rule 12(b)(5) Motion to Dismiss

" 'Before a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied.'" [50] Under Rule 12(b)(5), a court may dismiss an action against one or more defendants on the ground of " insufficient service of process." Plaintiff must prove the sufficiency of service.[51] " [D]efective service [cannot] be ignored on the mere assertion that a defendant had 'actual notice.'" [52]

D. Rule 12(b)(6) Motion to Dismiss

In deciding a motion to dismiss pursuant to Rule 12(b)(6), the court evaluates the sufficiency of the complaint under the " two-pronged approach" suggested by the Supreme Court in Ashcroft v. Iqbal,[53] First, a court " 'can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.'" [54] " Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice" to withstand a motion to dismiss.[55] Second, " [w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief." [56] To survive a Rule 12(b)(6) motion to dismiss, the allegations in the complaint must meet a standard of " plausibility." [57] A claim is facially plausible " when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." [58] Plausibility " is not akin to a probability requirement; " rather, plausibility requires " more than a sheer possibility that a defendant has acted

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unlawfully." [59]

D. Jurisdictional Discovery

A district court has " considerable procedural leeway" when deciding a motion to dismiss for lack of personal jurisdiction and " may permit discovery in aid of the motion." [60] While a plaintiff is not required to make a prima facie showing of jurisdiction before a court orders jurisdictional discovery,[61] a plaintiff may not make " conclusory non-fact-specific jurisdictional allegations and thus obtain extensive discovery on that issue." [62]

IV. APPLICABLE LAW

A. 12(b)(1) Motion to Dismiss

A federal district court may exercise jurisdiction only if so authorized by the Constitution and by statute.[63] The Constitution extends the federal judicial power to, inter alia, all cases arising under the Constitution, laws, and treaties of the United States, and to cases between citizens of different states.[64]

28 U.S.C. § 1332 confers subject matter jurisdiction on the federal district courts, giving them original jurisdiction over cases " where the matter in controversy exceeds $75,000, exclusive of interest and costs and is between . . . (2) citizens of a State and citizens or subjects of a foreign state[.]" " The general rule requiring complete diversity between opposing parties is explicit and unequivocal." [65] A corporation takes the citizenship of both the state in which it is incorporated and the state where " it has its principal place of business." [66] Diversity of citizenship is determined as of the time the lawsuit is filed. [67]

28 U.S.C. § 1338(a) provides federal district courts with " original jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trademarks[,]" and exclusive jurisdiction with respect to " patents, plant variety protection, or copyrights." 28 U.S.C. § 1338(b) grants federal district courts original jurisdiction over " any civil action asserting a claim of unfair competition when joined with a substantial and related claim under the copyright, patent, plant variety protection or trademark laws." Finally, 28 U.S.C. § 1367(a) permits district courts to exercise supplemental jurisdiction over " claims that are so related to claims in the action within [the court's] original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution."

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A district court may decline to exercise such jurisdiction when it has dismissed all claims over which it has original jurisdiction.[68]

B. 12(b)(2) Motion to Dismiss

" Federal courts are to apply the personal jurisdiction rules of the forum state." [69] A court must undertake a " two-step inquiry" to determine if it can exercise personal jurisdiction over a foreign defendant.[70] " First, we determine whether the defendant is subject to jurisdiction under the law of the forum state -- here, New York. Second, we consider whether the exercise of personal jurisdiction over the defendant comports with the Due Process Clause of the United States Constitution." [71] Additionally, there are two types of personal jurisdiction: " general or all-purpose jurisdiction, and specific or case-linked jurisdiction." [72]

1. General Jurisdiction

Under section 301 of the New York Civil Practice Law and Rules (" CPLR" ), a foreign corporation is subjected to general jurisdiction if it is " doing business" in the State. Under this test, a foreign corporation is amenable to suit in New York if it " 'has engaged in such a continuous and systematic course of 'doing business' [in New York] that a finding of its 'presence' [in New York] is warranted.'" [73]

However, general jurisdiction only comports with due process " when a corporation's contacts with a state are 'so continuous and systematic as to render [it] essentially at home in the forum State.'" [74] " [O]nly a limited set of affiliations with a forum will render a defendant" " at home" such that jurisdiction is appropriate.[75] The " paradigm" instances of when a corporate defendant is " at home" are in its " place of incorporation and principal place of business." [76] Generally, " a company's 'engage[ment] in a substantial, continuous, and systematic course of business' is alone insufficient to render it at home in a forum." [77] It is possible that " a corporation's operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that State," but this would be an " exceptional case." [78]

2. Specific Jurisdiction

If general jurisdiction is not satisfied, the court determines if there is specific jurisdiction. Under section 302(a)(2) of the CPLR, jurisdiction may be asserted over a non-domiciliary that " commits a tortious act within the state."

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The due process requirements for specific jurisdiction requires both a " minimum-contacts" test and a " reasonableness" inquiry. First, the plaintiff must demonstrate that " the claim arises out of, or relates to, the defendant's contacts with the forum." [79] As the Supreme Court recently explained, " the relationship [between the defendant and the forum state] must arise out of contacts that the 'defendant himself ' creates with the forum State." [80] Though " a defendant's contacts with the forum State may be intertwined with his transactions or interactions with the plaintiff or other parties . . . . a defendant's relationship with a plaintiff or third party, standing alone, is an insufficient basis for jurisdiction." [81] " Due process requires that a defendant be haled into court in a forum State based on his own affiliation with the State, not based on the 'random, fortuitous, or attenuated' contacts he makes by interacting with other persons affiliated with the State." [82] Second, jurisdiction must also be reasonable. Courts must weigh the following factors in evaluating the " reasonableness" requirement of due process:

(1) the burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the forum state in adjudicating the case; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of the controversy; and (5) the shared interest of the states in furthering substantive social policies.[83]

C. 12(b)(5)

The acceptable methods of service of a summons and complaint are set forth in Rule 4(h),which establishes that

a foreign corporation . . . must be served (1) in a judicial district of the United States (A) in the manner prescribed by Rule 4(e)(1) for serving an individual; or (B) by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process . . . . or (2) at a place not within any judicial district of the United States, in any manner prescribed by Rule 4(f) for serving an individual, except personal delivery.

In turn, Rule 4(f) permits service outside the United States " by any internationally agreed means of service that is reasonably calculated to give notice, such as those authorized by the Hague Convention." [84]

However, " [w]here service on a domestic agent [of a foreign entity] is valid and complete under both state law and the Due Process Clause . . . the Convention has no

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further implications." [85] Thus, if the corporate defendant is served according to Rule 4(h)(1), the requirements for service under the Hague Convention do not apply: " The only transmittal to which the [Hague] Convention applies is a transmittal abroad that is required as a necessary part of service." [86]

Rule 4(h)(1) authorizes service in a judicial district upon a foreign corporation " in the manner prescribed by Rule 4(e)(1) for serving an individual." Rule 4(e) in turn permits service " by following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located." Section 311(a) of the CPLR provides that " [p]ersonal service upon a corporation . . . shall be made by delivering the summons . . . upon any domestic or foreign corporation, to an officer, director, managing or general agent, or cashier or assistant cashier or to any other agent authorized by appointment or by law to receive service." " New York courts have construed the statute liberally, sustaining service of process 'if service is made in a manner which, objectively viewed, is calculated to give the corporation fair notice.'" [87]

D. 12(b)(6)

1. Copyright Infringement

" To prevail on a claim of copyright infringement, the plaintiff must demonstrate both (1) ownership of a valid copyright and (2) infringement of the copyright by the defendant." [88] Courts have held that a copyright claim must allege " (1) which specific original works are the subject of the copyright claim, (2) that plaintiff owns the copyrights in those works, (3) that the copyrights have been registered in accordance with the statute, and (4) by what acts during what time the defendant infringed the copyright." [89]

a. Ownership of a Valid Copyright

The validity of a copyright depends upon its originality.[90] Where a plaintiff holds a certificate of copyright registration made before or within five years of the first publication of a work, the certificate constitutes prima facie evidence of " the validity of the copyright and of the facts stated in the certificate." [91] Thus, the certificate of registration raises a rebuttable presumption that the work in question is copyrightable,[92] as well as original.[93]

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b. Infringement

" The second element is further broken down into two components: 'a plaintiff with a valid copyright must demonstrate that: (1) the defendant has actually copied the plaintiff's work; and (2) the copying is illegal because a substantial similarity exists between the defendant's work and the protectible elements of plaintiff's.'" [94]

i. Actual Copying

Actual copying may be established " circumstantially by demonstrating that the person who composed the defendant's work had access to the copyrighted material . . . and that there are similarities between the two works that are probative of copying." [95] " Access means that an alleged infringer had a 'reasonable possibility' -- not simply a 'bare possibility' -- of hearing [or seeing] the prior work." [96] Access to a copyrighted work may be inferred from the fact that a work was widely disseminated at the time of copying.[97] Wide dissemination is established where " the allegedly infringed work has had considerable commercial success or is readily available on the market." [98]

" Similarities between the two works are probative [of copying] only if the similarities 'would not be expected to arise if the works had been created independently.'" [99] " Under the probative similarity analysis used in this Circuit, the Court must look at each work in its entirety, including protectible and unprotectible elements." [100]

ii. Substantial Similarity

A plaintiff must also demonstrate that the similarity concerns protected elements of the work at issue.[101]

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" [C]opyright protection may extend only to those components of a work that are original to the author." [102] " Original, as the term is used in copyright, means only that the work was independently created by the author . . . , and that it possesses at least some minimal degree of creativity." [103] Copyright protection only extends to the particular expression of an idea -- not the idea itself.[104] Thus, under the doctrine of scènes à faire, " elements . . . that flow naturally and necessarily from the choice of a given concept cannot be claimed as original." [105]

" 'The standard test for substantial similarity between two items is whether an ordinary observer, unless he set out to detect the disparities, would be disposed to overlook them, and regard the aesthetic appeal as the same.'" [106] " In applying the so-called 'ordinary observer test,' we ask whether 'an average lay observer would recognize the alleged copy as having been appropriated from the copyrighted work.'" [107]

" [W]hen faced with works 'that have both protectible and unprotectible elements,'" the usual " ordinary observer" test becomes " more discerning," [108] and the court " must attempt to extract the unprotectible elements from . . . consideration and ask whether the protectible elements, standing alone, are substantially similar." [109] " No matter which test we apply, however, we have disavowed any notion that 'we are required to dissect [the works] into their separate components, and compare only those elements which are in themselves copyrightable.'" [110] Instead, the court is principally guided " by comparing the contested design's 'total concept and overall feel' with that of the allegedly infringed work." [111] " Accordingly, the Second Circuit has recognized that 'the defendant may infringe on the plaintiff's work not only through literal copying of a portion of it, but also by parroting properties that are apparent only when numerous aesthetic decisions embodied in the plaintiff's work . . . are considered in relation to

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one another.'" [112] Ultimately, the inquiry focuses on whether the alleged infringer has misappropriated " the original way in which the author has 'selected, coordinated, and arranged' the elements of his or her work." [113]

2. Trade Dress Infringement

Pursuant to 15 U.S.C. § 1125(a), a cause of action for trade dress infringement may be sustained under the Lanham Act.[114] Section 43(a) of the Lanham Act provides:

[a]ny person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which [ ] is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person [ ] shall be liable in a civil action by any person who believes he or she is or is likely to be damaged by such act.[115]

The purpose of trade dress protection is to " secure to the owner of the mark the goodwill of his business and to protect the ability of consumers to distinguish among competing producers." [116]

A plaintiff must prove " that (1) the claimed trade dress is non-functional; (2) the claimed trade dress has secondary meaning; and (3) there is a likelihood of confusion between the plaintiff's goods and the defendant's." [117] " A plaintiff must also offer a precise expression of the character and scope of the claimed trade dress," [118] and articulate the " elements of . . . design with specificity to be afforded trade dress protection." [119]

3. Federal Unfair Competition

A Lanham Act unfair competition claim examines " whether the public is likely to be misled into believing that the defendant is distributing products manufactured or vouched for by the plaintiff." [120] The Lanham Act prohibits any misrepresentation likely to cause confusion about the source of a product, in particular the use by any person of " any . . . name . . . likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection or association . . . with another person, or as to the origin, sponsorship, or

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approval of his or her goods, services, or commercial activities by another person." [121]

The Supreme Court has established " a narrow reading of 'origin of goods' in § 43(a) so as to minimize application in cases that obviously sought an extension of copyright protection through the trademark statute." [122] The " phrase 'origin of goods' under the Lanham Act . . . refers to the producer of the tangible goods that are offered for sale, and not to the author of any idea, concept, or communication embodied in those goods." [123]

4. State Law Unfair Competition

" In New York, 'the essence of unfair competition . . . is the bad faith misappropriation of the labors and expenditures of another, likely to cause confusion or to deceive purchasers as to the origin of the goods.'" [124] The elements of an unfair competition claim under New York law are identical to the elements of an unfair competition claim under the Lanham Act, except that plaintiff must show " bad faith by the infringing party." [125] " The inquiry into bad faith considers whether the defendant adopted its mark with the intention of capitalizing on the plaintiff's reputation and goodwill and on any confusion between [its] and the senior user's product." [126]

5. State Law Deceptive Business Practices

Section 349 of the New York General Business Law is a consumer protection statute. It creates a private right of action protecting consumers from " [d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state[.]" [127] A plaintiff bringing claims under section 349 must, " at the threshold, charge conduct that is consumer oriented." [128] " Under

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New York law, a deceptive act or practice that has a broader impact on consumers at large meets this threshold test." [129]

Once a plaintiff meets the consumer-oriented threshold test, it must then show " that the defendant has engaged in an act or practice that is deceptive or misleading in a material way and that the plaintiff has been injured by reason thereof." [130] " A 'deceptive act or practice' has been defined as a representation or omission 'likely to mislead a reasonable consumer acting reasonably under the circumstances.'" [131] The Second Circuit has held that a competitor can properly state a claim under section 349 if " the matter affects the public interest in New York." [132] Because section 349 is modeled after the Federal Trade Commission Act, federal courts have interpreted the statute's scope as limited to offenses that threaten the public interest, such as potential danger to public health or safety.[133]

6. Liability of Individual Defendants

a. Personal Liability for Lanham Act Violations

It is well-established in the Second Circuit that " under the Lanham Act, a corporate officer may be held personally liable for trademark infringement and unfair competition if the officer is a moving, active[,] conscious force behind [the defendant corporation's] infringement." [134] A showing that an officer " authorized and approved the acts of unfair competition which are the basis of [the] . . . corporation's liability . . . is sufficient participation in the wrongful acts to make [the officer] individually liable." [135] Furthermore, " in determining whether the officer's acts render him individually liable, it is immaterial whether . . . he knows that his acts will result in an infringement." [136]

b. Personal Liability for Copyright Act Violations

" '[O]ne who, with knowledge of the infringing activity, induces, causes

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or materially contributes to the infringing conduct of another, may be held liable as a 'contributory' infringer.'" [137] Contributory infringement includes personal conduct that encourages or assists the infringement.[138]

Under a related theory of secondary copyright liability,. " a defendant is vicariously liable for infringement where 'the right and ability to supervise coalesce with an obvious and direct financial interest in the exploitation of copyrighted materials -- even in the absence of actual knowledge that the copyright monopoly is being impaired.'" [139] " 'Individual officers of a corporation will be vicariously liable for the corporation's infringing conduct' under these circumstances." [140] " While knowledge -- either constructive or actual -- is a required element of contributory copyright infringement, it is not required to state a claim for vicarious copyright infringement." [141] To adequately plead secondary liability for infringement under either theory, there must be primary infringement.[142]

V. DISCUSSION

A. 12(b)(1) Motion to Dismiss

The Court has subject matter jurisdiction over the Copyright Act and the Lanham Act claims, and has supplemental jurisdiction over the related state law claims pursuant to section 1367 because they arise from the same set of operative facts as those at issue in the federal claims.

However, not all of the pieces included in the Complaint are properly before the court.[143] " Under [section] 411(a) of the [Copyright] Act, 'no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with' the Act." [144] While the Second Circuit recently declined to rule on whether " a pending application satisfies [section] 411(a)'s requirement of copyright registration as a precondition to instituting an infringement action," [145] other courts have observed that " the consensus among courts in the Second

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Circuit clearly favors the registration approach, under which [a plaintiff's] application for copyright registration cannot sustain a claim for infringement prior to its approval or rejection by the Copyright Office." [146]

Because I agree that an application is not sufficient to bring an infringement action, three pieces included in Plaintiff's copyright infringement claim must be dismissed. Two pairs of earrings that are part of the Meira T. Fall 2011 Earrings collection[147] have only been submitted as applications to the Copyright Office.[148] Additionally, for the first piece in paragraph 27 of the Complaint, Plaintiff has included neither a copyright registration nor a pending application.[149] However, the Court has subject matter jurisdiction over claims relating to the trade dress of this design.[150]

B. 12(b)(2) Motion to Dismiss

1. General Jurisdiction

There are three potential grounds for general jurisdiction under New York law. First, New York courts may assert general jurisdiction over a corporate defendants who " does business" in the state. Second, New York courts may assert general jurisdiction over a foreign parent company if it has a domestic " agent" that renders services of " sufficient[] importan[ce]" to the foreign parent in the state.[151] Third, New York courts may assert general jurisdiction over a foreign company when its in-state domestic affiliate " is so dominated by the defendant as to be its alter ego." [152]

In this case, jurisdiction under the first and second grounds would not comport

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with due process. Even if Foreign Defendants satisfy the " doing business" standard, Plaintiff has not alleged that Foreign Defendants' operations in New York are " so substantial and of such a nature as to render the corporation at home in that State" making this one of the " exceptional case[s]" [153] alluded to in Daimler. Further, Daimler " expressed doubts as to the usefulness of an agency analysis . . . that focuses on a forum-state affiliate's importance to the defendant." [154] Even if Oriental N.Y. could be characterized as the Foreign Defendants' domestic agent, its activities in the forum state are insufficient to overcome the due process concerns posed by haling foreign companies into an American court.[155]

It is possible, however, that the third ground of general jurisdiction -- the alter ego theory -- is satisfied in this case.[156] Whether it is, however, depends on facts that are not yet known. To determine if " the parent's control is so complete that the subsidiary is a 'mere department' of the parent," [157] courts must balance various factors.[158] Plaintiff alleges (1) that Oriental N.Y. is a domestic subsidiary of the Foreign Defendants,[159] (2) that the companies hold themselves out at trade shows and on their website as a single entity,[160] and (3) that Oriental N.Y. is " controlled by Defendants, and [is] merely a sales representative of" Foreign Defendants.[161] Although Defendants disagree on all three fronts,[162] they are vague about how the three companies interact, and serious questions remain as to the true nature of the relationship between Oriental N.Y. and the Foreign Defendants. The only way to resolve this is through jurisdictional discovery. Plaintiff's request for such discovery is therefore granted.

2. Specific Jurisdiction

Plaintiff also claims specific jurisdiction over Foreign Defendants under CPLR § 302(a)(2) which permits the exercise of jurisdiction over a " non-domiciliary . . . who . . . commits a tortious act within

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the state." Plaintiff alleges that Foreign Defendants " ship directly to Oriental N.Y. or to any address in the U.S. [sic]." [163]

On the facts alleged, the Court cannot determine if there is specific jurisdiction over Foreign Defendants. Jurisdictional discovery is granted to determine if Plaintiff has met its burden to establish specific jurisdiction.

First, Plaintiff may show that the Foreign Defendants were present in the state. " CPLR § 302(a)(2) reaches only tortious acts performed by a defendant who was physically present in New York when he performed the wrongful act." [164] Here, the tortious act was the actual or attempted sale or passing off of the allegedly infringing products to consumers.[165] Plaintiff asserts that the Foreign Defendants " attend trade shows in New York, Las Vegas and Hong Kong at least four times a year. Defendants display jewelry and initiate commitments at these trade shows to customers in New York and the U.S. [sic]." [166] If Plaintiff can show that the Foreign Defendants committed tortious acts while in New York, then section 302(a)(2) is satisfied.

Second, Plaintiff may show that the agency exception applies. " New York courts have recognized that jurisdiction under § 302(a)(2) may extend to out-of-state individuals who did not themselves commit a tort while physically present in New York but who can be deemed responsible for such a tort based upon theories of agency." [167] Thus, " if a tort is committed by a person who is physically present in New York but who is acting as an agent of . . . an out-of-state individual, courts may attribute the in-state acts to an out-of-state defendant for the purposes of obtaining personal jurisdiction." [168] " Whether a defendant's representative is an 'agent' for purposes of § 302(a) hinges on whether the representative acted 'for the benefit of and with the knowledge and consent of [the] defendant and [the defendant] exercised some control over [the agent] in the matter.'" [169] Thus, jurisdictional discovery is granted to determine if Oriental N.Y. committed a tortious act in New York

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while acting as the agent of the Foreign Defendants.[170]

Jurisdictional discovery is also appropriate to determine whether service on a director of Oriental N.Y. was sufficient as service upon a " mere department" or the agent of the Foreign Defendants.[171] Such discovery may resolve Defendants' 12(b)(5) motion to dismiss.

3. Jurisdiction under Rule 4(k)(2)

Plaintiff claims that the Court has jurisdiction over the Foreign Defendants pursuant to Rule 4(k)(2) which provides for jurisdiction if (1) the claim . . . arises under federal law, (2) the defendant is not subject to jurisdiction in any state's courts of general jurisdiction, and (3) exercising jurisdiction is consistent with the United States Constitution and laws. But because Plaintiff still contends that the Foreign Defendants are subject to jurisdiction in New York, the second prong of the rule is not met. If the Court finds that the Foreign Defendants are not amenable to personal jurisdiction in New York, then this rule will be considered.

4. Lanham Act Jurisdiction

The Lanham Act can reach activities occurring outside the United States if the " 'contacts and interests of the United States are sufficient to support the exercise of extraterritorial jurisdiction.'" [172] However, the Lanham Act does not create personal jurisdiction where it does not otherwise exist.[173] If there is personal jurisdiction

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over the Foreign Defendants and if Plaintiff can succeed on its claims under the Lanham Act and if the Court awards injunctive relief, it will then have to determine whether it can enjoin Oriental NY's infringing activities abroad and/or Foreign Defendants' infringing extraterritorial activities.

C. 12(b)(6) Motion to Dismiss

While jurisdictional discovery is ongoing with respect to the Foreign Defendants, the Court can consider the motions to dismiss for failure to state a claim brought by the domestic defendants -- Oriental N.Y. and N.K. Nigam.

1. Copyright Infringement

a. Ownership of Valid Copyrights and Infringement

Plaintiff has alleged that it owns the copyrights in seven of the pieces that Defendants allegedly infringed.[174] Plaintiff also pled " by what acts and during what time defendant has infringed the copyright" [175] by alleging Defendants' continued infringement,[176] which is sufficient to survive a motion to dismiss.[177]

b. Actual Copying

Plaintiff has sufficiently pled actual copying by alleging that Defendants had access to the copyrighted works and that similarities between the works are probative of copying. Plaintiff has alleged that it shows Meira T. jewelry in stores in the United States and abroad in a number of well-known department stores,[178] in trade shows and gift shows in the United States and abroad,[179] and promotes the line through advertising,[180] thereby demonstrating that Defendants had a " reasonable possibility" of seeing its widely disseminated works. Plaintiff has also alleged that side-by-side comparisons reveal similarities between Plaintiff's works and Defendants' works that are probative of copying.[181]

c. Substantial Similarity

As a threshold matter, I consider which elements of Plaintiff's works are not protectible, namely " the elements that 'flow naturally and necessarily from the choice of a given concept,'" [182] like maintaining the rough shape of a stone, or featuring a large center stone. Further,

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some elements of the jewelry may be dictated by utilitarian concerns, making those elements unoriginal. However, the selection and arrangement of unprotectible elements can be sufficiently original to warrant protection. Here, Plaintiff has plausibly alleged that its designs contain protectible elements. Plaintiff focuses on the " asymmetrical off-center designs" [183] in which a large center stone is flanked by an uneven number of side pendants. The designs are not necessarily dictated by functionality or the choice of the subject, and while they may combine unprotectible elements, there is sufficient creativity in the selection and arrangement of these elements.

Plaintiff alleges that Defendants' allegedly infringing products are substantially similar to Plaintiff's works.[184] This allegation falls within the " discerning observer test," as Plaintiff claims that Defendants' works mimic the look and feel of its works. Both parties' works share many elements. For example, both use naturally shaped stones surrounded by small crystal stones on thin chains, with smaller pendants hanging from the chains, on one or both sides of the center stone, in an uneven, asymmetric pattern. These are features that separately may be unprotectible, but when considered together, produces a specific " look." Some of the allegedly infringing products are not completely identical to those of Plaintiff - the colors or exact size of the stones are not the same, nor are the number of side pendants. However, " by definition copying need not be of every detail so long as the copy is substantially similar to the copyrighted work." [185] Defendants' works have individual features that, when " [t]aken together," evinces a very similar " total concept and overall feel" [186] as Plaintiff's works.

Therefore, Defendants' motion to dismiss the copyright infringement claim is denied.[187]

2. Trade Dress Infringement

Defendants assert that Plaintiff failed to allege the elements of a trade dress claim.[188] Defendants are mistaken.

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Plaintiff has sufficiently alleged the scope of the specific trade dress: " [A] distinctive off-center asymmetric design comprising a large center jewel or piece with the size and/or quantity of pendants on one side being greater than the other side." [189] Plaintiff only alleges trade dress infringement for four pieces, all of which possess these features.

Plaintiff has also sufficiently alleged that the trade dress has acquired secondary meaning through distinctiveness.[190] Plaintiff alleges that the features of the trade dress have come to be associated with Meira T. Designs as the source of the goods: " Meira T has created a distinctive image for the Meira T Collection that serves to identify the products in the minds of consumers." [191] Plaintiff refers to its advertising and marketing efforts to achieve this recognition,[192] and to " unsolicited press coverage generated for these products at the trade and consumer levels." [193] Plaintiff claims it has enjoyed " remarkable success in the United States and internationally," [194] and that Defendants have sold their infringing products " with the specific intent to exploit" the " widespread recognition" of its trade dress.[195]

However, Plaintiff has merely made conclusory allegations of actual customer confusion with no supporting facts.[196] But Plaintiff has pled likelihood of confusion by sufficiently alleging the Polaroid factors.[197] Plaintiff has claimed that its mark is strong: " the products of Meira T's Trade Dress are recognized by the trade and consumers as being products of a single source -- Meira T." [198] Plaintiff has also alleged that there is similarity between the trade dress of the competing products: Plaintiff calls the allegedly infringing works " look-alike[s]," [199] and has submitted side-by-side comparisons of the works with Meira T Trade Dress and Defendants' allegedly infringing works that show an obvious

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similarity.[200] Plaintiff also alleges that the two lines are close to one another in the marketplace, namely, directed towards " the same category of consumers -- women interested in high quality, distinctive jewelry" [201] in overlapping cities. Although Plaintiff has not sufficiently alleged actual confusion, or discussed the sophistication of customers, it has alleged Defendants' bad faith in creating the allegedly infringing works.[202] Plaintiff has described the high quality of its own jewelry,[203] and claims that in comparison, Defendants products are " inferior." [204] While none of these factors are dispositive, on balance, Plaintiff has sufficiently alleged likelihood of consumer confusion.

Therefore, Defendants' motion to dismiss the trade dress infringement claim is denied.

3. Federal Unfair Competition

Defendants move to dismiss Plaintiff's federal unfair competition claim, arguing that this claim is merely an attempt by Plaintiff to " use an alleged copyright infringement to bootstrap their claims related to unfair competition." [205] Defendants argue that this claim is " no more than a claim of copyright infringement dressed up in the guise of the Lanham Act." [206]

However, Plaintiff's Lanham Act claims differ from its copyright claim. Plaintiff alleges that by misappropriating the Meira T Trade Dress, Defendants are misleading consumers as to the producer of those goods. " Defendants' unlawful conduct has led to the ultimate purchasers believing that Defendants' copies with the Meira T Trade Dress are made by Meira T." [207] This is not duplicative of the copyright claim.[208]

An unfair competition claim under the Lanham Act requires a showing of " a valid trademark entitled to protection under the Act, and (2) defendant's actions are likely to cause confusion." [209] I have already determined that for the purposes of a Rule 12(b)(6) motion, Plaintiff has demonstrated that the Meira T Trade Dress is a protectible interest under the Lanham Act. Additionally, the analysis for likelihood of confusion for a trade dress infringement claim is the same as for an unfair competition claim.[210] Therefore, Defendants' motion to

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dismiss the federal unfair competition claim is denied.

4. State Law Unfair Competition

The New York law of unfair competition claim is subject to the same analysis as the Lanham Act claim, except for the additional requirement of bad faith. The Complaint alleges that " Defendants, with knowledge of the widespread recognition of the Meira T. Trade Dress . . . . and with the specific intent to exploit that recognition, have made and sold copies of the jewelry all having the distinctive Meira T Trade Dress." [211] This demonstrates bad faith. Therefore, Defendants' motion to dismiss the state unfair competition claim is denied.

5. State Law Deceptive Business Practice

Plaintiff has asserted claims for deceptive trade practices. To prevail, Plaintiff must demonstrate " consumer injury or harm to the public interest" which requires a showing that " the public's health or safety is at stake as a result of the alleged infringement." [212] Courts in this circuit have held " that trademark or trade dress infringement claims are not cognizable under these statutes unless there is a specific and substantial injury to the public interest over and above ordinary trademark infringement." [213] Plaintiff has failed to make any of these allegations. Accordingly, Defendants' motion to dismiss this claim is granted.

6. Individual Liability

Plaintiff claims that N.K. Nigam " is responsible for the control, management, operation, and maintenance of the affairs of Oriental NY," [214] and " [t]he acts and wrongful conduct complained of were done with Nigam's active assistance, cooperation, acquiescence, and procurement, and he derives financial benefit therefrom." [215] Defendants move to dismiss the claims against N.K. Nigam.

a. Lanham Act

Plaintiff has properly alleged personal liability for N.K. Nigam under the Lanham Act. The required showing has been made: as President of Oriental NY, he would have " authorized and approved the infringing acts" [216] done by the company. As previously noted, it is unnecessary to show that Nigam had knowledge of the infringing nature of the activity.[217] Therefore, Defendants' motion to dismiss N.K. Nigam as a defendant with respect to the

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trade dress and unfair competition claims is denied.

b. Copyright Act

Plaintiff argues that it has sufficiently plead the " contributory and vicarious liability" of N.K. Nigam[218] under the Copyright Act.

i. Contributory Liability

Defendants argue that the claim against N.K. Nigam must fail because Plaintiff did not plead the necessary elements of contributory infringement, namely that N.K. Nigam had knowledge of the infringing activity.[219] While the Complaint does not state that N.K. Nigam knew of the infringing activity, the Complaint does allege that Defendants generally " knowingly infringed upon . . . Meira T's Copyrights." [220] This is a sufficient allegation of personal knowledge by N.K. Nigam. Plaintiff also has alleged a sufficiently material contribution by N.K. Nigam because as President of Oriental NY, all of the acts of the company, including the infringing acts, were done with his " active assistance, cooperation, acquiescence, and procurement, and he derives financial benefit therefrom." [221]

ii. Vicarious Liability

Plaintiff has made sufficient allegations to state a claim against N.K. Nigam for vicarious liability. As President of Oriental NY, Nigam has the right and ability to supervise the company's activities.[222] Additionally, Plaintiff has pled that Nigam obtained personal financial benefit from the alleged infringement.[223]

Therefore, Defendants' motion to dismiss the claims against N.K. Nigam is denied.

E. Forum Non Conveniens

Defendants move to dismiss the case under the doctrine of forum non conveniens, because the Foreign Defendants are based respectively in Hong Kong and India and neither " do[es] business in the United States," [224] and " most of the jewelry at issue in this case was sold in Hong Kong and manufactured in Thailand." [225] Interestingly, Defendants did not suggest an alternate forum that would be more appropriate to hear these claims, but merely stated that " it is clear that the proper forum for this case is not New York." [226] A decision regarding Defendants' motion to dismiss based on forum non conveniens will be reserved following a determination of personal jurisdiction over the Foreign Defendants.

VI. CONCLUSION

For the reasons set forth above, Defendants' motions to dismiss are DENIED in

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part, and GRANTED in part. Additionally, Plaintiff's motion to conduct jurisdictional discovery is GRANTED. A conference is scheduled for December 8th at 4:30 P.M. The Clerk of the Court is directed to close these motions [Dkt. Nos. 18 and 41].

SO ORDERED:


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