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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


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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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Shira A. Scheindin, United States District Judge.


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.


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.


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]


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 ...

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