Complaint Review: Temple of the ancient dragon

An online jewelry business that displayed images of a California-based competitor’s custom designs on its website and social media pages created the minimum contacts necessary to establish jurisdiction over the business, the U.S. District Court for the Southern District of California ruled Dec. 15 ( Metzger v. Temple of Ancient Dragon, Inc. , 2016 BL 417888, S.D. Cal., No. 16cv1299-WQH-NLS, 12/15/16 ).

The defendant, Michigan-based Temple of the Ancient Dragon Inc., knew its action of copying the images would create customer confusion and harm the plaintiff, Deric Metzger, in California where he has his principal place of business, Judge William Q. Hayes said.

The decision shows that a court can exercise jurisdiction over an out-of-state defendant that doesn’t advertise directly towards the forum state and sells to few forum residents, on the basis that it infringed on the copyrighted works of a company in the state.

Copying Directed at California

The assertion of specific personal jurisdiction, consistent with constitutional due process, requires a showing that the defendant purposefully directed its activities at residents of the forum state, and that the cause of action arose out of those activities.

Metzger, the operator of a California jewelry business, alleged that Temple of the Ancient Dragon copied Metzger’s custom jewelry designs onto its social media and advertising pages. The defendant, in moving to dismiss for lack of personal jurisdiction, said that it didn’t direct its advertising to California residents and that its sales in the state accounted for less than 1 percent of its total business.

The court said that because both parties designed and sold custom jewelry over the internet and have sold jewelry to California, the defendant knew that its conduct would cause harm to Metzger’s California business