Federal District Court Opinions

MORPHO, INC., et al, Defendants. CASE NO. C06-0060RSM.
United States District Court, W.D. Washington, At Seattle.
December 6, 2006


RICARDO MARTINEZ, Magistrate Judge


This matter comes before the Court on defendants’ motion
to dismiss. (Dkt. #24). Defendant Sagem D?©fense S?©curit?©
(“SDS”) argues that because it has not had the required
contacts with this forum, the Court cannot exercise
personal jurisdiction over SDS. SDS further argues that
plaintiff is improperly attempting to use SDS’s
parent-subsidiary relationship with Sagem Morpho, Inc.
(“SMI”) and E-Software SAS to establish personal
jurisdiction over SDS. In the alternative, defendants SMI
and SDS argue that the Court lacks the ability to entertain
plaintiff’s claims under the Lanham Act because the alleged
infringing activity did not take place within the United
States, but in France. Finally, SDS argues that plaintiff’s
claims should be dismissed under the principles of forum
non conveniens. Page 2

Plaintiff argues that SDS sent an agent into the forum to
specifically conduct business with plaintiff, that SDS owns
the trademark of Xelios and likely controls or influences
the business actions associated with Xelios and E-Software
SAS. These facts, plaintiff argues, enable the Court to
exercise personal jurisdiction over SDS. Next, plaintiff
argues that defendants mischaracterize his Lanham Act
claims. Plaintiff claims that defendants infringed upon his
trademark within Washington and the United States and
therefore, the application of the Lanham Act is
appropriate. Finally, plaintiff argues that defendant SDS’s
request for dismissal on forum non conveniens grounds should
be denied because it fails to establish how it would be
unduly burdensome to litigate the case in this Court given
the fact that SDS conducts its business in this forum, SDS
focuses sales to this forum and the alleged violations
occurred within this forum.

For the reasons set forth below, the Court disagrees, in
part, with plaintiff, and GRANTS IN PART defendants’ motion
to dismiss.


A. Background

Plaintiff James Childers owns and operates a sole
proprietorship by the name of Artemis Solutions Group
located in Freeland, Washington. Defendant SMI is a
corporation organized under Delaware law. SMI’s principle
place of business is in Tacoma, Washington. Defendant
E-Software SAS is a company organized under the laws of
France, and also does business under the trade name Xelios.
E-Software SAS’s principle place of business is in Paris,
France. Defendant SDS is the parent company of both SMI and
E-Software SAS. SDS’s principle place of business is in
Paris, France. SDS also claims the trademark on
E-Software’s trade name Xelios.

Plaintiff is the owner of the trademark BioCert, United
States Trademark Registration No. 2,817,357. Plaintiff’s
BioCert products are used in connection with computer
software and hardware to allow users to authenticate
identity through a biometric interface. Plaintiff has used
the BioCert mark in the production and sale of his products
since 2002. Plaintiff’s BioCert mark is used Page 3 in at
least six different products related to fingerprint
scanning security for computer products. Plaintiff also
licences the use of the BioCert mark to Intelligent
Biometric Solutions, LTD (“IBS”), a registered Hong Kong
SAR company, in which plaintiff owns a forty percent
interest and has one half of the voting rights.

Beginning in February of 2004, plaintiff had several
meetings and email interactions with Christian Moussier,
director of Smartgem, a Hong Kong software company.
Plaintiff believes that Mr. Moussier is employed as a
biometric development and sales representative by both SDS
and SMI.[fn1] Plaintiff claims that these meetings were
focused on negotiating sales of SDS and SMI products
through IBS’s office, sales agents and global distribution
network. Mr. Moussier, on behalf of Smartgem, and plaintiff
executed a non-disclosure agreement to protect any
intellectual properties of both companies. There is no
evidence that a sales agreement was ever reached.

In June of 2005, E-Software SAS began marketing a suite of
products, under the Xelios trademark, called PC Login Pro
Suite 5. This product uses a biometric program by the name
of “X-BioCert.” Plaintiff asserts that the X-BioCert name
is confusingly similar to his BioCert trademark and will
cause consumer confusion between the products as well as
allow E-Software SAS to unlawfully trade upon the goodwill
and reputation generated by plaintiff’s BioCert trademark.

Plaintiff filed suit against SMI alleging violations of
the Lanham Act, as well as violations of Washington State
law restricting unfair competition. Service of SMI was
perfected on January 13, 2006. SMI filed an Answer to the
Complaint on February 6, 2006. Plaintiff then moved to
extend the deadline to add parties in the action and to
amend his Complaint to name SDS and E-Software SAS as
defendants. The Court granted plaintiff’s motion on April
24, 2006. SMI answered the Amended Complaint on May 12,
2006. SDS filed a Notice of Appearance on Oct 12, 2006. The
instant motion followed. Page 4

B. Nonservice of E-Software SAS

As a preliminary matter, E-Software SAS has not yet been
joined in this action as a defendant. There is no evidence
in the record establishing that E-Software SAS has been
served with a Summons or Complaint. Plaintiff has not
presented evidence or a declaration to the contrary, and
defendants maintain that service has not been achieved.
Accordingly, only the arguments made on behalf of SMI and
SDS will be considered for purposes of the present motion.

C. Personal Jurisdiction

1. Standard of review

Defendant SDS has moved to dismiss for lack of personal
jurisdiction pursuant to Fed.R.Civ.P 12(b)(2). In response
to a motion to dismiss for lack of personal jurisdiction,
the plaintiff bears the burden of demonstrating that
jurisdiction over a defendant is appropriate. Dole Food Co.
v. Watts, 303 F.3d 1104, 1108 (9th Cir. 2002). Where, as
here, the motion to dismiss is based on written materials
rather than an evidentiary hearing, the plaintiff need only
make a prima facie showing of jurisdictional facts to avoid
dismissal. Id. While the plaintiff may not simply rely on
the bare allegations of its Complaint, uncontroverted
allegations in the Complaint are taken as true.
Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800
(9th Cir. 2004). Conflicts between the facts contained in
the parties’ affidavits must be resolved in the plaintiff’s
favor. Id.; Dole, 303 F.3d at 1108.

In this case, the question of whether personal
jurisdiction exists over SDS is governed by Washington’s
long-arm statute, RCW 4.28.185, or Fed.R.Civ.P. 4(k)(2),
both of which are coextensive with the outer limits of
federal due process. Chan v. Society Expeditions, Inc., 39
F.3d 1398, 1405 (9th Cir. 1994); Glencore Grain Rotterdam
B.V. v. Shivnath Rai Harnarain, Co., 284 F.3d 1114, 1126
(9th Cir. 2002). Thus, the Court need only determine
whether jurisdiction in this District comports with due

Due process requires that a non-resident defendant have
certain minimum contacts with the Page 5 forum state so
that the exercise of jurisdiction does not offend
traditional notions of fair play and substantial justice.
International Shoe Co. v. Washington, 326 U.S. 310, 316
(1945). Personal jurisdiction can be specific or general.
Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408,
414 n. 8-9 (1984). Specific jurisdiction arises where a
cause of action results from a defendant’s contacts with
the forum state. Id. at 414 n. 8. General jurisdiction
arises where a cause of action is unrelated to a
defendant’s contacts with the forum state, but because the
defendant has had pervasive, continued and systematic
contacts with the forum state, there is justification to
exercise jurisdiction over any action of the defendant
within the forum state. Id. at 414 n. 9.

Here, plaintiff does not dispute SDS’s assertion that the
facts do not support general jurisdiction over SDS. Thus,
the Court turns to whether specific jurisdiction over SDS
can be established.

2. Specific Jurisdiction

Plaintiff argues that SDS directs its business toward the
United States market, including Washington State. He
further argues that E-Software SAS’s website is directed
toward all customers within the United States, including
those in Washington State. Therefore, plaintiff argues that
the Court should exercise personal jurisdiction over SDS.
SDS responds that it has not directed its activities into
the United States, let alone Washington State, that SDS has
no agents within either jurisdiction, and that SDS’s parent
relationship to E-Software SAS does not make E-Software’s
website material to this Court’s evaluation of personal

The Ninth Circuit applies a three-prong test to determine
if specific jurisdiction exists: (1) the non-resident
defendant must purposefully direct his activities or
consummate some transaction with the forum or resident
thereof, or perform some act by which he purposefully
avails himself of the privilege of conducting activities in
the forum, thereby invoking the benefits and protections of
its laws; (2) the claim must be one which arises out of or
relates to the defendant’s forum-related activities; and
(3) the exercise of jurisdiction must comport with fair
play and substantial justice, i.e. Page 6 it must be
reasonable. Schwarzenegger, 374 F.3d at 802 (citing Calder
v. Jones, 465 U.S. 783 (1984)); Pebble Beach Co. v. Caddy,
433 F.3d 1151, 1155 (9th Cir. 2006).

The burden is on the plaintiff to satisfy the first two
prongs. Schwarzenegger 374 F.3d at 802. If the plaintiff
meets this burden, then the burden shifts to the defendant
to “present a compelling case that the exercise of
jurisdiction would not be reasonable.” Id.

Here, plaintiff cannot satisfy the first prong of the test.
SDS is a French corporation with its principle place of
business in Paris. SDS is not licenced to do business
within the State of Washington, nor has plaintiff provided
evidence that SDS is licenced to do business anywhere
within the United States. Plaintiff has not shown that SDS
owns property, bank accounts or any other assets within
Washington or the United States. Moreover, plaintiff has
provided no evidence to establish that SDS has a registered
agent or a mailing address anywhere within the United

Plaintiff asserts three bases to justify the exercise of
personal jurisdiction over SDS. First, plaintiff claims that
Mr. Moussier is an employee or agent of SDS, a claim which
SDS denies. Plaintiff argues that Mr. Moussier’s
interactions with plaintiff throughout 2004-2005 establish
the requisite minimum contacts to establish personal
jurisdiction over SDS. However, plaintiff does not provide
the Court with any evidence to support this assertion. It
is plaintiff’s burden to provide evidence to establish his
claim and he cannot simply proffer a bare assertion that
Mr. Moussier is SDS’s agent. Without more, the Court cannot
accept plaintiff’s unsupported allegation as evidence of
SDS’s minimum contacts.

Second, plaintiff notes that E-Software SAS and SMI have
ties to Washington State by virtue of their operating in
the state. SMI operates its business from Tacoma,
Washington and E-Software uses SMI as its registered agent
in the United States. Plaintiff argues that because SDS has
some interaction with its subsidiaries by owning the
trademark name Xelios, this must mean that SDS exercises
enough control over these subsidiaries so that they can all
be considered a single entity. That presumption cannot be
substantiated. Page 7

If plaintiff presented facts showing that SMI or E-Software
SAS could be considered alter egos of SDS, or showing an
agency relationship between SDS and its subsidiaries,
plaintiff’s reliance on the parent-subsidiary relationship
might be proper. Doe v. Unocal Corp., 248 F.3d 915, 925-26
(9th Cir. 2001). However, plaintiff has not provided such
evidence. Therefore, plaintiff cannot simply rely upon the
parent-subsidiary relationship to establish the requisite
minimum contacts for personal jurisdiction. Rush v.
Savchuck, 444 US 320, 331-32 (1980); Unocal, 248 F.3d at
925; AT & T v. Compagnie Bruxelles Lambert, 94 F.3d 586,
591 (9th Cir. 1996).

Finally, plaintiff relies upon the fact that E-Software SAS
has a website, written in English, that provides
information about its various products and has employment
recruiting announcements. Plaintiff argues that this
website, in and of itself, is one that is directed at
Washington consumers and the United States software market
and therefore personal jurisdiction is proper. That
argument is misguided.

Here, plaintiff focuses on the fact that the website
operated by E-Software SAS is “interactive.” However,
plaintiff does not explain how this website has any
connection to SDS. Instead, plaintiff attempts to rely on
the actions of E-Software SAS as if those actions were
SDS’s own. While plaintiff would like to link the parent
and the subsidiary together for purposes of establishing
minimum contacts, this is not permitted. Unocal, 248 F.3d
at 925.

Because plaintiff has failed to fulfill his burden of
producing evidence to establish that SDS either
purposefully availed itself or directed activities toward
Washington State or the United States in general, the Court
cannot exercise specific jurisdiction over SDS without
violating due process. Therefore, SDS’s motion to dismiss
for lack of personal jurisdiction will be granted.

3. Jurisdictional Discovery

Plaintiff argues that if the Court finds that the evidence
presented does not support exercising personal jurisdiction
over SDS, plaintiff should be allowed an opportunity to
conduct discovery to gain more supporting evidence. Page 8

A district court is vested with broad discretion to permit
or deny discovery, and a decision “to deny discovery will
not be disturbed except upon the clearest showing that the
denial of discovery results in actual and substantial
prejudice to the complaining litigant.” Hallett v. Morgan,
287 F.3d 1193, 1212 (9th Cir. 2002). Prejudice is
established if there is a reasonable probability that the
outcome would have been different had discovery been
allowed. Martel v. County of Los Angeles, 56 F.3d 993, 995
(9th Cir. 1995) (en banc). “[D]iscovery should ordinarily
be granted where pertinent facts bearing on the question of
jurisdiction are controverted or where a more satisfactory
showing of the facts is necessary.” Butcher’s Union Local
No. 498 v. SDC Inv., Inc., 788 F.2d 535, 540 (9th Cir.
1986) (citation omitted). However, the Ninth Circuit has
stated that additional discovery is not appropriate when
the only evidence presented by a plaintiff is bare
assertions. Pebble Beach, 453 F.3d at 1160. (“Where a
plaintiff’s claim of personal jurisdiction appears to be
both attenuated and based on bare allegations in the face
of specific denials made by the defendants, the Court need
not permit even limited discovery.”) (quoting Terracom v.
Valley Nat. Bank, 49 F.3d 555, 562 (9th Cir. 1995)).

Here, the discovery deadline of October 17, 2006 has
passed. (Dkt. #22). After six months of searching,
plaintiff has found no evidence to link SDS to either the
United States in general or Washington State specifically,
besides the parent-subsidiary relationship. The lack of
convincing evidence presented, after what appears to be
ample time for discovery, makes clear that it is not
reasonably probable that granting plaintiff’s request for
jurisdictional discovery will lead to any additional facts
supporting the exercise of personal jurisdiction over SDS.

While plaintiff argues that his failure to conduct
jurisdictional discovery was due to the fact that SDS had
not contested jurisdiction before now, the Court is not
persuaded. Plaintiff was granted leave to add SDS as a
defendant on April 24, 2006. The burden to present facts
supporting personal jurisdiction has always rested upon
plaintiff. When plaintiff named a foreign corporation as a
defendant, he should have expected that personal
jurisdictional issues could arise in the course of Page 9
litigation. In six months, plaintiff has only produced
attenuated facts and bare allegations to shoulder his
burden. Under these circumstances, it is appropriate for
the Court to deny plaintiff’s request for further
discovery. Because it is not reasonably probable that
additional discovery will lead plaintiff to new supporting
evidence, plaintiff’s request for jurisdictional discovery
is denied.

D. Subject Matter Jurisdiction

Defendants also move to dismiss for lack of subject matter
jurisdiction under Fed.R.Civ.P 12(b)(1), asserting that the
Court lacks jurisdiction to hear plaintiff’s Lanham Act, 15
U.S.C. § 1114, 1125(a), claims. Defendants argue that
because the alleged violations took place in France, by a
French company, and not within United States commerce as
required under the Lanham Act, this Court cannot entertain
plaintiff’s claims.

Plaintiff argues that his claims focus solely upon the
effect that the alleged infringement had on United States
commerce. Plaintiff also argues that because SMI, SDS and
E-Software SAS all conduct their business in the world
market by selling their products via the internet and that
these products have entered, can enter or will enter United
States commerce, the exercise of subject matter
jurisdiction is proper. Plaintiff explains that he is not
asking the Court to apply the Lanham Act in an
extraterritorial manner, as defendants suggest, but in its
normal application to United States commerce. Because all
federal courts have jurisdiction to hear claims arising
under the Lanham Act in United States commerce, plaintiff
argues that this Court has subject matter jurisdiction over
his claims.

Plaintiff is correct that this Court has original
jurisdiction over any action arising under the Lanham
Act.[fn2] Plaintiff insists that his claims are solely
focused upon the alleged infringement in the United States
and the effect the infringement has had on United States
commerce. Plaintiff argues Page 10 that he has presented
facts to support his claims of domestic application of the
Lanham Act as well. In fact, nowhere in plaintiff’s Amended
Complaint, or any other of his pleadings, is there mention
of facts alluding to an extraterritorial application of the
Lanham Act. Thus, the Court accepts plaintiff’s
characterization of his claims.

Plaintiff is the master of his own Complaint and
defendants cannot characterize his action in a manner he
categorically rejects. Wells v. City of Alexandria, 178
F.App’x. 430, 433 (5th Cir. 2006) (“[T]he plaintiff is
master of his complaint, and the defendant cannot . . .
consistently [recast] the claims against the plaintiff’s
constant opposition.”). Accepting plaintiff’s
characterization of his claims, this Court has subject
matter jurisdiction over trademark infringement claims
occurring within United States commerce. 15 U.S.C. §
1121(a); 15 U.S.C. § 1127; Chance v. Pac-Tel
Teletrac Inc., 242 F.3d 1151, 1156 (9th Cir. 2001).
However, because personal jurisdiction cannot be exercised
over SDS, as discussed above, plaintiff’s Lanham Act claims
may only proceed against SMI.

E. Forum Non Conveniens

Defendant SDS has also moved to dismiss on forum non
conveniens grounds. However, because the Court will grant
SDS’s motion to dismiss for lack of personal jurisdiction,
its forum non conveniens concerns are moot. With respect to
SMI, the Court finds no basis to dismiss for this purpose
in light of the fact that it admitted in its Answer that it
operates in Washington State, has a registered agent in
Washington State and has its principle place of business in
Washington State. (Dkt. #19 at 1). Any claim that it would
be inconvenient for SMI to adjudicate in this Court is
without merit. Therefore, to the extent that SMI moves to
dismiss on forum non conveniens grounds, that motion will
be denied.


For the reasons set forth above, the Court hereby ORDERS:

(1) Defendant’s Motion to Dismiss (Dkt. #24) is GRANTED IN
PART and DENIED IN Page 11 PART as follows:

a. Defendant SDS’s motion to dismiss for lack of personal
jurisdiction is GRANTED and SDS is DISMISSED as a defendant
to this action.

b. Defendant SMI’s motion to dismiss for lack of subject
matter jurisdiction is DENIED and plaintiff’s claims will
proceed against that defendant.

(2) The Clerk shall forward a copy of this Order to all
counsel of record.

[fn1] However, SMI denies that Mr. Moussier is employed by
its company as does SDS. Instead, SDS states that Mr.
Moussier was employed by Sagem Monetel, an SDS subsidiary
operating in Hong Kong.

[fn2] 15 U.S.C. § 1121(a) states: “The district and
territorial courts of the United States shall have original
jurisdiction and the courts of appeal of the United States
(other than the United States Court of Appeals for the
Federal Circuit) shall have appellate jurisdiction, of all
actions arising under this chapter, without regard to the
amount in controversy or to diversity or lack of diversity
of the citizenship of the parties.” Page 1