30 Watt Holdings v. Tech & Goods - Motion To Dismiss

CASE 0:18-cv-03013-JNE-KMM Document 15 Filed 12/03/18 Page 1 of 28
IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MINNESOTA
DIVISION 3—ST. PAUL
30 WATT HOLDINGS, LLC, a

Minnesota limited liability company,
Plaintiff, No. 18-cv-03013-JNE-KMM
v.
TECH AND GOODS, INC., a Georgia

corporation, and DOES 1 through 10,
Defendants.
DEFENDANT TECH AND GOODS, INC.’S MEMORANDUM

IN SUPPORT OF ITS MOTION TO DISMISS THE
COMPLAINT FOR LACK OF PERSONAL JURISDICTION
AND FOR FAILURE TO STATE A CLAIM
30 Watt Holdings LLC (“30 Watt”), filed a seven-count Complaint contesting
that when Tech and Goods, Inc. d/b/a Sipcaddy (“Sipcaddy”) sent a cease-and-desist
letter to Australian-based Tooletries and informed Amazon that 30 Watt infringes
Sipcaddy’s registered, United States trademark, Sipcaddy engaged in trademark
misuse and tortious interference. Respectfully, 30 Watt’s Complaint should be
dismissed. This Court does not have personal jurisdiction over Sipcaddy for 30
Watt’s claims. Additionally, 30 Watt fails to state a claim as there is no basis in law
or fact for its claims against Sipcaddy. There is no affirmative cause of action for
trademark misuse. Sipcaddy’s actions are privileged under tortious interference law
1
and 30 Watt’s tortious interference claims are barred by the Noerr-Pennington
doctrine.
I. INTRODUCTION
Sipcaddy is the market leader and prominent innovator in suction-cup
beverage holders, and has several trademarks for these beverage holders, which have
been used in commerce since 2014. 30 Watt sells products that infringe on
Sipcaddy’s trademarks. Specifically, 30 Watt sells a “Sudski Shower Beer Holder”
and a “Sipski Shower Wine Glass Holder” that infringe Sipcaddy’s trademarks. 30
Watt filed a complaint against Sipcaddy in this District pre-emptively to secure its
forum of choice because its own headquarters are located in Minneapolis,
Minnesota. 30 Watt’s Complaint should be dismissed pursuant to Rule 12(b)(2) of
the Federal Rules of Civil Procedure because this Court lacks personal jurisdiction
over Sipcaddy. Sipcaddy does not have, and has never had, sufficient minimum
contacts with Minnesota for a Minnesota court to exercise personal jurisdiction over
it. Sipcaddy’s only contact with Minnesota relevant to 30 Watt’s claims is that
counsel Sipcaddy sent 30 Watt a cease-and-desist letter. This does not subject
Sipcaddy to personal jurisdiction.
In addition to the lack of personal jurisdiction, 30 Watt’s Complaint fails
because it does not state a claim and should be dismissed pursuant to Rule 12(b)(6)
of the Federal Rules of Civil Procedure. 30 Watt’s entire Complaint is premised on
the fictitious cause of action of trademark misuse. The allegedly tortious conduct on
2
which 30 Watt hangs its novel theory is a protected assertion of its trademark rights
– sending a cease-and-desist letter to sellers of 30 Watt’s infringing products.
Moreover, it attempts to apply two Minnesota consumer protection statutes using
this invented cause of action. These statutes, however, do not address Sipcaddy’s
actions and are inapplicable. Instead of respecting Sipcaddy’s trademark rights, 30
Watt filed this complaint lacking personal jurisdiction or a viable claim. 30 Watt’s
Complaint should be dismissed.
II. FACTS RELEVANT TO SIPCADDY’S MOTION1
Sipcaddy is a Georgia corporation with a principal place of business in
Decatur, Georgia. Dkt. 1, at ¶ 3; Declaration of C. LaFavors, at ¶ 4, attached hereto
as Exhibit 1.
Sipcaddy owns four United States registered trademarks for
“SHOWERBEER,” “SHOWER BEER,” “SHOWERWINE,” and “SHOWER
WINE.” Dkt. 1, at ¶¶ 21, 22. Sipcaddy has been using its registered marks in
commerce since 2014. Id. at Exs. F–I. These marks were registered on the Principal
Register in August and November 2017. Id.
1
Sipcaddy takes its recitation of facts from Plaintiff’s Complaint because of the
standard used by the Court in evaluating Sipcaddy’s motion. Nothing in this memorandum
should be construed as an admission of the truth of allegations made in Plaintiff’s
Complaint.
3
30 Watt’s “SUDSKI” trademark was not registered on the Principal Register
until May 2018. Id. at Ex. A. 30 Watt’s “SIPSKI” has not yet been registered. Id. at
¶¶ 15–16.
30 Watt is the junior user and only began using its marks in commerce in
2017. Id. at ¶¶ 12, 14. 30 Watt’s marks were first used after Sipcaddy’s
“SHOWERBEER,” “SHOWERWINE,” and “SHOWER WINE” marks were
published on the Principal Register and five days before Sipcaddy’s “SHOWER
BEER” mark was published on the Principal Register. Compare id. at ¶¶ 12, 14, with
id. at Exs. F–I.
On or about September 22, 2018, Sipcaddy filed two complaints with Amazon
regarding 30 Watt’s use of Sipcaddy’s “SHOWER BEER” federally registered
trademark. Id. at ¶ 28.
On or about September 24, 2018, Sipcaddy sent Tooletries Pty Ltd d/b/a
Journeymandesigns a cease-and-desist letter. Id. at ¶ 29. Tooletries is located in
Australia. Id. at Ex. R.
On September 28, 2018, counsel for Sipcaddy and 30 Watt exchanged
correspondence regarding the parties’ dispute. Id. at ¶¶ 30, 31.
III. 30 WATT’S COMPLAINT SHOULD BE DISMISSED

PURSUANT TO RULE 12(b)(2) BECAUSE THIS COURT
LACKS PERSONAL JURISDICTION OVER SIPCADDY
A motion to dismiss for lack of personal jurisdiction should be granted unless
“a plaintiff [makes] a prima facie showing that personal jurisdiction exists, which is
4
accomplished by pleading sufficient facts to support a reasonable inference that the
defendant can be subjected to jurisdiction within the state.” NexGen HBM, Inc. v.
ListReports, Inc., No. 16-CV-3143, 2017 WL 4040808, at *7 (D. Minn. Sept. 12,
2017) (citing K–V Pharm. Co. v. J. Uriach & CIA, S.A., 648 F.3d 588, 591–92 (8th
Cir. 2011)). In reviewing a motion to dismiss for lack of personal jurisdiction, the
court views the evidence in the light most favorable to the plaintiff and resolves all
factual conflicts in its favor in deciding whether the plaintiff made the requisite
showing.” Id. However, the burden is on the plaintiff to show that jurisdiction is
present. Cortec Corp. v. Transilwrap Co. Inc., No. 14-cv-3261, 2015 WL 164173,
at *1 (D. Minn. Jan. 13, 2015).
In determining whether personal jurisdiction exists over a nonresident
defendant, the court must ask: 1) whether the Minnesota long-arm statute is satisfied;
and 2) whether the exercise of jurisdiction over the nonresident defendant would
violate the Due Process Clause of the Fourteenth Amendment. Guinness Import Co.
v. Mark VII Distribs., Inc., 153 F.3d 607, 613–14 (8th Cir. 1998). Minnesota's long-
arm statute extends jurisdiction over nonresident defendants to the extent permitted
by the Due Process Clause of the United States Constitution. Guinness Import, 153
F.3d at 614. The Due Process Clause establishes that a defendant can be subject to
either general or specific personal jurisdiction. Bristol-Myers Squibb Co. v. Sup. Ct.
of Cal., San Francisco Cty., 137 S. Ct. 1773, 1780 (2017).
5
A. 30 Watt Does Not Have General Personal Jurisdiction Over

Sipcaddy Because Sipcaddy Is Not A Minnesota Corporation Nor
Does It Have A Principal Place Of Business In Minnesota.
Only a limited set of affiliations with a forum state will subject a defendant to
general personal jurisdiction. Daimler AG v. Bauman, 134 S. Ct. 746, 760 (2014).
For a corporation, the paradigm forum for the exercise of general jurisdiction is the
corporation’s “domicile” or the place in which the corporation is fairly regarded as
at “home.” NexGen, 2017 WL 4040808, at *8; Cortec Corp., 2015 WL 164173, at
*2. A corporation’s place of incorporation and principal place of business are the
main touchpoints for exercising general personal jurisdiction. NexGen, 2017 WL
4040808, at *8. For there to be general personal jurisdiction, a defendant must have
continuous and systemic contacts with the forum state to render it essentially at
home. Cortec Corp., 2015 WL 164173, at *3.
Here, 30 Watt’s Complaint does not support general personal jurisdiction over
Sipcaddy, nor can it. 30 Watt does not allege that Minnesota is Sipcaddy’s domicile,
nor does it allege any other facts from which it could be concluded that Sipcaddy is
essentially “at home” in Minnesota. Rather, 30 Watt acknowledges that Sipcaddy is
a Georgia corporation with its principal place of business in Georgia. Dkt, 1, at ¶ 3.
Additionally, Sipcaddy’s sole office is located in Georgia. Ex. 1, at ¶ 5. Sipcaddy’s
products are manufactured in China. Id. at ¶ 6. The only United States based
component of Sipcaddy’s products are the suction cups, which are manufactured by
Adams Manufacturing, a Pennsylvania based company. Id. Sipcaddy does not have
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an office, manufacturing facility, rental property, or any other physical presence of
any kind in Minnesota. Id. at ¶ 7. Sipcaddy has no employees based in Minnesota.
Id. at ¶ 8. Sipcaddy generates approximately 1.8% of its annual revenue in
Minnesota, primarily through Amazon sales. Id. at ¶¶ 9, 10. Sipcaddy does not have
continuous and systemic contacts with Minnesota. Accordingly, 30 Watt’s
Complaint fails establish general personal jurisdiction over Sipcaddy.
B. 30 Watt Does Not Have Specific Personal Jurisdiction Over

Sipcaddy Because The Complained Of Activity Was Not Directed
To Minnesota.
Specific jurisdiction requires an affiliation between the forum and the
underlying controversy, such as an activity or occurrence that takes place in the
forum state. NexGen, 2017 WL 4040808, at *9 (citing Bristol-Myers, 137 S. Ct.
1773 at 1773); Cortec Corp., 2015 WL 164173, at *4. The contacts to be considered
are those between the defendant and the forum, not the defendant's contacts with the
plaintiff or third parties. NexGen, 2017 WL 4040808, at *9 (citing Walden v. Fiore,
571 U.S. 277, 284–85 (2014)) (emphasis in original). Moreover, the defendant’s
suit-related conduct must create a substantial connection with the forum state. Id.
(emphasis added) A plaintiff “cannot be the only link between the defendant and the
forum.” Id. (quoting Walden, 571 U.S. at 285). “[T]he mere fact that [defendant’s]
conduct affected plaintiffs with connections to the forum state does not suffice to
authorize jurisdiction.” Walden, 571 U.S. at 291.
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In this case, 30 Watt’s allegations of wrongdoing against Sipcaddy are
confined to: 1) injuring 30 Watt in Minnesota by filing complaints of infringement
with Amazon and sending a cease-and-desist letter to an Australian company; and
2) Sipcaddy’s counsel sending a letter to 30 Watt. Dkt 1, at ¶¶ 28–36. Importantly,
none of these activities are alleged to have occurred in or were directed to
Minnesota. All were performed by Sipcaddy in Georgia. To the extent 30 Watt relies
on its location in Minnesota and the alleged “effects” of Sipcaddy’s conduct on 30
Watt in Minnesota to show that Sipcaddy purposefully availed itself of the privilege
of conducting activities in Minnesota, 30 Watt is wrong.
i. Sipcaddy Did Not Purposefully Avail Itself of the Benefits

and Privileges of Conducting Activities in Minnesota.
The path to specific personal jurisdiction is quite narrow—a defendant’s
conduct must connect it to the forum, not just the plaintiff, in a substantial and
meaningful way, and the defendant's relationship with the plaintiff alone cannot
serve as the basis for finding specific personal jurisdiction. NexGen, 2017 WL
4040808, at *14. See also Walden, 571 U.S. at 284–85 (holding that personal
jurisdiction cannot be based solely on an injury to a plaintiff in the forum state;
rather, the court must focus on the relationship among the defendant, the forum, and
the litigation). The mere fact that a plaintiff resides in the relevant forum and thus
experiences injury there is not enough to establish specific personal jurisdiction.
8
NexGen, 2017 WL 4040808, at *9 (citing Johnson v. Arden, 614 F. 3d 785, 794 (8th
Cir. 2010)).
Here, 30 Watt cannot demonstrate that Sipcaddy’s conduct and actions were
expressly aimed at the State of Minnesota. 30 Watt’s jurisdictional allegations run
squarely afoul of Walden, as 30 Watt points to its own location in Minnesota and the
alleged harm it has suffered there to connect Sipcaddy to Minnesota. The activity of
Sipcaddy that forms the basis of 30 Watt’s Complaint is filing infringement
complaints with Amazon (a Washington-based company) and sending demand
letters to Tooletries (an Australian-based company). Dkt. 1, at ¶¶ 28, 29. The only
connection to Minnesota are 30 Watt’s alleged injuries. Id. at ¶¶ 34–37. But, this
only enforces that 30 Watt itself is the only link between Sipcaddy and the State of
Minnesota. Simply put, 30 Watt is alleging precisely what Walden forbids –
jurisdiction based on nothing more than 30 Watt’s own location in the forum – not
any conduct by Sipcaddy that occurred in or that was specifically directed into
Minnesota.
Accordingly, 30 Watt fails to meet its burden that Sipcaddy purposefully
availed itself of personal jurisdiction in Minnesota under the Calder effects test.
ii. Sending A Cease-And-Desist Letter To The Forum State

Does Not Constitute Sufficient Minimum Contacts To Give
This Court Personal Jurisdiction Over Sipcaddy.
It is expected 30 Watt will argue that sending it a cease-and-desist letter
confers personal jurisdiction. This is wrong.
9
Sipcaddy’s act of sending a cease-and-desist letter to 30 Watt, in the absence
of any other contacts with Minnesota or 30 Watt, does not constitute sufficient
minimum contacts with Minnesota to give this Court personal jurisdiction over
Sipcaddy. Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1202 (Fed. Cir.
2003); Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1360
(Fed. Cir. 1998); Clearpractice, LLC v. Nimble, LLC, 819 F. Supp. 2d 892 (E.D. Mo.
2011); Full Circle Int'l, Inc. v. Wettstein, 2005 WL 174836, *3 (D. Minn. Jan. 26,
2005); MCCARTHY ON TRADEMARKS & UNFAIR COMPETITION, § 32:85 (5th Ed.). The
principles of fair play and substantial justice afford an intellectual property owner
sufficient latitude to inform others of its intellectual property rights without
subjecting itself to jurisdiction in a foreign forum. Full Circle Int'l, Inc., 2005 WL
174836, at *3; Red Wing Shoe Co, 148 F.3d at 1359–60; accord Hildebrand v. Steck
Mfg. Co., 279 F.3d 1351, 1356, (Fed. Cir. 2002) (holding that letters warning of
potential infringement to customers of plaintiff did not satisfy due process). For the
exercise of personal jurisdiction, there must be “other activities” directed at the
forum state and related to the cause of action in addition to cease-and-desist letters
or letters threatening an infringement suit. Inamed Corp. v. Kuzmak, 249 F.3d 1356,
1361 (Fed. Cir. 2001).
In this case, 30 Watt has not alleged any activities of Sipcaddy directed at
Minnesota or 30 Watt other than one cease-and-desist letter sent by Sipcady’s
10
counsel. Sipcaddy did not engage in any “other activities” in Minnesota that would
subject Sipcaddy to personal jurisdiction in Minnesota.
30 Watt’s Complaint should be dismissed for lack of personal jurisdiction.
IV. 30 WATT’S COUNTS TWO THROUGH SEVEN FAIL TO

STATE A CLAIM AND SHOULD BE DISMISSED PURSUANT
TO RULE 12(b)(6)
If the Court determines it has personal jurisdiction over Sipcaddy, then,
respectfully, it should dismiss Counts Two through Seven of 30 Watt’s Complaint
for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure.
When deciding a motion to dismiss under Rule 12(b)(6), the court accepts all
well-pleaded allegations as true and draws all reasonable, favorable inferences from
them. Varga v. U.S. Bank Nat’l Ass’n, 764 F.3d 833, 838 (8th Cir. 2014). “Factual
allegations must be enough to raise a right to relief above the speculative level.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The Court should grant a Rule
12(b)(6) motion when there is a failure to state a facially plausible claim that “the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009).
A. Count Two Should Be Dismissed Because 30 Watt’s Claim of

Trademark Misuse Is Not A Recognized Cause Of Action And 30
Watt Does Not Sufficiently Plead Unfair Competition.
Count Two of 30 Watt’s Complaint alleges unfair competition under the
Lanham Act for trademark misuse. This claim fails because trademark misuse does
11
not exist as an affirmative cause of action. Moreover, the facts pleaded by 30 Watt
do not rise to a claim for unfair competition. Therefore, Count Two should be
dismissed.
i. There Is No Cause of Action for Trademark Misuse.
Initially, there is no affirmative cause of action for trademark misuse; at best
it is purely an affirmative defense. Perfect Pearl Co., Inc. v. Majestic Pearl & Stone,
Inc., 889 F. Supp. 2d 453, 459–60 (S.D.N.Y. 2012); Maui Jim, Inc. v. SmartBuy
Guru Enters., No 1:16-cv-9788, 2018 WL 509960, at *6 (N.D. Ill. Jan. 23, 2018).
Moreover, it is doubtful trademark misuse is even a viable affirmative defense. Juno
Online Servs. v. June Lighting, Inc., 979 F. Supp. 684, 679 (N.D. Ill, 1997);
Microsoft Corp. v. Compusource Distribs., Inc., 115 F. Supp. 2d 800, 810 (E.D.
Mich. 2000). See also McCarthy, Schechter, Franklyn, McCarthy’s Desk
Encyclopedia of Intellectual Property, at 382 (2004 3d. Ed.) (“In no final reported
case has a court actually refused to enforce a trademark because it was used in
violation of antitrust law.”)
30 Watt’s claims of trademark misuse are similar to those rejected by the court
in Maui Jim. In that case, the defendant counterclaimed for trademark misuse on the
grounds of baseless and bad faith infringement claims related to registered
trademarks for the purposes of anticompetitive behavior by the plaintiff. Maui Jim,
Inc, 2018 WL 509960, at *6. The Maui Jim court recognized the repeated failure of
other litigants to bring an affirmative trademark misuse claim and rejected it. Id. The
12
Court should follow Maui Jim and all of the other courts that have rejected a claim
for trademark misuse. Accordingly, Court Two should be dismissed.
ii. 30 Watt Fails to Plead A Cause Of Action Under Section 43(a)

Of The Lanham Act.
Despite trademark misuse being an affirmative defense at best, 30 Watt
contends Sipcaddy engaged in unfair competition through trademark misuse under
the Lanham Act – specifically 15 U.S.C. § 1125(a) (Section 43(a) of the Lanham
Act). However, 30 Watt fails to sufficiently plead unfair competition under this
statute.
Section 43(a) of the Lanham Act (15 U.S.C. § 1125(a)) provides a cause of
action for unfair competition based on false designation of origin or other false
representation used in connection with the sale of a product. 15 U.S.C. § 1125(a);
Toro Co. v. R & R Prods. Co., 787 F.2d 1208, 1214 (8th Cir. 1986); 5 MCCARTHY,
TRADEMARKS & UNFAIR COMPETITION, §§ 27.9 (5th Ed.). It does not mention
“trademark misuse,” nor does it provide liability for a registered trademark holder
enforcing its rights. See 15 U.S.C. § 1125(a). The Lanham Act does, however,
provide that a certificate of registration on the principal register is prima facie
evidence of the validity of the registered mark and the owner’s exclusive right to use
the mark in commerce in connection with the goods specified in the certificate. 15
U.S.C. § 1057.
13
To state a claim for unfair competition under Section 43(a) of the Lanham
Act, a plaintiff must allege a protectable mark and likelihood of confusion,
deception, or mistake on the part of the consumers. Toro Co., 787 F.2d at 1214; Fair
Isaac Corp. v. Experian Info. Solutions Inc., 645 F. Supp. 2d 734, 756 (D. Minn.
2009); Minn. Specialty Corps, Inc. v. Minn. Wild Hockey Club, LP, No. 00-2317,
2002 WL 1763999, at *7 (D. Minn. July 26, 2002). Likelihood of confusion is
determined by balancing six factors, none of which are dispositive: 1) the strength
of the plaintiff’s mark; 2) the similarity of the plaintiff’s mark and the alleged
infringer’s mark; 3) the degree of competition between the products; 4) the alleged
plaintiff’s intent to “pass off” its goods as the trademark owner’s; 5) incidents of
actual confusion; and, 6) the type of product, its cost, and conditions of purchase.
Luigino’s Inc. v. Stouffer Corp., 170 F.3d 827, 830 (8th Cir. 1999).
30 Watt contends that Sipcaddy engaged in unfair competition. Dkt 1, at
¶¶ 62–73.2 Yet, 30 Watt alleges no protectable mark owned by it and infringed by
Sipcaddy nor any conduct by Sipcaddy directed to consumers. Id. Instead, 30 Watt
relies on its trademark misuse theory that is not viable. See id. at ¶¶ 66 –68. 30 Watt
alleges that Sipcaddy is engaged in anticompetitive and unfair competition because
Sipcaddy notified Amazon that 30 Watt infringed its U.S. Trademark Registration
2
It should be noted that 30 Watt alleges that Sipcaddy claims exclusive rights to
“shower beer holder.” Dkt. 1, at ¶¶ 64, 65. This is false. 30 Watt’s own pleading
demonstrates that Sipcaddy only claims rights to its U.S. Trademark Registration for
“SHOWER BEER.” Id. at ¶¶ 28, 67.
14
for “SHOWER BEER” through its sale of the “sudski” product. See id. at ¶ 68 &
Exs. F, P, Q. Yet, 30 Watt admits it uses Sipcaddy’s registered mark. Id. at ¶ 65. 30
Watt has to admit this because it does:
30 Watt pleaded no facts as to why Sipcaddy notifying Amazon of 30 Watt’s
use of Sipcaddy’s federally registered trademark would cause a likelihood of
confusion between Sipcaddy and 30 Watt in the eyes of consumers. See id. at ¶¶ 62–
73. Rather, 30 Watt attempts to recast trademark misuse in the guise of unfair
competition. Count Two of 30 Watt’s Complaint should be dismissed because it fails
to include any facts that 30 Watt has a protectable mark infringed by Sipcaddy, or
that consumers will be confused between Sipcaddy and 30 Watt’s products.
15
B. Count Three, 30 Watt’s Common Law Unfair Competition Claim,

Fails Because It Is Merely Duplicative Of 30 Watt’s Lanham Act
Claim.
In Count Three, 30 Watt alleges common law unfair competition against
Sipcaddy. This Count should be dismissed because it only restates its failed Lanham
Act claim.
Under Minnesota law, “[u]nfair competition is not a tort with specific
elements,” but rather, “it describes a general category of torts which courts recognize
for the protection of commercial interests.” Zimmerman Grp. v. Fairmount Foods of
Minn., 882 F. Supp. 892, 895 (D. Minn. 1994). However, if the underlying tort is
duplicative of another count of the complaint, the claim for unfair competition
cannot stand. Id.; Goddard, Inc. v. Henry's Foods, Inc., 291 F. Supp. 2d 1021, 1034
(D. Minn.2003) (“Under this doctrine, if we find that the underlying tort is
duplicative of another Count of the Complaint, the claim for unfair competition must
be dismissed”).
In this case, 30 Watt’s common law unfair competition claim is duplicative of
its Lanham Act claim and even incorporates that count by reference. Id. at ¶ 74. 30
Watt’s common law unfair competition does not add anything new to the remainder
of its Complaint, and Count Three should therefore be dismissed.
16
C. Count Four, 30 Watt’s Minnesota Unlawful Trade Practices Act

Claim, Fails Because Sipcaddy’s Alleged Actions Are Not
Recognized as Wrongful.
Count Four of 30 Watt’s Complaint alleges violations of the Minnesota
Unlawful Trade Practices Act (“MUTPA”) again on the grounds that Sipcaddy’s
reporting to Amazon of 30 Watt’s infringement of Sipcaddy’s “SHOWER BEER”
registered trademark is a misuse of Sipcaddy’s trademark rights. Dkt. 1, at ¶¶ 78, 79,
82. 30 Watt contends that Sipcaddy violated both Sections 12 and 13 of the statute
through this allegedly unlawful activity. 30 Watt’s allegation of unlawful behavior
by Sipcaddy fails to support its claim under MUPTA. Count Four should be
dismissed.
Claims under MUTPA require the pleading to conform to Rule 9(b) of the
Federal Rules of Civil Procedure. Lucky v. Alside, Inc., 245 F. Supp. 3d 1080, 1096
(D. Minn. 2017). A claim under MUTPA must plead a defendant made false
statements of fact about its or plaintiff’s products in an advertisement and consumers
were deceived by the statements. Fargo Elec., Inc. v. Iris Ltd., Inc., No 04-1017,
2005 WL 1431653, at *3 (D. Minn. March 8, 2005).
i. 30 Watt Fails to Allege Facts Giving Rise to a Violation of § 12

of MUPTA.
Section 12 of the MUTPA prevents retail sellers from 1) misusing the terms
manufacturer, wholesaler, or broker; and 2) making misrepresentations as to price.
MINN. STAT. § 325D.12; Kling v. Gem Shopping Network, Inc., No. 12-cv-2392,
17
2014 WL 7409580, at *2 (D. Minn. Dec. 31, 2014). Here, there are no allegations
anywhere in 30 Watt’s Complaint that Sipcaddy misused the terms “manufacturer,”
“wholesaler,” or “broker,” nor are there any allegations that Sipcaddy
misrepresented the price of any of its goods. The allegation that Sipcaddy violated
MUTPA § 12 is frivolous and should be dismissed.
ii. 30 Watt Fails to Allege Facts Giving Rise to a Violation of § 13

of MUPTA.
Section 13 of MUTPA prevents misrepresentation regarding the quality,
ingredients, or origin of merchandise. MINN. STAT. § 325D.13. In order sustain a
claim under MUTPA, a plaintiff must allege it relied on the alleged
misrepresentation of the defendant. Grp. Health Plan, Inc. v. Philip Morris Inc., 621
N.W.2d 2, 13 (Minn. 2001). Claims that a plaintiff was harmed because third-party
consumers relied on a defendant’s misrepresentations are not viable under MUTPA.
See Aviva Sports, Inc. v. Fingerhut Direct Mktg., Inc., No. 09-1091, 2010 WL
4193076, at *7, n.5 (D. Minn. Oct. 7, 2010) (questioning the viability of such an
action based on Minnesota Supreme Court precedent).
30 Watt makes no allegations as to Sipcaddy making any misrepresentation
regarding the quality, ingredients, or origin of either party’s products. 30 Watt only
alleges that Sipcaddy sent notices of Sipcaddy’s rights in its federal trademark
registration for “SHOWER BEER.” This does not violate Section 13 of MUPTA.
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30 Watt wholly fails to plead any wrongdoing by Sipcaddy that violates the
Minnesota Unlawful Trade Practices Act. Count Four should be dismissed.
D. Count Five, 30 Watt’s Minnesota Deceptive Trade Practices Act

Claim, Fails Because Sipcaddy’s Alleged Actions Are Not
Recognized as Wrongful.
Similar to Count Four, Count Five of 30 Watt’s Complaint alleges violation
of the Minnesota Deceptive Trade Practices Act (“MDTPA”) because Sipcaddy
reported 30 Watt’s infringement of Sipcaddy’s “SHOWER BEER” registered
trademark to Amazon claiming this is a misuse of Sipcaddy’s trademark rights. Dkt.
1, at ¶ 86. 30 Watt’s allegation of unlawful behavior by Sipcaddy fails to support its
claims under the statute. Count Five should be dismissed.
Like claims under MUTPA, MDTPA requires the pleading to conform to
Rule 9(b) of the Federal Rules of Civil Procedure. Lucky, 245 F. Supp. 3d at 1096.
Similar to MUTPA, a MDTPA plaintiff must plead a defendant made false
statements of fact about its or plaintiff’s products in an advertisement and consumers
were deceived by the statements. Fargo Elec., Inc., 2005 WL 1431653, at *3.
The deceptive trade practices providing liability under the MDTPA all relate
to causing consumer confusion or misunderstanding. MINN. STAT. § 325D.44, et seq;
Fitger’s On-the-Lake, LLC v. Fitger Co., LLC, No. 07-CV-4687, 2007 WL 4531502,
at *5 (D. Minn. Dec. 19, 2007); Masterson Personnel, Inc. v. The McClatchy Co.,
No. 05-1274, 2005 WL 3132349, at *6 (D. Minn. Nov. 22, 2005).
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30 Watt alleges liability under MDTPA solely based on Sipcaddy privately
reporting to Amazon 30 Watt’s infringement of Sipcaddy’s “SHOWER BEER”
registered trademark. There is no explanation as to how this report was relayed to
consumers or causes consumer confusion. 30 Watt alleges that Sipcaddy’s action is
a “misuse of [Sipcaddy’s] intellectual property to attack competitive goods and stifle
competition.” Id. at ¶ 86. Yet, this activity is not covered by MDTPA. Again, the
sole allegation is that Sipcaddy reported 30 Watt’s infringement of Sipcaddy’s
“SHOWER BEER” registered trademark to non-consumer Amazon. The allegation
that Sipcaddy violated MDTPA is frivolous.
Furthermore, 30 Watt’s MDTPA claim is nothing more than a rehashing of
30 Watt’s failed Lanham Act count. It merely incorporates and relies on prior
paragraphs for its allegations in this Count without alleging which subsection of the
MDTPA Sipcaddy alleged ran afoul. Id. at ¶¶ 85–88. 30 Watt’s MDTPA claim is
therefore insufficient as a matter of law and Count Five should be dismissed for this
additional reason. Honeywell Int’l Inc. v. ICM Controls Corp., No. 11cv569, 2017
WL 1012957, at *2 (D. Minn. March 14, 2017).
30 Watt fails to allege a violation of the Minnesota Deceptive Trade Practices
Act. Count Five of 30 Watt’s Complaint should be dismissed.
20
E. In Count Six, 30 Watt Does Not State A Claim For Tortious

Interference With Prospective Business Relations Because i) The
Complained Of Activity Is Protected, and ii) The Noerr-Pennington
Doctrine Bars 30 Watt’s Claims.
In Count Six, 30 Watt alleges Sipcaddy tortiously interfered with 30 Watt’s
prospective business relations. 30 Watt alleges that Sipcaddy reporting 30 Watt’s
use of Sipcaddy’s U.S. Trademark Registration for “SHOWER BEER” through its
sale of the “sudski” product to third-party, non-consumer Amazon resulted in
unlawful interference with 30 Watt’s prospective business relations with Amazon.
Dkt. 1, at ¶ 91. 30 Watt further alleges that Sipcaddy sending a cease-and-desist
letter to third-party Tooletries regarding Tooletries’ use of Sipcaddy’s U.S.
Trademark Registrations interfered with 30 Watt’s prospective business relations
with Tooletries. Id. at ¶ 92. But, 30 Watt does not state a claim for tortious
interference because i.) the complained of activity is protected, and ii.) the Noerr-
Pennington doctrine bars 30 Watt’s claims.
Tortious interference with prospective business relations requires the
defendant’s actions to be unjustified. As a result, there is no liability for tortious
interference for providing truthful information. Fox Sports Net N., LLC v. Minn.
Twins P’ship, 319 F.3d 329, 337–38 (8th Cir. 2003). Moreover, there can be no
action for tortious interference when the defendant has a legitimate economic
interest and does not employ improper means of protecting that interest such as
threats, violence, defamation, or fraud. Select Comfort Corp. v. Sleep Better Store,
21
LLC, 838 F. Supp. 2d 889, 893 (D. Minn. 2012); Harman v. Heartland Food Co.,
614 N.W.2d 236, 241 (Minn. Ct. App. 2000). The protection of trademark rights is
a legally protectable interest. Select Comfort Corp., 838 F. Supp. 2d at 893. Sending
a cease-and-desist letter to protect trademark rights does not give rise to a tortious
interference claim. Id. at 895.
i. Sipcaddy’s Actions Are Privileged And Cannot Form The Basis

For A Tortious Interference With Prospective Business Relations
Claim.
Select Comfort Corp. demonstrates that 30 Watt’s tortious interference with
prospective business relations claim fails. The counter-plaintiff in Select Comfort
Corp. argued that the counter-defendant tortiously interfered with the counter-
plaintiff by sending a cease and desist letter to a reseller of counter-plaintiff’s
products because the product name infringed the counter-defendant’s trademark.
Select Comfort Corp., 838 F. Supp. 2d at 893. The counter-plaintiff argued that its
use of counter-defendant’s mark was not infringement because the phrase was
descriptive. Id. The Select Comfort Corp. court rejected these arguments because
sending a demand letter to protect a registered trademark is not improper or an action
made in bad faith. Id. at 894–95. As noted by the Select Comfort Corp. court, “[i]t
has long been established that the owner of an intellectual property right ‘may notify
infringers of his claims, and warn them that, unless they desist, suits will be brought
to protect him in his legal rights.’” Id. at 895 (citing Virtue v. Creamery Package
Mfg. Co., 179 F. 115, 120 (8th Cir. 1910)).
22
Much like the counter-plaintiff in Select Comfort Corp., 30 Watt only alleges
that Sipcaddy tortiously interfered with it by enforcing its federally-registered
trademark rights. Dkt. 1, at ¶¶ 91, 92. Also like the plaintiff in Select Comfort Corp.,
30 Watt argues that Sipcaddy’s mark is merely descriptive making Sipcaddy’s
protection of its trademark rights undertaken in bad faith. Id. at ¶¶ 51–57. These
arguments failed for the counter-plaintiff in Select Comfort Corp. and they fail for
30 Watt. Count Six should be dismissed because Sipcaddy did nothing improper.
ii. 30 Watt’s Tortious Interference With Prospective Business

Relations Claim Is Barred By The Noerr-Pennington doctrine.
30 Watt’s tortious interference with prospective business relations claim also
fails under the Noerr-Pennington doctrine. This doctrine immunizes pre-suit
demand letters to enforce intellectual property rights. Select Comfort Corp., 838 F.
Supp. 2d at 900.
30 Watt contends that Sipcaddy sending a cease-and-desist letter to Tooletries
and a report of trademark infringement to Amazon is wrongful conduct subjecting
Sipcaddy to liability for tortious interference. Yet, Sipcaddy sued 30 Watt and
Tooletries for the conduct it complained of in the Tooletries demand letter. See Tech
and Goods, Inc. v. 30 Watt Holdings & Tooletries, No. 2:18-cv-13516 (E.D. Mich.).
30 Watt’s sole allegations supporting its claim for tortious interference with
prospective business relations are the sending of pre-suit letters alleging 30 Watt’s
infringement of Sipcaddy’s registered trademarks. Sending pre-suit letters for
23
intellectual property right violations is protected by the Noerr-Pennington doctrine.
Count Six should be dismissed.
F. In Count Seven, 30 Watt Does Not State A Claim For Tortious

Interference With Contract Because i) The Complained Of Activity
Is Protected, And ii) The Noerr-Pennington Doctrine Bars 30
Watt’s Claims.
In Count Seven, 30 Watt alleges Sipcaddy tortiously interfered with 30 Watt’s
contractual relations for the same conduct supporting its deficient tortious
interference with prospective business relations claim. Dkt. 1, at ¶ 98. 30 Watt does
not state a claim for tortious interference with contract because i.) the complained of
activity is protected, and ii.) the Noerr-Pennington doctrine bars 30 Watt’s claims.
Tortious interference with contract also requires the defendant’s actions to be
unjustified. Harman, 614 N.W.2d at 241. As a result, there is no liability for
providing truthful information. Fox Sports Net N., LLC, 319 F.3d at 337–38.
Moreover, there can be no action for tortious interference when the defendant has a
legitimate economic interest and does not employ improper means of protecting that
interest such as threats, violence, defamation, or fraud. Select Comfort Corp., 838 F.
Supp. 2d at 893; Harman, 614 N.W.2d at 241. The protection of trademark rights is
a legally protectable interest. Select Comfort Corp., 838 F. Supp. 2d at 893. Sending
a cease-and-desist letter to protect trademark rights does not give rise to a tortious
interference claim. Id. at 895.
24
i. Sipcaddy’s Actions Are Protected And Cannot Form The Basis

For A Tortious Interference With Contract Claim.
Select Comfort Corp. demonstrates that 30 Watt’s tortious interference claim
fails. The counter-plaintiff in Select Comfort Corp. argued that the counter-
defendant tortiously interfered with the counter-plaintiff by sending a cease and
desist letter to a reseller of counter-plaintiff’s products because the product name
infringed the counter-defendant’s trademark. Select Comfort Corp., 838 F. Supp. 2d
at 893. The counter-plaintiff argued that its use of counter-defendant’s mark was not
infringement because the phrase was descriptive. Id. The Select Comfort Corp. court
rejected these arguments because sending a demand letter to protect a registered
trademark is not improper or an action made in bad faith. Id. at 894–95. As noted by
the Select Comfort Corp. court, “[i]t has long been established that the owner of an
intellectual property right ‘may notify infringers of his claims, and warn them that,
unless they desist, suits will be brought to protect him in his legal rights.’” Id. at 895
(citing Virtue v. Creamery Package Mfg. Co., 179 F. 115, 120 (8th Cir. 1910)).
Much like the counter-plaintiff in Select Comfort Corp., 30 Watt only alleges
that Sipcaddy tortiously interfered with it by enforcing its federally registered
trademark rights. Dkt. 1, at ¶ 98. Also like the plaintiff in Select Comfort Corp., 30
Watt argues that Sipcaddy’s mark is merely descriptive making Sipcaddy’s
protection of its trademark rights undertaken in bad faith. Dkt. 1, at ¶¶ 51–57. These
25
arguments failed for the counter-plaintiff in Select Comfort Corp. and they fail for
30 Watt. Count Seven should be dismissed.
ii. 30 Watt’s Tortious Interference With Contract Claim Is Barred

By The Noerr-Pennington doctrine.
30 Watt’s tortious interference with contract claim also fails under the Noerr-
Pennington doctrine. This doctrine immunizes pre-suit demand letters to enforce
intellectual property rights. Select Comfort Corp., 838 F. Supp. 2d at 900.
30 Watt contends that Sipcaddy sending a cease-and-desist letter to Tooletries
and a report of trademark infringement to Amazon is wrongful conduct subjecting
Sipcaddy to liability for tortious interference with contract. Yet, Sipcaddy sued 30
Watt and Tooletries for the conduct it complained of in the Tooletries demand letter.
See Tech and Goods, Inc. v. 30 Watt Holdings & Tooletries, No. 2:18-cv-13516
(E.D. Mich.).
30 Watt’s sole allegations supporting its claim for tortious interference with
contract are the sending of pre-suit letters alleging 30 Watt’s infringement of
Sipcaddy’s registered trademarks. Sending pre-suit letters for intellectual property
right violations is protected by the Noerr-Pennington doctrine. Count Seven should
be dismissed.
26
V. CONCLUSION
For the foregoing reasons, this Court should enter an order dismissing this
action for lack of personal jurisdiction over Defendant Tech And Goods, Inc., or
dismiss Counts Two through Seven for failure to state a claim.
Dated: December 3, 2018 Respectfully submitted,
/s/ Joseph W. Barber
Steven L. Reitenour (#225691)

BOWMAN AND BROOKE LLP
150 South Fifth Street, Suite 3000
Minneapolis, MN 55402
(612) 339-8682
[email protected]
Joseph W. Barber
HOWARD & HOWARD ATTORNEYS
450 W. Fourth Street
Royal Oak, MI 48067
(248) 723-0456
[email protected]
admitted pro hac vice
Counsel for Defendant Tech and Goods, Inc.
27
CERTIFICATE OF COMPLIANCE WITH LR 7.1(f)

The undersigned certifies that this memorandum contains 6069 words set in
14-point Times New Roman proportional font, excluding the caption, signature
block and this certification of compliance. The word count was calculated using
Microsoft Word 2016 and included all text, footnotes, and quotations.
CERTIFICATE OF SERVICE
I, Joseph W. Barber, certify that on December 3, 2018, I electronically filed
the foregoing Defendant Tech Goods, Inc.’s Memorandum in Support of its Motion
to Dismiss Plaintiff’s Complaint using the ECF system, which will send notification
of that filing to counsel of record in this matter.
/s/ Joseph W. Barber______
28
CASE 0:18-cv-03013-JNE-KMM Document 15-1 Filed 12/03/18 Page 1 of 2
IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MINNESOTA
DIVISION 3—ST. PAUL
30 WATT HOLDINGS, LLC, a

Minnesota limited liability company,
Plaintiff, No. 18-cv-03013-JNE-KMM
v.
TECH AND GOODS, INC., a Georgia

corporation, and DOES 1 through 10,
Defendants.
CERTIFICATE OF COMPLIANCE WITH LR 7.1(f)

The undersigned certifies that this memorandum contains 6069 words set in
14-point Times New Roman proportional font, excluding the caption, signature
block and this certification of compliance. The word count was calculated using
Microsoft Word 2016 and included all text, footnotes, and quotations.

.
Dated: December 3, 2018 Respectfully submitted,
Steven L. Reitenour (#225691)

BOWMAN AND BROOKE LLP
150 South Fifth Street, Suite 3000
Minneapolis, MN 55402
(612) 339-8682
[email protected]
Joseph W. Barber
HOWARD & HOWARD ATTORNEYS
450 W. Fourth Street
Royal Oak, MI 48067
(248) 723-0456
[email protected]
admitted pro hac vice
Counsel for Defendant Tech and Goods, Inc.

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CASE 0:18-cv-03013-JNE-KMM Document 15 Filed 12/03/18 Page 1 of 28

IN THE UNITED STATES DISTRICT COURT

30 WATT HOLDINGS, LLC, a

Plaintiff, No. 18-cv-03013-JNE-KMM

TECH AND GOODS, INC., a Georgia

DEFENDANT TECH AND GOODS, INC.’S MEMORANDUM

30 Watt Holdings LLC (“30 Watt”), filed a seven-count Complaint contesting

letter to Australian-based Tooletries and informed Amazon that 30 Watt infringes

Sipcaddy’s registered, United States trademark, Sipcaddy engaged in trademark

misuse and tortious interference. Respectfully, 30 Watt’s Complaint should be

and 30 Watt’s tortious interference claims are barred by the Noerr-Pennington

Sipcaddy is the market leader and prominent innovator in suction-cup

Sipcaddy’s trademarks. Specifically, 30 Watt sells a “Sudski Shower Beer Holder”

forum of choice because its own headquarters are located in Minneapolis,

Minnesota. 30 Watt’s Complaint should be dismissed pursuant to Rule 12(b)(2) of

Sipcaddy to personal jurisdiction.

In addition to the lack of personal jurisdiction, 30 Watt’s Complaint fails

of the Federal Rules of Civil Procedure. 30 Watt’s entire Complaint is premised on

– sending a cease-and-desist letter to sellers of 30 Watt’s infringing products.

Moreover, it attempts to apply two Minnesota consumer protection statutes using

actions and are inapplicable. Instead of respecting Sipcaddy’s trademark rights, 30

Complaint should be dismissed.

II. FACTS RELEVANT TO SIPCADDY’S MOTION1

Sipcaddy is a Georgia corporation with a principal place of business in

Decatur, Georgia. Dkt. 1, at ¶ 3; Declaration of C. LaFavors, at ¶ 4, attached hereto

Sipcaddy owns four United States registered trademarks for

“SHOWERBEER,” “SHOWER BEER,” “SHOWERWINE,” and “SHOWER

Register in August and November 2017. Id.

30 Watt’s “SUDSKI” trademark was not registered on the Principal Register

“SHOWERBEER,” “SHOWERWINE,” and “SHOWER WINE” marks were

id. at Exs. F–I.

regarding 30 Watt’s use of Sipcaddy’s “SHOWER BEER” federally registered

trademark. Id. at ¶ 28.

Journeymandesigns a cease-and-desist letter. Id. at ¶ 29. Tooletries is located in

Australia. Id. at Ex. R.

On September 28, 2018, counsel for Sipcaddy and 30 Watt exchanged

correspondence regarding the parties’ dispute. Id. at ¶¶ 30, 31.

III. 30 WATT’S COMPLAINT SHOULD BE DISMISSED

A motion to dismiss for lack of personal jurisdiction should be granted unless

accomplished by pleading sufficient facts to support a reasonable inference that the

at *1 (D. Minn. Jan. 13, 2015).

In determining whether personal jurisdiction exists over a nonresident

of Cal., San Francisco Cty., 137 S. Ct. 1773, 1780 (2017).

A. 30 Watt Does Not Have General Personal Jurisdiction Over

corporation’s “domicile” or the place in which the corporation is fairly regarded as

at “home.” NexGen, 2017 WL 4040808, at *8; Cortec Corp., 2015 WL 164173, at

main touchpoints for exercising general personal jurisdiction. NexGen, 2017 WL

home. Cortec Corp., 2015 WL 164173, at *3.

essentially “at home” in Minnesota. Rather, 30 Watt acknowledges that Sipcaddy is

a Georgia corporation with its principal place of business in Georgia. Dkt, 1, at ¶ 3.

Additionally, Sipcaddy’s sole office is located in Georgia. Ex. 1, at ¶ 5. Sipcaddy’s

an office, manufacturing facility, rental property, or any other physical presence of

any kind in Minnesota. Id. at ¶ 7. Sipcaddy has no employees based in Minnesota.

Id. at ¶ 8. Sipcaddy generates approximately 1.8% of its annual revenue in

continuous and systemic contacts with Minnesota. Accordingly, 30 Watt’s

Complaint fails establish general personal jurisdiction over Sipcaddy.

B. 30 Watt Does Not Have Specific Personal Jurisdiction Over

Specific jurisdiction requires an affiliation between the forum and the