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Valtech, LLC v. 18Th Avenue Toys Ltd.

United States District Court, N.D. Illinois, Eastern Division

February 12, 2015

VALTECH, LLC, Plaintiff,
v.
18TH AVENUE TOYS LTD. and TOYS 4 USA, INC., Defendants.

MEMORANDUM OPINION

CHARLES P. KOCORAS, District Judge.

This matter comes before the Court on the motion of Defendants 18th Avenue Toys Ltd. ("Avenue Toys") and Toys 4 USA, Inc. ("Toys4USA") (collectively "Defendants") to dismiss the complaint brought by Plaintiff Valtech, LLC ("Valtech") pursuant to Federal Rule of Civil Procedure 12(b)(2) ("Rule 12(b)(2)") or, in the alternative, to transfer venue to the Eastern District of New York under 28 U.S.C. § 1404(a) ("Section 1404(a)"). For the reasons set forth below, Defendants' motion to dismiss, or in the alternative, to transfer venue is denied.

BACKGROUND

For the purposes of the instant motion, the following well-pleaded allegations derived from Valtech's second amended complaint are accepted as true. The Court draws all reasonable inferences in favor of Valtech. This action arises out of the alleged infringement of Valtech's federal trade-dress rights. Valtech is an Illinois limited liability company with its principal place of business in Hodgkins, Illinois. Avenue Toys is a New York corporation with its principal place of business in Brooklyn, New York. Toys4USA is also a New York corporation with its principal place of business in Brooklyn, New York.

Valtech has several trademarked products, including plastic building blocks with magnetic strips in various shapes and colors called "Magna-Tiles Solid Colors" and a transparent version called "Magna-Tiles Clear Colors" (collectively "Magna-Tiles"). Rudolph Valenta, owner of Valtech, retains a federal registration for the mark "Magna-Tiles" for use in association with toys, blocks and puzzles (U.S. Reg. No. 2, 654, 320).

Valtech alleges that Defendants have sold and/or are selling transparent, colorful, plastic building blocks in various sizes and colors almost identical to Magna-Tiles under the brand names "Magnetic Stick N' Stack" and "Playmags" (collectively "Defendants' Products"). Throughout its second amended complaint, Valtech provides visual demonstratives, comparing Magna-Tiles to Defendants' Products. Valtech also claims that the packaging used by Toys4USA is identical, or at least confusingly similar, to the packaging used by Valtech for its Magna-Tiles, and provides photographs for the Court to evaluate.

Valtech argues that Defendants' Products are sold in the same marketing channels as Magna-Tiles blocks, including in toy stores, general retail stores, and on the Internet. Valtech alleges that Defendants had knowledge of Magna-Tiles and intended to copy Valtech's trade-dress to obtain consumer recognition and interest based upon the success and reputation of Magna-Tiles. Also, Valtech alleges that Toys4USA uses nearly identical packaging to Magna-Tiles. With full knowledge and intent to copy such trade-dress, Toys4USA attempts to pass off its products as those of Valtech, creating consumer confusion. Overall, Defendants' actions have placed the valuable reputation of Magna-Tiles products in the hands of third-parties over whom Valtech has no control.

In its second amended complaint, Valtech alleges two counts: (i) product-design trade-dress infringement in violation of 15 U.S.C. § 1125(a) (Count I); and (ii) packaging trade-dress infringement in violation of 15 U.S.C. § 1125(a) (Count II). Valtech brings Count I against both Defendants and Count II against Toys4USA only. Defendants move to dismiss both counts for lack of personal jurisdiction under Rule 12(b)(2) or, in the alternative, request the Court to transfer the case to the Eastern District of New York under Section 1404(a).[1]

LEGAL STANDARD

Rule 12(b)(2) permits dismissal of a claim based on lack of personal jurisdiction over the defendant. Fed.R.Civ.P. 12(b)(2). The party asserting personal jurisdiction-here, Valtech-bears the burden of proof. See Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). When the court rules on the motion without a hearing, the plaintiff need only establish a " prima facie case of personal jurisdiction." Id. (quoting Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002)) (internal quotation marks omitted). The court will "read the complaint liberally, in its entirety, and with every inference drawn in favor of" the plaintiff. Cent. States, Se. & Sw. Areas Pension Fund v. Phencorp Reins. Co., 440 F.3d 870, 878 (7th Cir. 2006) (quoting Textor v. Bd. of Regents of N. Ill. Univ., 711 F.2d 1387, 1393 (7th Cir. 1993)) (internal quotation marks omitted).

To determine whether the plaintiff has met its burden, the court may consider affidavits from both parties. Felland v. Clifton, 682 F.3d 665, 672 (7th Cir. 2012). When the defendant challenges, by declaration, a fact alleged in the plaintiff's complaint, the plaintiff has an obligation to go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction. Purdue Research Found., 338 F.3d at 783. While, in this context, affidavits trump the pleadings, in the end, all facts disputed in the affidavits will be resolved in the plaintiff's favor. See id. at 782.

DISCUSSION

I. Motion to Dismiss

Defendants move to dismiss Valtech's second amended complaint under Rule 12(b)(2) because they claim that the Court does not have personal ...


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