Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-05777/USCOURTS-cand-3_07-cv-05777-4/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:101 Copyright Infringement

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MAPONICS, LLC,

Plaintiff(s),

v.

BERNT WAHL, ET AL.,

Defendant(s).

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No. C07-5777 BZ

ORDER DENYING MOTION 

TO DISMISS

Maponics LLC (“Maponics”) sued Bernt Wahl (“Wahl”) and

Factle alleging they unlawfully used Maponics’ copyrighted

mapping software. Wahl and Factle counterclaimed against

Maponics and its general and sales manager, Darrin Clement

(“Clement”), for declaratory judgment, defamation, trade

libel/product disparagement, interference with contractual

relations, interference with prospective economic advantage,

and unfair competition.

Maponics and Clement (collectively “counterdefendants”)

then moved to dismiss the counterclaims against Clement for

lack of personal jurisdiction pursuant to Federal Rule of

Civil Procedure 12(b)(2) and to dismiss the tort counterclaims

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1 All parties have consented to my jurisdiction,

including entry of final judgment, pursuant to 28 U.S.C. 

§ 636(c) for all proceedings.

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for failure to state a claim pursuant to Federal Rules of

Civil Procedure 12(b)(6).1 For the reasons set forth below,

counterdefendants’ motion to dismiss is DENIED. Because I

find that this court has specific jurisdiction over Clement,

counterclaimants’ motion for leave to conduct jurisdictional

discovery is DENIED as MOOT.

Motion to Dismiss for Lack of Jurisdiction over Clement:

Counterclaimants contend that this court has specific

jurisdiction over Clement. They allege that they are located

in California and that Clement intentionally directed tortious

conduct to California when he sent defamatory emails about

them to California companies. Clement admits that he sent the

emails to Factle’s clients TourSheet and Ask.com, but declares

that he did not know where TourSheet was located when he sent

the email and believed that Ask.com was headquartered in New

York where its parent company is located. In order to find

specific jurisdiction: “1) the nonresident defendant must have

purposefully availed himself of the privilege of conducting

activities in the forum by some affirmative act or conduct; 2)

plaintiff’s claim must arise out of or result from the

defendant’s forum-related activities; and 3) exercise of

jurisdiction must be reasonable.” Roth v. Garcia Marquez, 942

F.2d 617, 620 -621 (9th Cir. 1991). Because no jurisdictional

discovery has been conducted, counterclaimants need only make

a prima facie showing of jurisdiction. Schwarzenegger v. Fred

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2 In their moving papers, counterdefendants allege that

“Counterclaimants’ business operations are now primarily

located in Malaysia.” (Mot. to Dismiss at p. 12.) The

portions of the counterclaims they cite do not support that

allegation and the complaint alleges that Factle and Wahl

reside in California.

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 Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). Because

some of the counterclaims are intentional torts, the “effects”

test is used to determine if Clement purposely directed his

activities toward California. Calder v. Jones, 465 U.S. 783,

788-89 (1984); Schwarzenegger, 374 F.3d at 802-03. The

“‘effects’ test requires that the defendant allegedly have (1)

committed an intentional act, (2) expressly aimed at the forum

state, (3) causing harm that the defendant knows is likely to

be suffered in the forum state.” Dole Food Co., Inc. v.

Watts, 303 F.3d 1104, 1111 (9th Cir. 2002). 

 Counterclaimants have made a prima facie showing that

Clement “expressly aimed” his activities at California because

Clement “is alleged to have engaged in wrongful conduct

targeted at [the counterclaimants whom Clement] knows to be []

resident[s] of the forum state.” Id. quoting Bancroft &

Masters, 223 F.3d 1082, 1087 (9th Cir. 2000). Specifically,

Clement is alleged to have made libelous and disparaging

statements that Wahl stole Maponics data and that Factle’s

product contained topological errors in an attempt to

interfere with Factle’s contractual relationships. Since Wahl

and Factle are residents of California,2

 Clement’s alleged

tortious conduct was directed at this forum. The fact that

Clement claims to have “had no idea” where Ask.com and

TourSheet were located, and thought one was in New York, does

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not alter the analysis. Clement knew that the

counterdefendants, the people his emails could injure, were

located in California. See Panavision v. Toeppen, 141 F.3d

1316, 1321 (9th Cir. 1998)(defendant knew the brunt of harm

his conduct would cause would be felt in California,

plaintiff’s principal place of business); Sinatra v. National

Enquirer, Inc., 854 F.2d 1191, 1195 (9th Cir. 1988)(clinic who

gave interview in Switzerland directed effects at California,

where Sinatra lived). Unlike Pebble Beach Co. v. Caddy, 453

F.3d 1151, 1158 (9th Cir. 2006), Clement’s statements were not

just posted on the internet but were designed to impact

California residents, all of which constitutes “something

more” than alleging acts that might have a foreseeable effect

in California.

Counterdefendants’ argument that jurisdiction is lacking

because Clements actions were not tortious is also without

merit. Yahoo! Inc. v. La Ligue Contre Le Racisme Et

L'Antisemitisme, 433 F.3d 1199, 1208 (9th Cir. 2006)(“[I]f an

allegedly wrongful act were the basis for jurisdiction, a

holding on the merits that the act was not wrongful would

deprive the court of jurisdiction.”) 

Finally, I find that the totality of factors present here

make it reasonable to require Clement to litigate in this

forum. Ziegler v. Indian River County, 64 F.3d 470, 475 - 76

(1995). Counterdefendants cannot claim that a more convenient

forum exists, “because the true defendant and party in

interest already is before the court.” (Mot. to Dismiss at p.

17.) Maponics filed suit California, Clement directed his

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3 Counterclaimants’ motion to permit jurisdictional

discovery to oppose the motion to dismiss the counterclaims

against Clement is DENIED AS MOOT.

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allegedly tortious conduct towards California, and

counterclaimants are located in California. Clement must have

realized that any counterclaim arising from his conduct would

be filed in California, where Maponics sued. Presently,

Maponics and Clement are represented by the same counsel. 

For all these reasons, counterdefendants’ motion to dismiss 

the counterclaims against Clement for lack of jurisdiction

is DENIED.3

Motion to Dismiss for Failure to State a Claim

Counterdefendants also move to dismiss the tort

counterclaims pursuant to Federal Rule of Civil Procedure

12(b)(6). A motion to dismiss pursuant to Rule 12(b)(6) tests

the legal sufficiency of a claim and should be granted only if

the counterclaim fails to set forth facts sufficient to

establish a plausible right of recovery. Bell Atlantic Corp.

v. Twombly, 127 S. Ct. 1955, 1974 (2007). For purposes of

such a motion, the counterclaim is construed in a light most

favorable to the claimant and all properly pleaded factual

allegations are taken as true. Aquino v. Capital One Fin.

Corp., 2008 WL 1734752, at *1 (N.D. Cal.); Mitan v. Feeney,

497 F.Supp. 2d 1113, 1124 (C.D. Cal. 2007) (discussing the

post-Twombly standard).

When ruling on a motion to dismiss, if the court

“considers evidence outside the pleadings, it must normally

convert the 12(b)(6) motion into a Rule 56 motion for summary

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judgment, and it must give the nonmoving party an opportunity

to respond.” U.S. v. Ritchie, 342 F.3d 903, 907 (9th Cir.

2003); Fed. R. Civ. P. 12(b). Counterclaimants urge that the

motion to dismiss must be converted to a motion for summary

judgment because counterdefendants submitted the declaration

of Clement and attached exhibits. As I have not considered

the declaration or documents in ruling on the 12(b)(6) motion,

there is no need to convert the motion into a motion for

summary judgment.

Litigation Privilege:

Counterdefendants argue that the litigation privilege set

forth in California Civil Code section 47(b) bars the

counterclaims. “To be privileged a statement must (1) be made

in a judicial proceeding, (2) by litigants or other authorized

participants, (3) aim to achieve the litigation's objects, and

(4) have some logical connection or relation to the

proceeding.” O'Keefe v. Kompa, 84 Cal.App.4th 130, 134 (2000)

citing Silberg v. Anderson, 50 Cal.3d 205, 266 (1990). 

Counterclaimants allege that Clement, on behalf of

Maponics, made several statements giving rise to their

intentional tort counterclaims. Those statements include:

“telling others, including prospective customers of Factle

that either Factle cannot license the HomeGain neighborhood

mapping data or raising doubts as to that fact”; “posting

public comments on the internet that raise doubt about

Factle’s ability to license HomeGain neighborhood mapping

data”; “posting statements on the internet as to the origin of

the neighborhood mapping data” that were false; and

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4 The request of all parties that, for the purpose of

deciding the 12(b)(6) motion, I strike the copy of the emails

attached to counterdefendants’ moving papers, including the

emails to Ask.com and TourSheet referenced in the counterclaim,

is GRANTED. I GRANT counterclaimants’ motion to strike the

declaration of Clement and the attached exhibits for the

purpose of ruling on the 12(b)(6) motion, but not for the

purpose of ruling on the motion to dismiss for lack of

jurisdiction. I DENY counterdefendants’ request that I take

judicial notice of letters counterclaimants’ attorney sent to

them because those letters are not necessary to resolve these

motions.

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“repeatedly telling potential customers of Factle products

that ‘Factle stole our data,’ ‘Bernt stole our data,’ and

repeatedly claiming credit for neighborhood mapping data . . .

thereby causing great confusion and unrest in the marketplace

over the legitimacy of any Factle product.” (Countercompl. at

¶s 81 - 83 & 95.) The counterclaim also describes two emails

Clement sent to counterclaimant’s customers. One was to

Ask.com “stating that the neighborhood data used by Ask.com is

Maponics data and that Wahl ‘does not deny that is actually

our data and that he has infringed on our copyright’”; “‘you

can understand how upset we were when we found that Bernt

stole our data’”; and that Maponic’s “‘latest release has

almost twice as many neighborhoods as the data Bernt provided

to you (and we have none of the topological errors his version

had).’” Id. at ¶ 89. The other was to the founder and CEO of

TourSheet, “advising TourSheet to discontinue use of the

neighborhood mapping data that is had licensed from Factle

because ‘Factle stole our [Maponics] data.’” Id. at ¶ 90.4

To be privileged under section 47(b), a statement must be

“reasonably relevant” to the litigation. Silberg, 50 Cal.3d

at 220. The litigation privilege “applies to any publication

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required or permitted by law in the course of a judicial

proceeding to achieve the objects of the litigation, even

though the publication is made outside the courtroom and no

function of the court or its officers is involved.” Id. at

212. Counterdefendants argue that the statements were made to

“notify potential infringers” of Maponic’s complaint, “to

investigate the extent of the infringement[,] and mitigate

damages arising from it.” (Reply at p. 8.) They also claim

that the two specific emails constituted cease and desist

notices as required by 17 U.S.C. section 512(c)(3) of the

Digital Millennium Copyright Act (“DMCA”). 

It is not clear that Clement’s emails actually

constituted cease and desist notifications. Based on the

evidence properly before me in deciding these motions, the

emails do not appear to be what I would consider typical cease

and desist letters. The emails seem more like an attempt by

Maponics’ sales manager to gain business from a customer by

charging a competitor with theft, than an attempt to mitigate

a customer’s damages. The emails do not appear to satisfy the

notification requirements set forth in the DMCA. 17 U.S.C. §

512(c)(3)(A). Nor is it clear, at this stage of the

litigation, that the emails, in their entirety, served to “to

achieve the objects of the litigation.” Silberg, 50 Cal.3d at

212; Brown v. Wireless Networks, Inc., No. 07-4301, 2008 WL

1859990, at *4 (N.D. Cal., April 24, 2008), Lewis Mgmt. Co.,

Inc. v. Corel Corp., No. 94-1903, 1995 WL 724835, at *6 (S.D.

Cal. June 28, 1995). It is hard to see how the claim that 

Maponics’ software contains fewer errors that Factle’s was

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5 Counterdefendants reliance during oral argument on

Rubin v. Green, 4 Cal.4th 1187 (1993) was misplaced. None of

the concerns with which the California Supreme Court struggled

in that effort to impose liability for solicitation on a

attorney and her client who had sent a demand letter to the

plaintiff are present here. Most importantly, this suit had

already been filed, so the counterclaim will not deprive

counterdefendants of access to the courts, and the gist of

access to the courts, and the gist of the communications, as

pled, sounds more like communications designed to achieve a

business purpose than a litigation purpose.

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made to further this litigation.5 Based on the allegations of

the counterclaim, it is sufficiently unclear that the

statements at issue qualify for the litigation privilege that

the motion to dismiss is DENIED.

Defamation:

“Libel is a false and unprivileged publication by

writing, printing, picture, effigy, or other fixed

representation to the eye, which exposes any person to hatred,

contempt, ridicule, or obloquy, or which causes him to be

shunned or avoided, or which has a tendency to injure him in

his occupation.” Cal. Civ. Code § 45. 

Counterdefendants incorrectly argue that the

counterclaims do not specifically identify the allegedly

defamatory statements. In order to adequately state a claim

for defamation, the claimant must “allege either the specific

words or the substance of [the] statements,” which the

counterclaimants have done. Ellenberger v. Espinosa, 30

Cal.App.4th 943, 951 (1994) quoting Lipman v. Brisbane

Elementary School Dist., 55 Cal.2d 224, 235 (1961) superseded

by statute as stated in Muskopf v. Corning Hosp. Dist., 55

Cal.2d 211 (1961). 

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Counterdefendants also argue that Clement’s statements

constituted an opinion, which is not actionable, and not a

statement of fact. Clement’s statements that

counterclaimants’ “stole data” and that there are errors in

Factle’s products “imply a provably false assertion of fact”

which is actionable. Paterno v. Superior Court, 163 Cal. App.

4th 1342, 78 Cal. Rptr. 3d 244 , 256 (2008) discussing

Milkovich v. Lorain Journal Co., 497 U.S. 1, 19 (1990). 

Because the alleged statements are libel per se,

counterclaimants are not required to plead special damages. 

Cal. Civ. Code § 45a. 

Interference Counterclaims:

Counterdefendants argue that the trade libel/product

disparagement, interference with contractual relations,

interference with prospective economic advantage counterclaims

should be dismissed because counterclaimants fail to allege

that the complained of conduct actually disrupted a contract

or economic relationship and that the conduct was wrongful

instead of merely competitive. However, for the purposes of

this motion, the allegations that Factle lost business and

that Maponics and Clement lied to its customers as sufficient

to state claims for relief.

Unfair Competition:

Counterdefendants’ contend that the counterclaim for

unfair competition pursuant to California’s Business and

Professions Code section 17200 must be dismissed because none

of the tort claims are actionable. Because the tort

counterclaims survive the motion to dismiss, the unfair

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competition counterclaim also survives.

For the reasons set forth above, counterdefendants’

motion to dismiss pursuant to Rules 12(b)(2) and 12(b)(6) is

DENIED. Counterdefendants shall answer by August 1, 2008.

Dated: July 18, 2008

 Bernard Zimmerman 

 United States Magistrate Judge

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