Source: http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bc
Timestamp: 2017-06-24 22:19:14
Document Index: 464534602

Matched Legal Cases: ['art 1', '§ 1119', '§ 5361', '§ 19', '§ 19', '§ 4', '§ 19', 'ART 1', 'ART 1', '§ 19', '§ 19', '§ 19', '§ 19', '§5361', '§5361', '§5361', '§5361', '§ 1119', '§ 1119', '§ 1119', '§ 1119', '§ 4']

1st Technology's Motion for Preliminary Injunction | 1st Technology LLC v. Bodog Entertainment Group S.A., et al. | Venkat Balasubramani - JDSupra
1st Technology LLC v. Bodog Entertainment Group S.A., et al.1st Technology's Motion for Preliminary Injunction
The document seeks to enjoin transfers of trademarks. The underlying action is brought by a judgment creditor to levy/execute against trademarks owned by the judgment debtor. Download PDF TECHNOLOGY’S RELIEF (CV 08-00872) BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 JOHN C. COUGHENOUR TECHNOLOGY a company, GROUP a foreign and TELECOM S.A., a CV 08-00872 25, 2008 REQUESTED 1 HONORABLE JOHN C. COUGHENOUR 2345678 UNITED STATES DISTRICT COURT 9 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 10 1st TECHNOLOGY LLC, a Nevada limited CASE NO: CV 08-00872 JCC 11 liability company, 1ST TECHNOLOGY LLC’S MOTION 12 Plaintiff, FOR A PRELIMINARY INJUNCTION 13 vs. NOTED FOR HEARING: 14 BODOG ENTERTAINMENT GROUP JULY 25, 2008 S.A., a foreign entity; BODOG IP 15 HOLDINGS LTD., a foreign entity; and GK WORLDLINK TELECOM S.A., a ORAL ARGUMENT REQUESTED 16 foreign entity, 17 Defendants. 18 19 20 21 22 23 24 25 26 27 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S – BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 OF INTRODUCTION.............................................................................................................. FACTUAL AND PROCEDURAL BACKGROUND.................................................... Patent Infringement Claims in Nevada BEGSA.............................................................................. on the Nevada Judgment........................................ to Levy Against the Second ................................. Judge Erlick Rejects BEGSA’s Request Receiver........................................................................................ Defendants to Transfer Efforts.................................................................................... purports its in Marks ............................ to assign ......................... Files Instant Fraudulent ..................................... BEGSA Has the of U.S. ................ ARGUMENT................................................................................................................. Issue a Preliminary Use of the Marks........................................................................................... 1. 1st Technology of showing that the assignments of the Act.............................................. 2. 1st Technology of showing services............................................................ 3. 1st will ................................................................................................................. injunction to preserve assets in cases even may not yet have claim to the assets. ............................................ the Register Corrected........................................... ........................................ The may over BEGSA. .................................................... over remaining Defendants.............................. Court jurisdiction Marks............................................................... Set at Zero Given That Defendants Will Injunction........................................................................... Defendants (including BEGSA) Have Been Provided Adequate Notice of 1st Technology’s for .................................................................. CONCLUSION.............................................................................................................. 1 TABLE OF CONTENTS 2 I. INTRODUCTION ... .. 1 3 II. FACTUAL AND PROCEDURAL BACKGROUND... . 2 4 A. 1st Technology Asserts Patent Infringement Claims in Federal Court in Nevada and Obtains a Judgment Against BEGSA... ... 2 5 B. 1st Technology’s Efforts to Collect on the Nevada Judgment... . 3 6 C. 1st Technology’s Efforts to Levy Against the Second Set of Domain Names, and BEGSA’s Efforts to Thwart 1st Technology’s Collections Efforts ... ... 4 7 D. Judge Erlick Rejects BEGSA’s Request to Reconsider and Grants 1st Technology’s Request to Appoint a Receiver ... . 5 8 E. Defendants Purport to Transfer the Marks in a Further Effort to Frustrate 1st 9 Technology’s Collections Efforts... ... 6 1. BEGSA purports to assign its interest in the Marks to GK World. .. .. 6 10 2. GK World purports to assign its interest in the Marks to Bodog IP. .. .. 7 F. 1st Technology Files the Instant Fraudulent Transfer Lawsuit ... . 8 11 G. BEGSA Has Engaged in a Pattern of Flouting the Authority of U.S. Courts ... . 8 12 III. ARGUMENT ... .. 10 13 A. The Court Should Issue a Preliminary Injunction to Prevent Further Transfer, and Any 14 Unlawful Use of the Marks ... . 10 1.1st Technology has a strong likelihood of showing that the assignments were in 15 violation of the Washington Fraudulent Transfer Act... . 11 2.1st Technology has a strong likelihood of showing that the Marks are being used in 16 conjunction with the offer of illegal services... ... 13 17 3.1st Technology will suffer irreparable harm if the injunctive relief is not granted. 14 4. Defendants will not suffer any prejudice as a result of complying with the 18 injunction. .. ... 15 5. A court may issue a preliminary injunction to preserve assets in cases of equity even 19 if a party may not yet have a legal claim to the assets. .. ... 16 20 B. The Court has Authority to Order the Register Corrected ... . 17 1. The Court is expressly authorized to correct the register ... . 17 21 2. The Marks may be liquidated pursuant to court order to satisfy the judgment. .... 17 C. The Court has Jurisdiction Over Defendants, or in the Alternative, Over the Marks . 19 22 1. The Court has general jurisdiction over BEGSA. .. .. 19 23 2. The Court has specific jurisdiction over remaining Defendants. .. ... 20 3. The Court has jurisdiction over the Marks... ... 21 24 D. The Bond Should be Set at Zero Given That Defendants Will Not Suffer Any Damages From Complying With the Injunction ... ... 22 25 E. Defendants (including BEGSA) Have Been Provided Adequate Notice of 26 1Tsetchnology’s Request for Injunctive Relief ... ... 23 27 IV. CONCLUSION ... .. 24 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -i 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S – BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 OF Fan Royal Sovereign 1994)............................................................................................ v. (E.D................................................................................... Motors Int’l, Dist. LEXIS (................................................................ Life v. of Beverly Hills ........................................................................................ ............................................................................................. v. ............................................................................................. ............................................................................... Hotels & Resorts, B.V. 320 F.3d 1205 (11th Cir. 2003)........................................................................................... ........................................................................................... 1974)........................................................................................................... A. 1999)........................................................................................................... ........................................................................................... Mem’l Football League ........................................................................................... Jabez Dist. Kan.) (Dec. 2007).............. 5907, 110059, *5 (S.D.Tex. Feb. 8, 1998) .................. Inc. v. Cup Int’l ............................................................................... Bailey Combined 204 (S.D.N..................................................................................... .................................................................................. and .............................................................................................. States Union ............................................................................................. ............................................................................................. 1 TABLE OF AUTHORITIES CASES 2 Beverly Hills Fan v. Royal Sovereign Corp. 3 21 F.3d 1558 (Fed. Cir. 1994)... .. 20 Coca Cola Co. v. Gemini Rising, Inc. 4 346 F. Supp. 1183 (E.D.N.Y. 1972) ... . 13 5 Cieslukowski v. Norton Motors Int’l, Inc. 2002 U.S. Dist. LEXIS 17229 (D. Minn. 2002) ... . 17 6 Conn. Gen. Life Ins. Co. v. New Images of Beverly Hills 321 F.3d 878 (9th Cir. 2003) ... . 14, 20 7 CSC Holdings, Inc. v. Redisi 8 309 F.3d 988 (7th Cir. 2002) ... 16 Easter v. Am. West Fin. 9 381 F.3d 948 (9th Cir. 2004) ... 17 E & J Gallo Winery v. Cantine Rallo 10 430 F. Supp. 2d 1064 (E.D. Ca. 2005) ... 20 11 Four Seasons Hotels & Resorts, B.V. v. Consorcio Barr, S.A. 320 F.3d 1205 (11th Cir. 2003)... 21 12 Gorbach v. Reno 219 F.3d 1087 (9th Cir. 2000) ... 20 13 Granny Goose Foods, Inc. v. Teamsters 14 415 U.S. 423 (1974) ... 21 Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc. 15 527 U.S. 308 (1999) ... 15 Hirsch v. Blue Cross, Blue Shield of Kansas City 16 800 F.2d 1474 (9th Cir. 1986) ... 18 17 Los Angeles Mem’l Coliseum Comm’n v. Nat’l Football League 634 F.2d 1197 (9th Cir. 1980) ... 10 18 Panda Invs., Inc. v. Jabez Enters., 2007 U.S. Dist. LEXIS 93542 (No. 07-CV-114-LRR; D. Kan.) (Dec. 20, 2007)... 17 19 Polo Ralph Lauren L.P. v. Schuman 20 1998 U.S. Dist. LEXIS 5907, 1998 WL 110059, *5 (S.D.Tex. Feb. 8, 1998) ... 13 Quokka Sports, Inc. v. Cup Int’l Ltd. 21 99 F. Supp. 2d 1105 (N.D. Cal. 1999) ... 19 Ringling Brothers-Barnum & Bailey Combined Shows, Inc. v. B.E. Windows Corp. 22 937 F. Supp. 204 (S.D.N.Y. 1996) ... 13 23 Rubin v. Pringle (In re Focus Media, Inc.) 387 F.3d 1077 (9th Cir. 2004) ... . 9,10, 15 24 Textile Unlimited, Inc. v. A. BMH and Co. 240 F.3d 781 (9th Cir. 2001). .. .. 9 25 United States v. Odessa Union Warehouse Co-op 26 833 F.2d 172 (9th Cir. 1987) ... ... 10 United States v. Oncology Assocs., P.C. 27 198 F.3d 489 (4th Cir. 1999) ... ... 16 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -ii 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S – iii BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 ............................................................................................. STATUTES 1119..................................................................................................................... 5361..................................................................................................................... STATUTES ......................................................................................................... .............................................................................................................. ........................................................................................................... ................................................................................................................... AUTHORITIES Stolte, Avoiding Hague Convention Headaches of Process on Foreign Nationals, 92 TRADEMARK 2002)..................................................................................................................................... R. CIV. P. ................................................................................................................ 1 Walczak v. EPL Prolong, Inc. 198 F.3d 725 (9th Cir. 1999) ... ... 20 2 FEDERAL 3 STATUTES 15 U.S.C. § 1119... ... 16 4 31 U.S.C. § 5361... ... 13 5 STATE 6 STATUTES RCW § 19.40.041(A)(1) ... ... 10 7 RCW § 19.40.041(B) ... .. 10 8 RCW § 4.28.185(1)(C) ... .. 17 RCW § 19.40.051 ... . 12 9 OTHER AUTHORITIES 10 Keith M. Stolte, Avoiding Hague Convention Headaches --An analysis of Lanham Act 11 Section 1(e) Service of Process on Foreign Nationals, 92 TRADEMARK REP. 1417, 1424-25 12 (2002)... 20 13 RULES 14 FED R. CIV. P. 65(c) ... 20 15 16 17 18 19 20 21 22 23 24 25 26 27 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -iii 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S – BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 INTRODUCTION infringement lawsuit. creditor 1st Technology LLC (“an injunction preventing Bodog Entertainment Group S.A. (“BEGSA”), and Telecom A. from: or otherwise disposing of the trademarks, “BODOG,” “OF “BODOG GIRLS,” and “PLAY HARD” (the “Marks”); and or allowing the use with of the State of Washington, pending resolution of a default judgment – infringement – in excess (including pre and District is still outstanding, despite was entered a year ago refused to set Two months after entry of the Nevada Judgment, 1st domesticated Judgment in Washington and obtained a writ of execution in King in Washington by to the King for Writ Execution, BEGSA registered a second set of domain names the “Bodog” diverted to the new domain names, of initial 1 I. INTRODUCTION 2 This is an action seeking to unwind fraudulent transfers and to direct proper 3 ownership of trademarks owned (and purportedly assigned) by the judgment debtor in a 4 patent infringement lawsuit. Judgment creditor 1st Technology LLC (“1st Technology”) 5 seeks an injunction preventing Bodog Entertainment Group S.A. (“BEGSA”), Bodog IP 67 Holdings Ltd (“Bodog IP”), and GK World Link Telecom S.A. (“GK World”) from: 8 (1) transferring, assigning, or otherwise disposing of the trademarks, “BODOG,” “BODOG 9 BATTLE OF THE BANDS,” “BODOG GIRLS,” and “PLAY HARD” (the “Marks”); and 10 (2) utilizing or allowing the use of the Marks in connection with offering illegal gambling 11 services to residents of the State of Washington, pending resolution of this lawsuit. 12 13 1st Technology obtained a default judgment -in a patent infringement suit in federal 14 court (in Nevada) against BEGSA, Bodog.net and Bodog.com (the “Nevada Bodog 15 Defendants”) -in excess of $50 million (including pre and post-judgment interest). The 16 Nevada District Court’s judgment (the “Nevada Judgment”) is still outstanding, despite the 17 fact that the judgment was entered over a year ago and the court refused to set aside the 18 19 judgment. Two months after entry of the Nevada Judgment, 1st Technology domesticated 20 the Nevada Judgment in Washington and obtained a writ of execution in King County 21 Superior Court over approximately 2000 domain names registered in Washington by BEGSA 22 or its affiliates. 23 In response to the King County Superior Court’s Order Granting 1st Technology’s 24 25 Request for a Writ of Execution, BEGSA registered a second set of domain names that 26 encompassed the “Bodog” name, and diverted traffic to the new domain names, thereby 27 reducing the value of the initial set of domain names. This frustrated 1st Technology’s 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -1 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S – BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 to collect on of names. a second writ of execution from the King this again, time registering a third set of domain names shore BEGSA also requested that Court set aside The Court refused to set aside citing shell games” engaged entry of the after 1st Technology initiated the BEGSA ownership of the Marks (for minimis value – a overlapping officers and which has the identical street address. then purported this transfer prior transfer from BEGSA to GK World and an injunction prohibiting the their use gambling services, fraudulent transfer claims. There is ample evidence that Defendants engaged assets, and tried to evade jurisdiction. Defendants authority States FACTUAL AND PROCEDURAL BACKGROUND PATENT INFRINGEMENT CLAIMS IN COURT IN NEVADA AND OBTAINS A JUDGMENT AGAINST BEGSA 7, 2006 1st Technology filed patent infringement lawsuit et Case 1 ability to collect on the judgment through levying on the first set of domain names. When 2 1st Technology requested a second writ of execution from the King County Superior Court, 3 BEGSA did this again, this time registering a third set of domain names through an off-shore 4 registrar. BEGSA also requested that the Nevada District Court set aside the Nevada 56 Judgment. The Nevada District Court refused to set aside the Nevada Judgment, citing to, 7 among other things, the corporate “shell games” engaged in by the Nevada Defendants. 8 After entry of the Nevada Judgment, after 1st Technology initiated its collection action in 9 Washington, and after the Nevada court refused to set aside the Nevada Judgment, BEGSA 10 purported to transfer ownership of the Marks (for de minimis value -ten dollars) to GK 11 12 World, a related entity with overlapping officers and which has the identical street address. 13 GK World then purported to transfer the Marks to Bodog IP; oddly, this transfer was 14 purportedly effected prior to the transfer from BEGSA to GK World, calling into doubt 15 which of GK World and Bodog IP actually claims legal title. 16 The Court should issue an injunction prohibiting further transfer of the Marks, and 17 18 prohibiting their use in connection with illegal gambling services, pending resolution of 1st 19 Technology’s fraudulent transfer claims. There is ample evidence that Defendants engaged 20 in a pattern or practice of shifting assets, and tried to evade jurisdiction. Defendants have 21 thumbed their nose at the authority of the United States courts. 22 II. FACTUAL AND PROCEDURAL BACKGROUND 23 A. 1ST TECHNOLOGY ASSERTS PATENT INFRINGEMENT CLAIMS IN FEDERAL 24 CINO NUERVTADA AND OBTAINS A JUDGMENT AGAINST BEGSA 25 On September 7, 2006 1st Technology filed a patent infringement lawsuit in federal 26 court (in Nevada) (denominated 1st Technology LLC v. Rational Enterprises LTD et al., Case 27 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -2 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S – BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 GWF (the Nevada Lawsuit”)) against the Nevada Although the Nevada Bodog Defendants were personally served with failed a default judgment in excess of $46 million. Ex. months entry of the Nevada Judgment, filed the judgment. District L. refused among other things, the court did not want “sort of See Decl., of Judge In urging Judge Hunt to set aside the “became ha[d] not operated (See 5.) Thus, according to the Nevada to exist approximately year prior of Motion TECHNOLOGY’S EFFORTS TO COLLECT ON THE NEVADA JUDGMENT of the Nevada Judgment, domesticated a writ from Bodog Defendants’ property in Washington. Specifically, 2000 internet domain names eNom”), a registrar of (the “Domain 1 No. 2:06-cv-1110-RLH-GWF (the “Nevada Lawsuit”)) against the Nevada Bodog 2 Defendants. Although the Nevada Bodog Defendants were personally served in Costa Rica 3 in accordance with Costa Rican law, the Nevada Bodog Defendants failed to appear. As a 4 result, the Nevada Court entered a default on February 26, 2007, and on June 13, 2007 56 entered a default judgment in excess of $46 million. (See Ex. A to the Declaration of Venkat 7 Balasubramani.) 8 On August 31, 2007, two months after entry of the Nevada Judgment, the Nevada 9 Bodog Defendants filed a motion to set aside the judgment. The Nevada District Court 10 Judge (Chief Judge Roger L. Hunt (Judge, D. Nev.)) refused to set aside the default judgment 11 12 because, among other things, the court did not want “to permit some sort of corporation shell 13 game” by the Nevada Bodog Defendants. (See Balasubramani Decl., Ex. B, line 7, page 25 14 (transcript of hearing in front of Judge Hunt).) In urging Judge Hunt to set aside the Nevada 15 Judgment, counsel for the Nevada Bodog Defendants averred that as of September 2006, 16 BEGSA “became an unregistered taxpayer” and “ha[d] not operated since then.” (See Id., 17 18 lines 19-20, page 5.) Thus, according to the Nevada Bodog Defendants’ counsel, BEGSA 19 ceased to exist approximately one year prior to the date of the Motion to Set Aside the 20 Default. 21 B. 1ST TECHNOLOGY’S EFFORTS TO COLLECT ON THE NEVADA 22 JUDGMENT Two months after entry of the Nevada Judgment, 1st Technology domesticated the 23 judgment in Washington and sought a writ of execution from the King County Superior 24 25 Court over the Nevada Bodog Defendants’ property in Washington. Specifically, BEGSA 26 had an ownership interest in approximately 2000 internet domain names registered through 27 eNom, Inc. (“eNom”), a registrar located in the State of Washington (the “eNom Domain 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -3 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S – BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 On August 21, 2007, the County Superior Court granted of execution and ordered BEGSA, from using in any way the eNom Domain Names. (See to the entry of the writ such as “newbodog.com,” with registrars DSTR Acquisition and Dotster”). (See Declaration BEGSA’s services through via “to websites accessible set of domain names (the “Dotster Domain Names”). (Id. Ex. These websites via eNom the “and utilized C; ¶ 3.) BEGSA initially argued that these second set of domain names jurisdiction its position untenable. Decl., in TO LEVY THE OF AND EFFORTS TO THWART 1ST TECHNOLOGY’S COLLECTIONS actions, sought writ set of domain names (i.e., the Dotster Domain Names). an order prohibiting BEGSA from “from the websites via or by BEGSA 1 Names”). On August 21, 2007, the King County Superior Court granted 1st Technology’s 2 motion for writ of execution and ordered eNom to transfer control of all the eNom Domain 3 Names to 1st Technology, and in addition, the court enjoined the Nevada Bodog Defendants, 4 including BEGSA, from using in any way the eNom Domain Names. (See Balasubramani 56 Decl., Ex. C.) 7 In response to the entry of the writ of execution, BEGSA registered additional domain 8 names, such as “newbodog.com,” with the Washington-based registrars DSTR Acquisition 9 PA I, LLC and DOTREGISTER, LLC (“Dotster”). (See Declaration of Scott Lewis, Ex. A.) 10 BEGSA diverted its customers (who would utilize BEGSA’s services through websites 11 12 accessible via the eNom Domain Names, such as “bodog.com”) to websites accessible 13 through the second set of domain names (the “Dotster Domain Names”). (Id. Ex. B; ¶¶ 3-14 5.) These websites appeared identical to the websites accessible via the eNom Domain 15 Names, incorporated the “Bodog” name, and featured and utilized identical Bodog branding. 16 (Lewis Decl., Ex. C; ¶ 3.) BEGSA initially argued that these second set of domain names 17 18 were beyond the jurisdiction of Washington courts, but later reversed its position when it 19 realized this contention was untenable. (Balasubramani Decl., Ex. D, p 1, line 28-p 2, line 1 20 (arguing that the Dotster Domain Names are not located in Washington).) 21 C. 1ST TECHNOLOGY’S EFFORTS TO LEVY AGAINST THE SECOND SET OF DOMAIN 22 NAMES, AND BEGSA’S EFFORTS TO THWART 1ST TECHNOLOGY’S COLLECTIONS EFFORTS 23 As a result of BEGSA’s actions, 1st Technology sought a second writ of execution 24 against the second set of domain names (i.e., the Dotster Domain Names). 1st Technology 25 26 also sought an order prohibiting BEGSA from “diverting” traffic from the websites 27 accessible via the Dotster Domain Names to other websites created or operated by BEGSA 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -4 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S – BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 had In the meantime, the Nevada Judgment, and sought a stay of 1st Technology’s collections While 1st Technology’s request for a second execution respect pending in registered names, including “bodoglife.com”. See Lewis These were registered (unlike first foreignregistrar. – or its affiliated entities – transitioned from the “newbodog” sites sites by posting notices newbodog” sites home will at ‘bodoglife.com’”. the to Set by the Nevada Judge Erlick proceed. BEGSA, however, requested to reconsider that domain names all of to be transferred to the sheriff for liquidation. BEGSA further argued that levying against the domain names (Id.) In February 2008, 1st Judge Erlick enforce the Nevada Washington property. See Decl., Ex. H.) REJECTS REQUEST TO RECONSIDER AND GRANTS 1ST TO APPOINT A RECEIVER Erlick request are subject to execution under Washington law. Judge Erlick of Graham & Dunn as a receiver over the domain names 1 or by third parties with which BEGSA had a relationship. In the meantime, BEGSA moved 2 to set aside the Nevada Judgment, and sought a stay of 1st Technology’s collections efforts 3 in Washington. While 1st Technology’s request for a second writ of execution (with respect 4 to the Dotster Domain Names) was pending in front of Judge Erlick, BEGSA registered a 56 third set of domain names, including “bodoglife.com”. (See Lewis Decl., Ex D; ¶ 6.) These 7 domain names were registered (unlike the first two sets of domain names) through a foreign-8 registrar. BEGSA -or its affiliated entities -transitioned traffic from the “newbodog” sites 9 to the “bodoglife” sites by posting notices on the “newbodog” sites to the effect that 10 “Bodog’s permanent home will be at ‘bodoglife.com’”. (Id.) 11 12 Following the denial of the Motion to Set Aside filed by the Nevada Bodog 13 Defendants, Judge Erlick allowed 1st Technology’s collections efforts to proceed. 14 (Balasubramani Decl., Ex. E.) BEGSA, however, requested Judge Erlick to reconsider his 15 prior ruling that domain names were subject to execution under Washington law, and further 16 requested all of the domain names to be transferred to the sheriff for liquidation. 17 18 (Balasubramani Decl., Ex. F.) BEGSA further argued that levying against the domain names 19 would violate BEGSA’s rights in the Marks. (Id.) In February 2008, 1st Technology 20 requested Judge Erlick to appoint a receiver to enforce the Nevada Judgment against the 21 Nevada Bodog Defendants’ Washington property. (See Balasubramani Decl., Ex. H.) 22 D. JUDGE ERLICK REJECTS BEGSA’S REQUEST TO RECONSIDER AND GRANTS 1ST 23 TECHNOLOGY’S REQUEST TO APPOINT A RECEIVER 24 Judge Erlick rejected BEGSA’s request to reconsider his prior orders, and found that 25 domain names are subject to execution under Washington law. Judge Erlick further 26 appointed Mark Northrup of Graham & Dunn as a receiver over the domain names (the 27 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -5 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S – BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Dotster Domain Decl. Ex. Erlick’s Motion to Reconsider and to Appoint Judge expressed court lacked subject matter jurisdiction the Marks. Decl., Ex. H don’t know . . . the degree which state to transfer PURPORT TO TRANSFER THE MARKS IN A FURTHER TO 1ST TECHNOLOGY’S COLLECTIONS EFFORTS Erlick “domain names without BODOG” trademark rights and on this basis writ (See, Decl., Ex. At the same extraordinary steps those what other assets Technology’s The following sections detail game its interest in Marks to to documents BEGSA’s trademark counsel with the Patent BEGSA purported to assign on December 28, 2007 (after the Nevada Judgment was See Decl., Ex. I.) for Marks the PTO on January 1 eNom Domain Names and the Dotster Domain Names). (See Balasubramani Decl. Ex. G 2 (Judge Erlick’s Orders Denying BEGSA’s Motion to Reconsider and Granting 1st 3 Technology’s Request to Appoint a Receiver).) Finally, Judge Erlick expressed his belief 4 that the Washington State court lacked subject matter jurisdiction or the authority to appoint 56 a receiver over the Marks. (See Balasubramani Decl., Ex. H (transcript of March 3, 2008 7 hearing lines 9-12, page 54 (“I don’t know . . . the degree to which state courts have 8 jurisdiction to transfer federal trademarks.”)).) 9 E. DEFENDANTS PURPORT TO TRANSFER THE MARKS IN A FURTHER EFFORT TO FRUSTRATE 1ST TECHNOLOGY’S COLLECTIONS EFFORTS 10 11 BEGSA argued before Judge Erlick that the “BODOG” domain names would be 12 worthless to the receiver without “BODOG” trademark rights and on this basis should not be 13 subject to a writ of execution. (See, e.g., Balasubramani Decl., Ex. F, pp. 9-10.) At the same 14 time, BEGSA took extraordinary steps to try to shift those rights out of the judgment debtor’s 15 estate. In the course of investigating what other assets BEGSA had in the State of 16 17 Washington, and what actions BEGSA may have taken to frustrate 1st Technology’s 18 collections efforts, 1st Technology discovered that BEGSA purported to transfer its interest 19 in the Marks to GK World. The following sections detail BEGSA’s game of “keep-away.” 20 1. BEGSA purports to assign its interest in the Marks to GK World. 21 According to documents filed by BEGSA’s trademark counsel with the Patent and 22 Trademark Office, (“PTO”) BEGSA purported to assign its interest in the Marks to GK 23 24 World on December 28, 2007 (after the Nevada Judgment was entered and after 1st 25 Technology initiated the Washington enforcement action). (See Balasubramani Decl., Ex. I.) 26 The assignment for the Marks (which was filed with the PTO on January 15, 2008 and which 27 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -6 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S – BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 office of IP Law Group (“as BEGSA’s and GK World’s Domestic Representative”) September assignment was executed by BEGSA and GK World. World paid a mere ten dollars ($10) for the assignment trademarks. The assignment as a “nunc pro tunc” assignment. of the Marks from BEGSA to GK and overlapped. (See Decl., Ex. J.) “GK World Link Telecom S.A. is a 100% owned subsidiary Group of Companies.” Lewis Decl., to assign four months purportedly assigned World purported to assign (See Balasubramani The assignment GK World to Bodog IP was filed with the USPTO on January day the assignment between BEGSA and GK World was filed purported effective of 2007. assignment a “This assignment also lists Seed as for both entities (GK (See K.) In addition, Bodog IP also paid ten (10) dollars for the assignment (Id.) While the effective date of the assignment is February 7, 2007, not executed until four of the Marks to GK Since a transferor cannot transfer does of events suggests that title, if not in BEGSA, remains in GK World. 1 listed the Seattle office of Seed IP Law Group (“Seed”) as BEGSA’s and GK World’s 2 “Domestic Representative”) contains a purported effective date of “September 29, 2006.” 3 This date is over one year before the assignment was executed by BEGSA and GK World. 4 In addition, GK World paid a mere ten dollars ($10) for the assignment of four trademarks. 56 Id. The assignment is characterized as a “nunc pro tunc” assignment. At the time of the 7 purported assignment of the Marks from BEGSA to GK World, the officers of BEGSA and 8 GK World overlapped. (See Balasubramani Decl., Ex. J.) Further, according to BEGSA’s 9 website “bodoglife.com,” “GK World Link Telecom S.A. is a 100% owned subsidiary of the 10 Bodog.com Entertainment Group of Companies.” (See Lewis Decl., Ex. E.) 11 12 2. GK World purports to assign its interest in the Marks to Bodog IP. 13 Approximately four months after BEGSA purportedly assigned the Marks to GK 14 World, GK World purported to assign the Marks to Bodog IP. (See Balasubramani Decl., 15 Ex. K.) The assignment from GK World to Bodog IP was filed with the USPTO on January 16 15, 2008 (the same day the assignment between BEGSA and GK World was filed with the 17 USPTO) and contains a purported effective date of February 7, 2007. This assignment is 18 19 also characterized as a “nunc pro tunc” assignment. This assignment also lists Seed as the 20 domestic representative for both entities (GK World and Bodog IP). (See Balasubramani 21 Decl., Exs. I & K.) In addition, Bodog IP also paid ten (10) dollars for the assignment of the 22 four Marks. (Id.) While the effective date of the assignment is February 7, 2007, the 23 assignment was not executed until December 24, 2007, four days before BEGSA executed its 24 25 assignment of the Marks to GK World. Since a transferor cannot transfer what it does not 26 have, this sequence of events suggests that title, if not in BEGSA, remains in GK World. 27 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -7 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S – BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 TECHNOLOGY FILES THE INSTANT FRAUDULENT TRANSFER LAWSUIT the instant action to set aside because between BEGSA and GK as as between GK and after 1st Technology initiated the action in King In addition, the Defendants were necessarily aware of the Nevada Judgment efforts to collect on that judgment at the time the assignments were executed. counsel, was no longer a concern was executed between BEGSA and GK World. a BEGSA’s intent in the Marks to GK World of HAS ENGAGED IN A PATTERN OF FLOUTING THE AUTHORITY OF 1st writ BEGSA’s registered a second set domain names that encompassed name. In addition, BEGSA diverted web traffic from the first set of domain names set of domain names. (See Lewis Decl., Exs. A-D; did this yet again, when 1st Technology sought to levy against the second BEGSA’s registration of the second and third set of domain names its pattern of taking actions which 1st Technology’s In addition, BEGSA has demonstrated a pattern and process States 1 F. 1ST TECHNOLOGY FILES THE INSTANT FRAUDULENT TRANSFER LAWSUIT 2 1st Technology initiated the instant action to set aside the assignment of the Marks as 3 a fraudulent transfer of property because the assignment between BEGSA and GK World as 4 well as the assignment between GK World and Bodog IP was executed after the entry of the 5 Nevada Judgment and after 1st Technology initiated the action in King County Superior 67 Court. In addition, the Defendants were necessarily aware of the Nevada Judgment and 1st 8 Technology’s efforts to collect on that judgment at the time the assignments were executed. 9 Last, according to BEGSA’s counsel, BEGSA was no longer a going concern at the time the 10 assignment was executed between BEGSA and GK World. As a result, given the facts 11 surrounding the assignment, BEGSA’s intent in assigning the Marks to GK World could 12 13 only have been for the purpose of defrauding 1st Technology and frustrating 1st 14 Technology’s collections efforts. 15 G. BEGSA HAS ENGAGED IN A PATTERN OF FLOUTING THE AUTHORITY OF US COURTS 16 17 After 1st Technology obtained a writ of execution against BEGSA’s first set of 18 domain names, BEGSA registered a second set of domain names that encompassed the 19 “Bodog” name. In addition, BEGSA diverted web traffic from the first set of domain names 20 to the newly registered second set of domain names. (See Lewis Decl., Exs. A-D; ¶¶ 3-6.) 21 BEGSA did this yet again, when 1st Technology sought to levy against the second set of 22 23 domain names. (Id.) BEGSA’s registration of the second and third set of domain names 24 demonstrates its pattern of taking actions which frustrate 1st Technology’s legitimate 25 collections efforts. In addition, BEGSA has demonstrated a pattern of disregarding the 26 jurisdiction and process of United States Courts. 27 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -8 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S – BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 the BEGSA and the other BEGSA and the other Nevada to Compel seeking to compel responses (Judge the granted finding that the Nevada had refused to provide substantive responses to discovery requests.” (See Decl., Ex. L Technology’s Motion Judge 1st Technology’s request for attorney’s fees. (Id.) has documents. Rather, counsel for BEGSA sought to withdraw, controlling person (as-yet unnamed counsel the to not respond requests or provide any documents to 1st Technology. (Balasubramani Decl. Ex. M.)1 of this is not surprising, given the Calvin Ayre, the founder Bodog” entities. In a post on his personal Ayre, stated advice anyone a to just say have the Nevada (See added).) A look Mr. reveal that he has but contempt for the United States Courts, and believes in have been with inconsistencies. Although, the Nevada Bodog that BEGSA of 2006), it – – to have an interest the Marks. On the other hand, BEGSA’s purported trademark assignment is inconsistent its assertion infringement claims based g., Lewis G) (cease and desist (in January 2007) copied to eNom demanding bodogs.1 1st Technology sought limited discovery from the BEGSA and the other Nevada 2 Bodog Defendants in the Nevada action. BEGSA and the other Nevada Bodog Defendants 3 failed to respond to 1st Technology’s proper discovery requests. 1st Technology brought a 4 Motion to Compel seeking to compel responses to these requests. The Magistrate Judge (D. 56 Nev.) who is presiding over discovery (Judge Foley) in the Nevada Lawsuit granted 1st 7 Technology’s Motion, finding that the Nevada Defendants (including BEGSA) had refused 8 “to provide substantive responses to [1st Technology’s] discovery requests.” (See 9 Balasubramani Decl., Ex. L (Order Granting 1st Technology’s Motion to Compel).) Judge 10 Foley also granted 1st Technology’s request for attorney’s fees. (Id.) BEGSA has yet to 11 12 provide the requested documents. Rather, counsel for BEGSA sought to withdraw, alleging 13 that BEGSA’s controlling person (as-yet unnamed despite Judge Foley’s direct request for 14 BEGSA’s counsel to provide the name) instructed counsel for BEGSA to not respond to the 15 requests or provide any documents to 1st Technology. (Balasubramani Decl. Ex. 16 M.)1 All of this is not surprising, given the views of Calvin Ayre, the founder and 17 18 brainchild of the “Bodog” entities. In a post on his personal blog, Mr. Ayre, stated that his 19 “advice to anyone getting [a subpoena from 1st Technology] is to just say you have never 20 worked for [the Nevada Bodog Defendants]…and then just throw the [subpoena] in the 21 garbage.” (See Lewis Decl. Ex. F. (emphasis added).) A cursory look at Mr. Ayre’s blog 22 will reveal that he has nothing but contempt for the United States Courts, and believes that he 23 24 25 1 BEGSA’s allegations in this litigation have been rife with inconsistencies. Although, the Nevada Bodog Defendants’ counsel stated that BEGSA is no longer a going concern (as of September 2006), it continued -at least 26 -to have an interest in the Marks. On the other hand, BEGSA’s purported trademark assignment is inconsistent with its assertion of infringement claims based on the Marks. (See, e.g., Lewis Decl., Exhibit G) (cease and desist 27 letter from BEGSA (in January 2007) copied to eNom demanding transfer of the “bodogs.net” name).) 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -9 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S 08-– BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 beyond the reach of United law. 2 ARGUMENT COURT SHOULD ISSUE A INJUNCTION TO PREVENT FURTHER AND ANY UNLAWFUL USE OF THE MARKS of preliminary “is to preserve the status injury adjudication.” BMH and Co., (9th Cir. determining whether preliminary balances likelihood of success against the hardship Rubin v. Pringle (In re Focus Media, Inc.), 387 F.3d In particular, preliminary injunction relief is warranted where shows: “(1) a strong of success (possibility injury plaintiff[] if injunctive relief is not granted; (3) a balance favoring the plaintiff[]; and of the public interest.” Coliseum Comm’n v. Nat’l Football League, 634 F.2d 1197, is “required to show either a likelihood of success on the merits and of irreparable injury, or that serious questions going to the merits were raised of hardships tips sharply in [plaintiff’s] favor.” The two alternatives represent United States v. Odessa Warehouse Coop, 1st Technology presents the evidence that it has obtained on its own (either through its own investigations or issued to third parties). is than sufficient preliminary stage, flexibility to consider hearsay See, Indeed, given BEGSA’s failure to respond to 1st Technology’s discovery requests, raised 1 and his companies are beyond the reach of United States law. (Id.)2 2 III. ARGUMENT 3 A. THE COURT SHOULD ISSUE A PRELIMINARY INJUNCTION TO PREVENT FURTHER TRANSFER, AND ANY UNLAWFUL USE OF THE 4 MARKS The purpose of a preliminary injunction “is to preserve the status quo and avoid 56 irreparable injury before adjudication.” Textile Unlimited, Inc. v. A. BMH and Co., 240 7 F.3d 781, 786 (9th Cir. 2001). In determining whether to issue a preliminary injunction, a 8 court “balances the plaintiff’s likelihood of success against the relative hardship to the 9 parties.” Rubin v. Pringle (In re Focus Media, Inc.), 387 F.3d 1077, 1085 (9th Cir. 2004) 10 (internal citations omitted). In particular, preliminary injunction relief is warranted where a 11 12 plaintiff shows: “(1) a strong likelihood of success on the merits; (2) the possibility of 13 irreparable injury to the plaintiff[] if injunctive relief is not granted; (3) a balance of 14 hardships favoring the plaintiff[]; and (4) advancement of the public interest.” Los Angeles 15 Mem’l Coliseum Comm’n v. Nat’l Football League, 634 F.2d 1197, 1200 (9th Cir. 1980). 16 Thus, plaintiff is “required to show either a likelihood of success on the merits and the 17 18 possibility of irreparable injury, or that serious questions going to the merits were raised and 19 the balance of hardships tips sharply in [plaintiff’s] favor.” Id. The two alternatives 20 “represent two points on a sliding scale . . . “ United States v. Odessa Union Warehouse Co-21 op, 833 F.2d 172, 174 (9th Cir. 1987). 22 //23 24 25 2 1st Technology presents the evidence that it has obtained on its own (either through its own investigations or through subpoenas issued to third parties). This evidence is more than sufficient at the preliminary injunction stage, 26 where the Court has flexibility to consider hearsay evidence. See, e.g., Republic of Philippines v. Marcos, 862 F.2d 1355, 1363 (9th Cir. 1988). Indeed, given BEGSA’s failure to respond to 1st Technology’s discovery requests, the 27 Court should disregard any evidentiary objections raised by Defendants. 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -10 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S 08-– BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 of showing that the assignments of the of in its were with the intent to hinder or defraud BEGSA’s (and further assignment to Bodog IP), 1st Technology has a chance was a fraudulent transfer of See A transfer is deemed WFTA”) if the transfer was made creditor claim arose was made.” RCW § 19.40.041(a)(1). other things, the following the was (2) “[b]efore the transfer was made or obligation was incurred, the debtor had been or threatened with suit;” insolvent was made or the obligation incurred.” of the Marks by BEGSA was BEGSA’s to hinder, delay, or defraud 1st Technology’s collection from BEGSA to GK World to an insider: BEGSA had overlapping the officers and shared the same address. Decl., Indeed, Bodog’s own websites state subsidiary of BEGSA. had before the transfer was made: executed, BEGSA been sued by 1st Technology in the federal court 1 1. 1st Technology has a strong likelihood of showing that the assignments were in violation of the Washington Fraudulent Transfer Act. 2 a. 1st Technology has a substantial chance of success in its claim that the 3 assignments were made with the intent to hinder or defraud 1st Technology 4 Given the undisputed facts regarding BEGSA’s purported assignment of the Marks to 5 GK World (and further assignment to Bodog IP), 1st Technology has a substantial “chance 67 of success” of showing that the assignment was a fraudulent transfer of property. See Rubin, 8 387 F.3d at 1086. A transfer is deemed fraudulent under the Washington Fraudulent 9 Transfer Act (“WFTA”) if the transfer was made by the debtor with the “intent to hinder, 10 delay, or defraud any creditor of the debtor” whether the “creditor’s claim arose before or 11 after the transfer was made.” RCW § 19.40.041(a)(1). In determining intent, the Court may 12 13 consider, among other things, the following factors: (1) “the transfer or obligation was to an 14 insider;” (2) “[b]efore the transfer was made or obligation was incurred, the debtor had been 15 sued or threatened with suit;” and (3) “the debtor was insolvent or became insolvent shortly 16 after the transfer was made or the obligation incurred.” RCW § 19.40.041(b). 17 Here, the assignment of the Marks by BEGSA to GK World was a fraudulent transfer 18 19 because BEGSA’s intent was to hinder, delay, or defraud 1st Technology’s collection efforts. 20 1. The assignment from BEGSA to GK World was to an insider: At the time of 21 the assignment, BEGSA and GK World had overlapping the officers and shared the same 22 street address. (Balasubramani Decl., Ex. J.) Indeed, Bodog’s own websites proudly state 23 that GK World is a 100% subsidiary of BEGSA. (Lewis Decl., Ex. E.) 24 25 2. BEGSA had been sued before the transfer was made: At the time the 26 assignment was executed, BEGSA had been sued by 1st Technology in the federal court (in 27 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -11 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S 08-– BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Technology In fact, the assignment the between World was executed was entered and four months after King its first (Compare Decl., Ex K.) insolvent insolvent shortly after the transfer: the assignment was executed BEGSA was insolvent. the assignment on December 28, 2007; over one year after BEGSA – A. shut unregistered as an active tax payer in result of operations since September 2006 when Bodog Entertainment S.ceased did not have to satisfy a $46 Million security. Jorge Chaves – the Further, the assignment BEGSA of Marks was executed between GK World IP. to GK in of the transfer under the WFTA determines did not have efforts, the assignment as a fraudulent transfer under the WFTA. A transfer made by a also fraudulent to creditor made if: 1 Nevada) and 1st Technology had already initiated the Washington State Court action against 2 BEGSA. In fact, the assignment of the Marks between BEGSA and GK World was executed 3 six months after the Nevada Judgment was entered and four months after the King County 4 Superior Court entered its first writ of execution. (Compare Balasubramani Decl., Ex A with 56 Exs. I & K.) 7 3. The debtor was insolvent or became insolvent shortly after the transfer: On 8 the date the assignment was executed BEGSA was insolvent. Specifically, the assignment 9 was executed on December 28, 2007; over one year after BEGSA was no longer a going 10 concern. Indeed, BEGSA sought to argue -in the words of BEGSA’s own external 11 12 accountant: 13 Bodog Entertainment Group, S.A. effectively shut down operations in September 2006 and has been unregistered as an active tax payer in Costa Rica 14 as a result of discontinuation of operations since September 2006 . . . . As of 15 September 2006 when Bodog Entertainment Group, S.A. effectively ceased operating, it did not have assets to satisfy a $46 Million judgment or $9.3 16 Million security. 17 (Balasubramani Decl., Ex. N (declaration of Mario Jorge Chaves Salas -filed in the Nevada 18 Lawsuit).) Further, the assignment of the Marks between BEGSA and GK World was 19 executed four days after the assignment of the same Marks was executed between GK World 20 21 and Bodog IP. Thus, it is not certain BEGSA had anything to assign to GK World. 22 b. 1st Technology has a substantial chance of success in satisfying the alternate basis of setting aside the transfer under the WFTA 23 Even if the Court ultimately determines that BEGSA did not have the requisite intent 24 to hinder, delay or defraud 1st Technology’s collection efforts, the assignment can be still be 25 26 set aside as a fraudulent transfer under the WFTA. A transfer made by a debtor may also be 27 deemed fraudulent as to a creditor whose claim arose before the transfer was made if: (1) the 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -12 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S 08-– BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 transfer without a debtor was insolvent at the time of the transfer. assignment World was executed on and four months after the King its first writ did not receive value in exchange for the assignment. Specifically, paid a mere the assignment. This is not a reasonable of this amount. Lewis BODOG appear every day on television. And bodoglife.com still by BEGSA the assignment of the Marks with GK World. (See Decl. Ex. between BEGSA and GK judgment BEGSA, did not receive a reasonable on the date the assignment of World should be characterized as Thus, 1st has fair chance success” has a strong likelihood in services. an injunction prohibiting of the Marks in connection with illegal Courts have found that of a mark with or activities constitutes dilution by tarnishment. Ringling Corp., (D.N.1 debtor made the transfer without receiving a reasonable equivalent value in exchange for the 2 transfer and (2) the debtor was insolvent at the time of the transfer. RCW § 19.40.051. 3 BEGSA’s assignment of the Marks to GK World was executed on December 28, 4 2007, six months after the Nevada Judgment was entered and four months after the King 56 County Superior Court entered its first writ of execution. BEGSA did not receive a 7 reasonable value in exchange for the assignment. Specifically, GK World paid a mere ten 8 (10) dollars for the assignment. This is not a reasonable exchange given the fact that by any 9 valuation, the Marks are valued in excess of this amount. (See Lewis Decl., ¶ 12.) For 10 instance, BODOG advertisements appear every day on television. And bodoglife.com still 11 12 operates. (Id.) Last, as argued by BEGSA itself, BEGSA was insolvent at the time it 13 executed the assignment of the Marks with GK World. (See Balasubramani Decl. Ex. N.) 14 Since the assignment between BEGSA and GK World was executed after 1st Technology 15 had obtained a judgment against BEGSA, BEGSA did not receive a reasonable exchange for 16 the assignment and BEGSA was insolvent on the date the assignment was executed, the 17 18 assignment of the Marks between BEGSA and GK World should be characterized as a 19 fraudulent conveyance. Thus, 1st Technology has a “fair chance of success” on the merits. 20 2. 1st Technology has a strong likelihood of showing that the Marks are being used in conjunction with the offer of illegal services. 21 In addition to seeking an injunction preventing further transfer of the Marks, 1st 22 23 Technology seeks an injunction prohibiting use of the Marks in connection with illegal 24 activity. Courts have found that the association of a mark with illegal or questionably illegal 25 enterprises or activities constitutes dilution by tarnishment. Ringling Brothers-Barnum & 26 Bailey Combined Shows, Inc. v. B.E. Windows Corp., 937 F. Supp. 204, 209 (S.D.N.Y. 27 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -13 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S 08-– BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 by connection of the mark with shoddy or association with obscenity, unwholesome wares, or sexual or illegal activity.” 1998 U.S. Dist. LEXIS WL 346 F. Supp. is illegal under United States federal) law, as as 31 U.S.C. §5361 prohibits the acceptance credit cards 31 U.S.C. §5361. Similarly, an internet gambling ban, making it a felony The changes expressly address for internet See There is no dispute the Marks – e., com where end gamble with – are The current use of the Marks extends goods and will the value of the Marks. (See Lewis Decl., ¶11.) An use the Marks is warranted in order to preserve the 1st suffer irreparable harm if the injunctive relief is not past party’s basis that the moving party will injury 321 F.3d 1 1996). Tarnishment can be established by connection of the mark with “shoddy good and 2 services, or an association with obscenity, unwholesome wares, or sexual or illegal activity.” 3 Polo Ralph Lauren L.P. v. Schuman, 1998 U.S. Dist. LEXIS 5907, 1998 WL 110059, *5 4 (S.D.Tex. Feb. 8, 1998); Coca Cola Co. v. Gemini Rising, Inc., 346 F. Supp. 1183, 1189 56 (E.D.N.Y. 1972). 7 Online gambling is illegal under United States (federal) law, as well as under 8 Washington law. 31 U.S.C. §5361 prohibits the acceptance of any financial instrument 9 (including credit cards or electronic funds transfers). See 31 U.S.C. §5361. Similarly, 10 Washington recently enacted an internet gambling ban, making it a felony to facilitate 11 12 internet gambling. The changes expressly address gambling on the internet, operating an 13 internet gambling site, installing or maintaining equipment for transmitting or receiving 14 gambling information, or facilitating internet gambling in any way. See generally RCW 15 9.46.240. There is no dispute that the services marketed under the Marks -i.e., internet sites 16 like bodoglife.com where end users can gamble with money -are available in the State of 17 18 Washington to its residents. The current use of the Marks extends to illegal goods and 19 services and will reduce the value of the Marks. (See Lewis Decl., ¶11.) An injunction 20 preventing further illegal use of the Marks is warranted in order to preserve the value in the 21 Marks (for the benefit of 1st Technology, as judgment creditor). 22 3. 1st Technology will suffer irreparable harm if the injunctive relief is not 23 granted. 24 A party’s past behavior as well as the party’s prior contempt is sufficient basis for a 25 court to determine that the moving party will suffer irreparable injury if an injunction is not 26 granted. Conn. Gen. Life Ins. Co.. v. New Images of Beverly Hills, 321 F.3d 878, 881 (9th 27 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -14 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S 08-– BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 irreparable harm history to disclose asset information in defiance of a court order). and executing was entered and BEGSA’s failure to in the Nevada action that BEGSA or the other transfer Indeed, actions demonstrate shift to engage in corporate “shell games”. Technology will be further stymied by the requests.) will not suffer any prejudice as a result of complying with the potentially For example, courts reject attempts to resist on the party will Triad Sys. Corp v. Southeastern 1338 (9th Cir. (“cannot complaint of the harm that will to desist from its infringing activities”). Similarly, in this case, will with offering and in the State of Washington. 1 Cir. 2003) (irreparable harm was found where defendant had a history of fraudulent transfers 2 and refused to disclose asset information in defiance of a court order). Given the fact 3 BEGSA’s and the other Defendants’ misconduct in executing the assignment of the Marks 4 after the Nevada Judgment was entered and BEGSA’s failure to provide any substantive 56 response to discovery requests about its assets in the Nevada action (despite a court order 7 compelling it to do so), it is highly likely that BEGSA or the other Defendants will transfer 8 the Marks to another offshore entity. Indeed, BEGSA’s actions demonstrate an intent to 9 successively shift its operations off-shore and to engage in corporate “shell games”. As 10 judgment debtor, 1st Technology will suffer irreparable harm if the Marks are further 11 12 transferred. (1st Technology’s collections efforts will be further stymied by the fact that the 13 defendants in the Nevada Lawsuit have refused to provide any discovery requests.) 14 4. Defendants will not suffer any prejudice as a result of complying with the injunction. 15 In considering irreparable harm, courts only consider damages potentially arising 16 17 from actions which the enjoined party is entitled to take. For example, courts reject attempts 18 by a party resisting injunctive relief to resist on the basis that the party will be harmed from 19 being enjoined from engaging in infringements. Triad Sys. Corp v. Southeastern Exp. Co., 20 64 F.3d 1330, 1338 (9th Cir. 1995) (defendant “cannot complaint of the harm that will befall 21 it when properly forced to desist from its infringing activities”). Similarly, in this case, 22 23 BEGSA and the other Defendants will not suffer any hardships if the Court enjoins them 24 from transferring or otherwise disposing of the Marks pending resolution of this lawsuit or 25 from using the Marks in connection with the offering of illegal online gambling in the United 26 States and in the State of Washington. Indeed, Defendants cannot argue that they intend to 27 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -15 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S 08-– BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 – without admitting to the Court that they are engaged to frustrate 1st Technology’s collections efforts. Defendants cannot they will the States State of Washington. cannot possibly articulate any prejudice face as the court may issue a preliminary injunction to preserve assets in cases of to the assets. Bond, the Court held that “may not issue to which a party did a legal claim.” Bond Fund, 527 S. However, the excepted this rule cases involving and cases in which equitable relief is sought. Grupo Mexicano, 527 U.S. at 324-25); United States Oncology Assocs., (of a preliminary injunction where equitable relief was sought); CSC Holdings, of a preliminary In particular, the “nexus between the assets injunction] and the ultimate relief requested in the lawsuit is essential equity to enter freezing assets.” to the assignment between BEGSA and GK World between GK and IP set 1 further transfer the Marks -without admitting to the Court that they are engaged in further 2 transfers to frustrate 1st Technology’s collections efforts. Similarly, Defendants cannot 3 argue that they will be irreparably harmed by being prevented from using the Marks in 4 connection with online gambling in the United States and in the State of Washington. As 56 such, Defendants cannot possibly articulate any prejudice that they will face as a result of 7 complying with the sought after injunction. 8 5. A court may issue a preliminary injunction to preserve assets in cases of equity even if a party may not yet have a legal claim to the assets. 9 In Grupo Mexicano v. Alliance Bond, the Supreme Court held that “preliminary 10 11 injunctions may not issue to preserve assets to which a party did not yet have a legal claim.” 12 Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308, 318-33 13 (1999). However, the Court explicitly excepted from this rule cases involving fraudulent 14 conveyances and cases in which equitable relief is sought. Rubin, 387 F.3d at 1085-85 15 (citing Grupo Mexicano, 527 U.S. at 324-25); United States v. Oncology Assocs., P.C., 198 16 17 F.3d 489, 496 (4th Cir. 1999) (upholding the issuance of a preliminary injunction freezing 18 assets where equitable relief was sought); CSC Holdings, Inc. v. Redisi, 309 F.3d 988, 996 19 (7th Cir. 2002) (upholding the issuance of a preliminary injunction where equitable relief 20 was sought). In particular, the “nexus between the assets sought to be frozen through [a 21 preliminary injunction] and the ultimate relief requested in the lawsuit is essential to the 22 23 authority of a district court in equity to enter a preliminary injunction freezing assets.” 24 Oncology Assocs., 198 F.3d at 496-97. 25 Here, 1st Technology seeks to have the assignment between BEGSA and GK World 26 as well as the assignment between GK World and Bodog IP set aside as fraudulent 27 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -16 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S 08-– BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 sought by 1st Technology is, among against disposition by the Defendants As a result, in the instant case, prohibiting Defendants further transferring because legal claim HAS AUTHORITY TO ORDER THE REGISTER CORRECTED TO RECTIFY A FRAUDULENT TRANSFER will likely raise the issue whether the respect to satisfy the Nevada these lack expressly to respect provides that “court” the register respect of any party to the action”. 1119. court – – it had authority to order the director of the Patent has shown that the transfer of Alpha’s intellectual as transfer. See a registered part, restore of action.”). Trademark Office of Patent and Trademark Office” re-store the marks on Court Exhibit Invs., Inc. v. Jabez Enters., 2007 U.S. Dist. LEXIS 93542 (No. 07-CV-114-LRR) 1 conveyances. In addition, the ultimate relief sought by 1st Technology is, among others 2 things, an injunction “against further disposition by the Defendants or any one of them of the 3 Marks transferred.” As a result, in the instant case, the Court is not precluded from issuing a 4 preliminary injunction prohibiting Defendants from further transferring pending resolution of 56 the lawsuit simply because 1st Technology may not yet have a legal claim to the Marks. 7 B. THE COURT HAS AUTHORITY TO ORDER THE REGISTER CORRECTED TO FRREACUTIDFUYL AENT 8 TRANSFER Defendants will likely raise the issue of whether the Court has the authority to order 9 the Director of the Patent and Trademark Office to correct the register with respect to the 10 11 Marks or whether the Marks may be properly liquidated to satisfy the Nevada Judgment. 12 Both of these arguments lack any support in the law. 13 1. The Court is expressly authorized to correct the register with respect to the 14 Marks. 15 15 U.S.C. § 1119 provides that “the court” may “rectify the register with respect to 16 the registrations of any party to the action”. 15 U.S.C. § 1119. One federal court -in nearly 17 identical factual circumstances -found it had authority to order the director of the Patent and 18 Trademark Office to correct the register in order to rectify a fraudulent transfer: 19 Panda has shown that the transfer of Alpha’s intellectual property was 20 fraudulent as to Panda, a secured party. Therefore, Panda has shown its 21 entitlement to avoidance and rescission of the fraudulent transfer. See 15 U.S.C. § 1119 (“In any action involving a registered mark the court may 22 determine the right to registration, order the cancellation of registrations, in whole or in part, restore canceled registrations, and otherwise rectify the 23 register with respect to the registrations of any party to the action.”). . . . The 24 court shall order that the Director of the Patent and Trademark Office “make appropriate entry upon the records of the Patent and Trademark Office” to 25 reflect the rescission and re-store the marks on Court Exhibit 1 to Alpha. 15 U.S.C. § 1119. 26 27 Panda Invs., Inc. v. Jabez Enters., 2007 U.S. Dist. LEXIS 93542 (No. 07-CV-114-LRR) (D. 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -17 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S 08-– BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 liquidated satisfy may additionally argue that the Marks cannot be against BEGSA in This argument has expressed skepticism that trademarks may be subject to forded (judicial) g., Marshak v. 746 F.2d 927, 223 U.P.Q. 1099 (2d Cir. effecting a forced sale on the theory that the public would by different cases more realistic and Adams Apple Distributing Co. v. Papeleras Reunidas, Indeed, Adams Apple states the] assertion that a to an involuntary judicial sale is incorrect.” Id. to – – That in one federal court lawsuit – involving similar facts – where the court imposed a lien on the marks and admonished an are to secure his judgment. The Court is deeply concerned their through the creation of are attempting to commit by seeking to protect their assets his rightful judgment. Defendants may continue to advocate the appeals but they and may not evade Counsel assist in the Court’s warned that they will by Inc., 2002 1 Kan., Dec. 20, 2007). 2 2. The Marks may be liquidated pursuant to court order to satisfy the judgment. 3 BEGSA may additionally argue that the Marks cannot be used to satisfy the judgment 4 issued against BEGSA in favor of 1st Technology. This argument has no support in the law. 5 Early cases expressed skepticism that trademarks may be subject to forded (judicial) 67 sales. See, e.g., Marshak v. Green, 746 F.2d 927, 223 U.S.P.Q. 1099 (2d Cir. 1984) 8 (precluding judgment creditor from effecting a forced sale of the judgment debtor’s 9 trademark rights based on the theory that the public would be deceived by a different musical 10 group using the same name). Later cases take a more realistic view and have squarely 11 rejected this notion. Adams Apple Distributing Co. v. Papeleras Reunidas, S.A., 773 F.2d 12 13 925, 931 (7th Cir. 1985). Indeed, Adams Apple states that “[the] assertion that a trademark 14 is not subject to an involuntary judicial sale is incorrect.” Id. Any other view would allow a 15 judgment debtor to attempt to -as BEGSA did here -transfer its marks in order to frustrate 16 judgment creditors. That was precisely the case in one federal court lawsuit -involving 17 strikingly similar facts -where the court imposed a lien on the marks and admonished 18 19 counsel: 20 Based on the facts of this case and the discussion above, the Court concludes that imposition of an equitable lien, combined with an injunction, are required 21 for plaintiff to secure his judgment. The Court is deeply concerned that 22 defendants and their associates, through the creation of new entities, use of default judgments, and other transactions, are attempting to commit fraud upon 23 this Court and upon the plaintiff by seeking to protect their assets while denying plaintiff his rightful judgment. Defendants may continue to advocate 24 their positions through the appeals process, but they may not ignore this 25 Court’s judgment, and they certainly may not evade it. Counsel who assist defendants in evading the Court’s judgment are warned that they will face 26 sanctions imposed by this Court. 27 Cieslukowski v. Norton Motors Int’l, Inc., 2002 U.S. Dist. LEXIS 17229 (D. Minn. 2002). 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -18 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S 08-– BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 make clear that: (1) the Court respect is no legal bar to liquidating COURT HAS JURISDICTION DEFENDANTS, OR IN THE THE MARKS has of personal jurisdiction Judge (both that BEGSA raise objection here. BEGSA’s anticipated jurisdictional jurisdiction BEGSA acts within this judicial the in the Court has over the actions which they took underlying Technology’s to be taken within this judicial forth various bases for jurisdiction RCW 1)(Washington’s long-arm statute “reaches extent of the due clause of the United States Constitution.” jurisdiction has over a with are “substantial” or “systematic and continuous.” Id. determining is subject to general jurisdiction, court “all Hirsch v. Blue Cross, Kansas 1 The cases make clear that: (1) the Court is authorized to order the register corrected 2 with respect to the Marks and (2) there is no legal bar to liquidating the Marks in order to 3 satisfy the Nevada Judgment. 4 C. THE COURT HAS JURISDICTION OVER DEFENDANTS, OR IN THE ALTERNATIVE, 5 OVER THE MARKS 6 BEGSA has raised the issue of personal jurisdiction both in the Nevada Lawsuit and 7 in front of Judge Erlick (both courts rejected BEGSA’s arguments). 1st Technology 8 anticipates that BEGSA will raise the same objection here. Accordingly, 1st Technology 9 addresses BEGSA’s anticipated jurisdictional arguments. As set forth below, the Court 10 11 clearly has personal jurisdiction over BEGSA who took numerous acts within this judicial 12 district, including the transactions in question. Similarly, the Court has jurisdiction over the 13 remaining Defendants because the actions which they took underlying 1st Technology’s 14 claims were deemed to be taken within this judicial district. 15 Washington’s long arm statute sets forth various bases for jurisdiction over foreign 16 17 defendants. See RCW § 4.28.185(1)(c) (2008). Washington’s long-arm statute “reaches the 18 full extent of the due process clause of the United States Constitution.” Easter v. Am. West 19 Fin., 381 F.3d 948, 960 (9th Cir. 2004). 20 1. The Court has general jurisdiction over BEGSA. 21 A court has general jurisdiction over a defendant where the defendant’s contacts with 22 the forum state are “substantial” or “systematic and continuous.” Id. In determining whether 23 24 a defendant is subject to general jurisdiction, a court “considers all the activities that impact 25 the state.” Hirsch v. Blue Cross, Blue Shield of Kansas City, 800 F.2d 1474, 1478 (9th Cir. 26 1986). 27 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -19 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S 08-– BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 which took place Washington were  Registering approximately 2000 domain names through a Washington-based  Registering domain names through Washington-based LLC and DOTREGISTER, LLC (Balasubramani  Engaged in extensive promotion and business signing a Seattle-based Bodog Battle of the in Seattle (Lewis Decl., Ex. H;  Engaging Seed IP to prosecute the Marks, paying fees IP, all offices IP (Balasubramani Decl., Ex.  Making available various “Bodog”-branded online gambling sites to residents of (dispute that the foregoing not a sufficient nexus. jurisdiction Defendants. intertwined (see, Decl., Ex. in the State In the alternative, the remaining Defendants are here. is appropriate where the cause took in the forum employs a threepart specific First, the foreign defendant must have taken steps 1 BEGSA’s activities which took place in Washington or which were aimed at or which 2 affected the State of Washington are numerous, and include: 3 ? Registering approximately 2000 domain names through a Washington-based 4 registrar (eNom), corresponding with eNom, and paying money to eNom (Lewis Decl., Ex. G; ¶ 9); 56 ? Registering domain names through Washington-based registrars, DSTR Acquisition PA I, LLC and DOTREGISTER, LLC (Balasubramani Decl., Ex. 7 P); 8 ? Engaged in extensive promotion and business activities through its music label 9 subsidiary, including signing a Seattle-based band, engaging in advertising, participating and promoting its “Bodog Battle of the Bands,” and hosting 10 physical shows in Seattle (Lewis Decl., Ex. H; ¶ 10); 11 ? Engaging Seed IP to prosecute the Marks, paying fees and communicating to 12 Seed IP, all in the Seattle offices of Seed IP (Balasubramani Decl., Ex. O); and 13 ? Making available various “Bodog”-branded online gambling sites to residents 14 of the State of Washington (Lewis Decl., ¶ 11). 15 There cannot be any serious dispute that the foregoing actions are not a sufficient 16 jurisdictional nexus. 17 2. The Court has specific jurisdiction over remaining Defendants. 18 1st Technology contends that the relationship between the remaining Defendants and 19 BEGSA is sufficiently intertwined (see, e.g., Balasubramani Decl., Ex. J) that BEGSA’s 20 21 actions may be imputed to the remaining Defendants and subject the remaining Defendants 22 to jurisdiction in the State of Washington. In the alternative, the remaining Defendants are 23 subject to specific jurisdiction here. 24 Specific jurisdiction is appropriate where the cause of action arises from actions 25 which the non-resident defendant took in the forum state. The Ninth Circuit employs a three-26 27 part test to determine specific jurisdiction. First, the foreign defendant must have taken steps 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -20 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S 08-– BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 itself of the privilege of conducting activities in the forum state. Inc. Int’l Ltd., 99 F. Supp. Second, the at of by the Court must be reasonable. of Technology’s claims State of Washington. during the period when Seed has remained the “domestic representative” (Balasubramani Decl., Exs. I, K, O.) Indeed, Seed was the domestic representative of the assignment. Defendants necessarily maintained an agreement Seed could as Defendants’ domestic representative. directly Washington-nexus. of jurisdiction not be unreasonable. Those Defendants selected Seed their domestic representative with respect to the Mark. for Defendants to expect to deal with Mark is located (i.e., in Washington). specific over Defendants jurisdiction some Court that it jurisdiction the Court has in rem jurisdiction Marks. Federal patent “[are] called into play.” Hills Fan v. Royal Sovereign (Fed. Cir. 1994). utilized 1 to “purposefully avail” itself of the privilege of conducting activities in the forum state. 2 Quokka Sports, Inc. v. Cup Int’l Ltd., 99 F. Supp. 2d 1105, 1111 (N.D. Cal. 1999). Second, 3 “the claim must arise out of or result from defendant’s forum-related activities.” Id. at 1113. 4 Last, the assertion of jurisdiction by the Court must be reasonable. Id. at 1113. 56 Here, there is no dispute that the remaining Defendants undertook the acts which are 7 the subject of 1st Technology’s claims in the State of Washington. Throughout the life cycle 8 of the Marks, including during the time period when the marks were (purportedly) 9 successively assigned, Seed has remained the “domestic representative” with respect to the 10 Marks. (Balasubramani Decl., Exs. I, K, O.) Indeed, Seed was the domestic representative 11 12 during the time of the assignment. Defendants necessarily maintained an agreement of some 13 sort with Seed so Seed could serve as Defendants’ domestic representative. 1st 14 Technology’s claims arise out of the transfers of the Marks, and related directly to 15 Defendants’ activities, which have a Washington-nexus. Finally, the assertion of jurisdiction 16 over the remaining Defendants would not be unreasonable. Those Defendants selected Seed 17 18 to serve as their domestic representative with respect to the Mark. As such, it would be 19 reasonable for those Defendants to expect to deal with legal issues around the Mark where 20 Seed is located (i.e., in Washington). Thus, specific jurisdiction over Defendants is proper. 21 3. The Court has jurisdiction over the Marks. 22 Even if for some reason the Court concludes that it lacks jurisdiction over one or 23 more of the Defendants, the Court has in rem jurisdiction over the Marks. Federal trademark 24 25 rights, like patent rights and other federally created intellectual property rights, have a “legal 26 situs…anywhere [they are] called into play.” Beverly Hills Fan v. Royal Sovereign Corp., 27 21 F.3d 1558, 1564 (Fed. Cir. 1994). The Marks have been utilized extensively in this 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -21 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S 08-– BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 “into is is also proper because respect of Washington. Keith M. Hague --Section 1(e) Service of Process Rep. 1417, 1424-25 (2002) (noting “implication provide a valid basis to confer personal jurisdiction . . .”) n.BOND BE AT THAT DEFENDANTS WILL NOT ANY DAMAGES FROM COMPLYING WITH THE INJUNCTION Court to set bond prior to issuing preliminary FED 65(c). Trial accorded wide discretion in setting a bond. 1999). The bond may be set at zero party suffer damages the issuance See 1087, 1092 (9th Cir. party requesting likely Connecticut General Life 321 F.3d 878, 882 (9th Cir. 2003) (refusing to address a district Defendants from of the Marks pending resolution of this lawsuit. to prevent Defendants from using the Marks in conjunction with 1st Technology is not arguing in this motion that it is entitled to effect service via the domestic representative. See, e.g., E & J Gallo Winery v. Cantine 430 F. Supp. address service (and seek motion. 1 jurisdiction, and are “called into play” here. In rem jurisdiction is proper on this basis. In 2 rem jurisdiction is also proper because the “domestic representative” with respect to the 3 Marks is located in the State of Washington. See Keith M. Stolte, Avoiding Hague 4 Convention Headaches --An analysis of Lanham Act Section 1(e) Service of Process on 56 Foreign Nationals, 92 Trademark Rep. 1417, 1424-25 (2002) (noting “implication that 7 [section 1051(e)] may also provide a valid basis to confer personal jurisdiction . . .”) Id. at 8 n.35.3 9 D. THE BOND SHOULD BE SET AT ZERO GIVEN THAT DEFENDANTS WILL NOT SUFFER ANY DAMAGES FROM COMPLYING WITH THE INJUNCTION 10 11 Rule 65(c) requires the Court to set bond prior to issuing preliminary relief. FED R. 12 CIV. P. 65(c). Trial courts are accorded wide discretion in setting a bond. Walczak v. EPL 13 Prolong, Inc., 198 F.3d 725, 733 (9th Cir. 1999). The bond may be set at zero where there is 14 no evidence that a party will suffer damages from the issuance of an injunction. See Gorbach 15 v. Reno, 219 F.3d 1087, 1092 (9th Cir. 2000). A party requesting bond must submit 16 17 evidence regarding likely damages. Connecticut General Life Ins. Co. v. New Images of 18 Beverly Hills, 321 F.3d 878, 882 (9th Cir. 2003) (refusing to address a bond-related question 19 on appeal where the district court was not presented with the bond issue). 20 Here, the injunction seeks to prevent Defendants from further transferring or 21 otherwise disposing of the Marks pending resolution of this lawsuit. The injunction also 22 23 seeks to prevent Defendants from using the Marks in conjunction with online gambling 24 25 3 1st Technology is not arguing in this motion that it is entitled to effect service via the domestic 26 ree.gp.r,e Es e&n tJa Gtivaell.o S Weein,ery v. Cantine Rallo, 430 F. Supp. 2d 1064, 1070 (E.D. Ca. 2005) (declining to find service proper on domestic representative). 1st Technology will address service (and seek leave to serve via alternate 27 means) in a separate motion. 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -22 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcTECHNOLOGY’S 08-– BALASUBRAMANI LAW 8426 40th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 to Washington and U.S. residents. Defendants will as a result of being prevented from they not entitled acts anyway. requests set (INCLUDING BEGSA) HAVE BEEN PROVIDED ADEQUATE OF TECHNOLOGY’S REQUEST FOR INJUNCTIVE RELIEF must be opportunity to Hotels & B.V. 1210 (11th Cir. 2003) citing R. Civ. 65(a)(1) (“injunction shall be issued notice to the adverse Granny Goose 415 U.S. 423, 434 n.7 (1974). not define ““sufficiency ‘left within discretion of the trial court.’” 320 F.3d at 1210 (internal quotation marks and citations omitted). Court stated that the notice requirement “implies in to oppose and Granny Goose Foods, S. provided notice of the preliminary junction motion other Defendants by delivering motion to: (1) counsel for BEGSA County Superior Court proceedings, (2) counsel the Foley (3) Domestic Representative listed for 1st Technology has the papers to BEGSA and the other Defendants at the addresses documents. opportunity interpreting 1 services to Washington and U.S. residents. Defendants will not suffer any legitimate 2 damages as a result of being prevented from taking these acts, since they are not entitled to 3 take these acts anyway. Thus, 1st Technology requests that the Court set the bond at zero. 4 E. DEFENDANTS (INCLUDING BEGSA) HAVE BEEN PROVIDED ADEQUATE NOTICE OF 5 1ST TECHNOLOGY’S REQUEST FOR INJUNCTIVE RELIEF 6 Preliminary injunctions must be noticed to the non-moving party (who must be given 7 a reasonable opportunity to respond). Four Seasons Hotels & Resorts, B.V. v. Consorcio 8 Barr, S.A., 320 F.3d 1205, 1210 (11th Cir. 2003) citing 3 Fed. R. Civ. P. 65(a)(1) (“No 9 preliminary injunction shall be issued without notice to the adverse party.”); Granny Goose 10 11 Foods, Inc. v. Teamsters, 415 U.S. 423, 434 n.7 (1974). Rule 65 does not define “notice.” 12 Rather, “the sufficiency of notice ‘is a matter left within the discretion of the trial court.’” 13 Four Seasons, 320 F.3d at 1210 (internal quotation marks and citations omitted). However, 14 the Supreme Court has stated that the notice requirement “implies a hearing in which the 15 defendant is given a fair opportunity to oppose the application and to prepare for such 16 17 opposition.” Granny Goose Foods, 415 U.S. at 434 n.7. 18 1st Technology has provided notice of the preliminary junction motion to BEGSA 19 and the other Defendants by delivering the motion papers to: (1) counsel for BEGSA in the 20 King County Superior Court proceedings, Newman Dichter; (2) counsel for the Nevada 21 Defendants, Foley & Lardner LLP; (3) Domestic Representative for the Marks, Seed IP Law 22 23 Group; and (4) Canadian counsel listed for the Marks. 1st Technology has also delivered a 24 copy of the motion papers to BEGSA and the other Defendants at the addresses listed on the 25 assignment documents. The foregoing constitutes sufficient notice and an opportunity to 26 respond under Rule 65 and the cases interpreting it. 27 1st TECHNOLOGY’S LLC’s MOT. FOR BALASUBRAMANI INJUNCTIVE RELIEF (CV 08-00872) -23 842L6A 4W0th Ave SW /Seattle, WA 98136 tel: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bc1 IV. CONCLUSION 2 1 st Technology presents compelling evidence that Defendants have attempted to 3 transfer the Marks in order to frustrate 1st Technology's collections efforts, and that the 4 Marks are being used in connection with the sale of services which are illegal under 5 Washington and United States law. A receiver should be appointed in order to manage and 67 liquidate the Marks (along with the domain names). In the interim, the Court should grant an 8 injunction preventing further transfer of the Marks and enjoining their use in connection with 9 illegal goods or services. 10 Respectfully submitted, and dated this 2nd day of July, 2008 11 12 Balasubramani Law 13 Venkat Balasubramani, WSBA 28269 14 8426 40th Ave SW Seattle, WA 98136 15 tel: 206 529-4827 fax: 206 260-3966 16 email: venkat@balasubramani.com 17 Flachsbart & Greenspoon, LLC Robert Greenspoon (admitted pro hac vice) 18 The Monadnock Building 53 West Jackson Blvd., Suite 65 19 Chicago, Illinois 60604 Phone: 312-431-3800 20 Fax: 312-431-3810 21 22 23 24 25 26 27 1st TECHNOLOGY'S LLC's MOT. FOR Balasubramani Law INJUNCTIVE RELIEF (CV 08-00872) -24 8426 40th Avc SW /Seattle, WA 98136 el: (206) 529-4827/fax: (206) 260-3966 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bcDocument hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=87df7e84-47ca-4433-b41a-8590a52757bc