1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 FUTURE MOTION, INC., Case No. 21-cv-06771-EMC

8 Plaintiff, ORDER GRANTING DEFENDANT’S 9 v. MOTION TO DISMISS

10 JW BATTERIES LLC, Docket No. 16 11 Defendant.

12 13 14 Plaintiff Future Motion, Inc. is a company that markets and sells “the ONEWHEEL® line 15 of self-balancing electronically motorized skateboards, along with related accessories, replacement 16 parts, and merchandise.” Compl. ¶ 9. The skateboards have processors and software incorporated 17 into them that control various functions and safety features – e.g., “monitoring the status of the 18 skateboard and causing it to slow down or stop if it approaches an unsafe operating condition.” 19 Compl. ¶ 11. Future Motion has filed suit against Defendant JW Batteries LLC (“JW”) because 20 the latter sells a computer processor chip that is allegedly intended to circumvent the safety and 21 technological measures implemented by Future Motion for its skateboards. Also, JW sells a 22 sticker that Future Motion claims incorporates a Future Motion trademark. Currently pending 23 before the Court is JW’s motion to dismiss for lack of personal jurisdiction and/or improper 24 venue.1 25 Having considered the parties’ briefs and accompanying submissions (including the 26 supplemental briefing provided after Future Motion had an opportunity to take jurisdictional 27 1 || discovery), the Court hereby GRANTS the motion to dismiss. 2 I. FACTUAL & PROCEDURAL BACKGROUND 3 A. Complaint 4 In the complaint, Future Motion alleges as follows. 5 Future Motion is a company that markets and sells the ONEWHEEL® line of self- 6 || balancing motorized skateboards. See Compl. 4 9. Below is an example of a user riding one of 7 the skateboards. 8 9 . ogi. 13 : ee Khas Bo a

16 || Compl. § 9. 3 17 Future Motion uses processors and software in the skateboards to control various functions 18 and safety features. See Compl. {] 11. Some of the important safety features involve 19 “communications between the battery management system processor (‘BMS’), which monitors the 20 status of the skateboard battery, and the main controller of the skateboard.” Compl. ¥ 12. “[T]he 2] controller is programmed not to allow the skateboard motor to operate unless [it] receives 22 || information from the BMS indicating that the battery is in a safe riding condition.” Compl. § 16. 23 Also, the controller is programmed to take action to avoid potential rider injury — e.g., □□ battery 24 || approaching an extremely high power draw or an extremely low state of charge will cause 25 || pushback to avoid rider injury.” Compl. {fj 12, 17. 26 JW is a company that advertises and sells a computer processor chip “intended to 27 circumvent the Future Motion safety and technological measures [such as] those descried above.” 28 || Compl. § 20. The chip is known as the JWFFM Chip, with “FFM” meaning “‘F*ck Future

1 Motion.’” Compl. § 20. JW sells the chip through its e-commerce website. See Compl. § 21. 2 || The JWFFM Chip intercepts communications between the BMS and controller in the Future 3 || Motion skateboard and further alters and deletes information from the BMS that could indicate an 4 || unsafe riding condition. See Compl. § 22. “In this manner, the JWFFM Chip allows 5 unauthorized, aftermarket batteries to access the . . . controller and to control the skateboard, 6 || regardless of whether the battery meets Future Motion’s safety requirements.” Compl. § 22. JW 7 || has a video on its YouTube channel that shows customers how to install the chip. JW also offers 8 || to install the chips for customers itself. See Compl. | 24-25. 9 In addition to the above, JW offers “JWXR” stickers through its website “which 10 || incorporate Future Motion’s distinctive, stylized XR trademark, as shown below.” 11 12

WAR RP v 14 Defendant’s Use of JWXR Future Motion’s XR Mark

15 16 || Comp. § 28. JW’s sticker “creates the false impression that [JW] is affiliated with Future Motion,

= 17 or that Future Motion sponsors or approved [JW] or its products.” Compl. § 29.

18 Based on, inter alia, the above allegations, Future Motion asserts the following causes of 19 || action. 20 (1) Circumvention of a technological measure in violation of the Copyright Act. See 21

22 23 24 ? Section 1201(a)(1)(A) provides in relevant part: “No person shall circumvent a technological measure that effectively controls access to a work protected under this title.”

(a)(1)(A). 25 26 Section 1201(a)(2) provides in relevant part: 07 No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, 28 component, or part thereof, that —

1 (2) Violation of the Computer Fraud & Abuse Act. See

2 (3) False designation of origin in violation of the Lanham Act. See

1125(a). 4 B. Jurisdictional Evidence 5 Both parties have provided evidence related to whether JW has a presence in California for 6 purposes of personal jurisdiction. That evidence indicates as follows.4 7 • JW’s location. JW is a Texas corporation. Its only physical location is in Texas. 8 See Martin Decl. ¶ 2. It does not operate any location in California. See Martin 9 Decl. ¶ 5. 10 • JW’s products. JW’s products include the chip at issue, i.e., the JWFFM Chip, as 11 well as batteries. See Martin Decl. ¶ 8 (testifying that JW “offers a number of 12 products for sale through its website including the JWFFM Chip”) (emphasis 13 added). According to Future Motion, the chip and the batteries work hand in hand. 14 Specifically, the batteries will not work unless the JWFFM Chip is installed, and 15 the chip does not function as planned without the battery. At the hearing on the 16 motion to dismiss, JW did not dispute Future Motion’s assertion about the 17 relatedness of the chips and batteries. 18 • JWFFM Chip. To develop the JWFFM Chip, JW borrowed a Future Motion 19 Onewheel from a resident of Texas; it did not purchase the product from Future 20 (A) is primarily designed or produced for the purpose of 21 circumventing a technological measure that effectively controls access to a work protected under this title; [or] 22

(B) has only limited commercially significant purpose or use other 23 than to circumvent a technological measure that effectively controls access to a work protected under this title . . . . 24

§ 1201(a)(2). 25

3 Section 1030(a)(5)(C) prohibits one from “intentionally access[ing] a protected computer 26 without authorization, and as a result of such conduct, caus[ing] damage and loss.”

(a)(5)(C). 27 1 Motion or anyone else. See Martin Reply Decl. ¶ 9. 2 • JW’s means of selling its products. JW sells all of its products, including the 3 JWFFM Chip, through a website, https://jwbatteries.com/. See Martin Decl. ¶ 7. 4 JW does not have a contractual relationship with anyone in California for sales or 5 distribution of its products. See Martin Decl. ¶ 5. 6 • JW’s advertising. JW maintains that it does not “run any advertisements for its 7 products in California or otherwise.” Martin Decl. ¶ 10. Future Motion suggests 8 that JW still advertises through its website as well as through its Instagram and 9 Facebook accounts. See Kolitch Decl. ¶¶ 5-6. However, Future Motion has not 10 pointed to anything specifically about JW’s website or its social media accounts 11 that indicates a targeting of California customers. 12 • JW’s sales. JW has shipped its products to customers in 45 states, plus D.C. See 13 Martin Decl. ¶ 12(a) (adding that JW has shipped products to 10 jurisdictions 14 outside of the United States). 15 o Since JW started tracking distribution of the stickers, it has sold 79 stickers 16 nationwide, with 15 out of the 79 being sold to people in California (about 17 19%). See Pl.’s Supp. Br., Ex. B. 18 o For a 16-month period (September 2020-January 2022), JW had 583 sales 19 with California customers (including about 60 returns). The bulk of these 20 sales – 570 – involved “relevant” products (i.e., not just chips but also 21 batteries). See Pl.’s Supp. Br., Ex. C. Therefore, on average, there were 22 about 36 sales of “relevant” products per month to Californians (570/16 = 23 35.6). 24 o For a 17-month period (August 2020-January 2022), JW had 3,415 sales 25 total (most in the United States). The bulk of these sales – 3,350 – involved 26 “relevant” products. See Pl.’s Supp. Br., Ex. D. Accordingly, if there were 27 570 out of 3,350 sales of “relevant” products to California, sales to 1 California represented about 17% of the total.5 2 o JW’s sales to California also account for less than 19% of total sales in 3 terms of revenue (not just units).6 See Martin Decl. ¶ 12(b). 4 • Installation of the JWFFM Chip. JW can install the chip for its customers if 5 requested. JW found two instances in which a customer sent it a product from 6 California so that JW could install a JWFFM Chip. See Martin Reply Decl. ¶ 7. 7 JW also suggests how a customer can get a JWFFM chip installed by someone else. 8 For example, on its webpage for the JWFFM chip, JW has a “FAQ” section where 9 it states that “we highly encourage individuals to have the chip professionally 10 installed”; that “Stoke Life Services can handle the installation”; and that 11 [email protected] can be contacted “for more information and the SLS shop in 12 your area.” Kolitch Decl. ¶ 2 & Ex. A (JWFFM Chip webpage). “SLS is a global 13 Personal Electric Vehicle (PEV) repair shop network – something like an Angie’s 14 List for PEV repair shops.” Martin Reply Decl. ¶ 2. Although JW makes referrals 15 to SLS, there is no indication that JW has a contractual relationship with SLS. 16 Counsel for JW confirmed this at the hearing. 17 • Communications between JW and California customers. Future Motion has 18 provided evidence demonstrating that JW has communicated with prospective 19 customers located in California, as well as existing customers located in California 20 (e.g., to provide technical support). These communications, however, do not 21 indicate that JW is reaching out to prospective or existing customers in California; 22 rather, the communications indicate that those customers are reaching out to JW. 23 Nor is there any indication that communications with customers generally were 24 targeted at California. 25 26 5 If the Court were to look at only chips, it appears that there were about 125 sales of chips to 27 Californians and that there were about a total of 640 sales of chips. 125/640 is about 19.5%. 1 II. DISCUSSION 2 A. Legal Standard 3 A motion to dismiss for lack of personal jurisdiction is brought pursuant to Federal Rule of 4 Civil Procedure 12(b)(2).

5 When a defendant moves to dismiss for lack of personal jurisdiction, "the plaintiff bears the burden of demonstrating that jurisdiction is 6 appropriate." [If] no evidentiary hearing occur[s] . . . , "the plaintiff need only make a prima facie showing of jurisdictional facts." All 7 uncontroverted allegations in the complaint are deemed true, and factual disputes are to be resolved in favor of the non-moving party. 8 9 Morrill v. Scott Fin. Corp.,

(9th Cir. 2017). 10 A motion to dismiss for improper venue is brought pursuant to Rule 12(b)(3). In the 11 instant case, JW’s venue argument applies to the Copyright Act claim only. Title

1400(a) provides that “[c]ivil actions . . . arising under any Act of Congress relating to copyrights 13 . . . may be instituted in the district in which the defendant or his agent resides or may be found.” 14

(a). The Ninth Circuit “interprets this provision to allow venue in any judicial 15 district where, if treated as a separate state, the defendant would be subject to personal 16 jurisdiction.” Brayton Purcell LLP v. Recordon & Recordon,

(9th Cir. 17 2010). 18 B. Personal Jurisdiction 19 “Where . . . no federal statute authorizes personal jurisdiction, the district court applies the 20 law of the state in which the court sits. California's long-arm statute ‘is coextensive with federal 21 due process requirements, [so] the jurisdictional analyses under state law and federal due process 22 are the same.’” CollegeSource, Inc. v. AcademyOne, Inc.,

(9th Cir. 2011). 23 There is no dispute here that JW is not a resident of California. “A district court's exercise 24 of jurisdiction over a nonresident defendant comports with due process when the defendant has at 25 least ‘minimum contacts’ with the forum and subjecting the defendant to an action in that forum 26 would ‘not offend traditional notions of fair play and substantial justice.’” Ayla, Ltd. Liab. Co. v. 27 Alya Skin Pty. Ltd., No. 20-16214,

, at *8-9 (9th Cir. Aug. 27, 1 defendant. 2 In the instant case, Future Motion does not contend that there is general jurisdiction over 3 JW. Instead, it asserts only specific jurisdiction. For specific jurisdiction, the Ninth Circuit 4 applies a three-prong test.

5 (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or 6 resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, 7 thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant's 8 forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e., it must be 9 reasonable. 10 CollegeSource,

. The plaintiff bears the burden of meeting the first two prongs 11 above; if it does so, then the burden shifts to the defendant “to set forth a ‘compelling case’ that 12 the exercise of jurisdiction would not be reasonable.”

13 With respect to the first prong, the Ninth Circuit usually uses a purposeful direction 14 analysis in tort cases,

15 “applying an 'effects' test that focuses on the forum in which the defendant's actions were felt, whether or not the actions themselves 16 occurred within the forum." The "effects" test, which is based on the Supreme Court's decision in Calder v. Jones,

(1984), requires that "the defendant allegedly must have (1) committed an intentional act, (2) expressly aimed at the forum state, 18 (3) causing harm that the defendant knows is likely to be suffered in the forum state." 19 20 Mavrix Photo, Inc. v. Brand Techs., Inc.,

(9th Cir. 2011). 21 In the case at bar, JW focuses on the express aiming prong of the effects test. It argues that 22 all it has done is sell products on the Internet on a national scale, which is not enough to show 23 express aiming at California – even taking into account the sales it has made to California. Future 24 Motion disagrees. For the reasons discussed below, the Court finds JW’s argument persuasive. 25 Although at this juncture, Future Motion need only establish a prima facie case of jurisdiction, it 26 has not met even that relatively lenient standard. 27 C. Specific Jurisdiction: Express Aiming 1 which JW points out. Specifically, several of Future Motion’s arguments in favor of personal 2 jurisdiction are dependent on JW’s conduct expressly targeting Future Motion (e.g., through the 3 stickers and through the chip named “FFM” which allegedly stands for F*ck Future Motion) – 4 with Future Motion suffering injury in California since it is located there. But the case law 5 (including Ninth Circuit case law) on which Future Motion relies to support its argument largely 6 predates Walden v. Fiore,

(2014). The Ninth Circuit has expressly noted that,

7 [i]n Walden, the Supreme Court rejected our conclusion that the defendants' "knowledge of [the plaintiffs'] 'strong forum 8 connections,'" plus the "foreseeable harm" the plaintiffs suffered in the forum, comprised sufficient minimum contacts. The Court 9 found that our approach "impermissibly allow[ed] a plaintiff's contacts with the defendant and forum to drive the jurisdictional 10 analysis." The Court made clear that we must look to the defendant's "own contacts" with the forum, not to the defendant's 11 knowledge of a plaintiff's connections to a forum.

12 In light of the Court's instructions in Walden, mere satisfaction of the test outlined in Washington Shoe [i.e., individualized targeting of 13 the plaintiff by the defendant], without more, is insufficient to comply with due process. Following Walden, we now hold that 14 while a theory of individualized targeting may remain relevant to the minimum contacts inquiry, it will not, on its own, support the 15 exercise of specific jurisdiction, absent compliance with what Walden requires. 16 17 Axiom Foods, Inc. v. Acerchem Int'l, Inc.,

(9th Cir. 2017) (emphasis 18 added). 19 Because much of Future Motion’s supplemental brief is gutted by Walden and Axiom 20 Foods, this leaves Future Motion with, in essence, two arguments: specifically, that there is 21 personal jurisdiction over JW based on (1) its communications with California (i.e., forum) 22 residents and based on (2) its sales to California residents. 23 With respect to communications, as noted above, Future Motion has provided evidence 24 demonstrating that JW has communicated with both prospective and existing customers located in 25 California. But nothing in these communications suggests that JW is soliciting the customers; 26 rather, the communications indicate that it is customers who are unilaterally reaching out to JW. 27 Moreover, there is no evidence that JW’s communications with customers targeted California in 1 With respect to sales, the Court first takes note of Future Motion’s contention that the 2 Court should consider not just the sales of the JWFFM Chips and the stickers but also the JW 3 batteries. Future Motion acknowledges that its claims are technically based on the chips and 4 stickers, not the batteries. However, it contends that the battery sales should still be counted 5 because, as indicated above, the batteries and chips work hand in hand – i.e., without the chips, the 6 batteries cannot be used. 7 For purposes of the pending motion, the Court accepts Future Motion’s contention that the 8 sales of chips, stickers, and batteries should all count. But sweeping in batteries does not yield 9 much, if any, real benefit to Future Motion. For example, as indicated above, based on 10 jurisdictional discovery, it appears that, over a 16- to 17-month period, JW sold about 570 11 “relevant” products (both chips and batteries) to Californians. This translates to (1) about 36 sales 12 per month to Californians and (2) about 17% of JW’s total sales to Californians. 13 The percentage of sales is not particularly helpful. In AMA Multimedia, LLC v. Wanat, 14

(9th Cir. 2020), the plaintiff was a Nevada company that produced and distributed 15 adult entertainment over the Internet. The plaintiff discovered that there was an internationally 16 available website, ePorner.com, that displayed the plaintiff’s copyrighted works. ePorner.com was 17 a Polish company owned in part by a Polish resident. See AMA,

. About 19% 18 of the website’s visitors were from the United States, “making the United States its largest 19 market.”

. But in spite of this percentage, the Ninth Circuit concluded that specific 20 jurisdiction was lacking. The court noted that “we [have] held that a website’s operators can be 21 said to have ‘expressly aimed’ at a forum where a website ‘with national viewership and scope 22 appeals to, and profits from, an audience in a particular state.’”

(emphasis added). 23 But, essentially, there was nothing in the record to suggest that ePorner.com had appealed to a 24 U.S. audience specifically. See, e.g.,

(stating that, even if “ePorner ‘features a 25 significant portion of U.S.-based content from producers like [plaintiff] and U.S.-based models,’ 26 this does not mean ePorner's subject matter is aimed at the U.S. market”; “ePorner's content is 27 primarily uploaded by its users, and the popularity or volume of U.S.-generated adult content does 1 same basic situation before the Court. Although the percentage of sales to California is 17%, there 2 is nothing to suggest JW has been appealing to a California audience specifically.7 Nothing shows 3 that, relative to the consumer market for the products at issue, 17% is a substantially 4 disproportionate share of the national market. 5 Future Motion suggests still that the regularity of sales should still be enough to support 6 specific jurisdiction. The Court does not dispute that, in some circumstances, regularity of sales 7 can be significant. Most notably, in Keeton v. Hustler Magazine, Inc.,

(1984), the 8 plaintiff was a New York resident who sued Hustler Magazine, a Ohio corporation, for allegedly 9 libelous material published in the magazine. She filed suit in New Hampshire in order to take 10 advantage of the state’s long statute of limitations. Hustler had a circulation of about 10,000- 11 15,000 copies per month in the state. The Supreme Court held that Hustler’s “regular circulation 12 of magazines in the forum State is sufficient to support an exercise of jurisdiction in a libel action 13 based on the contents of the magazine”; “[s]uch regular monthly sales of thousands of magazines 14 [even though only 1% of total sales8] cannot by any stretch of the imagination be characterized as 15 random, isolated, or fortuitous.”

. The court continued:

16 Where, as in this case, respondent Hustler Magazine, Inc., has continuously and deliberately exploited the New Hampshire market, 17 it must reasonably anticipate being haled into court there in a libel action based on the contents of its magazine. . . . Respondent 18 produces a national publication aimed at a national audience. There is no unfairness in calling it to answer for the contents of that 19 publication wherever a number of copies are regularly sold and distributed. 20 21

. 22 But the facts in Keeton are clearly different from those in the instant case. In Keeton, the 23 7 Admittedly, in Ayla, Ltd. Liab. Co. v. Alya Skin Pty. Ltd.,

(9th Cir. 2021), the Ninth 24 Circuit found that there was specific jurisdiction where the defendant’s sales to the United States were only 10% of its total sales. See

. But notably, in Ayla, there were multiple 25 advertisements by the defendant that specifically targeted Americans. See

(referring to advertising on Instagram with the words “ATTENTION USA BABES WE NOW ACCEPT after 26 pay,” advertising of Black Friday sales, and advertising on defendant’s website that its products were featured in American magazines). 27 1 defendant regularly sold 10,000-15,000 copies of its magazine per month in New Hampshire. In 2 contrast, here, JW averages sales of about 36 products per month to California. It appears that the 3 substantial number of sales in Keeton allowed the Supreme Court to infer that the defendant was 4 deliberately exploiting the New Hampshire market – and that the defendant could reasonably 5 anticipate being haled into court in the state. That same reasoning does not have much traction in 6 a case such as the instant suit where the number of sales is so significantly smaller. 7 Finally, the Court takes note of Mavrix,

, as there the Ninth Circuit 8 addressed an issue similar to the one before this Court – specifically, “whether tortious conduct on 9 a nationally accessible website is expressly aimed at any, or all, of the forums in which the website 10 can be viewed.”

. In Mavrix, the plaintiff was a Florida company that licensed and sold 11 candid photos of celebrities, e.g., to magazines such as People. The defendant was a Ohio 12 company that operated a website called celebrity-gossip.net. The plaintiff sued the defendant for 13 copyright infringement in a California district court after the defendant posted the plaintiff’s 14 copyrighted photos on its website without permission. See

. 15 The record did not reflect how many of the celebrity-gossip.net’s visitors were from 16 California. But notably, the record contained evidence that the website courted a California 17 audience. See

.

18 As did Hustler in distributing its magazine in New Hampshire [in Keeton], Brand "continuously and deliberately exploited" the 19 California market for its website. Brand makes money by selling advertising space on its website to third-party advertisers: the more 20 visitors there are to the site, the more hits that are made on the advertisements; the more hits that are made on the advertisements, 21 the more money that is paid by the advertisers to Brand. A substantial number of hits to Brand's website came from California 22 residents. One of the ways we know this is that some of the third- party advertisers on Brand's website had advertisements directed to 23 Californians. . . . The fact that the advertisements targeted California residents indicates that Brand knows – either actually or 24 constructively – about its California user base, and that it exploits that base for commercial gain by selling space on its website for 25 advertisements. 26

(emphasis added). 27 The Ninth Circuit also took into account that the defendant’s website had entertainment industries. Based on the website's subject matter, as 1 well as the size and commercial value of the California market, we conclude that Brand anticipated, desired, and achieved a substantial 2 California viewer base. This audience is an integral component of Brand's business model and its profitability. As in Keeton, it does 3 not violate due process to hold Brand answerable in a California court for the contents of a website whose economic value turns, in 4 significant measure, on its appeal to Californians. 5

; see also

(thus stating that, “where, as here, a website with national 6 viewership and scope appeals to, and profits from, an audience in a particular state, the site's 7 operators can be said to have ‘expressly aimed’ at that state”) (emphasis added). 8 In contrast to Mavrix, there is nothing to suggest that the sales that JW made to California 9 were tied in any way to some targeting of the forum state by JW or that JW otherwise appealed to 10 a California audience even if that appeal did not produce actual sales. Indeed, based on the record 11 submitted, the relatively small number sales in California could well have resulted without any 12 effort on the part of JW to court a California audience at all. 13 While neither the Supreme Court nor the Ninth Circuit has articulated a concrete formula 14 for determining personal jurisdiction under the express arising prong of the test where internet 15 sales are involved, cf. Good Job Games Bilism Yazilim Ve Pazarlama A.S. v. SayGames, LLC, No. 16 20-16123,

, at *2 (9th Cir. Dec. 10, 2021) (not providing a specific 17 test but indicating that, per AMA, Mavrix, and Ayla, the following information is relevant: revenue 18 derived from the forum state, efforts to advertise in or market to or profit from the forum state, and 19 distribution in the forum state), it is evident that, absent a large and regular volume of sales into 20 the forum state, there must be some element of targeting the forum state that distinguishes the 21 forum state from other states. Given the low volume of sales in the instant case and the lack of a 22 clear disproportion of sales in California together with the lack of any evidence of specific 23 targeting at California, there is no specific jurisdiction over JW. 24 /// 25 /// 26 /// 27 /// 1 III. CONCLUSION 2 For the foregoing reasons, the Court grants JW’s motion to dismiss for lack of personal 3 jurisdiction. Because the Court dismisses for lack of personal jurisdiction, the Court need not 4 address JW’s additional contention that venue in this District was improper. 5 This order disposes of Docket No. 16. 6 The Clerk of the Court is ordered to enter a final judgment in accordance with this opinion 7 and close the file in the case. 8 9 IT IS SO ORDERED. 10 11 Dated: May 2, 2022 12 13 ______________________________________ EDWARD M. CHEN 14 United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27