Intellectual Property Law

Western District Dismisses Breach of Contract Counterclaims

By Michael Atkins

In Amiga, Inc. v. Hyperion VOF, plaintiff sued defendant in the Western District for breach of contract, trademark infringement, trademark dilution, false designation of origin, and unfair competition relating to the development of a software operating system. Hyperion counterclaimed against Itec, Inc., alleging that Amiga, Inc. (Washington), one of the other parties to a software development agreement, had assigned its rights to Itec, which breached its obligation under the agreement to deliver certain intellectual property to Hyperion. (Itec allegedly later transferred its rights to another company that changed its name to Amiga, Inc. (Delaware), the plaintiff in this case).

New York-based Itec moved to dismiss the counterclaims based on lack of personal jurisdiction. Judge Ricardo Martinez agreed. As the court summarized:

“Hyperion’s counterclaims against Itec arise from the April 24, 2003 agreement between these two parties. That agreement states, in relevant part, ‘Hyperion confirms that for the receipt of 25000.00 USD, Hyperion shall transfer the ownership of the Object Code, Source Code and intellectual property for OS 4.0 to Itec in accordance with the provisions of the [November 3, 2001] agreement between Amiga, Hyperion and Eyetech and to the extent it can do so under existing agreements with their party developers whose work shall be integrated in OS 4.0.’ Hyperion asserts that this agreement constitutes an assignment to Itec of the rights and obligations of the 2001 Agreement, including the jurisdiction and venue provisions, which laid venue in Washington State. Itec argues that this is a simple contract of sale of the rights to OS 4.0; that it has never claimed to be an assignee of the 2001 Agreement between Amiga Inc., (the Washington corporation) and Hyperion, and that as a non-party to that Agreement it is not bound by its jurisdiction and venue provisions.

“The Court cannot resolve this ‘assignment’ versus ‘sale’ dispute on the basis of the record now before it. The issue has taken on proportions far beyond the scope of this motion…. However, it is not necessary for the Court to resolve that dispute, as regardless whether the April 24, 2003 agreement was an assignment of rights in OS 4.0 or a sale, there is no language in that agreement by which Itec consented to the jurisdictional and venue provisions of the November 3, 2001 Agreement between Amiga, Inc., and Hyperion.

“The Court finds in this 2003 agreement between two non-residents of this forum, neither purposeful direction of activities toward Washington State, nor consummation of a transaction within this forum or resident thereof. Nor has Itec performed some act by which it purposefully avails itself of the privilege of conducting activities in this forum, thereby invoking the benefits and protections of its laws. The first test for specific jurisdiction is therefore not met.”

The case cite is Amiga, Inc. v. Hyperion VOF, 2008 WL 163623, No. 07-631 (W.D. Wash. Jan. 17, 2008).

Full post as published by Seattle Trademark Lawyer on January 23, 2008 (boomark / email).