Court Allows Wargaming.net to Take Jurisdictional Discovery in U.S. Trademark Suit Against Belorussian Company Started by Former Employees

BIG PICTURE

Back in March, Wargaming.net filed a trademark infringement lawsuit in the Central District of California against Blitzteam, a Belorussian competitor started by former Wargaming employees. Blitzteam moved to dismiss for lack of personal jurisdiction and Wargaming asked the court for permission to take jurisdictional discovery in support of its opposition to the motion. The court allowed jurisdictional discovery so that Wargaming can learn more about Blitzteam’s ads targeted at California residents and revenue generated in California. This is especially interesting to us because back in May, a Northern District of California court reached the opposite conclusion on the exact same issue.

In this blog, we’ll look at the current decision, then compare and contrast.

BACKGROUND

Wargaming.net, the developer of World of Tanks, World of Warships, World of Warplanes, etc., has sued a group of former employees who worked on “World of Tanks Blitz,” a popular mobile game based on the famous PC title. Internally, Wargaming referred to this group of employees as “The Blitz Team,” led by four individuals — Andrei Karpiuk, Vitali Baradouski, Stsiapan Drozd, and Dzimitry Babraunichy. Wargaming alleges that it “richly compensated” these guys for their efforts, paying them collectively over $10,000,000, which included a share of the game’s revenue.

In 2017, the four devs left to start their own videogame company, Blitzteam LLC, formed in Belorussia, and allegedly hired away over thirty Wargaming employees. Wargaming alleges that Blitzteam then began distributing a game called “Battle Prime” on Google Play, the Apple App Store, and various websites.

On March 25, 2020, Wargaming sued Blitzteam and the individual devs in the Central District of California, alleging trademark infringement and various other claims. You might be wondering: Why would a videogame company headquartered in Cyprus sue a Belorussian company in California federal court? Wargaming answers this question in its complaint. It alleges: “BATTLE PRIME’s total worldwide revenue is $183,694, and the single largest source of revenue was $70,023 from the United States. As such, Defendants’ BATTLE PRIME game is advertised and marketed to the same public as the one targeted by Plaintiff for its own BLITZ video games.”

On July 30, 2020, Blitzteam answered and Wargaming filed an amended complaint on August 20.

On September 23, 2020, Blitzteam filed a motion to dismiss for lack of jurisdiction. Wargaming opposed the motion and filed an ex parte application to continue the hearing date so it could conduct jurisdictional discovery, to further support its opposition.

EX PARTE APPLICATION TO CONDUCT JURISDICTIONAL DISCOVERY

The court’s short order explains that “Courts may exercise specific personal jurisdiction only where a Plaintiff’s claim is related to the defendant’s activities that are purposefully directed at the forum state.” Wargaming had asked to conduct discovery into the defendants’ “targeting of advertisements for the allegedly infringing game at California consumers” and also “revenue earned from the allegedly infringing game in California.” The court concluded that this discovery would be relevant to the “purposefully directed” inquiry and granted Wargaming’s application, setting a new hearing date and discovery deadline.

COLOR COMMENTARY: WHAT ABOUT THAT INTERNET COURT OF THE WORLD THING?

Back in May, I wrote about a Northern District of California Court that announced it is not the world’s “international court of internet law” and dismissed a copyright infringement clone case between a Turkish and Belorussian company, even though the allegedly infringing game was distributed in the U.S. on the Apple App Store and on Google Play, and U.S. citizens received ads on Facebook. In response to that opinion, I asked:

When you distribute a game on Apple or Google’s platforms you have to choose to distribute your game in the United States, though, don’t you? Similarly, when you advertise to U.S. or California residents on Facebook, you have to choose to do that — and pay for it, no?

That particular N.D. Cal. court didn’t see either of these things as a specific focus on California residents and granted the motion to dismiss for lack of personal jurisdiction and also denied the plaintiff’s request for leave to propound jurisdictional discovery. Good Job Games Bilism Yazilim Ve Pazarlama A.S. v. SayGames LLC, 458 F. Supp. 3d 1202 (N.D. Cal. 2020). Here, however, we see a Central District of California Court reaching the exact opposite conclusion about what’s relevant. True, this court hasn’t ruled on the merits of the motion to dismiss yet, and may ultimately still reach the same conclusion, but at least this court views the jurisdictional discovery as relevant to the question.

In my view, the Central District got this question right and the Northern District got it wrong.

[Special thanks to Docket Navigator for access to the pleadings. The case is Wargaming.net Ltd. v. Blitzteam, LLC, Case No.: CV 20-02763-CJC (MRWx), currently pending in the Central District of California.]