Motion To Dismiss

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Case 3:22-cv-00173-RLY-MPB Document 36-1 Filed 02/22/23 Page 1 of 27 PageID #: 210

IN THE UNITED STATES DISTRICT COURT


FOR THE SOUTHERN DISTRICT OF INDIANA
EVANSVILLE DIVISION

MADDENCO INC., )
Plaintiff, )
)
v. )
) Case No. 3:22-CV-173
JAMES REED, DRU DARBY, and HG )
AUTOTECH LLC )
Defendants. )

MEMORANDUM IN SUPPORT OF DEFENDANT’S RULE 12(b)(6) MOTION TO


PARTIALLY DISMISS, RULE 12(b)(2) MOTION TO DISMISS FOR LACK OF
PERSONAL JURISDICTION, AND RULE 12(B)(3) MOTION TO DISMISS FOR LACK
OF PROPER VENUE AND, ALTERNATIVELY, MOTION TO TRANSFER VENUE

Defendant HG AutoTech, L.L.C. (“HG AutoTech”) files this Memorandum in Support of

Rule 12(b)(6) Motion to Dismiss. For the reasons set forth below, Defendant respectfully requests

that this Honorable Court dismiss the pled copyright statutory damages claim as prohibited by law

and dismiss all state law claims brought by Plaintiff, MaddenCo Inc. (“MaddenCo”) against HG

AutoTech on the grounds that they are preempted by the Copyright Act, in addition to other

deficiencies. As such, all state law claims against HG AutoTech, except Plaintiff’s copyright

claims, should be dismissed.

Defendant also moves this Court, pursuant to Fed. R. Civ. P. 12(b)(2) and 12(b)(3), to

dismiss Plaintiff’s complaint on the grounds that this Court lacks personal jurisdiction over it, and

the United States District Court for the Southern District of Indiana is a court of improper venue.

Alternatively, pursuant to 28 U.S.C. § 1404, Defendant moves for an order transferring this matter

to the United States District Court for the Middle District of Louisiana, a court of proper

jurisdiction and venue for all Defendants.

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I. BACKGROUND OF THE DISPUTE

The purpose of this motion is to address certain substantive and procedural impediments

to Plaintiff’s claims. At a later date, Defendant will address the faulty factual underpinnings (or

lack thereof) for Plaintiff’s copyright allegation. However, to give the Court some background,

and to keep this dispute in context, Defendant offers the following brief summary of the facts.

A. The Parties

Plaintiff MaddenCo is an Indiana corporation that develops and supports integrated

software systems for independent tire dealers. Doc. 2, ¶¶ 1-8. MaddenCo developed its proprietary

software systems titled “The Tire Dealer System” (the “TDS”). Doc. 2, ¶ 9. MaddenCo obtained

a federal copyright registration through the United States Copyright Office on August 26, 2022.

Doc. 2, ¶ 9.1

HG AutoTech is a Louisiana-based company, with its only in-person office being in

Denham Springs, Louisiana. Exhibit 1, ¶ 4. HG AutoTech has an LLC comprised of five members.

Exhibit 1, ¶ 3. None of those members reside (part-time or full-time) in Indiana. HG AutoTech’s

owners reside in Arizona, Louisiana, and Tennessee. Exhibit 1, ¶ 3. Jesse Broderick serves as the

President of HG AutoTech, and the member with the largest controlling interest. Exhibit 1, ¶ 2.

HG AutoTech’s software (the “Software”) is a warehouse inventory management system.

Exhibit 1, ¶ 5. HG AutoTech’s Software is not specific to tires. Exhibit 1, ¶ 6. It is not based on

any programming code, or any other source material, from MaddenCo. Exhibit 1, ¶ 7. The

Software is completely original. Exhibit 1, ¶ 7. No material, source code, etc. from MaddenCo was

used in the development of HG AutoTech’s Software. Exhibit 1, ¶ 8. HG AutoTech’s Software is

owned by HG AutoTech, not Reed or Darby personally. Exhibit 1, ¶ 9.

1
Oddly, MaddenCo states it is attaching its registration to the Complaint, but no such registration was actually
attached. The record should be supplemented.

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HG AutoTech does not do or solicit any business in Indiana. Exhibit 1, ¶ 10. None of HG

AutoTech’s customers are based in Indiana. Exhibit 1, ¶ 11. HG AutoTech does not have any

office or other type of facility or property in Indiana. It has no physical presence in Indiana. Exhibit

1, ¶ 12. HG AutoTech does not even have an online presence in Indiana, as they do not currently

engage in online marketing. Exhibit 1, ¶ 13.

HG AutoTech does not have a bank account in Indiana. Exhibit 1, ¶ 14. HG AutoTech has

never paid taxes in Indiana. Exhibit 1, ¶ 15. HG AutoTech does not derive revenue from goods

used or consumed or services rendered in Indiana. Exhibit 1, ¶ 16. Except for the above captioned

suit, HG AutoTech has never been sued in or filed suit in Indiana. Exhibit 1, ¶ 17.

When HG AutoTech hired James Reed and Dru Darby, it did not request or encourage that

either Reed or Darby obtain any information from MaddenCo, bring information from MaddenCo

to HG AutoTech, or in any way utilize MaddenCo’s intellectual property. Exhibit 1, ¶ 18.

It would be very inconvenient for HG AutoTech or Jesse Broderick, as a representative of

HG AutoTech, to participate in a lawsuit in Indiana due to the burden and expense associated with

the travel. Exhibit 1, ¶ 19. A flight to Evansville, Indiana is about seven-hours one way; driving to

Evansville, Indiana takes about thirteen hours by car. Exhibit 1, ¶ 20.

B. The Complaint

On October 31, 2022, MaddenCo filed its Complaint against Darby, James Reed, and HG

AutoTech. Doc. 2, ¶¶ 1-4. According to the Complaint, James Reed and Dru Darby joined HG

AutoTech and used MaddenCo’s confidential information and copyrighted works to produce HG

AutoTech’s Software. Doc. 2, ¶ 18. MaddenCo alleges that HG AutoTech was aware of Reed and

Darby’s purported confidentiality obligations. Doc. 2, ¶ 19. It is alleged that HG AutoTech uses

advertising materials which infringe on MaddenCo’s copyrighted works, falsely designated HG

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AutoTech’s Software as its own, rather than attributing it to MaddenCo. Doc. 2, ¶ 20. All these

allegations are made “upon information and belief” without any substantiating details. Doc. 2, ¶¶

18-20.

At the heart of its allegations, MaddenCo asserts, only upon “information and belief,” that

HG AutoTech is using and selling its Software which originated from MaddenCo’s intellectual

property. Doc. 2, ¶ 20. MaddenCo asserts that these advertisements or promotional materials use

false designations of origin and misbranding to unfairly promote HG AutoTech’s competing

product. Doc. 2, ¶ 20. In other words, this matter is a copyright infringement dispute where a

competitor is suing another competitor based on allegations that a former employee took

copyrighted material (in this case, software code) to use in the competitor’s products. This is a

textbook copyright infringement claim.

Despite the clear nature of the dispute, MaddenCo brought nine claims, five of which are

against HG AutoTech, as follows:

1. Count V—Tortious Interference by HG AutoTech

2. Count VI—federal Copyright Infringement

3. Count VII—federal Reverse Passing Off

4. Count VIII—state Unfair Competition

5. Count IX—state-based Request for Declaratory Judgment

Doc. 2. Counts V, VIII, and IX should be dismissed as failing to state a claim for which Plaintiff

is entitled to any relief as they are preempted by the Copyright Act. For the remaining copyright

claims, this Court lacks personal jurisdiction over HG AutoTech and venue is improper.

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II. LAW AND ARGUMENT

“When considering a motion to dismiss, the district court ordinarily assumes the truth of

all well-pleaded allegations in the plaintiff's complaint. But this rule is less absolute when

considering a motion to dismiss under Federal Rule 12(b)(3) than under Rule 12(b)(6).” Deb v.

SIRVA, Inc., 832 F.3d 800, 808–09 (7th Cir. 2016) (citing Firestone Fin. Corp. v. Meyer, 796 F.3d

822, 826 (7th Cir. 2015). “[U]nder Rule 12(b)(3), which allows for dismissal for improper venue,

the district court assumes the truth of the allegations in the plaintiff's complaint, unless contradicted

by the defendant's affidavits.” Id. at 809 (emphasis in original).

Plaintiff’s complaint is procedurally and substantively deficient on multiple fronts. First,

Plaintiff’s request for statutory damages under the Copyright Act is improper and should be

dismissed. Second, Plaintiff’s state law claims are preempted by federal copyright law. Third,

Indiana courts do not have personal jurisdiction over HG AutoTech for any claim, much less the

remaining copyright claims (for which MaddenCo cites no evidence to support its “information

and belief”). Fourth, venue is improper in the Southern District of Indiana. As such, dismissal is

warranted. Finally, in the alternative, HG AutoTech prays that this matter be transferred pursuant

to 28 U.S.C. § 1404 to the Middle District of Louisiana, a court of proper jurisdiction and venue.

A. Plaintiff’s State Law Claims are Preempted

Fed.R.Civ.P. 12(b)(6) allows dismissal if a plaintiff fails “to state a claim upon which relief

can be granted.” To withstand a Rule 12(b)(6) motion, a complaint must contain “enough facts to

state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544,

570 (2007); see also Elsensohn v. St. Tammany Parish Sheriff’s Office, 530 F.3d 368, 372 (5th Cir.

2008) (quoting Twombly). A claim satisfies the plausibility test “when the plaintiff pleads factual

content that allows the court to draw the reasonable inference that the defendant is liable for the

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misconduct alleged.” Twombly’s plausibility standard is “not akin to a ‘probability requirement,’

but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (citations omitted). While a complaint need not contain detailed

factual allegations, it must set forth “more than labels and conclusions, and a formulaic

recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (emphasis

added) (citation omitted). “A claim has facial plausibility when the plaintiff pleads factual content

that allows the court to draw the reasonable inference that the defendant is liable for the misconduct

alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

1. Count VI—Copyright Infringement

While Defendant will show this Court that Plaintiff’s Copyright Act claim is legally

unsupportable at the appropriate time, for the sole purpose of the instant Motion to Dismiss, HG

AutoTech concedes that a copyright claim has been vaguely pled. However, allegations to support

MaddenCo’s request for statutory damages and attorneys’ fees related to its copyright claim have

not. Those claims should, therefore, be dismissed. In addition, and important to the instant motion,

MaddenCo’s copyright claim preempts its state law claims against HG AutoTech, thereby

warranting their dismissal.

a. Copyright statutory damages and attorneys’ fees that arise


before federal registration cannot be maintained.

Plaintiff’s claim of a Copyright Act violation is accompanied by a request for statutory

damages and attorneys’ fees. Doc. 2, ¶ 47, Prayer C. However, the allegations of the Complaint,

establishing the timeline of the registration of Plaintiff’s alleged protected work, conclusively

show that Plaintiff’s request for statutory damages and attorneys’ fees must be dismissed.

17 U.S.C. §§504 and 505 govern the damages that can be recovered statutorily. 17 U.S.C.

§412 makes clear that statutory damages, attorneys’ fees, and costs, as provided in §§504 and 505,

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are not available for infringement of an unpublished work that takes place before its effective date

of registration.

Here, there is no allegation of infringement that would allow for the recovery of statutory

damages or attorneys’ fees. For Plaintiff’s (now) registered work, the TDS, the effective date of

registration is August 26, 2022. Doc. 2, ¶ 9. The Complaint is wholly deficient of any specifics in

order to discuss a comparable timeline. In other words, while the Complaint generally alleges the

Defendants were involved in creating a competing product and marketing it, the Complaint does

not state when a product was created, what the product is or its name, when it was marketed or to

whom it was marketed. From the bare bones Complaint, no infringement is sufficiently pled, much

less with enough detail to assess Plaintiff’s claims. Any claim for statutory damages or fees related

to HG AutoTech’s software before August 26, 2022 must be dismissed.

b. Dismissal of state claims is mandated pursuant to 17 U.S.C.


§301(a).

Plaintiff’s claim, at its core, is for an alleged infringement of copyrighted material.

However, Plaintiff also pled numerous state law causes of action based on the same alleged

infringement. The Copyright Act preempts state law claims to the extent they seek to address the

same facts as is the basis for of the alleged infringement. Being the case here, Plaintiff’s state law

claims are inappropriate and preempted.

The Copyright Act preempts all other causes of action that come within the subject matter

of copyright. 17 U.S.C. §301(a) provides:

On and after January 1, 1978, all legal or equitable rights that are equivalent to any
of the exclusive rights within the general scope of copyright as specified by section
106 in works of authorship that are fixed in a tangible medium of expression and
come within the subject matter of copyright as specified by sections 102 and 103,
whether created before or after that date and whether published or unpublished, are
governed exclusively by this title. Thereafter, no person is entitled to any such

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right or equivalent right in any such work under the common law or statutes
of any State.

(Emphasis added.) Section 301(a) establishes a general federal policy of creating a uniform

method for protecting and enforcing certain rights in intellectual property by preempting other

claims.

“The Copyright Act preempts ‘all legal and equitable rights that are equivalent to any of

the exclusive rights within the general scope of copyright as specified by section 106” and are “in

a tangible medium of expression and come within the subject matter of copyright as specified by

sections 102 and 103.’” Seng-Tiong Ho v. Taflove, 648 F.3d 489, 500–01 (7th Cir. 2011) (citing

17 U.S.C. § 301(a)). The Seventh Circuit has interpreted this provision to contain a two-step test.

“First, the work in which the right is asserted must be fixed in tangible form and come within the

subject matter of copyright as specified in § 102. Second, the right must be equivalent to any of

the rights specified in § 106.” Id. (citing Baltimore Orioles, Inc. v. Major League Baseball Players

Ass'n, 805 F.2d 663, 674 (7th Cir.1986)). “Baltimore Orioles holds that state laws that intrude on

the domain of copyright are preempted even if the particular expression is neither copyrighted nor

copyrightable. Such a result is essential in order to preserve the extent of the public domain

established by copyright law.” Toney v. L'Oreal USA, Inc., 406 F.3d 905, 911 (7th Cir. 2005).

Regarding the first element, tangible medium, the “material” in which Plaintiff asserts

rights—its software code for the TDS and the software code for HG AutoTech’s competing

program—are expressions in tangible form. See Seng-Tiong Ho, 648 F.3d at 500. These

expressions even originate in tangible works that are copyrighted—namely, MaddenCo’s TDS.

Because the expressions are in tangible materials, the first element is satisfied. See Id. at 500-01.

As to the second element, the equivalent right, Defendant will separately address each of

Plaintiff’s state law claims.

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2. Count III—Tortious Interference & Count IX—Request for


Declaratory Judgment

Whereas MaddenCo brought breach of contract claims against the individuals, Reed and

Darby, MaddenCo asserts a Tortious Interference claim against HG AutoTech, presumably

because there is no contractual relationship between the two parties. Doc. 2, ¶¶ 35-40. MaddenCo

is unquestionably using the alleged tortious interference claim to protect the same rights governed

by the Copyright Act. Therefore, MaddenCo’s tortious interference claim must be dismissed.

“The notes and commentary accompanying § 106 make it clear that copyright holders have

five exclusive and fundamental rights: reproduction, adaptation, publication, performance, and

display.” Toney, 406 F.3d at 909 (citing 17 U.S.C. § 106). “A copyright is violated or infringed

when, without permission, someone other than the copyright holder exercises one of these

fundamental rights.” Id. at 909–10. “[T]o avoid preemption, a state law must regulate conduct that

is qualitatively distinguishable from that governed by federal copyright law—i.e., conduct other

than reproduction, adaptation, publication, performance, and display.” Id. at 910.

Specific to a tortious interference of contract claim, it has been noted:

The elements of a tortious interference with contract claim are: (1) the existence of
a valid and enforceable contract; (2) knowledge of that relationship on the part of
the interferer; (3) an intentional interference inducing breach of contract; (4) a
breach of contract caused by the interferer's acts; and (5) damages to the plaintiff.
See Fieldcrest Builders v. Antonucci, 311 Ill.App.3d 597, 243 Ill.Dec. 740, 724
N.E.2d 49, 61 (1999). The Court preempts Higher Gear's tortious interference
with contract claim because the additional elements of knowledge and intent
do not render the asserted right different in kind than the rights protected in
a copyright infringement claim. See FASA Corp., 869 F.Supp. at 1360, n. 43
(citing Harper & Row, Publishers, Inc. v. Nation Enters., 723 F.2d 195, 201 (2d
Cir.1983)). The tortious interference with contract claim is based on Auto eDirect
creating software that “closely functioned and resembled the Higher Gear licensed
software.” (R. 20–1, Pl.'s Resp. at 11.) The allegations supporting this claim are
not qualitatively different than unauthorized copying, which is the same
conduct necessary to support a copyright infringement claim. Therefore,

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Higher Gear's claim of tortious interference asserts rights that are equivalent to
federal copyright law and must be preempted.

Higher Gear Grp., Inc. v. Rockenbach Chevrolet Sales, Inc., 223 F. Supp. 2d 953, 959 (N.D. Ill.

2002) (emphasis added). In that matter, the court found that to the extent the tortious interference

claim was based on alleged “unauthorized copying” and “copyright infringement,” the claim was

preempted. Id.

MaddenCo alleges HG AutoTech interfered with the contracts Reed and Darby had with

MaddenCo by encouraging Reed and Darby to breach those agreements. Doc. 2, ¶ 38. While not

clearly spelled out, MaddenCo is alleging HG AutoTech encouraged Reed and Darby to breach

their confidentiality provisions by improperly obtaining, then using to HG AutoTech’s benefit,

MaddenCo’s confidential and proprietary information. Doc. 2, ¶¶ 21-38. It is from these purported

acts of HG AutoTech that MaddenCo alleges damage. Doc. 2, ¶ 40. MaddenCo then seeks the

remedy of a declaration from this Court that ownership and control over any products or services

marketed by Defendants. Doc. 2, ¶¶ 61.

Substantively, the allegation that HG AutoTech urged Reed or Darby to use MaddenCo’s

confidential software code to develop its software code is nothing more than a restatement of

MaddenCo’s Copyright Infringement claim. MaddenCo’s tortious interference claim and resulting

request for a declaratory judgment are based on allegations of “creating software that ‘closely

functioned and resembled the [MaddenCo] licensed software.’” Higher Gear Grp., Inc., 223 F.

Supp. 2d 953, 959 (N.D. Ill. 2002). As such, they are an attempt to re-package copyright

infringement claims and should be dismissed as preempted.

3. Count VIII—Unfair Competition

Defendant, James Reed, previously filed a Motion to Dismiss asserting that MaddenCo’s

Unfair Competition claim was preempted by clear law. Doc. 18, pp. 11-13. In response, MaddenCo

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admitted its unfair competition claim was preempted. Doc. 25, p. 7, n. 1. For the same reasons, the

claim against HG AutoTech should be dismissed as well.

B. This Court Does Not Have Personal Jurisdiction Over HG AutoTech.

In its Complaint, MaddenCo alleges it has personal jurisdiction over the Defendants

(generally without differentiating between the three) “by the virtue of their transacting, doing, and

soliciting business in this District, and because a substantial part of the relevant events occurred in

this District, and a substantial party of the property that is the subject of this action is situated here,

and under Indiana Long-arm statute, Indiana Trial Rule 4.4 . . .” Doc. 2, ¶ 6. This assertion is false,

and MaddenCo cannot meet its burden of establishing such.

“In a case involving federal question jurisdiction, ‘a federal court has personal jurisdiction

over the defendant if either federal law or the law of the state in which the court sits authorizes

service of process to that defendant.’” NBA Properties, Inc. v. HANWJH, 46 F.4th 614, 620 (7th

Cir. 2022) (citations omitted). “Because the Lanham Act does not have a special federal rule for

personal jurisdiction, ... we look to the law of the forum for the governing rule.” Id. (citing

Advanced Tactical, 751 F.3d at 800; Fed. R. Civ. P. 4(k)(1)).

The Indiana long-arm statute is located in Indiana Trial Rule 4.4. “In Indiana, personal

jurisdiction depends on whether the requirements of the state's long-arm statute are met and

whether federal due process requirements are satisfied. Id. Indiana Trial Rule 4.4(A) serves as

Indiana's long-arm statute. Because Indiana's long-arm statute expands personal jurisdiction to the

full extent permitted by the Due Process Clause, LinkAmerica Corp. v. Albert, 857 N.E.2d 961,

966–67 (Ind.2006), the sole inquiry before the court is whether exercising personal jurisdiction

over the Defendants would offend due process.” Best Chair Inc. v. Factory Direct Wholesale, LLC,

121 F. Supp. 3d 828, 835 (S.D. Ind. 2015). “The Due Process Clause protects an individual's liberty

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interest in not being subject to the binding judgments of a forum with which he has established no

meaningful ‘contacts, ties, or relations.’” NBA Properties, Inc, 46 F.4th at 621 (citing Burger King

Corp. v. Rudzewicz, 471 U.S. 462, 471–72 (1985); Int'l Shoe Co. v. Washington, 326 U.S. 310,

319 (1945)).

“Personal jurisdiction over a nonresident defendant meets the standard of due process when

the defendant has established minimum contacts within the state ‘such that the maintenance of the

suit does not offend ‘traditional notions of fair play and substantial justice.’” Best Chair Inc, 121

F. Supp. 3d at 835–36 (citing Tamburo v. Dworkin, 601 F.3d 693, 700–01 (7th Cir.2010); Int'l

Shoe Co., 326 U.S. 310). “Personal jurisdiction may be either general or specific. General

jurisdiction over a defendant exists where the defendant has continuous and systemic business

contacts with the state, even where those contacts do not relate to the action at issue.” Best Chair

Inc, 121 F. Supp. 3d at 835–36 (citations omitted). “To be subject to specific personal jurisdiction

in a forum state, the defendant must have ‘purposefully directed’ its activities to the forum state,

and the litigation must relate to those activities.” NBA Properties, Inc., 46 F.4th at 621. “When a

defendant challenges personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2),

however, ‘the plaintiff bears the burden of demonstrating the existence of jurisdiction.’” Id. at 620

(citing Purdue Rsch. Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003)).

Exercising jurisdiction over HG AutoTech here is improper under both Indiana’s long-arm

statute and the limits of the United States Constitution. Thus, this matter should be dismissed.

1. Personal Jurisdiction is Not Proper Under Indiana’s Long-Arm


Statute.

Federal Rule of Civil Procedure 4(k)(1)(A) provides personal jurisdiction over any

defendant who would be subject to personal jurisdiction under the long-arm statute of the state in

which the district court sits. “The 2003 amendment to Indiana Trial Rule 4.4(A) was intended to,

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and does, reduce analysis of personal jurisdiction to the issue of whether the exercise of personal

jurisdiction is consistent with the Federal Due Process Clause. Retention of the enumerated acts

found in Rule 4.4(A) serves as a handy checklist of activities that usually support personal

jurisdiction but does not serve as a limitation on the exercise of personal jurisdiction by a court of

this state.” LinkAmerica Corp. v. Cox, 857 N.E.2d 961, 967 (Ind. 2006). The Indiana long-arm

statute authorizes jurisdiction over:

(A) Acts Serving as a Basis for Jurisdiction. Any person or organization that is a
nonresident of this state, a resident of this state who has left the state, or a person
whose residence is unknown, submits to the jurisdiction of the courts of this state
as to any action arising from the following acts committed by him or her or his or
her agent:
(1) doing any business in this state;
(2) causing personal injury or property damage by an act or omission done
within this state;
(3) causing personal injury or property damage in this state by an
occurrence, act or omission done outside this state if he regularly does or
solicits business or engages in any other persistent course of conduct, or
derives substantial revenue or benefit from goods, materials, or services
used, consumed, or rendered in this state;
(4) having supplied or contracted to supply services rendered or to be
rendered or goods or materials furnished or to be furnished in this state;
(5) owning, using, or possessing any real property or an interest in real
property within this state;
(6) contracting to insure or act as surety for or on behalf of any person,
property or risk located within this state at the time the contract was made;
(7) living in the marital relationship within the state notwithstanding
subsequent departure from the state, as to all obligations for alimony,
custody, child support, or property settlement, if the other party to the
marital relationship continues to reside in the state; or
(8) abusing, harassing, or disturbing the peace of, or violating a protective
or restraining order for the protection of, any person within the state by an
act or omission done in this state, or outside this state if the act or omission
is part of a continuing course of conduct having an effect in this state.
In addition, a court of this state may exercise jurisdiction on any basis not
inconsistent with the Constitutions of this state or the United States.

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Ind. R. Trial P. 4.4 The last four prongs, Nos. 5-8, are wholly irrelevant to HG AutoTech and will

not be addressed for utter lack of merit. The first four prongs, Nos. 1-4, similarly lack merit and

will be addressed in turn.

MaddenCo’s copyright claims arise out of the alleged use of the code for MaddenCo’s TDS

to create HG AutoTech’s competing Software. See Doc. 2, ¶¶ 18, 44. MaddenCo’s infringement

claim also asserts that the Defendants falsely advertised its product as their own to potential

customers, investors, or partners. See Doc. 2, ¶¶ 20, 49. In sum, it is HG AutoTech’s actions of

creating a competing software that must be evaluated. It, therefore, cannot establish specific

jurisdiction with Indiana.

For Subsection (A)(1) of Indiana’s long-arm statute to be applicable, the Plaintiff’s claims

must arise out of the defendant doing business in the state. The question is whether the defendant

“‘structured its business affairs’ such that it could have predicted that it would be answerable in

an Indiana court for its actions with respect to the” purported contact. NExTT Sols., LLC v. XOS

Techs., Inc., 71 F. Supp. 3d 857, 861 (N.D. Ind. 2014). Subsection (A)(4) applies to defendant who

are “contracted to supply services rendered or to be rendered or goods or materials furnished or to

be furnished in” Indiana.

Here, HG AutoTech has no, and has not had any, contact with Indiana. HG AutoTech does

not do any business, or solicit any business, in Indiana. It has no current customers from Indiana.

None of its owners or employees live or reside in Indiana. It has no office, physical property, or

physical presence in Indiana.

Any alleged infringement of MaddenCo’s code (which is denied) and attempts to reverse

pass it off thereafter did not occur in Indiana. The allegations undermining MaddenCo’s

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infringement claims simply could not have and would not have occurred in Indiana. Thus, the first

and fourth prong of Indiana’s long-arm statute are not satisfied.

For Subsection (A)(2) to be applicable, the act or omission at issue must have occurred in

Indiana. Subsection (A)(3) applies to damage within Indiana caused by a defendant that “regularly

does or solicits business or engages in any other persistent course of conduct, or derives substantial

revenue or benefit from goods, materials, or services used, consumed, or rendered in” Indiana.

Again, the alleged acts of infringement would have occurred in Louisiana, as HG

AutoTech’s only physical presence is in Louisiana. HG AutoTech does not regularly do or solicit

business or engages in any other persistent course of conduct, or derives substantial revenue or

benefit from goods, materials, or services used, consumed, or rendered in Indiana. As a company,

HG AutoTech as had no contacts with Indiana. Thus, the second and third prongs of Indiana’s

long-arm statute are also not satisfied.

2. Personal Jurisdiction is Not Proper under Constitutional Limits

Section (A) of Indiana’s statute provides for jurisdiction to the extent of constitutional

limits. Even if this Court finds personal jurisdiction is present under the checklist of activities of

Indiana’s long-arm statute (which is denied), this Court must also find that exercising personal

jurisdiction falls within the constitutional limits. This Court may only exercise personal

jurisdiction over HG AutoTech if: 1) HG AutoTech’s Indiana contacts (of which there are none)

were sufficiently related to the facts and issues in this case (specific jurisdiction); or if 2) HG

AutoTech’s contacts with Indiana were “sufficiently continuous, and systematic” (general

jurisdiction). Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984).

Respectfully, this Court lacks both general and specific jurisdiction over HG AutoTech.

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a. This Court lacks general jurisdiction over HG AutoTech.

“Unlike specific jurisdiction (which focuses on a defendant’s connections to a forum state

with respect to the transaction at issue), general jurisdiction permits a defendant to be sued in the

forum regardless of the subject matter of the litigation.” NExTT Sols., LLC, 71 F. Supp. 3d at 861.

“[T]he constitutional requirement for general jurisdiction is ‘considerably more


stringent’ than that required for specific jurisdiction.” Id. (quoting United States v.
Swiss Am. Bank, Ltd., 274 F.3d 610, 618 (1st Cir.2001)). “General jurisdiction is
permitted only where the defendant has ‘continuous and systematic general
business contacts' with the forum.” Id. (citing Helicopteros Nacionales de
Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)).
Such contacts must be so extensive as to be tantamount to the defendant being
constructively present in the forum to such a degree that it would be “fundamentally
fair to require it to answer in [that forum] in any litigation arising out of any
transaction or occurrence taking place anywhere in the world.” Id. (emphasis in
original). The general jurisdiction standard is rigorous because “the consequences
can be severe: if a defendant is subject to general jurisdiction in a state, then it may
be called into court there to answer for any alleged wrong, committed in any place,
no matter how unrelated to the defendant's contacts with the forum.” uBID, 623
F.3d at 426.

Id. To find general jurisdiction, “the affiliation between the defendant and the forum state must be

so continuous and systematic that the defendant is ‘comparable to a domestic enterprise in that

State.’” Id. at 862 (citing Daimler AG v. Bauman, 571 U.S. 117, 133 (2014)).

HG AutoTech does not, by any means, have the continuous and systematic contacts with

Indiana to support general jurisdiction. HG AutoTech does not have any, and has not had any,

contact with Indiana. General personal jurisdiction is lacking.

b. This Court lacks specific jurisdiction over HG AutoTech.

Without the continuous and systematic contacts required for general jurisdiction,

MaddenCo is relegated to relying on specific jurisdiction. Unfortunately for MaddenCo, it falls

short on its burden with respect to specific jurisdiction as it did with general jurisdiction.

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To determine whether a defendant's contacts with the forum state are sufficient to establish

specific jurisdiction, the Seventh Circuit employs a three-part test:

1. “the defendant's contacts with the forum state must show that it purposefully
availed itself of the privilege of conducting business in the forum state or
purposefully directed its activities at the state,”

2. “the plaintiff's alleged injury must have arisen out of the defendant's forum-related
activities,” and

3. “any exercise of personal jurisdiction must comport with traditional notions of fair
play and substantial justice.”

NBA Properties, Inc., 46 F.4th at 623. Although the Seventh Circuit has not addressed the issue,

other jurisdictions have held that the exercise of limited personal jurisdiction over a defendant is

claim specific. See, e.g. Picot v. Weston, 780 F.3d 1206, 1211 (9th Cir. 2015).

An analysis of whether personal jurisdiction is present must be conducted for each

independent cause of action, considering the contacts specific to that claim. “[T]he minimum

contacts analysis is different depending on the types of claims alleged . . .” Commissioning Agents,

Inc. v. Long, 143 F. Supp. 3d 775, 788 (S.D. Ind. 2015). Therefore, only the contacts specific to a

single claim can be analyzed to determine if jurisdiction is present.

Here, the only two viable claims against HG AutoTech, Counts VI and VII, are based on

the same allegations of copyright infringement. Thus, they can be analyzed together. For Counts

VI and VII, MaddenCo cannot sustain its burden with respect to showing that the three-factor test

set forth by the Seventh Circuit are met. This Court should, therefore, decline to exercise specific

jurisdiction over HG AutoTech.

i. Purposeful Availment/Purposeful Direction

The Seventh Circuit has reiterated three important focuses for a specific jurisdiction

analysis: (1) “in examining ‘minimum contacts,’ we must focus on the defendant’s own contacts

with the state, not the plaintiff’s,” (2) “[t]he defendant’s contacts must be with the forum state, not

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just with individuals within the state,” and (3) “[t]he defendant’s contacts with the state must

demonstrate that the defendant purposively availed itself of the laws of that jurisdiction by availing

itself of the privilege of doing business in the state or by purposively directing activities at the

state.” NBA Properties, Inc., 46 F.4th at 621. “[W]e must remember that the ‘minimum contacts’

analysis is aimed principally at protecting ‘the liberty of the nonresident defendant—not the

convenience of plaintiffs ... and the forum state.’” Id. at 622 (citing Walden v. Fiore, 571 U.S. 277,

284 (2014)).

Notably, MaddenCo’s Complaint is full of general allegations without any specificity of

factual allegations. The copyright infringement assertions contained in the Complaint are no

different. MaddenCo asserts generally, with no identifiable factual support, that Reed and Darby

joined HG AutoTech and used MaddenCo’s software code to develop and market a competing

product. Doc. 2, ¶ 18. MaddenCo generally alleges that HG AutoTech made and distributed

infringing marketing materials, with no allegation specific to Indiana. Doc. 2, ¶ 20. To assert

infringement, MaddenCo generally alleges that HG AutoTech manufactured, distributed, and

offered for sale a product which infringes its protected property. Doc. 2, ¶ 44. Even taking this

empty assertion as true (which is denied), these alleged actions would not establish jurisdiction

over HG AutoTech in Indiana, nor allege any action of HG AutoTech that is connected to Indiana.

These claims fail the first specific jurisdiction factor, because the alleged action is not a

contact with Indiana. As stated, HG AutoTech is a Louisiana company with no Indiana based

owners or employees. Any alleged development of a software for HG AutoTech would have

occurred in Louisiana.

Also, MaddenCo makes general assertions about a competing product being marketed to

customers and investors, particularly using promotional materials with misleading representations.

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Doc. 2, ¶¶ 17, 20, 49, 50. However, these assertions are wholly deficient of any relation to Indiana.

MaddenCo doesn’t name a single potential customer, investor, or partner, much less one in

Indiana, which would have involved marketing activities in Indiana or to Indiana citizens. It is

unclear who these purported customers, investors, or partners are, when these alleged sales

solicitations occurred, where they allegedly occurred, or how they occurred (in-person, zoom,

phone, text, email, etc.). While MaddenCo alleged in its Complaint that this Court has jurisdiction

over the Defendants based on “transacting, doing, and soliciting business in this District,” doc. 2,

¶ 6, it has not presented a single factual allegation to establish that HG AutoTech has any

connection to Indiana. These allegations are insufficient to support jurisdiction.

Regardless, HG AutoTech’s declaration confirms that it does not transact or solicit any

business from Indiana. None of its current clients are in Indiana. The alleged infringement cannot

support specific personal jurisdiction over HG AutoTech.

The aforementioned facts lead to the inescapable conclusion that this Court’s exercise of

either general or specific personal jurisdiction over HG AutoTech would be unreasonable under

the facts of this case. Thus, dismissal is warranted pursuant to Fed. R. Civ. P. 12(b)(2).

ii. Arising Out of or Relating to Forum–Related Activities

Because MaddenCo cannot satisfy the first prong of the test, it objectively cannot do so for

the second. HG AutoTech does not have any Indiana related contacts from which an injury to

MaddenCo arose. MaddenCo alleges the Defendants’ actions (though vaguely pled) infringed on

its copyright in order to unfairly compete with MaddenCo. Doc. 2, ¶¶ 20, 43. These alleged

actions—coding a competing software, marketing it to potential investors or customers, competing

with MaddenCo—would not have and did not occur in Indiana. HG AutoTech undertook no such

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actions in Indiana from which MaddenCo’s competition (MaddenCo’s real complaint) arose.

Accordingly, the second requirement for specific jurisdiction is not satisfied.

iii. Reasonableness

Finally, the Court must consider whether “exercising jurisdiction over the defendant

comports with traditional notions of fair play and substantial justice." Best Chair Inc., 121 F. Supp.

3d at 838. This factor considers: “(1) the burden on the defendant; (2) the forum State’s interest in

adjudicating the dispute; (3) the plaintiff’s interest in obtaining convenient and effective relief; (4)

the interstate judicial system’s interest in obtaining the most efficient resolution of controversies;

and (5) the shared interest of the several States in furthering fundamental substantive social

policies.” Id. at 838–39 (citations omitted).

Here, MaddenCo has not (because it cannot) satisfied its burden under the first two prongs

of the test. Thus, the burden never shifts to HG AutoTech to prove that the exercise of personal

jurisdiction over it in Indiana is unreasonable. However, out of an abundance of caution, it is clear

that exercising personal jurisdiction over HG AutoTech would be unreasonable in this instance for

the same reasons this Court lacks general jurisdiction. HG AutoTech lacks any affiliation with

Indiana and the burden on it to defend a case in Indiana would be great. It would be very

inconvenient for HG AutoTech to participate in a lawsuit in Indiana due to the burden and expense

associated with the travel. Exhibit 1, ¶ 19. A flight to Evansville, Indiana is about seven-hours one

way; driving to Evansville, Indiana takes about thirteen hours by car from his home in Louisiana.

Exhibit 1, ¶ 20. Also, the most efficient resolution of this matter would occur in Louisiana, where

all three Defendants are subject to jurisdiction and venue, as detailed infra, and where any alleged

infringement would have occurred. This Court lacks personal jurisdiction over HG AutoTech.

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C. The Southern District of Indiana is Not a Proper Venue.

MaddenCo alleges that venue is proper in the Southern District of Indiana pursuant to 28

U.S.C. § 1391(b) and § 1400(a) because MaddenCo resides in this District and a substantial part

of the events or omissions occurred in this District. Doc. 2, ¶ 7. Contrary to MaddenCo’s

unsupported allegations, § 1391(b) is not relevant to the Copyright claims before this Court and §

1400(a) is only concerned with the residence of the defendants, not MaddenCo.

“When considering a motion to dismiss, the district court ordinarily assumes the truth of

all well-pleaded allegations in the plaintiff's complaint. But this rule is less absolute when

considering a motion to dismiss under Federal Rule 12(b)(3) than under Rule 12(b)(6).” Deb v.

SIRVA, Inc., 832 F.3d 800, 808–09 (7th Cir. 2016) (citing Firestone Fin. Corp. v. Meyer, 796 F.3d

822, 826 (7th Cir. 2015). “Under Rule 12(b)(3), which allows for dismissal for improper venue,

the district court assumes the truth of the allegations in the plaintiff's complaint, unless contradicted

by the defendant's affidavits.” Id. at 809 (emphasis in original). “[W]hen considering a motion to

dismiss in general, a court may consider matters outside of the pleadings to resolve factual

questions pertaining to jurisdiction, process, or indispensable parties.” Id. “Where one party makes

a bald claim of venue and the other party contradicts it, a district court may look beyond the

pleadings to determine whether the chosen venue is appropriate.” Id. at 809–10. MaddenCo cannot

sustain its burden that venue is proper.

MaddenCo asserts venue under § 1391(b) and § 1400(a). However, MaddenCo’s general

state law claims are preempted by federal Copyright Law, leaving only the copyright claims. The

general venue provision of § 1391(b) is not applicable to copyright claims, and the specific venue

provision of § 1400(a) is the exclusive venue provision for copyright claims. See Quad Intern.,

Inc. v. Doe, 2013 WL 178141, *5 (E.D. Cal. 2013) (“The proper venue for infringement of

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copyright suits is not determined by the general provision governing suits in the federal district

courts, but is governed by the specific venue provision of the Copyright Act.”); Collins v. Doe,

2012 WL 1414246, *3 (S.D. Tex. 2012) (“The general venue statute, 28 U.S.C. § 1391(b), governs

most claims brought in federal court. Copyright-infringement claims are an exception. For

copyright-infringement claims, 28 U.S.C. § 1400(a), not 28 U.S.C. § 1391(b), governs venue.”);

West Coast Prods. v. Does, 2011 WL 11049265, *1 n.1 (D.D.C. 2011) (“The complaint also cites

28 U.S.C. § 1391(b), but since copyright infringement is the sole claim set forth in the complaint,

it is 28 U.S.C. § 1400(a), the exclusive venue provision for actions brought under the Copyright

Act, that controls.”); Nu Image, Inc. v. Does 1-23,322, 799 F. Supp. 2d 34, 37 (D.D.C. 2011)

(“When copyright infringement is the sole claim being alleged, it is misleading, and arguably

disingenuous, to assert that venue may be proper under section 1391(b), the general venue statute,

when section 1400(a) is the exclusive venue statute for copyright infringement actions.”).

The Seventh Circuit has discussed the applicable analysis under § 1400(a) as follows:

Although we rely on the tools of personal jurisdiction—namely, state long-arm


statutes—to determine where a defendant ‘may be found,’ we must do so in a way
that is meaningful to the venue analysis, for section 1400(a) is concerned solely
with venue and not personal jurisdiction. The section 1400(a) inquiry must
therefore focus on contacts with the particular federal judicial district in which the
copyright action has been filed. It is not sufficient that Fjeld would be subject to
personal jurisdiction under the [state] long-arm statute by virtue of contacts with
another district in that state.

Milwaukee Concrete Studios, Ltd. v. Fjeld Mfg. Co., Inc., 8 F.3d 441, 446 (7th Cir. 1993). 28

U.S.C. § 1400 provides for venue in a copyright claim as follows: “(a) Civil actions, suits, or

proceedings arising under any Act of Congress relating to copyrights or exclusive rights in mask

works or designs may be instituted in the district in which the defendant or his agent resides or

may be found.” (Emphasis added.)

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As set forth in detail above, the HG AutoTech does not have any contacts with Indiana

with regard to the copyright infringement allegations. HG AutoTech has no physical presence in

Indiana. It employs no agents or representatives in this District. None of the alleged infringing acts

occurred in Indiana. For the sake of brevity, the arguments set forth above in support of the Rule

12(b)(2) motion to dismiss will not be reiterated. However, it is clear from the arguments above

that, because HG AutoTech is not subject to personal jurisdiction in any judicial district in Indiana,

venue cannot possibly be proper in this particular District. This matter should be dismissed,

therefore, because MaddenCo filed the Complaint in an incorrect venue.

C. Alternatively, This Matter Should Be Transferred.

Based on the foregoing, this Court lacks personal jurisdiction over HG AutoTech, and the

Southern District of Indiana is not a proper venue. Therefore, this matter should be dismissed.

Alternatively, HG AutoTech moves for an order transferring this matter to the Middle District of

Louisiana.

“The common law doctrine of forum non conveniens allows a trial court to dismiss a suit

over which it would normally have jurisdiction if it best serves the convenience of the parties and

the ends of justice.” In re Bridgestone/Firestone, Inc., 420 F.3d 702, 703 (7th Cir.2005). Pursuant

to 28 U.S.C. § 1404(a): “[f]or the convenience of parties and witnesses, in the interest of justice, a

district court may transfer any civil action to any other district or division where it might have been

brought or to any district or division to which all parties have consented.” “When applying forum

non conveniens, district courts must engage in a two-step inquiry, determining (1) whether there

is an available adequate alternative forum and (2) whether adjudication in that forum best serves

the convenience of the parties and the interests of justice.” IAC/InterActiveCorp v. Roston, 44 F.4th

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635, 645 (7th Cir. 2022) (citing Stroitelstvo Bulgaria Ltd. v. Bulgarian–Am. Enter. Fund, 589 F.3d

417, 421 (7th Cir. 2009)).

1. The Middle District of Louisiana is an Adequate Alternative Forum.

The first step in a forum non conveniens analysis is the determination of whether an

adequate alterative forum exists. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 239 (1981). The key

determination is whether “the remedy provided by the alternative forum is so clearly inadequate

or unsatisfactory that it is no remedy at all. Id. This requirement is generally satisfied if the

defendant is amenable to service of process in the alternative forum. Id. at n. 22. The Supreme

Court has described such an inadequate forum as one which “does not permit litigation of the

subject matter of the dispute.” Id.

Here, MaddenCo has named three defendants, a Louisiana company and two of its

employees. The Louisiana company, HG AutoTech, is not subject to this Court’s jurisdiction

because of its pure lack of association with Indiana. The two individual Defendants are subject to

Louisiana’s jurisdiction and venue in the Middle District of Louisiana due to their ongoing

employment with HG AutoTech. As a result, the Middle District of Louisiana is an adequate

alternative forum for MaddenCo’s allegations.

2. The Balance of Relevant Private and Public Interest Factors Weigh


Heavily in Favor of Dismissal.

“When deciding whether to transfer a case under § 1404(a), a district court therefore ‘must

evaluate both the convenience of the parties and various public-interest considerations.’” In re

Ryze Claims Sols., LLC, 968 F.3d 701, 707–08 (7th Cir. 2020) (citing Atl. Marine Const. Co. v.

U.S. Dist. Ct. for W. Dist. of Texas, 571 U.S. 49, 62 (2013)).

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a. Private Interest Factors

“The private interest factors that a court may consider include ‘the relative ease of access

to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of

obtaining attendance of willing, witnesses; possibility of view of premises, if view would be

appropriate to the action; and all other practical problems that make trial of a case easy, expeditious

and inexpensive.’” Clerides v. Boeing Co., 534 F.3d 623, 628 (7th Cir. 2008).

For the private interest factors, any proof of alleged infringement would be located in

Louisiana, with HG AutoTech at its office or with its computer systems. Any evidence of

marketing of the alleged passed off product would be outside of Indiana, as no marketing efforts

were made to any Indiana companies or residents. Also, it is difficult to know the location of

MaddenCo’s alleged witnesses as they are not identified with any specificity. Any HG AutoTech

employee that is compelled to testify will not be easily ordered into court in Indiana, and the burden

of their travel would be significant. The mere fact that all three Defendants would be subjected to

jurisdiction and venue in the Middle District of Louisiana, while only one party (the Plaintiff) is

located in the Southern District of Indiana, demonstrates that the Middle District of Louisiana is

the most convenient venue for the parties to litigate this dispute.

b. Public Interest Factors

The “interest of justice” considerations include: “docket congestion and likely speed to trial

in the transferor and potential transferee forums,” “each court’s relative familiarity with the

relevant law,” “the respective desirability of resolving controversies in each locale,” and “the

relationship of each community to the controversy.” In re Ryze Claims Sols., LLC, 968 F.3d at 708

(citations omitted).

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As to public interest, there is no indication that this matter would be handled more

expediently by the Southern District of Indiana or the Middle District of Louisiana to satisfy the

first factor. As for the second factor, both courts would be applying federal copyright law, making

both courts equally competent to adjudicate the present copyright claims. As to third and fourth

factors, while Indiana is likely to have some interest in resolving any alleged infringement of an

Indiana company, Louisiana also has an interest in resolving allegations of infringement levied

against a Louisiana company and at least one Louisiana resident. However, with any alleged

infringement of MaddenCo’s software code occurring in Louisiana or Tennessee, those

jurisdictions are in a better position to adjudicate the substance of the claims.

Applying these factors, it is in the interest of justice and the convenience of the parties and

witnesses, for this matter to be transferred to the Middle District of Louisiana, a court of proper

jurisdiction and venue as to all three named defendants. Trying this matter before the Southern

District of Indiana will unfairly and unreasonably burden HG AutoTech. HG AutoTech has no

presence in this District. For these reasons, HG AutoTech prays, in the alternative, for an order

transferring this matter to the Middle District of Louisiana.

CONCLUSION

For the foregoing reasons, Defendant HG AutoTech, L.L.C. prays that this Honorable

Court dismiss Plaintiff MaddenCo Inc.’s request for statutory damages and all state law claims

against it. Defendant HG AutoTech further prays that this Court dismiss Plaintiff’s Complaint

pursuant to Fed. R. Civ. P. 12(b)(2) and 12(b)(3) on the grounds that this Court lacks personal

jurisdiction over it, and the United States District Court for the Southern District of Indiana is a

court of improper venue. Alternatively, Defendant prays for an order of this Court transferring this

matter to the United States District Court for the Middle District of Louisiana, a court of proper

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jurisdiction and venue, pursuant to 28 U.S.C. § 1404. Finally, HG AutoTech prays for an award

of all costs and fees associated with filing this motion, and any other relief the Court may deem

appropriate.

Respectfully submitted:

BREAZEALE, SACHSE & WILSON, L.L.P.


23rd Floor, One American Place
Post Office Box 3197
Baton Rouge, LA 70821-3197
Telephone (225) 387-4000
Telecopier (225) 381-8029

/s/ Scott Hensgens


Scott Hensgens (La Bar # 25091)
[email protected]
Danielle L. Borel (La. Bar #35669)
[email protected]

and

MARTIN IP LAW GROUP


C. Richard Martin (In. Bar # 47708)
225 Court Street
Evansville, IN 47708
Telephone: (812) 492-4478
[email protected]

Counsel for HG AutoTech, L.L.C.

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