In MGA Entertainment Inc. v. Innovation First Inc. et al., the Ninth Circuit Court of Appeals affirmed a lower court ruling dismissing MGA Entertainment Inc.’s lawsuit accusing Innovation First Inc. (IFI) of engaging in an anti-competitive scheme by making false statements about the design for the Hexbug Nano, for lack of personal jurisdiction. In its suit, MGA accused its rival of violating the Lanham Act by making claims that its competitors had stolen design components related to the motor assembly, housing and legs of its popular Hexbug Nano robotic insect toy. MGA further claimed that Innovation made its Hexbug Nano claims to interfere with the sale of MGA’s Legend of Nara Battling Bugs.
In a unanimous, unpublished ruling, the Ninth Circuit held that MGA failed to show that Texas-based IFI had adequate “continuous and systematic” contacts within California to trigger general personal jurisdiction. According to the court, although IFI maintains contacts with various California entities and actively contracts to sell their products in California, the alleged continuous activity is not sufficiently substantial to hold IFI amenable to suits unrelated to that activity.
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