## Facts

- Thousand Oaks Barrel Co., LLC (Thousand Oaks) was a Virginia company with its principal place of business in Virginia that manufactured and sold miniature bourbon barrels for uses such as beverage containers, cigar humidors, and wedding card depositories.
- Deep South Barrels LLC (Deep South) was a Texas limited liability company that sold similar miniature barrel products, including through an interactive e-commerce website available to customers nationwide.
- Thousand Oaks alleged that Deep South copied Thousand Oaks’s products and related intellectual property and used Thousand Oaks’s information to compete in the same market.
- Thousand Oaks filed suit in the Eastern District of Virginia asserting multiple claims that included federal intellectual-property theories (such as trademark/trade dress and copyright) and state-law business torts and contract-related theories.
- Thousand Oaks also asserted a Virginia Uniform Trade Secrets Act (VUTSA) claim and, separately, a Virginia common-law misappropriation claim.
- Defendants moved to dismiss on several grounds, including lack of personal jurisdiction over out-of-state defendants and failure to state claims, with specific challenges to the common-law misappropriation claim and portions of the VUTSA claim.

## Issues

1. Whether the court could exercise specific personal jurisdiction over Deep South, a Texas company, based on its interactive website and sales of the accused products into Virginia.
2. Whether the court could exercise personal jurisdiction over certain other non-Virginia defendants (including individuals and other entities) based on their alleged roles in Deep South’s business and the alleged wrongdoing.
3. Whether Virginia recognizes a stand-alone common-law misappropriation claim in this setting, or whether the claim is displaced by the Virginia Uniform Trade Secrets Act.
4. Whether parts of Thousand Oaks’s VUTSA claim were barred by the statute of limitations.

## Decision

- The court held it had specific personal jurisdiction over Deep South because Deep South conducted online sales into Virginia through an interactive e-commerce site and those forum contacts were tied to the alleged infringement and unfair competition.
- The court dismissed certain other defendants for lack of personal jurisdiction where the complaint did not allege sufficient Virginia-directed contacts attributable to those defendants individually.
- The court dismissed Thousand Oaks’s Virginia common-law misappropriation claim, concluding Virginia law did not provide a free-standing misappropriation tort that would duplicate trade-secret remedies governed by VUTSA.
- The court dismissed portions of the VUTSA claim as time-barred to the extent the alleged misappropriation occurred outside the applicable limitations period.
- The court allowed the case to proceed against Deep South on other adequately pleaded claims (including core intellectual-property and unfair-competition theories), at least at the motion-to-dismiss stage.

## Legal Principles

- A federal court sitting in diversity applies the forum state’s long-arm statute and due process; for specific personal jurisdiction, the plaintiff must show purposeful availment, a sufficient link between the forum contacts and the claims, and constitutional reasonableness.
- In internet commerce cases in the Fourth Circuit, an out-of-state defendant may be subject to specific jurisdiction when it directs electronic activity into the forum with the intent to do business there and that activity gives rise to the plaintiff’s claims (including through a website that completes sales shipped into the forum).
- Personal jurisdiction over individuals and related entities requires forum contacts tied to each defendant; a defendant’s corporate status or association with a business is not, by itself, enough to establish minimum contacts.
- Under Rule 12(b)(6), a complaint must plead enough factual content to state a plausible claim for relief.
- VUTSA provides a comprehensive civil remedy for trade-secret misappropriation and can displace overlapping common-law theories that rest on the same alleged misuse of confidential or trade-secret information.
- VUTSA claims are subject to a statute of limitations; claims based on misappropriation outside the limitations period are subject to dismissal.

## Conclusion

The court found that a Texas seller’s interactive website and actual sales into Virginia supported specific personal jurisdiction over that seller for claims tied to the alleged copying of miniature barrel products, but it declined to exercise jurisdiction over several other out-of-state defendants whose alleged Virginia connections were not adequately pleaded. On the merits, the court dismissed the plaintiff’s stand-alone Virginia common-law misappropriation claim as displaced in substance by VUTSA and dismissed untimely portions of the VUTSA claim, while permitting the principal intellectual-property and related claims against Deep South to continue past the pleading stage.


Thousand Oaks Barrel Co., LLC v. Deep South Barrels LLC, 241 F. Supp. 3d 708, 2017 WL 1074936 (2017)