JFXD TRX ACQ LLC v. trx.com

1   WO                                                                   
2                                                                        
3                                                                        
4                                                                        
5                                                                        
6                 IN THE UNITED STATES DISTRICT COURT                    
7                     FOR THE DISTRICT OF ARIZONA                        

8                                                                        

9   JFXD TRX ACQ LLC,                  No. CV-23-02330-PHX-ROS           

10              Plaintiff,              ORDER                             

11   v.                                                                   

12   trx.com, et al.,                                                     

13              Defendants.                                               
14                                                                        
15        Hoping to obtain ownership of the domain name <trx.com>, Plaintiff JFXD TRX 
16   ACQ LLC filed this case in the Eastern District of Virginia.  That court concluded it lacked 
17   personal jurisdiction over Defendant Loo Tze Ming and transferred the case to Arizona.  
18   Once in Arizona, the Court gave Plaintiff multiple opportunities to plead a viable claim.  
19   Plaintiff was unable to do so, and the Court dismissed Plaintiff’s complaint with prejudice.  
20   Ming now seeks an award of attorneys’ fees and non-taxable expenses.  Ming is entitled to 
21   such an award.                                                       
22     I.   Standard for Awarding Fees and Costs                          
23        JFXD  sued  Ming  under  

15 U.S.C. § 1125

(d)  hoping  to  obtain  ownership  of 
24   <trx.com>.  The type of claim JFXD brought meant the court could “award reasonable 
25   attorney fees to the prevailing party” after concluding the case was “exceptional.”  15 

26 U.S.C. § 1117

(a).  Determining whether a case qualifies as “exceptional” requires looking 
27   “to the totality of the circumstances” and assessing whether the case “stands out from 
28   others with respect to the substantive strength of a party’s litigating position (considering 
1   both the governing law and the facts of the case) or the unreasonable manner in which the 
2   case was litigated.”  SunEarth, Inc. v. Sun Earth Solar Power Co., 

839 F.3d 1179

, 1180 
3   (9th Cir. 2016).  In making this assessment a court should consider factors such as 
4   “frivolousness,  motivation,  objective  unreasonableness  (both  in  the  factual  and  legal 
5   components of the case) and the need in particular circumstances to advance considerations 
6   of compensation and deterrence.”  

Id.

                                
7        Understanding why the present case qualifies as “exceptional” requires looking to 
8   events that occurred long before this suit was filed as well as the proceedings in a separate 
9   case.  Those background facts, combined with the weakness of JFXD’s arguments and 
10   positions asserted in this case, render this case exceptional.       
11     II.  Events Before Present Suit                                    
12        The domain name <trx.com> was first registered in 1999 by an unknown third party.  
13   Approximately four years after that registration, nonparty Randal Hetrick invented “the 
14   famous gym product called TRX.”  (Doc. 68 at 3).  Mr. Hetrick began selling that gym 
15   product through a company known as Fitness Anywhere LLC.  Over the following years, 
16   Fitness Anywhere obtained and used numerous trademarks involving the letters “TRX.”  
17   (Doc. 68 at 3).  In 2018, attorney Alain Villeneuve began providing “IP legal services” to 
18   Fitness Anywhere.  (Doc. 95-7 at 5).  In June 2022, Fitness Anywhere filed for Chapter 11 
19   reorganization.  (CV-22-2042, Doc. 11-1).                            
20        On June 16, 2022, Fitness Anywhere and a related company filed an application 
21   with the bankruptcy court for permission to employ Mr. Villeneuve as special intellectual 
22   property  counsel  while  the  bankruptcy  proceeded.    (Doc.  95-7).    According  to  that 
23   application, Mr. Villeneuve would provide Fitness Anywhere with “general IP advice, 
24   patent and trademark prosecution, brand enforcement, IP litigation, management of foreign 
25   IP counsel, and maintenance of IP assets.”  (Doc. 95-7 at 5).  Mr. Villeneuve submitted a 
26   declaration  in  support  of  that  application  where  he  explained  his  appointment  was 
27   appropriate because of his “deep understanding and familiarity with [Fitness Anywhere], 
28   [its] IP and the issues that arise concerning [Fitness Anywhere’s] IP.”  (Doc. 95-7 at 11).  
1   The  application  was  granted,  and  Mr.  Villeneuve  provided  legal  services  to  Fitness 
2   Anywhere beginning on June 8, 2022.  The record does not disclose when Mr. Villeneuve 
3   stopped providing services, but it is undisputed Mr. Villeneuve was still providing services 
4   as of late August 2022.  (Doc. 95-8 at 4 n.1).                       
5        On August 26, 2022, JFXD purchased all of Fitness Anywhere’s assets, including 
6   its intellectual property such as trademarks.  (Doc. 23-2330 Doc. 74-3).  Mr. Villeneuve’s 
7   name does not appear on the asset purchase agreement, but it is difficult to believe Fitness 
8   Anywhere’s “special intellectual property counsel” would have been unaware that his 
9   client had agreed to sell all its intellectual property.  Despite Fitness Anywhere no longer 
10   owning any intellectual property, Mr. Villeneuve continued to work for Fitness Anywhere 
11   in some capacity.                                                    
12        In the fall of 2022, Fitness Anywhere asked Mr. Villeneuve to file a domain name 
13   dispute regarding ownership of <trx.com>.1  (Doc. 68-2).  Mr. Villeneuve prepared the 
14   necessary paperwork and on October 19, 2022, filed the dispute with a nongovernmental 
15   entity.  In that dispute Mr. Villeneuve stated, “Fitness Anywhere LLC is the owner of the 
16   famous trademark TRX.”  (Doc. 68-2 at 4).  That was false.  As of October 2022, JFXD, 
17   not Fitness Anywhere, owned “the famous trademark TRX.”              
18        As of 2022, Defendant Ming had owned <trx.com> for approximately four years.  
19   Ming had purchased the domain name from a nonparty for $138,000.  Despite owning 
20   <trx.com>, Ming claims he did not receive notice of the domain name dispute proceeding 
21   initiated by Mr. Villeneuve.  Thus, Ming did not respond in that proceeding.  In November 
22   2022, a decision was issued by the nongovernmental entity concluding <trx.com> should 
23   be transferred to Fitness Anywhere unless Ming filed suit in Arizona.  (CV-22-2042 Doc. 
24   1).  Ming received notice of that decision and on November 30, 2022, filed suit in Arizona. 
25        Ming’s complaint sought a determination he was entitled to remain the owner of 
26   <trx.com>.  That case was assigned to Judge Logan.  After filing his complaint, Ming 
27                                                                        
    1 Mr. Villeneuve has not identified who at Fitness Anywhere asked him to file that dispute 
28   and, again, it is difficult to believe Fitness Anywhere would have made such a request 
    given that Fitness Anywhere did not own the intellectual property.   
1   obtained a waiver of service from Fitness Anywhere, signed by Mr. Villeneuve.  (CV-22-
2   2042 Doc. 8).  Despite waiving service, Fitness Anywhere did not respond to the complaint.  
3   Instead, on February 3, 2023, Mr. Villeneuve emailed Judge Logan’s chambers stating 
4   Fitness Anywhere had declared bankruptcy in June 2022.  Mr. Villeneuve’s email also 
5   stated he was “the general counsel of JFXD . . . the purchaser of the Chapter 11 assets” and 
6   he was unable to determine “the optimal way” to file notice of Fitness Anywhere’s 
7   bankruptcy.  (CV-22-2042 Doc. 11-1).  Given that Mr. Villeneuve was general counsel for 
8   JFXD, it is not clear why he waived service on behalf of Fitness Anywhere.  Nor is it clear 
9   why  Mr.  Villeneuve  believed  he  was  responsible  for  filing  notice  regarding  Fitness 
10   Anywhere’s  bankruptcy.    At  any  rate,  Judge  Logan  stayed  the  case  against  Fitness 
11   Anywhere pending resolution of the bankruptcy.                       
12     III.  Activities in Present Suit                                   
13        Shortly after Mr. Villeneuve emailed Judge Logan’s chambers, JFXD filed the 
14   present suit in the Eastern District of Virginia.  Mr. Villeneuve was involved as counsel for 
15   JFXD from the beginning.  (Doc. 6-1).  JFXD’s complaint asserted a cybersquatting claim 
16   against  <trx.com>  and  Ming.    According  to  JFXD,  <trx.com>  is  “identical  to  or 
17   confusingly similar to or dilutive of the TRX marks.”  (Doc. 1 at 12).  As for Ming, he was 
18   identified as “the registrant of <trx.com>” and allegedly had a “bad faith intent to profit 
19   from” misusing <trx.com>.  (Doc. 1 at 2, 12).  JFXD’s complaint sought transfer of 
20   <trx.com> to JFXD as well as an award of statutory damages.  When the Virginia court 
21   asked JFXD why it believed the Virginia court had personal jurisdiction over Ming, JFXD 
22   responded by arguing Ming was not a proper party because Ming did not own <trx.com>.  
23   Of course, it had been JFXD’s own decision to identify Ming as the owner of <trx.com> 
24   and to name him as a defendant.  JFXD did not offer any explanation to the Virginia court 
25   why it had sued Ming if JFXD believed Ming was not the owner of <trx.com>.     
26        Ming appeared in Virginia to contest personal jurisdiction.  Ming conceded he was 
27   subject to personal jurisdiction in Arizona, and he requested the case be transferred to 
28   Arizona.  (Doc. 42 at 8).  JFXD opposed transfer by arguing, again despite its own 
1   allegations  that  Ming  was  the  owner  of  <trx.com>,  that  there  was  no  “evidence  of 
2   ownership of the domain by [Ming].”  (Doc. 39 at 6).                 
3        The Eastern District of Virginia did not address JFXD’s shifting positions regarding 
4   Ming.  Instead, that court concluded personal jurisdiction over Ming was lacking and 
5   transferred the case to Arizona.  (Doc. 59).  After the case arrived in Arizona, Mr. 
6   Villeneuve, as counsel for JFXD, filed a motion for preliminary injunction.  (Doc. 68).  The 
7   motion sought an order requiring the immediate transfer of <trx.com> to JFXD.  That 
8   motion did not discuss or cite GoPets Ltd. v. Hise, the Ninth Circuit authority most 
9   pertinent to JFXD’s cybersquatting claim.  

657 F.3d 1024, 1032

 (9th Cir. 2011).  Ming 
10   filed an opposition, discussing the applicability of GoPets and why, under that precedent, 
11   JFXD’s cybersquatting claim was doomed.  According to Ming, <trx.com> was first 
12   registered  years  before  the  TRX  gym  product  was  invented  and,  therefore,  GoPets 
13   established  JFXD’s  cybersquatting  claim  had  no  chance  of  success.    JFXD’s  reply 
14   acknowledged GoPets but argued, for indecipherable reasons, the Court should not follow 
15   GoPets.  It was unreasonable for JFXD to file a reply that did not contain any plausible 
16   argument that GoPets did not bar the cybersquatting claim.           
17        The Court denied the request for preliminary injunction by pointing out it was 
18   undisputed “<trx.com> was initially registered in 1999 and the TRX-related marks did not 
19   exist until years later.”  (Doc. 82 at 4).  Based on that sequence of events and the rule set 
20   forth in GoPets, the Court concluded JFXD had “no likelihood of success.”  (Doc. 82 at 3).  
21   Instead of requiring Ming file a motion to dismiss making the same arguments he had made 
22   in opposing the motion for preliminary injunction, the Court ordered JFXD to file a 
23   document explaining how GoPets did not require dismissal of the complaint.  JFXD was 
24   also ordered to explain Mr. Villeneuve’s contradictory statements regarding ownership of 
25   the TRX-related marks.  (Doc. 82 at 5).  That is, the Court instructed Mr. Villeneuve to 
26   explain why he had stated Fitness Anywhere owned the TRX-related marks in filing the 
27   domain name dispute despite Fitness Anywhere having sold those marks months earlier.   
28        JFXD’s  response  addressing  the  viability  of  its  claim  in  light  of  GoPets  was 
1   exceptionally difficult to understand.  It appeared JFXD misunderstood basic aspects of 
2   litigating a cybersquatting claim.  For example, JFXD titled one section of its response 
3   “Further Evidence a Registrar Owns this URL.”  (Doc. 83 at 8).  A “registrar” is a company 
4   that registers “domain names with registries on behalf of those who own the names.”  Off. 
5   Depot Inc. v. Zuccarini, 

596 F.3d 696, 699

 (9th Cir. 2010).  It was undisputed <trx.com> 
6   was not currently owned by a “registrar.”  Thus, JFXD’s statement that <trx.com> was 
7   owned by a “registrar” was inexplicable.                             
8        JFXD’s response also recounted a sequence of events it described as “worthy of a 
9   fiction book.”  (Doc. 83 at 8).  JFXD allegedly attempted to buy <trx.com> through 
10   GoDaddy, a nonparty brokerage that connects buyers with sellers of domain names.  JFXD 
11   claims it was contacted by a GoDaddy agent and “[t]here was the smell of money in the 
12   air, the same vibe as entering a used car showroom.”  The agent “was forceful . . . and tried 
13   to bully [JFXD] in giving an initial seven number initial offer” to purchase <trx.com>.”  
14   (Doc. 83 at 8).  JFXD refused to do so.  These events had no relevance to the current 
15   dispute.  GoDaddy is not a party nor is there any connection between GoDaddy and Ming.  
16   The fact that JFXD believed it had been mistreated by GoDaddy was irrelevant to the claim 
17   JFXD was pursuing in this case.                                      
18        On the merits, and as best as the Court could determine, JFXD’s response was 
19   attempting to argue GoPets did not preclude its cybersquatting claim because <trx.com> 
20   had been “re-registered” after the TRX-related marks came into existence.  While unsure 
21   whether that was the position JFXD wished to pursue, the Court granted JFXD leave to 
22   amend its complaint to allege facts supporting that argument.  (Doc. 85).   
23        For  unknown  reasons,  JFXD  and  Mr.  Villeneuve  ignored  the  Court’s  Order 
24   requiring an explanation of Mr. Villeneuve’s contradictory statements regarding ownership 
25   of the TRX-related marks.  Identifying the proper owner of the TRX-related marks was 
26   crucial for this case to continue.  If Mr. Villeneuve’s statement in October 2022 that Fitness 
27   Anywhere still owned the TRX-related mark was accurate, JFXD would not have standing 
28   to bring the current case.  The decision to ignore the Court’s Order requiring an explanation 
1   addressing ownership was unreasonable.                               
2        JFXD  filed  an  amended  complaint  but,  as  the  Court  later  observed,  those 
3   “allegations appear[ed] to be based on a misunderstanding of how the domain name system 
4   operates.”    (Doc.  88  at  2).    JFXD’s  amended  complaint  alleged  the  registration  of 
5   <trx.com> had lapsed and Ming had purchased the domain name from “the public domain.”  
6   It was not clear what JFXD meant by “public domain.”  More importantly, JFXD’s position 
7   had  always  been  that  Ming  purchased  <trx.com>  for  $138,000  through  an  “internet 
8   brokerage.”  (Doc. 74 at 3).  JFXD appeared to believe registration with a registrar was the 
9   same as purchasing a domain name through an “internet brokerage.”  Those are very 
10   different events.  Because JFXD had not alleged any facts establishing the registration of 
11   <trx.com>  had lapsed and Ming had “re-registered”  it,  the complaint was dismissed 
12   without leave to amend.                                              
13        At the same time JFXD filed its amended complaint, Mr. Villeneuve submitted a 
14   statement addressing his contradictory statements.  That statement was submitted ex parte 
15   via email to the Court.  (Doc. 87).  The Court noted it was improper to submit such ex parte 
16   statements and instructed Mr. Villeneuve not to send future communications via email.  As 
17   for the contents, the email was “largely indecipherable.”  (Doc. 88 at 4).  The Court could 
18   not determine why Mr. Villeneuve had made conflicting statements and submitting an 
19   indecipherable statement attempting to explain his behavior was unreasonable. 
20        A few weeks after judgment was entered against JFXD, Ming filed a motion for 
21   attorneys’ fees.  The governing statute allows for awards of attorney’s fees to prevailing 
22   parties in “exceptional cases.”  

15 U.S.C. § 1117

(a).  Ming argues that requirement is met 
23   here because JFXD “had no chance of success” and engaged in inappropriate behavior 
24   throughout this case, such as presenting baseless legal arguments and attempting ex parte 
25   communications with the Court.  Ming seeks an award of $39,746.50 in attorneys’ fees and 
26   $1,352.27 in non-taxable expenses.  JFXD filed an opposition but, as with many of its 
27   previous filings, that document is very hard to understand.  JFXD’s opposition does not 
28   contain any objections to the hourly rates of Ming’s counsel or the number of hours that 
1   counsel spent on this case.                                          
2        JFXD’s improper behavior continued in opposing the request for attorneys’ fees.  
3   The following is a partial list of JFXD’s misstatements or unreasonable arguments made 
4   in that opposition:                                                  
5          •  JFXD argues a plaintiff is entitled to fees only upon showing the defendant 
6             “engaged in malicious, fraudulent, deliberate or willful infringement.”  (Doc. 
7             99 at 2).  That test was overruled in SunEarth, Inc. v. Sun Earth Solar Power, 
8             Co., 

839 F.3d 1179

 (9th Cir. 2016).  JFXD cites SunEarth but fails to apply 
9             its holding.                                               
10          •  JFXD argues Ming “cites a bizarre lower standard” regarding entitlement to 
11             fees.  (Doc. 99 at 3).  However, JFXD is the party that cites the incorrect 
12             standard.                                                  
13          •  JFXD repeatedly argues the Court should have applied “2nd Circuit law” 
14             because the case was transferred from Virginia.  (Doc. 99 at 3, 4).  Virginia 
15             is in the Fourth Circuit, not the Second Circuit.          
16          •  JFXD argues the Court should not have applied Ninth Circuit law.  JFXD did 
17             not make this argument while the case was pending.         
18          •  JFXD argues “extreme poor lawyering in GoPets misled the 9th Circuit to 
19             ignore the relevant portion of the ACPA.”  (Doc. 99 at 3).  JFXD appears to 
20             believe “poor lawyering” is a basis to ignore binding precedent.  It is not.   
21          •  JFXD argues it will request GoPets be overruled and that argument “is not 
22             frivolous litigation but a public service.”  (Doc. 99 at 5).  Before judgment, 
23             JFXD  never  argued  GoPets  was  incorrect.    Rather,  JFXD  consistently 
24             maintained, without explanation, that  GoPets did not apply in this case 
25             because of factual differences.                            
26          •  JFXD argues GoPets should not apply because “[t]he 9th Circuit’s own jury 
27             instructions no [sic] not include GoPets.”  (Doc. 99 at 6).  The contention 
28             that model  jury instructions  should  control  over  a published  opinion  is 
1             frivolous.                                                 
2          •  JFXD argues the Court required he file an amended complaint by February 
3             21, 2024, despite the fact that Mr. Villeneuve was “leaving on February 14, 
4             2024 to return on February 27, 2024 for a romantic anniversary.”  (Doc. 99 
5             at 7).  JFXD did not seek an extension of the February 21 deadline and it is 
6             unreasonable to argue the Court should have considered Mr. Villeneuve’s 
7             undisclosed “romantic anniversary” plans in setting a briefing schedule. 
8          •  JFXD presents a strange argument that, despite naming Ming as a defendant, 
9             JFXD continues to believe Ming is a “fraud.”  (Doc. 99 at 1).  JFXD allegedly 
10             attempted to investigate Ming and what it found was “chilling.”  (Doc. 99 at 
11             9).  JFXD cites postings on an Internet message board allegedly discussing 
12             fraud committed by Ming.  The Court cannot understand what JFXD is 
13             attempting  to  establish  through  this  argument  because  it  was  JFXD’s 
14             decision to sue Ming.  Any argument from JFXD that Ming is not a proper 
15             party is frivolous.                                        
16   That partial list of arguments in a single filing is representative of JFXD’s behavior 
17   throughout this case.  JFXD and its counsel were unable to present intelligible factual or 
18   legal arguments, leaving Ming and the Court to guess as to  why JFXD believed its 
19   cybersquatting claim was viable.  Many cases involve one or two bad arguments or 
20   positions, but this case was unique in the number of unintelligible assertions made by JFXD 
21   and its counsel.                                                     
22     IV.  Award and Amount                                              
23        Given the behavior outlined above, this case is “exceptional.”  This case stands out 
24   from others in both the frivolousness and objective unreasonableness of JFXD’s behavior.  
25   It would be unjust to require Ming bear the cost of litigating against unintelligible factual 
26   and legal positions.  Moreover, awarding fees might dissuade JFXD from pursuing such 
27   tactics in the future.                                               
28        Having determined this is an exceptional case such that Ming should be awarded 
       costs and fees, the final issue is determining the amount to award.  Local Rule 54.2(f) 
2||    required  JFXD  “identify  with  specificity  all  disputed  issues  of material  fact  and... 
  ||  separately identify each and every disputed time entry or expense item.”  JFXD chose not 
4||    to comply with this rule.  In fact, JFXD did not make any objection to the hourly rate or 
5 ||  the number of hours set forth in Ming’s motion for fees.  The Ninth Circuit has instructed 
6 ||  that when an opposing party “cannot come up with specific reasons for reducing the fee 
      request that the district court finds persuasive, [the district court] should normally grant the 
8 ||  award in full, or with no more than a haircut.”  Moreno v.  City of Sacramento, 

534 F.3d 1106, 1116

 (th Cir. 2008).  Defense counsel’s hourly rates are reasonable, the number of 
10 ||  hours expended in defending this case was reasonable, and the non-taxable expenses were 
11 ||  reasonable.  Therefore, not even a “haircut” would be appropriate.  Jd.  The Court will 
12 ||  award the full amount requested. 
13          Accordingly, 
14          IT IS ORDERED the Motion for Attorney Fees and Non-Taxable Expenses (Doc. 
      95) is GRANTED.  Defendant is awarded $39,746.50 in attorneys’ fees and $1,352.27 in 
16 ||  non-taxable expenses.  The Clerk of Court shall enter a judgment in favor of Defendant 
17||    Loo Tze Ming in the amount of $41,098.77. 
18          Dated this 8th day of May, 2024. 
19                                               fo            = 
20                                              C        |        .     ES      . 
21                                               Honorable    slyn ©.   Silver 
02                                               Senior United States District Judge 
23 
24 
25 
26 
27 
28 

                                         -10-