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ElcomSoft, Ltd. v. Passcovery Co., Ltd.

United States District Court, E.D. Virginia

July 31, 2013

ELCOMSOFT, LTD, Plaintiff,
v.
PASSCOVERY CO. LTD., et al., Defendants

For ElcomSoft, Ltd., Plaintiff: Filipp Iosifovich Kofman, Kevin Richard Garden, International Legal Counsels PC, Alexandria, VA.

For Passcovery Co. Ltd., Accentsoft, Denis Gladish, Ivan Golubev, Defendants: Duncan Glover Byers, LEAD ATTORNEY, Jeffrey Dennis Wilson, Byers Law Group, Norfolk, VA; Peter Andrew Koziol, PRO HAC VICE, Assouline & Berlowe PA, Boca Raton, FL.

OPINION

Page 617

Arenda L. Wright Allen, United States District Judge.

ORDER

On January 9, 2013, Plaintiff ElcomSoft, Ltd. (" ElcomSoft" ) brought this suit against Defendants Passcovery Co., Ltd. (" Passcovery" ), Accentsoft, Denis Gladysh, [1] and Ivan Golubev, alleging that Defendants had infringed its patents in violation of federal law. ElcomSoft also asserts claims of unjust enrichment and breach of contract under common law doctrines.

On May 10, 2013, Defendants filed a Motion to Dismiss. ECF No. 21. Defendants seek dismissal on the bases of personal jurisdiction, venue, forum non conveniens ,

Page 618

and failure to state a claim upon which relief could be granted.

Defendants' first three objections stem from the uncontested fact that all parties to this suit are citizens of the Russian Federation (" Russia" ). Defendants argue that their ties to the United States and to this district are insufficient to establish proper personal jurisdiction and venue in this Court. Alternatively, Defendants argue that Russia would be a more convenient forum for this litigation.

For the following reasons, the Motion to Dismiss is GRANTED IN PART on the basis of forum non conveniens , and the case is DISMISSED WITHOUT PREJUDICE.

I. OVERVIEW

Although Defendants have raised jurisdictional questions, the Court addresses their claim of forum non conveniens first.

" A district court . . . may dispose of an action by a forum non conveniens dismissal, bypassing questions of . . . personal jurisdiction, when considerations of convenience, fairness, and judicial economy so warrant." Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp. , 549 U.S. 422, 432, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007).

ElcomSoft argues that Passcovery has waived its objection to personal jurisdiction and that all Defendants have sufficient ties to this District. Even assuming that ElcomSoft's waiver argument is correct, jurisdictional discovery would be required in order to determine whether this Court possesses personal jurisdiction over Mr. Gladysh and Mr. Golubev. Therefore, " considerations of convenience, fairness, and judicial economy" warrant resolving Defendants' forum non conveniens claim before addressing their other arguments for dismissal. See id. at 435 (affirming a district court's decision to dismiss a case on the basis of forum non conveniens prior to determining personal jurisdiction because the latter question would have required jurisdictional discovery).

II. FORUM NON CONVENIENS

A. Factual Background

ElcomSoft and Passcovery are companies organized under the laws of Russia, and their business involves the sale of digital password recovery products. Compl. paras. 3-4, 13, 21, ECF No. 1; Gladysh Decl. paras. 7, 13-16, ECF No. 22-1. Accentsoft is a brand name used by Passcovery. Compl. para. 5, ECF No. 1; Gladysh Decl. para. 8, ECF No. 22-1. Mr. Gladysh and Mr. Golubev are residents and citizens of Russia. Compl. paras. 6-7, ECF No. 1; Gladysh Decl. para. 4, ECF No. 22-1; Golubev Decl. para. 3, ECF No. 22-2.

ElcomSoft alleges that it owns patents on several password recovery methods. Compl. para. 15, ECF No. 1. It alleges that Mr. Golubev was hired as a software developer on June 1, 2003, and that his employment contract contained non-disclosure and confidentiality provisions. Id. at para. 18. But see Golubev Decl. para. 11, ECF No. 22-2 (alleging that Mr. Golubev never signed the contract attached to the Complaint). According to the Complaint, Mr. Golubev and Mr. Gladysh founded Passcovery while Mr. Golubev was working for Elcomsoft. Compl. para. 20, ECF No. 1. But cf. Gladysh Decl. para. 50, ECF No. 22-1 (alleging that Mr. Golubev is not currently a Passcovery employee).

The Complaint alleges that Mr. Golubev resigned from ElcomSoft on December 31, 2009, and that thereafter Passcovery released several products that allegedly infringe ElcomSoft's patents. Compl. paras. 22, 24, ECF No. 1. ElcomSoft asserts that these products ...


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