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No Personal Jurisdiction over Trademark Defendants

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On November 12, 2018, Tech and Goods, Inc. (Plaintiff) filed a complaint against Tooletries, LLC, and Tooletries Pty. Ltd. (together, Tooletries Defendants) and 30 Watt Holdings, LLC (30 Watt) (Defendants). Plaintiff alleged that Defendants’ “Sudski” and “Sipski” products violated various provisions of the Lanham Act, violated the Michigan Consumer Protection Act, and constituted common law unfair competition. On December 6, 2018, 30 Watt filed a motion to dismiss for lack of personal jurisdiction and improper venue. On January 4, 2019, Tooletries Defendants followed suit and filed a similar motion.


PARTIES OVERVIEW

Tech and Goods, Inc. – operating under the tradename Sipcaddy – is a Georgia corporation that conducts business in southeastern Michigan.

Tooletries Pty. Ltd. is an Australian company, and Tooletries, LLC is its wholly-owned American subsidiary. The two companies have the same owners and conduct the same business in selling the same products in the United States and Australia.

30 Watt Holdings, LLC is a Minnesota limited liability company, who operates as a novelty item retailer. 30 Watt conducts business in southeastern Michigan. Tooletries Defendants operate as 30 Watt’s supplier.

Defendants market and sell a “Sudski Shower Beer Holder” and “Sipski Shower Wine Glass Holder” that allegedly infringe Plaintiff’s SHOWER BEER trademark. The allegedly infringing products are sold by third parties in Michigan. Tooletries Defendants also directly sell the allegedly infringing product through their websites, and a buyer in Michigan can make purchases from the websites. However, Tooletries Defendants have not directly sold a single product in Michigan.

THE PRODUCTS

The products at issue are suction-cup beverage holders, designed with the purpose of enabling consumers to drink – namely beer or wine – in the shower.

Plaintiff alleged that its SHOWER BEER and SIPCADDY products have existed in the stream of commerce since 2014. Plaintiff applied for and received federal trademark registration for SIPCADDY on March 3, 2015 for “bath accessories, namely, cup holders.” Plaintiff applied for and received federal trademark registration for SHOWER BEER on November 7, 2017 for “bath accessories, namely, cup holders.

30 Watt alleged that it launched its “Sudski” and “Sipski” products in 2017.

Plaintiff argued that by using Sipcaddy’s SHOWER BEER mark as a focal point in their “Sudski” packaging, and by using a similar name to Sipcaddy for their “Sipski” product, Defendants risked causing consumer confusion between Sipcaddy and Defendants’ products.

LEGAL STANDARD

When a defendant files a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing that jurisdiction does in fact exist.[1] The court may decide the motion (1) using affidavits alone, (2) permitting discovery before deciding the motion, or (3) conducting an evidentiary hearing.[2]

Article III, § 2 of the United States Constitution grants federal courts with jurisdiction to hear cases arising under the United States Constitution, federal statutes, and treaties. For federal question jurisdiction to exist, the plaintiff must present a federal question or federal issue as part of its well-pleaded complaint; the well-pleaded complaint rule is not satisfied by a defense based on federal law. For cases over which the Court has federal question jurisdiction, personal jurisdiction over a defendant exists if the defendant is subject to service of process under the forum state’s long-arm statute and if the exercise of personal jurisdiction would not deny the defendant due process.[3] If the forum’s state court would have personal jurisdiction over a defendant, generally a federal court in the same state will as well.

State courts have general jurisdiction, meaning that they can hear any controversy except those prohibited by state law. The immediate Court applied the conclusion stemming from Bird v. Parsons, which held that “general jurisdiction is proper only [when] ‘a defendant’s contacts with the forum state are of such a continuous and systematic nature that the state may exercise personal jurisdiction over the defendant even if the action is unrelated to the defendant's contacts with the state.’”[4]

Specific jurisdiction arises from the defendant having certain minimum contacts with the forum state so that the court may hear a case whose issues arise from those minimum contacts. Minimum contacts typically exist where a defendant purposefully availed themselves to the benefits offered by a state, or behaved in such a way where they would expect to be subject to that state’s judicial system. This immediate Court also applied Justice O’Connor’s stream of commerce theory, which states, “the placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State.”[5]

CONCLUSION

Here, the Court determined it lacked personal jurisdiction over Tooletries Defendants because: (1) Tooletries Defendants do not have the continuous and systematic contacts with Michigan required for general personal jurisdiction, and (2) Tooletries Defendants did not purposefully avail themselves of the privilege of acting in Michigan. The lack of personal jurisdiction over Tooletries Defendants led the Court to dismiss them from the case.

DO YOU NEED LEGAL ADVICE FROM AN EXPERIENCED TRADEMARK ATTORNEY?

Navigating the ins and outs of securing patents and trademarks for your business can be tricky. There are various legal regulations and considerations at play, which can make it difficult to understand the proper course of action. A knowledgeable patent and trademark attorney can make all of the difference, helping you avoid pitfalls and resolve any issues that might arise.

If you have a legal issue you need help with, the attorneys at Whitcomb, Selinsky Law PC would love to share their expertise with you. Please call (303) 543-1958 or complete an online contact form.


[1] Serras v. First Tenn. Bank Nat’l Assoc., 875 F.2d 1212, 1214 (6th Cir. 1989).

[2] Id.

[3] Bridgeport Music, Inc. v. Still N The Water Publ’g, 327 F.3d 472, 477 (6th Cir. 2003) (quoting Bird v. Parsons, 289 F.3d 865, 871 (6th Cir. 2002)).

[4] Bird v. Parsons, 289 F.3d 865, 871 (6th Cir. 2002).

[5] Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 112 (1987).

About the AuthorChloe Vickers

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