Trademark infringement:
Is a single sale enough?
Circuit courts vary
Where can you sue for trademark infringement?
Two recent cases involving leisure wear show that it depends on which Circuit you’re in.
The first case is Brothers and Sisters in Christ, LLC v. Zazzle, Inc.
Brothers and Sisters in Christ, LLC (BASIC) alleged that Zazzle sold a t-shirt that infringed on BASIC’s federal trademark for the phrase “love happens.” The district court granted Zazzle’s motion to dismiss for lack of personal jurisdiction, and the 8th Circuit affirmed.
BASIC, a Missouri company, alleged that in 2019 Zazzle sold a shirt with a “love happens” logo to at least one Missouri resident and shipped the shirt to that resident in Missouri. BASIC also alleged that Zazzle “uses a webpage, available to those in Missouri and elsewhere, to advertise its goods, including the trademark infringing goods, and to sell and carry out the transaction for trademark infringing goods.”
Zazzle filed a motion to dismiss asserting that the facts didn’t establish that Zazzle was subject to personal jurisdiction in Missouri. Zazzle also provided undisputed evidence that the single identified purchase of a “love happens” t-shirt by a Missouri resident was made by someone affiliated with BASIC.
The Circuit Court considered whether exercising jurisdiction over Zazzle would be proper under the Due Process Clause of the US Constitution:
Critical to due process analysis is that the defendant’s conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there….
General jurisdiction exists where a defendant is “essentially at home” in the forum state, whereas specific jurisdiction “covers defendants less intimately connected with a State, but only as to a narrower class of claims,” namely those that “`arise out of or relate to the defendant’s contacts with the forum.”
In determining whether specific jurisdiction exists, a court must consider five factors:
1. the nature and quality of [defendant’s] contacts with the forum state;
2. the quantity of such contacts;
3. the relation of the cause of action to the contacts;
4. the interest of the forum state in providing a forum for its residents; and
5. convenience of the parties.
The first three factors are of “primary importance” and the “fourth and fifth factors carry less weight.”
Zazzle admitted that it sold lots of goods to consumers in Missouri, and BASIC asserted this was enough to support jurisdiction.
However, as the court noted, “Specific jurisdiction must rest on the litigation-specific conduct of the defendant in the proposed forum state” – i.e., the sale of the specific t-shirt at issue.
“What this leaves us with, then,” said the court, “is a single suit-related contact with Missouri. The Supreme Court ‘has strongly suggested that a single sale of a product in a State does not constitute an adequate basis for asserting jurisdiction over an out-of-state defendant.’”
In contrast, in NBA Properties, Inc. v. HANWJH the 7th Circuit held that the sale of a single pair of shorts in Illinois was enough to establish personal jurisdiction.
The NBA sued HANWJH, a China-based online retailer, for allegedly infringing NBA trademarks by selling counterfeit products in its online stores.
HANWJH moved to dismiss the complaint for lack of personal jurisdiction. The district court denied the motion and the Circuit Court affirmed.
An NBA investigator accessed HANWJH’s online Amazon store and bought a pair of shorts, designating a delivery address in Illinois. The NBA didn’t allege any contacts between HANWJH and Illinois other than the single sale to its investigator and the accessibility of HANWJH’s online store from Illinois.
This time the district court cited a three-part standard for jurisdiction:
First, the defendant must have minimum contact with the forum state. To determine whether the defendant has such contacts, the court must ask whether the defendant should reasonably anticipate being haled into court in the forum State because the defendant has purposefully availed itself of the privilege of conducting activities there. Second, the plaintiff’s claims must arise out of the defendant’s contacts with the forum. Third, and finally, maintenance of the suit must not offend traditional notions of fair play and substantial justice.
The district court concluded that these requirements were met as to HANWJH:
specific personal jurisdiction over an online retailer is not established merely because the retailer’s website is available in the forum but rather it is necessary that the retailer `st[and] ready and willing to do business with’ residents of the forum and then `knowingly do … business with’ those residents.
This test was satisfied, in the district court’s view, by the fact that HANWJH “admit[ted] that it both offered to ship and in fact shipped products to Illinois.”
