District Court Finds No Lanham Act Jurisdiction Over U.K. Seller of Allegedly Infringing Product; Third-Party Websites’ U.S. Activities Insufficient to Support Jurisdiction

The World in U.S. Courts: Winter 2014 - Intellectual Property (IP) | November.05.2013

Gibson Brands Inc. v. Viacom Int’l Inc. and John Hornby Skewes & Co., Ltd., U.S. District Court, Central District of California, Nov. 5, 2013

Plaintiff guitar manufacturer, Gibson, holds trademarks to its "Flying V" body shape design and mark. Defendant Skewes, a U.K. manufacturer, allegedly used a version of the mark in connection with sale of the "Spongebob Square Pants Flying V Ukulele." Gibson sued Skewes on multiple Lanham Act theories, arising out of Skewes' alleged "advertising and selling" of the ukulele on websites that could be accessed from the U.S. Skewes moved to dismiss, alleging that the complaint failed on its face to establish Lanham Act jurisdiction, and that the factual assertions in support of jurisdiction were untrue.

As to Skewes' activities outside the U.S., the court applied the three-part "Star-Kist/Timberlane" test adopted by the U.S. Court of Appeals for the Ninth Circuit, which finds jurisdiction based on the presence of a combination of three factors: (i) some effect on U.S. foreign commerce, (ii) an effect large enough to satisfy the requirements of the Lanham Act, and (iii) a U.S. interest that outweighs that of other countries.

The court found no effect on U.S. commerce: Gibson failed to show that Skewes had engaged in allegedly infringing activities in the U.S., nor was there evidence of direct sales of the products into the U.S. by Skewes (although secondary retails apparently had made sales).

The court found that Skewes was not responsible for the actions of third party websites that could be accessed in the U.S. Even assuming that their activities could also be attributed to Skewes, the court concluded that the websites’s conduct did not sufficiently implicate U.S. commerce to support jurisdiction. Thus, the court noted that the websites were all based outside the U.S. (in Japan and the U.K.) and/or focused their efforts on non-U.S. customers. Notably, the court made this ruling despite one website offering the allegedly infringing product in U.S. dollars.

The second factor of the Star-Kist/Timberlane test was not satisfied because Gibson could show no injury from the conduct alleged. The third factor—the extent of a U.S. interest and potential conflicts with other nations’ interests—was in turn evaluated based upon a seven-factor test. In concluding that this factor did not favor retention of U.S. jurisdiction, the court focused on Gibson’s trademark applications in the U.K., giving rise to potential conflicts as to infringement; that the focus of Gibson’s complaint is the activity of online retailers that are not parties; and the fact that the weight of the effects of the alleged violation appeared not to be in the U.S.

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