The World in U.S. Courts: Fall 2014 - Personal Jurisdiction
Plaintiff German and Italian manufacturers of amusement rides sued Chinese competitors based on the latter's alleged infringement of trademarks in promotion at an international trade show in Florida. For reasons not relevant here, the Chinese manufacturers did not appear to defend the case and a default judgment was entered against them. The Chinese manufacturers ultimately retained counsel and, among other things, sought to vacate the default judgment on grounds that the Court did not have personal jurisdiction over them.
The Court stated that it would have personal jurisdiction over the Chinese companies if (i) courts of the forum state (Florida) could obtain personal jurisdiction over the parties and (ii) exercising the jurisdiction was consistent with the Due Process Clause of the U.S. Constitution. It first considered whether specific personal jurisdiction would exist under Florida's "long-arm" statute by virtue of the commission of tortious conduct within the State. The Court found that this test was satisfied for two reasons. First, it concluded that the defendants' advertising at the trade show violated the Lanham Act and was tortious, noting in the process that the statute may be violated by advertising that merely solicits sales, whether or not sales result from the effort. Second, and independently, the Court found injury in Florida from the "likely" confusion of Florida consumers as to the Plaintiffs' trademarks.
The Court then considered whether the assertion of personal jurisdiction would be consistent with the Due Process Clause, requiring three factors to be considered: (i) whether the claims relate to any of the defendants' contacts with the forum, (ii) whether the defendants "purposely availed" themselves of the privilege of conducting activities in the forum, and (iii) whether exercising jurisdiction would comport with "traditional notions of fair play and substantial justice."
The Court found the first factor to be satisfied by the defendant's illegal promotion of their products at the Florida trade show. The second factor was satisfied under either of the two possible tests: That the effects of the wrongdoing were felt in the forum state (here, the likely confusion of trade show participants in Florida), and that the defendants had sufficient ""minimum contacts" with the forum (here, the trade show activities and the fact that the defendants were regular exhibitors at the show). The third factor, the Court noted, was increasingly easy to satisfy given the internationalization of business and the relatively easy means of travel, and it found that factor to be satisfied, noting that defending the action would be no more burdensome that the defendants' Florida-based marketing activities.
[Editor's note: the Mauber Rides case is also addressed in this report under the Intellectual Property: Lanham Act heading of this report.]