The World in U.S. Courts: Fall 2017 - Personal Jurisdiction/Forum Non Conveniens | August.14.2017
Plaintiff Lodestar is a Lichtenstein corporation having a principal place of business in Cyprus. It owns a US trademark for “UNTAMED,” and used that mark in connection with advertising campaigns promoting the sale of Irish whiskey and rum in the US. It sued Bacardi & Co., Ltd., a Bermuda corporation, and two of Bacardi’s subsidiaries (one US-based) for trademark infringement in connection with Bacardi’s use of an allegedly near-identical mark and similar BACARDI UNTAMED advertising campaign to promote its iconic rum brand. Lodestar alleged that Bacardi’s infringement was knowing and intentional.
Bacardi-Bermuda moved to dismiss on grounds that the court could not assert personal jurisdiction over it. The Court only considered the potential assertion of specific personal jurisdiction and, analogizing a trademark infringement claim to a tort, applied the tort-based test requiring that the defendant “have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state.” Lodestar argued that this test was satisfied by evidence that Bacardi Ltd. oversaw and directed the global “BACARDI UNTAMED” marketing campaign, which included substantial spending in the US. The Court agreed that the advertising campaign could be deemed the intentional act of Bacardi-Bermuda, giving credence to disputed evidence that Bacardi had itself used at an earlier phase of the case. The Court also found that the advertising was “expressly aimed” at California, the forum state, citing images on a company website and social media account showing promotion specifically tailored its advertising to target consumers in California. The requirement that injury be “foreseeable” was satisfied because infringement inherently caused damage to a trademark holder’s reputation.
Specific personal jurisdiction also requires that the plaintiff’s claims “arise out of or result” from the defendant’s contacts with a forum, and the Court found this was the case. Applying the lenient “but for” test, it found that the claims would not have arisen had the contacts with California attributed to Bacardi-Bermuda not occurred.
Finally, the Court found that Bacardi-Bermuda had not made the “compelling case” necessary to establish that the assertion of jurisdiction was “unreasonable,” and therefore inconsistent with the Due Process Clause of the US Constitution. The Court observed that a seven-factor test is used to determine the “reasonableness” of requiring a defendant to appear, and that Bacardi-Bermuda had only addressed one of the factors.
[Editor’s note: The Lodestar Anstalt case is also discussed in the Intellectual Property - Trademarks section of this report.]