ABSTRACT

The Southern District of Florida denied a Mexican corporation's motion to dismiss an action for trademark infringement and false designation of origin based upon lack of subject matter jurisdiction, lack of personal jurisdiction, and forum non conveniens. The court concluded that defendant's advertising in the United States to U.S. citizens through its website and U.S.-based infringement activities were sufficient to support a finding of subject matter jurisdiction and, further, to exercise personal jurisdiction based on the national long-arm statute (Fed. R. Civ. P. 4(k)(2)). The court also denied defendant's motion to dismiss for forum non conveniens, finding that Mexico was not an available and adequate forum, and the public and private interests and governing law favored bringing suit in the United States.

CASE SUMMARY

FACTS

Defendant Grupo Industrial Hotelero, S.A. ("Grupo") is a Mexican corporation that owns and operates the Coco Bongo nightclub in Cancun, Mexico. Grupo uses plaintiff Curtis Jackson's image, likeness, and federally registered trademark, G-UNIT, to promote the Coco Bongo nightclub on its website and in flyers distributed in the United States. Jackson, a rapper, music producer, and actor, is more commonly known as "50 Cent." Grupo draws more than half of its business from the United States. 50 Cent sued for trademark infringement and false designation of origin under the Lanham Act, and Grupo moved to dismiss based on lack of subject matter jurisdiction, lack of personal jurisdiction, and forum non conveniens.

ANALYSIS

Grupo argued that the court lacked subject matter jurisdiction because the Lanham Act should not be applied extraterritorially to any alleged trademark infringement by it that occurred outside the United States. The court explained that 50 Cent was not seeking extraterritorial application of the Lanham Act, but rather, 50 Cent's infringement claims were based upon Lanham Act violations that occurred exclusively and directly within the United States, namely, the distribution of promotional materials in the United States and the use of 50 Cent's likeness and trademark on Grupo's website, accessed by persons within the United States. The court found these activities sufficient to support subject matter jurisdiction.

The court noted that it could obtain personal jurisdiction over Grupo under two theories: (1) if Grupo's contacts with Florida were sufficient to exercise jurisdiction under Florida's long-arm statute; and (2) if Grupo's contacts with the United States as a whole were suffi cient to exercise jurisdiction under the national long-arm statute, Fed. R. Civ. P. 4(k)(2).

Evaluating the Florida long-arm statute, the court explained that Grupo must have committed a tortious act within the state, causing harm within the state. Although Grupo's transmission of ads via its website was a suffi cient electronic communication to commit a tort within the State of Florida, and although this communication gave rise to the cause of action (i.e., trademark infringement based on Grupo's website), the court concluded that the harm was not suffered within the state because 50 Cent was not a Florida resident. Accordingly, the court could not exercise personal jurisdiction over Grupo under the Florida long-arm statute.

Fed. R. Civ. P. 4(k)(2), however, commonly referred to as the "national long-arm statute," allows courts to exercise personal jurisdiction over a defendant if: (1) the defendant is not subject to jurisdiction in any state; and (2) the defendant has minimum contacts with the United States as a whole such that exercising jurisdiction would not offend the U.S. Constitution and applicable laws. Here, the court held that Grupo was not subject to jurisdiction in any state, and Grupo's promotional advertisements in the United States, both on its website and in flyers, demonstrated that Grupo purposefully availed itself of the privilege of conducting activities within the United States as a whole. Although Grupo's infringing ads and promotional videos on its website appeared most influential in allowing the court to exercise jurisdiction, the court also emphasized additional relevant factors, including Grupo's regular attendance at travel trade shows in the United States and Grupo's dealings with U.S. travel agencies and tour operators to promote its Coco Bongo nightclub. Accordingly, the court denied Grupo's motion to dismiss for lack of personal jurisdiction.

Finally, the court also rejected Grupo's motion to dismiss for forum non conveniens. In rejecting Grupo's argument that Mexico was an available alternate adequate forum, the court explained that Grupo's own evidence (an article discussing Mexican IP law) demonstrated that the Mexican court system was admittedly slow, and that it was unclear whether there was a private right of action for injunctive relief for trademark infringement under Mexican law. Thus, even if Mexico were an adequate alternate forum, both the private and public interests favored keeping the case out of Mexico and in the United States. Because 50 Cent was suing for violations occurring within the United States, the evidence of the violations should be available in the United States. While Grupo's witnesses were in Mexico, the plaintiff and his witnesses were all located in the United States. Similarly, contrary to Grupo's claims that 50 Cent was asserting violations of Mexican law, the court concluded that 50 Cent was, in fact, asserting violations of U.S. law that would be better handled by a U.S. court. Based upon the foregoing, the court denied Grupo's motion for forum non conveniens.

CONCLUSION

This case demonstrates that foreign companies physically outside the United States but operating websites accessible by U.S. citizens in the United States can be pulled into U.S. courts for violations of the Lanham Act. As cyberspace continues to grow and as presence on the Internet becomes increasingly essential to survival in the global marketplace, U.S. companies should find comfort in knowing that, extraterritorial difficulties notwithstanding, they can bring Lanham Act claims against foreign entities based on infringements occurring almost entirely on a website.