IP Law Daily, TRADEMARK—N.D. Ala.: Dispute over medical care marks dismissed for lack of personal jurisdiction, (Apr 15, 2016)

By Mark Engstrom, J.D.

An action for a declaratory judgment of non-infringement of the Righttime trademark RIGHT CARE AT THE RIGHT TIME could not be litigated in the Northern District of Alabama because the owner of the mark—defendant Righttime Inc.—lacked minimum contacts with the state of Alabama, a magistrate judge for the federal district court in Birmingham, Alabama, has ruled (American Family Care, Inc. v. Righttime, Inc., April 14, 2016, Ott, J.). Righttime’s motion to dismiss was granted.

Plaintiffs American Family Care (AFC) and AFC Franchising sought a declaratory judgment that their marketing phrase—“THE RIGHT CARE. RIGHT NOW.”—did not infringe Righttime’s medical services mark RIGHT CARE AT THE RIGHT TIME. Righttime sought dismissal on the ground the court lacked personal jurisdiction over Righttime.

The plaintiffs argued that the court had specific personal jurisdiction over Righttime because: (1) Righttime had sent a cease and desist letter to AFC’s Alabama counsel regarding AFC’s alleged infringement of Righttime’s RIGHT CARE AT THE RIGHT TIME mark and (2) Righttime had numerous other infringement communications—both written and verbal—with AFC’s Alabama counsel.

Righttime argued that its communications with AFC were made with the intention to stop AFC from infringing its trademark rights, not to start a relationship with AFC or Alabama. Nevertheless, the plaintiffs argued that, in tort cases, the “purposeful availment” prong of the minimum contacts analysis could be satisfied if an out-of-forum defendant engaged in conduct that was aimed at, and had an effect in, the forum state.

In this case, however, the plaintiffs did not allege that Righttime had committed fraud or any other tort—in Alabama or elsewhere—against the plaintiffs. In fact, AFC had conceded in its opposition that its lawsuit was “not one for intentional tort.” According to AFC, the gravamen of the parties’ dispute was whether AFC was infringing Righttime’s trademark.

The court decided that Righttime’s contacts with Alabama were insufficient to subject Righttime to specific personal jurisdiction in the Northern District of Alabama. According to the court, the plaintiffs failed to proffer any evidence of Righttime’s intent to avail itself of Alabama’s judicial system or the benefits and protections of Alabama’s law, and the evidence did not show that Righttime had ever done so. The court thus dismissed the action, without prejudice, for lack of personal jurisdiction over Righttime.

Request for limited discovery. AFC asked the court to allow limited discovery on the issue of personal jurisdiction over Righttime, but the court refused. Significantly, Righttime’s CEO had stated, in his declarations in support of Righttime’s motion to dismiss, that: (1) Righttime did not have any business operations or employees in Alabama and (2) Righttime did not provide services in Alabama.

Nevertheless, AFC argued that one could reasonably infer that Righttime had systematic contacts with Alabama residents who had sought urgent care at its medical facilities. The court disagreed. Because those inferences had been refuted by Righttime’s CEO, who stated that, to the best of his knowledge and upon reasonable investigation, Righttime “never provided services to a citizen of Alabama at any Righttime facility.”

Based on those and other declarations, the court refused to allow even limited discovery to further develop the record on personal jurisdiction.

The case is No. 2:15-cv-01873-JEO.

Attorneys: Joseph L. Leak (Leak & Douglas PC) for American Family Care Inc. and AFC Franchising LLC. Charles H. Dougherty Jr. (Beck & Thomas, PC) and Will Hill Tankersley (Balch & Bingham LLP) for Righttime Inc.

Companies: American Family Care, Inc.; AFC Franchising, LLC, d/b/a AFC/Doctors Express; Righttime, Inc.

Cases: Trademark AlabamaNews