IP Law Daily, TRADEMARK—N.D. Cal.: California court lacked personal jurisdiction over Scottish company with only three U.S. sales, (Oct 21, 2022)

By Robert B. Barnett Jr., J.D.

The California federal court refused to exercise personal jurisdiction over a Scottish company, noting that its interactions with the U.S. were “scant, fleeting, and attenuated.”

In a trademark infringement suit by St. Andrews Links Ltd. against a Scottish clothing manufacturing using “St. Andrews” on its clothing, the California federal district court dismissed the case for lack of personal jurisdiction over the Scottish defendant because doing nothing more than operating a website accessible from California was insufficient to satisfy the “express aiming” prong of jurisdictional analysis. Two Florida sales and one California sale were simply not enough to connect the Scottish defendant’s conduct to the U.S. in any meaningful way such that exercising personal jurisdiction would comport with due process (St. Andrews Links Ltd. v. Source and Design International (UK) Ltd., October 20, 2022, Tigar, J.).

Background. St. Andrews Links Ltd. owns and operates, among other things, the famous golf course in St. Andrews, Scotland. St. Andrews sued Source and Design International (UK) LTD and its director John Charles Morton after learning that Sound and Design was selling apparel bearing the name “St. Andrews” on its website, on Amazon.com UK, and through social media. The complaint alleged (1) trademark infringement, counterfeiting, cybersquatting and false designation of origin, and unfair competition under the Lanham Act, (2) unfair competition under the California Business and Professions Code, and (3) trademark infringement and unfair competition under California common law. Source and Design filed a motion to dismiss for lack of personal jurisdiction.

Personal jurisdiction. St. Andrews argued that the California federal court had personal jurisdiction over the defendants on two theories: (1) their contacts with California and (2) their contacts with the U.S. as a whole.

The Ninth Circuit uses a three-part test to determine specific personal jurisdiction: (1) purposeful availment by the defendant must exist, (2) the claim must arise out of the activities with the forum, and (3) the exercise of jurisdiction must comport with fair play and substantial justice (Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (9th Cir. 2004)).

Express aiming. The problem with this case was purposeful availment, which requires that the defendants’ activities be expressly aimed at the forum state. St. Andrews argued that Source and Design aimed their activity towards California by operating an interactive website and social media accounts that were accessible to California residents. It also argued that transactions were handled by companies such as PayPal, Facebook, Instagram, and Twitter, all headquartered in California.

“These allegations are insufficient,” the court concluded. Source and Design’s online activities had no forum-specific focus. The existence of websites that were accessible from California, the court said, was “not enough to satisfy the express aiming prong,” citing several California court decisions reaching the same result.

Second, when the case was filed, Source and Design had sold one item in California and two in Florida. The delivery of a single polo shirt to Burlingame, California, was “insufficient to establish that Defendants expressly aimed their activity towards California.” Furthermore, St. Andrews was the buyer. Personal jurisdiction cannot be manufactured in a trademark case by purchasing the accused product in the forum state (Clarus Transphase Sci., Inc. v. Q-Ray, Inc., No. C 06-3450 JF (RS), 2006 Wl 2374738, at *3 n.3 (N.D. Cal. Aug. 16, 2006)).

In addition, the court rejected the argument that having PayPal, Facebook, Instagram, and Twitter headquartered in California was relevant. If that argument were to be accepted, “millions of persons around the globe” would be subjected to personal jurisdiction in California, rendering the personal jurisdiction test meaningless.

The court, therefore, concluded that St. Andrews failed to establish that Source and Design directly targeted its conduct to California.

Nationwide connections. St. Andrews also argued that Fed. R. of Civ. P. 4(k)(2) provided personal jurisdiction over Source and Design because of its connections to the U.S. as a whole. The problem with this argument, the court ruled, was that it could not satisfy the requirement that the exercise of jurisdiction comport with due process, which uses the same analysis as the personal jurisdiction analysis.

Thus, rather than apply the analysis to California, Rule 4(k)(2) requires that the analysis be applied to the United States as a whole. The facts revealed, however, that Source and Design had sold only two items outside of California, both to a single customer in Tampa, Florida. St. Andrews argued nevertheless that (1) the website had four times as many users in the U.S. as in U.K. and (2) Barack Obama appeared in a Facebook ad promoting the mark ST ANDREWS.”

While the express aiming argument was stronger under Rule 4(k)(2) than it was under the California analysis, the court acknowledged, it still was not enough to constitute direct aiming. Two sales in Florida and one in California were “precisely the kind of ‘random, isolated, or fortuitous’ interactions that are insufficient to establish personal jurisdiction” (Keeton v. Hustler Mag., Inc., 465 U.S. 770, 774 (1984)).

Furthermore, no cases exist for the proposition that receiving more hits from U.S. users constitutes express aiming. Nor did the use of Barack Obama in an ad constitute express aiming. Taken together, the limited interactions with the U.S. were “scant, fleeting, and attenuated.”

The court, therefore, concluded that St. Andrews failed to establish that Source and Design directly targeted its conduct to the U.S. as a whole.

The court thus granted Source and Design’s motion to dismiss for lack of personal jurisdiction.

The Case is No. 4:21-cv-06470-JST.

Attorneys: Robert Ahlefeld Weikert (Nixon Peabody LLP) for St. Andrews Links Ltd. Scott Everett Schutzman (Law Offices of Scott E. Schutzman) for Source and Design International (UK) Ltd.

Companies: St. Andrews Links Ltd.; Source and Design International (UK) Ltd.

Cases: Trademark TechnologyInternet CaliforniaNews