IP Law Daily, TRADEMARK—S.D. Ohio: Ohio federal court had jurisdiction over staffing agency’s infringement suit against out-of-state competitor, (Dec 11, 2020)

By John W. Scanlan, J.D.

Allegations of economic harm to an Ohio staffing company arising from purported trademark violations, supported by evidence of consumer confusion, satisfied the long-arm statute.

In denying a motion to dismiss, the U.S. District Court for the Southern District of Ohio has ruled that it possessed personal jurisdiction over a national temporary nurse staffing agency headquartered in California and its subsidiary in a trademark infringement suit brought by an Ohio-based temporary nursing staffing agency. Because the California agency and its subsidiary were working to expand their operations in the Ohio market and allegedly committed trademark law violations there, it was reasonable for them to expect that they might be sued there (Trustaff Travel Nurses, LLC v. Trusted, Inc., December 9, 2020, McFarland, M.).

Trustaff Travel Nurses, LLC, provides temporary staffing services for travel nurses. It owns the TRUSTAFF trademark, which is registered in International Class 35 and which was first used in commerce in November 2004. Trusted, Inc. operates a digital marketplace for nurses, along with social media accounts such as Facebook and Twitter, and has applied for federal trademark protection for TRUSTED for employment agency services for health care professionals. Trusted Health is a subsidiary of Trusted and employs traveling nurse professionals and provides placement of temporary nurses with health care facilities. Trustaff brought trademark infringement claims against Trusted and Trusted Health in the Southern District of Ohio; the defendants moved to dismiss based on lack of personal jurisdiction.

Due process. The court determined that its exercise of personal jurisdiction over Trusted and Trusted Health satisfied due process requirements. It initially found that the two companies demonstrated "purposeful availment" of Ohio as a forum. Trusted was not registered to conduct busines in Ohio and has not into entered any contracts with businesses located there. Three of its approximately 75 employees are in Ohio performing entry-level services. Its subsidiary, Trusted Health, has contracted with about five healthcare businesses to provide nurses, of which two have staffed Trusted Health nurses. However, the evidence showed that Trusted and its subsidiary were working together to expand Trusted Health’s staffing business in the state. Trusted Health used Trusted’s digital marketplace and its TRUSTED mark for its staffing services, and its social media accounts provided advertising that benefited Trusted Health. The number of Ohio employees that were staffed in Ohio and the amount of revenue that came from Ohio was unimportant, the court said, because Trusted and Trusted Health’s contacts with Ohio showed that they were attempting to expand Trusted Health’s business in Ohio.

Furthermore, the court found that Trustaff had shown that the causes of action arose from Trusted’s and Trusted Health’s activities that were directed toward Ohio. Although its web site and social media accounts did not specifically target the state, testimony by a Trustaff nurse recruiter about a nurse he was attempting to recruit provided evidence that Trusted Health had created confusion as to whether it was affiliated with Trustaff by providing temporary nursing staffing services in Ohio under the TRUSTED name. This purported confusion was the type of harm to which the infringement claim was addressed, the court said.

Because the defendants purposefully availed themselves of the Ohio forum and the causes of action arose there, the court found that personal jurisdiction in Ohio was reasonable. It observed that the defendants conducted business nationally and they reasonably should expect that expanding their business into Ohio might result in being subject to litigation there.

Ohio long-arm statute. The court concluded by finding that jurisdiction over the defendants was proper under the state’s long-arm statute. The statute’s grant of jurisdiction over a person "transacting any business in this state" had the same standards as those for finding "purposeful availment" and "substantial connection with the forum state," the court observed. The defendants’ activities in attempting to expand Trusted Health’s nursing staffing services in Ohio were sufficient to authorize jurisdiction over them. Furthermore, jurisdiction also was authorized by the long-arm statute’s provision regarding causing tortious injury in Ohio. Trustaff alleged that trademark violations occurring in Ohio had caused it economic harm in that state, in which its primary office was located, and this allegation was further supported by the testimony of the Trustaff recruiter.

This case is No. 1:19-cv-00481-MWM.

Attorneys: Michael James Gallagher (Luper Neidenthal & Logan) for Trustaff Travel Nurses, LLC. Scott A. Kane (Squire Patton Boggs [US] LLP) for Trusted, Inc. and Trusted Health, Inc.

Companies: Trustaff Travel Nurses, LLC; Trusted, Inc.; Trusted Health, Inc.

Cases: Trademark GCNNews OhioNews