Question

1)In a trade name infringemnt case filed in the federal court, how do you decide which district (venue) is the proper one?

2) In a trade name infringmwnt case filed in state court, which state/states could hear the case?

Answer 1

Part1

When filing a complaint for trademark infringement, the plaintiff should make sure that the court has jurisdiction to hear the case and the court is a proper venue for the lawsuit. More specifically, jurisdiction refers to a court’s legal authority to hear a case (i.e., the power to adjudicate the action) whereas venue refers to where jurisdiction should or may be exercised (i.e., the location where the lawsuit should take place).Jurisdiction, in turn, is usually broken down into subject matter jurisdiction and personal jurisdiction. Subject matter jurisdiction refers to the court’s authority to hear a particular type of case.

In other words, which federal district court in the nation is proper? And the purpose of venue rules is primarily to protect the defendant against a plaintiff selecting an unfair or inconvenient place of trial. With that in mind, let’s examine venue and figure out what judicial district you can file your trademark infringement lawsuit in.

Venue in Trademark Cases Is Governed by 28 U.S.C. § 1391

Some causes of action are governed by separate, specific venue statutes. For example, patent infringement and copyright infringement lawsuits are governed by 28 U.S.C. § 1400.

Venue in trademark infringement actions, however, is governed by the general venue statute, 28 U.S.C. § 1391. Adobe Systems, Inc. v. Blue Source Group, Inc., 125 F. Supp. 3d 945, 959 (N.D. Cal. 2015). For purposes of determining whether venue is proper, the most relevant subsections of 28 U.S.C. § 1391 are subsection (b) through (d), which read as follows:

(b) Venue in General.—A civil action may be brought in—

(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located;

(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or

(3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court’s personal jurisdiction with respect to such action

(c) Residency.—For all venue purposes—

(1) a natural person, including an alien lawfully admitted for permanent residence in the United States, shall be deemed to reside in the judicial district in which that person is domiciled;

(2) an entity with the capacity to sue and be sued in its common name under applicable law, whether or not incorporated, shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court’s personal jurisdiction with respect to the civil action in question and, if a plaintiff, only in the judicial district in which it maintains its principal place of business; and

(3) a defendant not resident in the United States may be sued in any judicial district, and the joinder of such a defendant shall be disregarded in determining where the action may be brought with respect to other defendants

(d) Residency of Corporations in States With Multiple Districts. For purposes of venue under this chapter, in a State which has more than one judicial district and in which a defendant that is a corporation is subject to personal jurisdiction at the time an action is commenced, such corporation shall be deemed to reside in any district in that State within which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate State, and, if there is no such district, the corporation shall be deemed to reside in the district within which it has the most significant contacts.

As with jurisdiction, the plaintiff bears the burden of showing that venue is proper. Adobe, 125 F. Supp. 3d at 958 (N.D. Cal. 2015). But improper venue is a defense that must be raised by the defendant. Therefore, the plaintiff does not need to allege proper venue in its complaint. The defendant should raise improper venue by way of a motion or by preserving the objection in its answer.

Stepping Through §1391’s Venue Provisions

Basis #1: Residing in the Judicial District — § 1391(b)(1)

The first basis for proper venue is not complicated. If one defendant resides in the judicial district and all the remaining defendants, if any, reside in the State of the judicial district, venue is proper. But note that, pursuant to § 1391(c)(3), you should disregard any defendants that do not reside in the United States when making this analysis.Residency for Individuals. Section 1391(c), in turn, defines “reside” for individuals. Individuals reside in the judicial district in which they are domiciled. 28 U.S.C. § 1391(c)(1). Domiciled refers to a legal residence which is the place where a person has fixed dwelling with an intention of making it his permanent home. For illustrative purposes, someone’s summer home doesn’t count.

Residency for Companies. Section 1391(c) also defines “reside” for companies. Companies (defending companies) reside in any judicial district in which they are subject to personal jurisdiction. 28 U.S.C. § 1391(c)(2). So you can see that, for companies that reside in the U.S., the venue analysis under § 1391(b)(1) collapses into a personal jurisdiction inquiry.

But when you are trying to decide on venue for company in a state that has more than one judicial district, you have to take an additional step under § 1391(d). In such cases, a company will reside in any district that would have personal jurisdiction over the company if that district were a separate state. And if there’s no such state, then the district in the State with which the company has the most significant contacts.

Residency for Non-U.S. Residents. And a defendant who does not reside in the U.S. can be sued in any judicial district. 28 U.S.C. § 1391(c)(3).

Basis #2: Substantial Part of Events Occur in Judicial District — § 1391(b)(2)

The second basis for proper venue is “a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated.” In a trademark infringement lawsuit, a substantial part of the events giving rise to the claim occurs in any district in which consumers are likely to be confused by the infringing goods or services, whether that occurs in one district or many districts. Lindora, LLC v. Isagenix Int’l, LLC, 2016 U.S. Dist. LEXIS 100413, *42 (S.D. Cal. 2016). If the defendant is advertising or using the infringing mark in the judicial district, then § 1391(b)(2) applies. Alto Velo Racing Club v. Rouleur Sports Group, LLC, 2015 U.S. Dist. LEXIS 124773, *13 (N.D. Cal. 2015). Likewise, a substantial part of the events occurs where the infringing labels are affixed to goods. Kaswit, Inc. v. Dogfather K9 Connections, Inc., 2014 U.S. Dist. LEXIS 93460, *12 (C.D. Cal. 2014). Alternatively, some courts are willing to conclude that a substantial part of the events takes place where the infringer is located and/or where the trademark owner is located. However, not all courts agree that a substantial part of the events takes places where the trademark owner is located (e.g., the Eighth Circuit), so if you’re relying on this basis for § 1391(b)(2), you’ll have to confirm the law in your jurisdiction.

Basis #3: Catchall—Any District in Which Defendant Is Subject to Personal Jurisdiction — § 1391(b)(3)

If there is no judicial district that qualifies for the first and second bases for venue under § 1391(b), then venue is proper in any judicial district in which any defendant is subject to the court’s personal jurisdiction. This provision rarely comes into play because it is only triggered when there is no judicial district that qualifies under § 1391(b)(1) or (b)(2). And even if all the defendants do not reside in the State of the judicial district under (b)(1), there should be a judicial district in which a substantial part of the events occurred given the lax interpretation given to (b)(2). But to the extent this provision has to be relied on, the analysis again collapses into a personal jurisdiction analysis (see the posts on general jurisdiction and specific jurisdiction).

Part 2

A Court can exercise its power within a territorial/ geographical limit. For example, a District Court can exercise its power within the territorial limits of a district, a High Court can exercise its power within a state that comprises a plurality of districts and the Supreme Court can exercise its power within the whole country. This territorial limitation is referred to as the territorial jurisdiction of a Court. There is also another hierarchy of Courts based on the value of the claim made in a case. This is called its pecuniary jurisdiction. Still further, recently, the Commercial Courts were introduced. These Courts exercise jurisdiction when the case relates to commercial matters, such as IPR matters. There are other Courts that take up specialised matters. For instance, Family Courts which exercise jurisdiction in matrimonial matters and maritime Courts that act in Maritime matter. In all these cases, the territorial jurisdiction is determined in accordance with Section 20 of the Code of Civil Procedure, 1908. Under the general law, territorial jurisdiction is determined on the basis of the following:

• The place where the defendant resides;

• The place where the defendant carries out business; or works for gain; or

• The place where atleast a portion of the cause of action arises.

Therefore, ordinarily, barring cause of action, the plaintiff is required to select a Court which is convenient to the defendant. Particularly if the Plaintiff does not reside or work for gain in the Defendant’s jurisdiction, this provision of the law, may act as a deterrent on the Plaintiff in taking legal action.

Trademarks are a form of intellectual property and a proprietor of a trademark applies it to his/ her goods or services, so that consumers can distinguish the proprietor’s goods or services from those of other proprietors. At the same time, different trademarks can also be used by the same owner to distinguish one of its products from another. For instance, HUL uses the mark ‘Lux’ for one type of soap and ‘Lifebuoy’ for another type of soap. An owner can protect the trademark by trademark registration under the Trade Marks Act, 1999. Violation of a registered trademark by someone else goes by the technical term infringement and if a trademark is registered the owner enjoys some special benefits. Convenience of jurisdiction is one such special benefit. The Trade Mark Act specifically provides that an infringement action, whatever may be the value claimed, must be filed only in a District Court. Therefore, the pecuniary jurisdiction of the Court, is not taken into consideration in a trademark matter. Another, special privilege given to the proprietor of a registered trademark is that in the case of infringement of his/ her trademark, Section 134 (2) of the Act, gives the registered proprietor, the right to file an infringement case, within the territorial limits of the Court, in which the trademark proprietor resides or works for gain. In the case of a company, this generally means the location of its registered office or its principal place of business. Of course, the normal territorial jurisdiction laid down under Section 20 of CPC, is also available.

In a recent case at the Delhi High Court , Hindustan Times (“HT”), a leading national news broadcasting agency, found an entity in New York infringing upon its trademark rights by using the domain name www.hindustan.com which HT had already registered as a trademark in India. The Court exercised extra-territorial jurisdiction over the defendant based in New York and granted injunction against its use of the domain name www.hindustan.com. The defendant had filed a declaration suit in New York. However, the Delhi High Court stated that since the trademarks were registered in India, the New York District Court did not have jurisdiction over the matter, and also granted an anti-suit injunction against the defendant from pursuing the suit in New York.

In another case2 , HT sued a domain registrant at the Delhi High Court for violating its copyright by using its content on the infringing website without giving due credit to HT. It was difficult to identify or track the registrant of this infringing website as it was located outside India. However, the Delhi High Court passed an order of injunction directing the servers hosting the website to block its access. These cases clearly show us that intellectual property protection cannot be restricted to a particular area or geographical limit. Moreover, violation can take place at multiple locations at the same time. Thus, the burden is upon the rightful proprietors of trademarks to sue them at different locations all over the world.

The Supreme Court of India in Indian Performing Rights Society Limited v Sanjay Dalia , 3and the Delhi High Court in Burger King Corporation v Techchand Shewakramani4 , explained that the provisions of Section 134 of the Trade Marks Act are in addition to Section 20 of the Civil Procedure Code.

As a final word of caution, Section 134 can also be used, as a weapon by a registered trademark proprietor to drag a Defendant to a location which may be inconvenient to the Defendant. However, the Courts in their wisdom, have always decided to prevent such an abuse of the law.