Brand Enforcement / 05.03.2019

Ohio Trademark Owners Seeking to Enforce Rights Must Prove State Connection for Personal Jurisdiction

By David Posteraro

  • brand enforcementOhio-based International Watchman, Inc. sued Watching Time, LLC and others for infringement of its federally registered “NATO” mark.
  • The federal district court in Cleveland held that Watching Time’s cancellation proceeding against the NATO mark was insufficient “injury” upon which to find jurisdiction.
  • Key takeaway: General allegations to support jurisdiction are insufficient.

In order for a court to try a case, render a judgment and have that judgment be binding on the parties, it must have jurisdiction. A “long-arm” statute allows a court to have personal jurisdiction over an out-of-state defendant, provided that the defendant has a sufficient connection with the state. The plaintiff bears the burden of demonstrating that such jurisdiction exists.

Recently, the federal district court in Cleveland dismissed a trademark infringement action because the plaintiff failed to allege any connection between the defendant and Ohio, and did not, therefore, meet the requirements of Ohio’s long-arm statute. The defendant’s filing of a cancellation proceeding against the Ohio plaintiff was an insufficient “injury” on which to base the court’s jurisdiction. Additionally, the plaintiff’s infringement claim failed on its merits because the plaintiff admitted that the defendant did not use the plaintiff’s trademark in commerce (International Watchman Inc. v. Strap.ly).

International Watchman, Inc., the plaintiff, is an Ohio corporation. It sells watches and watch accessories under various federally registered marks for the word NATO. International Watchman sued Watching Time, LLC and other defendants for infringement of its NATO mark. With respect to Watching Time, International Watchman claimed that Watching Time and its attorney, John Heim III, improperly initiated a cancellation proceeding against International Watchman in the Trademark Trial and Appeal Board (“TTAB”), even though Watching Time had no standing to do so. It alleged that the cancellation action was an effort by Watching Time and Heim to conceal the identity of certain of the other defendants.

Watching Time argued that the complaint did not allege any connection between Watching Time and Ohio, and therefore did not meet the requirements of Ohio’s long-arm statute. The mere fact of filing a TTAB cancellation proceeding against the Ohio corporation was insufficient grounds for it to be brought into the Ohio court. The court agreed.

International Watchman argued that the act of filing a cancellation proceeding was sufficient to confer personal jurisdiction upon Watching Time under Ohio’s long-arm statute, which provides, among other things, that personal jurisdiction may be exercised over a defendant who causes “tortious injury in [Ohio] to any person by an act outside [Ohio] . . . . with the purpose of injuring persons, when he might reasonably have expected that some person would be injured thereby in [Ohio].” International Watchman argued that because Watching Time knew that its cancellation proceeding would cause it to suffer an injury within Ohio, the exercise of personal jurisdiction over Watching Time was permissible. The court disagreed, holding that there was no tangible “injury” to the plaintiff in Ohio merely as a result of Watching Time filing a cancellation proceeding with the TTAB. The plaintiff argued that the injury was “the potential cancellation and subsequent loss of its NATO registration,” but the court found that this “potential” injury was hypothetical in nature and would not, in any case, constitute a tortious injury under Ohio’s long-arm statute.

Moreover, the court held that, even if it were to exercise personal jurisdiction, the plaintiff’s federal trademark claim should be dismissed because the plaintiff explicitly alleged that Watching Time did not use the “NATO” trademark in commerce, which is a fundamental and required element of a federal trademark infringement claim. Because the plaintiff specifically alleged that Watching Time did not use the protected mark in commerce, its federal trademark claim failed.

Finally, the court held that the plaintiff’s allegations failed to give rise to a claim for civil conspiracy. A civil conspiracy in Ohio is “a malicious combination of two or more persons to injure another in person or property, in a way not competent for one alone, resulting in actual damages.” The court noted that an underlying unlawful act is required before a civil conspiracy claim can succeed.

Here, the plaintiff did not allege facts sufficient to state a civil conspiracy claim against Watching Time. It alleged that the defendants “acted in concert and in furtherance of their plan to infringe upon the NATO trademark” and that Watching Time was “formed with the specific intent” of filing a cancellation proceeding with the TTAB to have the NATO Trademark cancelled and in order to hide the real parties-in-interest, namely the other defendants, and in order to avoid exposing the other defendants to liability for trademark infringement.

International Watchman’s allegations were insufficient to support the claim for civil conspiracy, the court held. Although it is true that a civil conspiracy claim “does not require a showing of an express agreement between defendants, but only a common understanding or design, even if tacit, to commit an unlawful act,” mere legal conclusions and generalized allegations are not sufficient, the court stated. With the exception of sharing a common attorney, the plaintiff failed to allege any facts connecting Watching Time to the other defendants. The plaintiff failed to allege any facts about how, why or when the defendants acted in concert.

The key takeaway here is for lawyers. General allegations to support jurisdiction are insufficient; the mere filing of a TTAB proceeding is not an injury that makes the filer subject to Ohio courts.

For more information, contact David Posteraro at drp@kjk.com or 216.736.7218, or reach out to any of our Intellectual Property or Brand Enforcement professionals.

 

KJK publications are intended for general information purposes only and should not be construed as legal advice on any specific facts or circumstances. All articles published by KJK state the personal views of the authors. This publication may not be quoted or referred without our prior written consent. To request reprint permission for any of our publications, please use the “Contact Us” form located on this website. The mailing of our publications is not intended to create, and receipt of them does not constitute, an attorney-client relationship. The views set forth therein are the personal views of the author and do not necessarily reflect those of KJK.