A trademark case with Arizona roots opens a new avenue for personal jurisdiction
The Ninth Circuit clarifies what it means to “purposefully direct” activities toward forum residents
A trademark case that got its start in a Phoenix suburb has given Arizona litigants a new avenue for asserting personal jurisdiction over out-of-state companies that sell products through websites such as Amazon. But the precedential ruling, which came down in the middle of an otherwise sleepy July 4 week, came with an important caveat—and a critical practice pointer about the value of cease-and-desist letters.
The case was brought by Herbal Brands, a Tempe-based company that manufactures and distributes dietary supplements. The company accused a group of Brooklyn retailers of taking its products outright and selling them through Amazon. The federal district court here in Phoenix dismissed the trademark infringement case, finding that sales through Amazon—even those made to Arizona residents—were not enough to establish personal jurisdiction over Brooklyn retailer here.
But the Ninth Circuit reversed. In doing so, the court of appeals made two points that will be of note to Arizona litigators. First, while the mere fact that an out-of-state vendor sold products to Arizona customers through a website capable of taking and fulfilling orders (that is, an “interactive” as opposed to passive website) was not enough on its own to hale that vendor into an Arizona court, it could be enough if that vendor made those sales as part of its “regular course of business.” Second, the court of appeals noted, a critical factor weighing in favor of personal jurisdiction in this case was that the allegedly infringing conduct continued after the Arizona company sent a cease-and-desist letter—making clear, in other words, that the Brooklyn retailers were on notice of the harm their conduct was doing in Arizona.
Our counsel Matt Hersh has a full writeup of the case in the Intellectual Property Law Daily, which readers can find here.