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Deltona Transformer Corp. v. Noco Co.

United States District Court, M.D. Florida, Orlando Division

September 16, 2019

DELTONA TRANSFORMER CORPORATION, Plaintiff,
v.
THE NOCO COMPANY, Defendant.

          REPORT AND RECOMMENDATION

          LESLIE R. HOFFMAN UNITED STATES DISTRICT JUDGE.

         TO THE UNITED STATES DISTRICT COURT:

         This cause came on for consideration without oral argument on the following motion filed herein:

MOTION: DEFENDANT'S MOTION TO DISMISS OR, IN THE ALTERNATIVE, MOTION TO STAY (Doc. 12)
FILED: March 7, 2019
THEREON it is respectfully RECOMMENDED that the motion be DENIED.

         I. Background

         The Deltona Transformer Corporation (Plaintiff) is a Florida corporation that designs, manufactures, and sells batteries and battery-related products for the automotive, motorcycle, and power sports industries. (Doc. 1 at ¶¶ 2, 7-8). The Plaintiff has advertised and sold its battery products under four BATTERY TENDER and DELTRAN BATTERY TENDER trademarks (collectively, the Marks) for more than twenty-five years. (Id. at ¶¶ 8-10).

         The Noco Company (Defendant) is an Ohio corporation with its principal place of business in Ohio. (Id. at ¶ 3). The Defendant sells battery-related products that directly compete with the products that the Plaintiff advertises and sells under the Marks. (Id. at ¶ 26).

         This case primarily stems from the Defendant's multi-year marketing campaign of its battery-related products on Amazon. (Id. at ¶¶ 28-46). The advertisements at issue included “tender” or “battery tender” in their taglines and appeared when a user included the phrase “battery tender” in his or her search. (Id. at ¶¶ 31, 35, 37, 41, 44). The Plaintiff alleges that the Defendant was not authorized to reference “tender” or “battery tender” in the advertisements and, by doing so, infringed the Marks. (Id. at ¶¶ 27-28). Each time the Plaintiff learned of the unauthorized advertisements, the Plaintiff would contact the Defendant and demand that it cease using the “tender” and “battery tender” Marks. (Id. at ¶¶ 33, 36, 42, 45). Each time, the Defendant would respond by removing the offending advertisement. (Id. at ¶¶ 34, 37, 43, 46). However, shortly after the advertisement was removed, the Defendant would place a new, slightly altered advertisement on Amazon that again mentioned “tender” or “battery tender” in the tagline. (Id. at ¶¶ 35, 37, 41, 44).

         In 2016, the Defendant expressed an interest in purchasing the Plaintiff's assets, including the Marks, in order to “carry[] on the legacy and passion of the Battery Tender brand.” (Id. at ¶ 38). The Plaintiff declined the overtures, which allegedly led the Defendant to place additional advertisements on Amazon that used the Marks to refer to the Defendant's own brand “in an effort to bootstrap its products to and benefit from the selling power of [the Plaintiff's] brand.” (Id. at ¶¶ 39-40). However, after December 19, 2018, it does not appear that the Defendant placed any further unauthorized advertisements on Amazon using the words “tender” or “battery tender.” (Id. at ¶¶ 46-47).

         Instead, the Defendant has continued to use the Marks elsewhere to advertise its products. (Id. at ¶¶ 47-48). For example, the Plaintiff points to a message that appeared on the Defendant's website on January 31, 2019 which stated, in relevant part, that the Defendant's “chargers are also battery tenders/maintainers.” (Id. at ¶ 48).[1]

         The Plaintiff alleges that the Defendant's unauthorized use of the Marks in its marketing campaigns is likely to cause confusion among consumers as to the origin of the Defendant's products, and is a deliberate attempt to trade on the goodwill and reputation of the Marks to divert prospective customers to the Defendant's products. (Id. at ¶¶ 50-51). As a result, the Plaintiff filed this action asserting the following claims against the Defendant: Count I - trademark infringement in violation of Section 32(a) of the Lanham Act, 15 U.S.C. § 1114(1); Count II - false designation of origin and unfair competition in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); Count III - common law trademark infringement; and, Count IV - violation of the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq. (Id. at 13-16).

         The Defendant has moved to dismiss the case for want of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2). (Doc. 12 (Motion to Dismiss)). Alternatively, the Defendant requests that the case be stayed pending the resolution of a related cancellation proceeding currently before the Trademark Trial and Appeal Board of the United States Patent and Trademark Office (TTAB). (Id.). Finally, in the event the Court does not dismiss or stay the case, the Defendant requests that the case be transferred to the United States District Court for the Northern District of Ohio. (Id.). In support of these arguments, the Defendant filed an affidavit from its owner and president, Jonathan Nook (Doc. 12-1), its standard reseller agreement (Doc. 12-2), and its petition to cancel one of the Marks at issue in this case (Doc. 12-3).

         The Plaintiff has filed a response in opposition, arguing that personal jurisdiction exists in Florida, that the TTAB proceedings do not warrant a stay of the present litigation, and that venue is proper in this Court. (Doc. 27). The Plaintiff relies upon screenshots from the Defendant's website and social media webpages (Docs. 28-1; 28-2; 28-3; 28-4; 28-5), and screenshots from various webpages showing the location of retailers in Florida that sell the Defendant's products (Docs. 28-6; 28-7; 28-8; 28-9; 28-10; 28-11; 28-12; 28-13; 28-14). The Motion to Dismiss was referred to the undersigned, and the matter is ripe for review.

         II. Analysis

         The Defendant raises three distinct arguments: 1) the Court lacks personal jurisdiction over the Defendant; 2) the case should be stayed pending the TTAB's resolution of the cancellation proceeding; and 3) the case should be transferred to the Northern District of Ohio. (Doc. 12). The undersigned will address each argument in turn.

         A. Personal Jurisdiction

         A plaintiff claiming that the Court has personal jurisdiction over a nonresident defendant bears the initial burden of alleging sufficient facts in the complaint to establish a prima facie case of personal jurisdiction over the defendant. United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009). A prima facie case is established if the plaintiff alleges enough facts to withstand a motion for directed verdict or judgment as a matter of law. Meier ex rel. Meier v. Sun Intern. Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir. 2002). If the defendant challenges jurisdiction by submitting affidavits containing specific averments contradicting the plaintiff's allegations in support of personal jurisdiction, the burden shifts back to the plaintiff to produce evidence supporting the existence of personal jurisdiction. United Techs., 556 F.3d at 1274. “Where the plaintiff's complaint and supporting evidence conflict with the defendant's affidavits, the court must construe all reasonable inferences in favor of the plaintiff.” Meier, 288 F.3d at 1269.

         A court undertakes a two-step inquiry in determining whether it can exercise personal jurisdiction over a nonresident defendant. Cable/Home Communication Corp. v. Network Productions, Inc., 902 F.2d 829, 855 (11th Cir. 1990). First, the Court must determine whether the forum state's long-arm statute provides a sufficient basis for personal jurisdiction. Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 626 (11th Cir. 1996). Second, if the Court finds that personal jurisdiction exists under the forum state's long-arm statute, the Court “must determine whether sufficient minimum contacts exist between the defendant[ ] and the forum state so as to satisfy traditional notions of fair play and substantial justice under the Due Process Clause of the Fourteenth Amendment.” Id. (internal quotation omitted).

         1. Florida's Long-Arm Jurisdiction

         Florida's long-arm statute (which both parties agree applies to this case) provides for both general and specific personal jurisdiction. See Fla. Stat. § 48.193(1)-(2). General personal jurisdiction exists when a defendant “is engaged in substantial and not isolated activity within this state . . . whether or not the claim arises from that activity.” Id. § 48.193(2). “General personal jurisdiction is based on a defendant's substantial activity in Florida without regard to where the cause of action arose.” Louis Vuitton Malletier, S.A. v. Mosseri, 736 F.3d 1339, 1352 (11th Cir. 2013) (citing Oldfield v. Pueblo De Bahio Lora, S.A., 558 F.3d 1210, 1220 n.27 (11th Cir. 2009)). Specific jurisdiction, on the other hand, “authorizes jurisdiction over causes of action arising from or related to the defendant's actions within Florida and concerns a nonresident defendant's contacts with Florida only as to those contacts related to the plaintiff's cause of action.” Id.

         The parties appear to agree that the Plaintiff is only asserting specific personal jurisdiction over the Defendant under Fla. Stat. § 48.193(1)(a)(2) - the “tortious acts within Florida” provision - based on the Defendant's allegedly tortious actions, i.e., trademark infringement, within the state. (See Docs. 12; 27).[2] The Defendant contends that it did not commit a tortious act in Florida because it did not directly communicate the Amazon advertisements or the message on its own website into Florida, and therefore § 48.193(1)(a)(2) cannot be satisfied. (Doc. 12 at 8-9). In response, the Plaintiff contends that the Defendant's infringing marketing campaigns are enough to satisfy the requirements of § 48.193(1)(a)(2) because they were accessible by customers in Florida via a national website and injured the Plaintiff in Florida. (Id. at 5-7).[3]

         The reach of Florida's long-arm statute “is a question of Florida law, ” therefore the Court is required to apply the statute “as would the Florida Supreme Court.” United Techs., 556 F.3d at 1274. “Florida's long-arm statute is to be strictly construed.” Sculptchair, 94 F.3d at 627.

         The Florida long-arm statute provides, in relevant part, as follows:

A person, whether or not a citizen or resident of this state, who personally or through an agent does any of the acts enumerated in this subsection thereby submits himself or herself and, if he or she is a natural person, his or her personal representative to the jurisdiction of the courts of this state for any cause of action arising from any of the following acts:
Committing a tortious act within this state.

Fla. Stat. § 48.193(1)(a)(2). The Eleventh Circuit has adopted a “broad interpretation” of this provision, concluding that a nonresident defendant commits a tortious act within Florida “when he commits an act outside the state that causes injury within Florida.” Louis Vuitton Malletier, S.A., 736 F.3d at 1353 (emphasis in original) (citing Licciardello v. Lovelady, 544 F.3d 1280, 1283 (11th Cir. 2008)).

         A claim of trademark infringement constitutes a “tortious act” for purposes of § 48.193(1)(a)(2). Id. The issue here is whether a nonresident defendant's allegedly infringing use of a trademark on the internet is enough to establish specific jurisdiction.[4] The Eleventh Circuit confronted this very issue in Licciardello v. Lovelady, 544 F.3d 1280 (11th Cir. 2008) and Louis Vuitton Malletier, S.A. v. Mosseri, 736 F.3d 1339 (11th Cir. 2013) and held in the affirmative.

         In Licciardello, the plaintiff (Licciardello) was a nationally-known entertainer and Florida resident who sued his former personal manager and Tennessee resident (Lovelady), for trademark infringement in the Middle District of Florida. Id. at 1282-83. Licciardello alleged that Lovelady wrongfully used Licciardello's trademarked name and picture on Lovelady's website, which was accessible to the public in Florida and promoted Lovelady as a personal manager for music artists. Id. at 1282. The website was created by one of Lovelady's employees in Tennessee. Id. at 1283. Licciardello argued that Lovelady's creation of the website in Tennessee containing an allegedly infringing and deceptive use of Licciardello's trademarks constituted a tortious act within Florida pursuant to § 48.193(1)(a)(2).[5] Id. Lovelady moved to dismiss for lack of personal jurisdiction on the basis that he did not commit any tort because he did not actually create the website. Id. The district court granted the motion to dismiss. Id. at 1282-83.

         On appeal, the Eleventh Circuit reversed and held that personal jurisdiction existed under § 48.193(1)(a)(2), because “although the website was created in Tennessee, the Florida long-arm statute is satisfied if the alleged trademark infringement on the website caused injury in Florida.” Id. at 1283. The Court of Appeals ignored (and implicitly rejected) Lovelady's argument that he could not be held liable because he did not directly create the website. The Court went on to reason that it “need not decide whether trademark injury necessarily occurs where the owner of the mark resides, as the Florida district courts have held, because in this case the alleged infringement clearly also occurred in Florida by virtue of the website's accessibility in Florida.” Id. Thus, as the Eleventh Circuit clarified in a later decision, Licciardello “instructs that, under the ‘tortious acts' provision in § 48.193(1)(a)(2), a trademark infringement on an Internet website causes injury and occurs in Florida ‘by virtue of the website's accessibility in Florida.'” Louis Vuitton Malletier, S.A., 736 F.3d at 1353-54 (citing Licciardello, 544 F.3d at 1283).

         The Eleventh Circuit followed Licciardello in its later decision Louis Vuitton Malletier, in which the defendant created websites that marketed and sold counterfeit and infringing Louis Vuitton merchandise. Id. at 1354. The court found the location where the websites were created was immaterial in determining whether § 48.193(1)(a)(2) applies. Id. Instead, the court stated that the relevant inquiry is whether the defendant's tortious acts caused injury in Florida. Id. Because the websites were ...


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