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Bar-Ray Products, Inc. v. Infab Corporation

United States District Court, M.D. Pennsylvania

November 5, 2014

BAR-RAY PRODUCTS, INC., Plaintiff.
v.
INFAB CORPORATION, Defendant.

MEMORANDUM

WILLIAM W. CALDWELL, District Judge.

I. Introduction

We are considering a motion to dismiss filed by Defendant Infab Corporation. (Doc. 6). This matter relates to a dispute concerning the use of a trademark. Plaintiff filed a complaint asking us to enter a judgment declaring that its trademark is not confusingly similar to Defendant's and that it has the right to continue using its mark. (Doc. 1). Defendant filed a motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3), arguing that we lack personal jurisdiction, and alternatively, this court is not the proper venue. (Doc. 6; Doc. 7). For the reasons discussed below, we find that we lack personal jurisdiction over Infab Corporation, and we transfer the case to the United States District Court for the Central District of California.

II. Background

Plaintiff Bar-Ray Products is a Pennsylvania corporation with its principal place of business in Littlestown, Pennsylvania. (Doc. 1 at 2). Defendant Infab Corporation is incorporated under the laws of California and has its principal place of business in Camarillo, California. (Id.). Both parties are in the business of manufacturing and selling products that protect users from the harmful effects of x-ray radiation. (Id.). Plaintiff developed computer software for customers to use in conjunction with its products and offered the software to its customers under the trademark "SmartID." (Id.). Defendant offers an analogous computer software to its customers. (Doc. 1 at 6). The trademark Defendant uses for that software is "Smart Track." (Id.).

On or about February 27, 2014, Plaintiff received a letter from Defendant. (Doc. 1 at 6). Defendant advised Plaintiff that its use of the "SmartID" trademark infringed on Defendant's "Smart Track" name. (Doc. 1 at 6-9). Defendant asserted, among other things, that "SmartID" was confusingly similar to "Smart Track, " and Plaintiff was violating the Lanham Act and California law. (Id.). Accordingly, Defendant demanded that Plaintiff cease and desist from using the SmartID trademark. (Id.). In response, Plaintiff commenced the instant action on March 10, 2014, seeking declaratory judgment. On April 4, 2014, Defendant entered a special appearance and filed its motion to dismiss.

III. Discussion

A. Standard of Review

The plaintiff bears the burden of establishing the court's personal jurisdiction over the defendant. Miller Yacht Sales, Inc. v. Smith , 384 F.3d 93 (3d Cir. 2004). Although we "must accept all of the allegations in the complaint as true and construe disputed facts in favor of the plaintiff, " Pinker v. Roche Holdings Ltd. , 292 F.3d 361, 368 (3d Cir. 2002), once a jurisdictional defense is raised, the plaintiff must prove, through affidavits or other competent evidence, sufficient contact with the forum state to establish personal jurisdiction. Dayhoff, Inc. v. H.J. Heinz Co. , 86 F.3d 1287, 1302 (3d Cir. 1996). At the preliminary stages of litigation, if an evidentiary hearing is not held on the motion, the plaintiff need only demonstrate a prima facie case. Miller Yacht Sales, Inc. , 384 F.3d at 97.

B. Personal Jurisdiction Over Defendant Infab Corporation

Federal district courts have personal jurisdiction over defendants to the same extent as a state court of general jurisdiction where the district court sits. FED. R. CIV. P. 4(k)(1)(A). In Pennsylvania, courts of general jurisdiction enjoy personal jurisdiction to the "fullest extent allowed under the Constitution of the United States." 42 PA. CONS. STAT. ยง 5322(b). Accordingly, our jurisdiction extends to the constitutional limit as well. "The Due Process Clause of the Fourteenth Amendment sets out the outer boundaries of a... tribunal's authority to proceed against a defendant." Goodyear Dunlop Tires Operations, S.A. v. Brown , 564 U.S. ___, 131 S.Ct. 2846 (2011). Its "requirements are satisfied when in personam jurisdiction is asserted over a non-resident corporate defendant that has certain minimum contacts with the forum such that the maintenance of suit does not offend traditional notions of fair play and substantial justice.'" Helicopteros Nacionales de Columbia, S.A. v. Hall , 466 U.S. 408, 414 (1984) (quoting International Shoe Co. v. Washington , 326 U.S. 310, 316 (1945)).

1. Infab Corporation's Contacts with Pennsylvania

Since 2009, approximately $224, 000 of Infab's products were sold to Pennsylvania customers, accounting for less than one percent of Infab's total sales during that period. (Doc. 28 at 11-15; Doc. 30 at 3). These sales were accomplished in a variety of ways. Some Pennsylvania customers contacted Infab's California location directly. (Doc. 28 at 3). Other customers placed orders with an Infab sales representative who is stationed in New York and travels into Pennsylvania to sell Infab products.[1] (Doc. 28 at 15). Last, some customers purchased Infab products through distributors. Approximately eleven distributors received orders for Infab products from Pennsylvania customers. (Doc. 28 at 9). Three of those distributors are physically located in Pennsylvania. (Id.). Additionally, one distributor, CoreArmor, is located outside of Pennsylvania but has an interactive e-commerce website, which allows it to have a virtual presence in Pennsylvania and sell products to Pennsylvania customers over the internet. (Doc. 28 at 15-18). All distributors, however, are business entities separate and distinct from Defendant Infab. (Doc. 30 at 6).

In addition to the sale of products, Infab's contacts with Pennsylvania include the following. First, between June 2013 and August 2014, Infab purchased approximately $6, 300 worth of products from a Pennsylvania supplier. (Doc. 30 at 11). Next, a Pennsylvania publisher issued a press release concerning Infab's "Smart Track" software and distributed the press release within Pennsylvania. (Doc. 28 at 18). Infab asserts that the press release was not published at its request. (Doc. 30 at 11). Next, Infab sent the cease and desist letter to Plaintiff concerning its use of the "SmartID" trademark. (Id.). Finally, ...


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