throbber
Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA642813
`ESTTA Tracking number:
`12/05/2014
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`92046676
`Defendant
`Signamax LLC
`BRUCE A MCDONALD
`BUCHANAN INGERSOLL & ROONEY
`1737 KINGS STREET, SUITE 500
`ALEXANDRIA, VA 22314-2727
`UNITED STATES
`fred.hathaway@bipc.com, bruce.mcdonald@bipc.com, holly.lance@bipc.com
`Other Motions/Papers
`Bruce A. McDonald
`bruce.mcdonald@bipc.com
`/Bruce A. McDonald/
`12/05/2014
`12-5-2014 Response to Petitioner's Submission Regarding Status of Proceed-
`ings.pdf(71302 bytes )
`
`Proceeding
`Party
`
`Correspondence
`Address
`
`Submission
`Filer's Name
`Filer's e-mail
`Signature
`Date
`Attachments
`
`

`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Cancellation No. 92/046,676
`
`))))))))
`
`___________________________________
`AESP, INC.,
`
`Petitioner,
`
`v.
`
`SIGNAMAX LLC,
`
`Registrant.
`___________________________________
`
`RESPONSE TO PETITIONER’S
`SUBMISSION REGARDING STATUS OF CIVIL PROCEEDINGS
`
`
`
`Responding to Petitioner’s submission dated December 1, 2014, entitled “Status of Civil
`
`Proceedings,” Registrant agrees with Petitioner’s statement as far as it goes, but would add that
`
`the Court’s order dated July 8, 2014, was accompanied by a precedential opinion that was
`
`omitted from Petitioner’s submission to the Board, see AESP, Inc. v. Signamax, LLC, ____ F.
`
`Supp. 2d ____ (E.D.Va. 2014) (copy attached).
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`SIGNAMAX LLC
`
`By:
`
`
`________________________________________
`Bruce A. McDonald
`BUCHANAN INGERSOLL & ROONEY PC
`1700 K Street, N.W., Suite 300
`Washington, D.C. 20006
`tel.
`(202) 452-6052
`fax
`(703) 836-2021
`
`ATTORNEYS FOR THE REGISTRANT
`
`December 5, 2014
`
`

`
`CERTIFICATE OF SERVICE
`
`
`
`I hereby certify that on December 5, 2014, a copy of RESPONSE TO PETITIONER’S
`
`SUBMISSION REGARDING STATUS OF CIVIL PROCEEDINGS was served by U.S. mail,
`
`first class postage prepaid, on Petitioner's counsel of record at the following address:
`
`Adam G. Garson, Esq.
`LIPTON, WEINBERGER & HUSICK
`201 N. Jackson Street
`Media, PA 19063
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`__________________________________________
`Bruce A. McDonald
`Attorney
`BUCHANAN INGERSOLL & ROONEY PC
`
`
`
`2
`
`

`
`--- F.Supp.2d ----, 2014 WL 3348134 (E.D.Va.)
`(Cite as: 2014 WL 3348134 (E.D.Va.))
`
`Page 1
`
`Only the Westlaw citation is currently available.
`
`Trademarks 382T
`
`1559
`
`United States District Court, E.D. Virginia,
`Alexandria Division.
`AESP, INC., et al., Plaintiffs,
`v.
`SIGNAMAX, LLC, Defendant.
`
`Case No. 1:13–CV–1089.
`Signed July 8, 2014.
`
`Background: Florida manufacturer of cables for
`connecting personal computers and peripherals
`brought copyright and trademark infringement action
`against District of Columbia limited liability company
`formed by a Czech corporation, disputing ownership
`of “SIGNAMAX CONNECTIVITY SYSTEMS”
`trademark. Defendant moved to dismiss.
`
`Holding: The District Court, T.S. Ellis, III, J., held
`that subjecting Czech corporation to personal juris-
`diction in Virginia would not comport with due pro-
`cess.
`
`Motion granted.
`
`West Headnotes
`
`382T Trademarks
` 382TIX Actions and Proceedings
` 382TIX(A) In General
` 382Tk1557 Jurisdiction
` 382Tk1559 k. Foreign Commerce. Most
`Cited Cases
`
`Subjecting District of Columbia limited liability
`company (LLC) formed by a Czech corporation to
`personal jurisdiction in Virginia, for purposes of
`lawsuit disputing ownership of “SIGNAMAX
`CONNECTIVITY SYSTEMS” trademark, based on
`mere presence in Virginia of allegedly infringing
`products manufactured by the Czech corporation,
`would not comport with due process; only basis for
`personal jurisdiction over Czech corporation was four
`sales of allegedly infringing products to a Pennsylva-
`nia corporation which subsequently sold those prod-
`ucts to two customers in Virginia, Czech corporation
`had not directed that its products be sold in Virginia or
`to any Virginia customers nor required the buyer to
`sell the products to Virginia customers, it had not
`marketed the allegedly infringing products in Virginia
`or advertised in Virginia, and its only contact with
`Virginia appeared to be its sales to a nationwide dis-
`tributor. U.S.C.A. Const.Amend. 5.
`
`[1] Constitutional Law 92
`
`3965(4)
`
`[2] Trademarks 382T
`
`1552
`
`92 Constitutional Law
` 92XXVII Due Process
` 92XXVII(E) Civil Actions and Proceedings
` 92k3961 Jurisdiction and Venue
` 92k3965 Particular Parties or Circum-
`stances
` 92k3965(4) k. Manufacture, Distri-
`bution, and Sale. Most Cited Cases
`
`382T Trademarks
` 382TIX Actions and Proceedings
` 382TIX(A) In General
` 382Tk1552 k. What Law Governs. Most
`Cited Cases
`
`Virginia law governed application of Virginia's
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`

`
`--- F.Supp.2d ----, 2014 WL 3348134 (E.D.Va.)
`(Cite as: 2014 WL 3348134 (E.D.Va.))
`
`long-arm statute to motion, in action disputing own-
`ership of
`the “SIGNAMAX CONNECTIVITY
`SYSTEMS” trademark, to dismiss for lack of personal
`jurisdiction.
`
`[3] Trademarks 382T
`
`1552
`
`382T Trademarks
` 382TIX Actions and Proceedings
` 382TIX(A) In General
` 382Tk1552 k. What Law Governs. Most
`Cited Cases
`
`Fourth Circuit law, rather than Federal Circuit
`law, applied to motion, in action disputing ownership
`of the “SIGNAMAX CONNECTIVITY SYSTEMS”
`trademark, to dismiss for lack of personal jurisdiction;
`action did not involve patent law.
`
`[4] Constitutional Law 92
`
`3964
`
`92 Constitutional Law
` 92XXVII Due Process
` 92XXVII(E) Civil Actions and Proceedings
` 92k3961 Jurisdiction and Venue
` 92k3964 k. Non-Residents in General.
`Most Cited Cases
`
`Federal Courts 170B
`
`2721
`
`170B Federal Courts
` 170BX Personal Jurisdiction
` 170BX(B) Actions by or Against Nonresi-
`dents; “Long-Arm” Jurisdiction
` 170Bk2721 k. In General. Most Cited Cases
`
`Federal Courts 170B
`
`3025(4)
`
`170B Federal Courts
` 170BXV State or Federal Laws as Rules of Deci-
`sion; Erie Doctrine
`
`Page 2
`
` 170BXV(B) Application to Particular Matters
` 170Bk3022 Procedural Matters
` 170Bk3025 Jurisdiction
` 170Bk3025(4) k. Personal Jurisdic-
`tion. Most Cited Cases
`
`When resolving personal jurisdiction challenges,
`it is necessary to determine whether the state long-arm
`statute, by its terms, reaches a defendant's conduct; if
`the long-arm statute does not reach the defendant's
`conduct, the inquiry ends and there is no personal
`jurisdiction over the defendant, but if the long-arm
`statute, by its terms, reaches the defendant's conduct,
`then the second inquiry–the due process inquiry–must
`be pursued to determine whether the long-arm statute's
`reach exceeds its constitutional grasp. U.S.C.A.
`Const.Amend. 5.
`
`[5] Constitutional Law 92
`
`3964
`
`92 Constitutional Law
` 92XXVII Due Process
` 92XXVII(E) Civil Actions and Proceedings
` 92k3961 Jurisdiction and Venue
` 92k3964 k. Non-Residents in General.
`Most Cited Cases
`
`A court's exercise of personal jurisdiction over a
`non-resident defendant is consistent with due process
`if the defendant has sufficient minimum contacts with
`the forum such that requiring the defendant to defend
`its interests in the forum does not offend traditional
`notions of fair play and substantial justice; the mini-
`mum contacts must be purposeful, a requirement that
`helps ensure that non-residents have fair warning that
`a particular activity may subject them to litigation
`within the forum. U.S.C.A. Const.Amend. 5.
`
`[6] Federal Courts 170B
`
`2743(1)
`
`170B Federal Courts
` 170BX Personal Jurisdiction
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`

`
`--- F.Supp.2d ----, 2014 WL 3348134 (E.D.Va.)
`(Cite as: 2014 WL 3348134 (E.D.Va.))
`
` 170BX(B) Actions by or Against Nonresi-
`dents; “Long-Arm” Jurisdiction
` 170Bk2737 Particular Contexts and Causes
`of Action
` 170Bk2743 Manufacture, Distribution,
`and Sale of Products
` 170Bk2743(1) k. In General. Most
`Cited Cases
`
`In the Fourth Circuit, simple awareness that the
`stream of commerce may or will sweep the product
`into the forum State is not enough to render the exer-
`cise of personal jurisdiction constitutional; a defend-
`ant's placement of products into the stream of com-
`merce with the expectation that they would be pur-
`chased in the forum State is not enough to constitute
`activity purposefully directed at that forum State.
`
`[7] Federal Courts 170B
`
`2743(1)
`
`170B Federal Courts
` 170BX Personal Jurisdiction
` 170BX(B) Actions by or Against Nonresi-
`dents; “Long-Arm” Jurisdiction
` 170Bk2737 Particular Contexts and Causes
`of Action
` 170Bk2743 Manufacture, Distribution,
`and Sale of Products
` 170Bk2743(1) k. In General. Most
`Cited Cases
`
`Fourth Circuit law requires that, in addition to
`placing an object in the stream of commerce, a plain-
`tiff seeking to demonstrate that the defendant is sub-
`ject to personal jurisdiction must show additional
`conduct of the defendant that indicates an intent or
`purpose to serve the market in the forum State; such
`additional, intentional conduct may consist of de-
`signing the product for the market in the forum ad-
`vertising in the forum, establishing channels for
`providing regular advice to customers in the forum, or
`marketing the product through a distributor who has
`
`Page 3
`
`agreed to serve as the sales agent in the forum.
`
`Trademarks 382T
`
`1800
`
`382T Trademarks
` 382TXI Trademarks and Trade Names Adjudi-
`cated
` 382Tk1800 k. Alphabetical Listing. Most
`Cited Cases
`
`SIGNAMAX CONNECTIVITY SYSTEMS.
`
`David Zachary Kaufman, Kaufman Law Group, Vi-
`enna, VA, for Plaintiffs.
`
`Bruce A. McDonald, Buchanan Ingersoll & Rooney
`PC, Washington, DC, Scott Lloyd Smith and Holly
`Beth Lance, Buchanan Ingersoll & Rooney PC, Al-
`exandria, VA, for Defendant.
`
`MEMORANDUM OPINION
`T.S. ELLIS, III, District Judge.
`*1 In this trademark and copyright infringement
`case, the parties have disputed the ownership of the
`trademark at issue—SIGNAMAX CONNECTIVITY
`SYSTEMS—for over seven years, including pro-
`ceedings in a Czech court and before the Trademark
`Trial and Appeals Board (“TTAB”) of the Patent and
`Trademark Office (“PTO”). This dispute remains
`central to the claims in this case. But at issue now is
`the
`threshold question of personal
`jurisdiction,
`namely, whether defendant's sale of allegedly in-
`fringing products from abroad to a United States dis-
`tributor that, in turn, sells these infringing products
`nationwide constitutes a sufficient basis for the exer-
`cise of personal jurisdiction over defendant in this
`forum.
`
`[1] For the reasons that follow, the facts alleged in
`the complaint and the current factual record warrant
`the conclusion that there is no personal jurisdiction
`over defendant, and thus, defendant's motion to dis-
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`

`
`Page 4
`
`--- F.Supp.2d ----, 2014 WL 3348134 (E.D.Va.)
`(Cite as: 2014 WL 3348134 (E.D.Va.))
`
`miss must be granted for lack of personal jurisdiction.
`
`mark to Intelek.FN1
`
`I.
`A.
`Plaintiff AESP, Inc. (“AESP”) is a Florida cor-
`poration in the business of designing, developing,
`manufacturing, and selling cables for connecting
`personal computers and peripherals, including printers
`and disk drives. Plaintiff Signamax, Inc., a Florida
`corporation, is a wholly owned subsidiary of AESP.
`
`Defendant Signamax, LLC is a District of Co-
`lumbia limited liability company formed in 2005 by
`Apron spol s.r.o. (“Apron”), a Czech corporation.
`Defendant is engaged in the business of selling net-
`work connection components and cabling products.
`
`In 1999, plaintiff AESP acquired the assets, in-
`cluding trademarks, of Communication Components
`Co., Inc. (“CCCI”). Prior to the acquisition, CCCI was
`a corporation that designed, developed, manufactured,
`and sold structured cabling products, including inter-
`connect cables and various devices used for computer
`networking. Plaintiffs allege that CCCI developed the
`SIGNAMAX CONNECTIVITY SYSTEMS mark
`and logo in early 1994 to identify CCCI's line of
`structured cabling products. In 2000, following plain-
`tiff AESP's acquisition of CCCI's assets, plaintiffs
`allege that plaintiff AESP began to market and sell
`CCCI's SIGNAMAX CONNECTIVITY SYSTEMS
`line of structured cabling products.
`
`In 2001, plaintiff AESP purchased Intelek spol
`s.r.o. (“Intelek”), a Czech corporation that manufac-
`tured Internet equipment and wireless communication
`hardware. Plaintiff AESP made Intelek its wholly
`owned subsidiary for the purpose of establishing a
`market presence in the Czech and Slovak Republics.
`In 2002, Intelek filed a registration for the term
`SIGNAMAX CONNECTIVITY SYSTEMS with the
`PTO, and on December 16, 2003, the PTO issued the
`SIGNAMAX CONNECTIVITY SYSTEMS trade-
`
`In September 2004, plaintiff AESP and Intelek
`entered into an agreement through which Intelek's
`rights
`in
`the Czech
`trademark registration for
`SIGNAMAX CONNECTIVITY SYSTEMS were
`transferred to plaintiff AESP. This agreement did not
`contain a provision that expressly transferred the U.S.
`trademark registration from Intelek to plaintiff AESP.
`Plaintiffs allege that this omission was merely a
`scrivener's error that neither Intelek nor plaintiff
`AESP noticed at the time, and that the agreement
`should have contained such a provision because the
`consideration paid by plaintiff AESP to Intelek pur-
`suant to the agreement included the cost of registering
`both the Czech trademark and the U.S. trademark.
`Defendant denies this allegation, and claims that there
`was no understanding between the parties that the
`September 2004 agreement was meant to transfer all
`trademark registrations to AESP, not just the Czech
`registration.
`
`*2 On April 3, 2005, plaintiffs sold Intelek's as-
`sets to defendant's predecessor, Apron, a Czech cor-
`poration. Plaintiffs claim that all parties to the April
`2005 transaction understood that, despite the sale of
`Intelek's assets to Apron, plaintiff AESP was, and
`continued to be, the owner of the SIGNAMAX
`CONNECTIVITY SYSTEMS registration. Defend-
`ant, however, claims that the SIGNAMAX CON-
`NECTIVITY SYSTEMS registration was transferred
`to Apron together with all of Intelek's assets, and
`further claims
`that Apron's acquisition of
`the
`SIGNAMAX CONNECTIVITY SYSTEMS registra-
`tion was the very purpose of the sale.
`
`On July 29, 2005, defendant was registered as a
`Washington, D.C. limited liability company. On Au-
`gust 24, 2005, Intelek, now owned by defendant, rec-
`orded an assignment of the SIGNAMAX CONNEC-
`TIVITY SYSTEMS trademark that designated de-
`fendant as the assignee.FN2
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`

`
`--- F.Supp.2d ----, 2014 WL 3348134 (E.D.Va.)
`(Cite as: 2014 WL 3348134 (E.D.Va.))
`
`Thereafter, on October 25, 2006, plaintiffs filed
`an action against Intelek in the Regional Court of
`Brno, Czech Republic, alleging unfair competition
`and trademark infringement of the SIGNAMAX
`CONNECTIVITY SYSTEMS mark and seeking re-
`covery of the disputed U.S. Trademark registration.
`Central to the dispute in the Czech Republic court
`proceeding was ownership of the mark.
`
`Two days after the filing of the Czech Republic
`court action, plaintiffs, on October 27, 2006, instituted
`a cancellation petition against defendant before the
`PTO's TTAB. This cancellation proceeding remains
`pending before the TTAB. The TTAB has suspended
`this proceeding several times. First, the TTAB sus-
`pended the proceeding on June 20, 2007 pending the
`outcome of the Czech Republic regional court action.
`Proceedings were resumed on December 23, 2009.
`The TTAB again suspended the proceeding on April
`22, 2012 pending the outcome of plaintiffs' appeal of
`the Czech Republic regional court's decision to the
`High Court in Olomouc, Czech Republic. The TTAB
`suspended the petition a third time on May 25, 2010
`pending resolution of an ultimately unsuccessful mo-
`tion for summary judgment filed at the TTAB by
`plaintiffs. Finally, on August 30, 2013, plaintiffs filed
`a motion to suspend the cancellation petition before
`the TTAB pending the outcome of the instant case.
`
`In the meantime, the Czech Republic regional
`court proceeding concluded on March 11, 2011 when
`that court found that plaintiff AESP transferred the
`SIGNAMAX CONNECTIVITY SYSTEMS mark to
`Apron, defendant's predecessor, along with the rest of
`Intelek's assets pursuant to the April 3, 2005 sale. On
`October 1, 2012, the Czech appellate court affirmed
`the judgment of the regional Czech court against
`plaintiffs and dismissed every count of plaintiffs'
`complaint. The Czech appellate court held that the
`SIGNAMAX CONNECTIVITY SYSTEMS mark
`was fully integrated in plaintiff AESP's April 3, 2005
`sale of Intelek's assets to defendant's predecessor, and
`
`Page 5
`
`as a result of that transaction, the trademark belongs to
`defendant.
`
`In this case, plaintiffs allege that plaintiffs own
`the rights to the SIGNAMAX CONNECTIVITY
`SYSTEMS mark and copyright FN3 and therefore seek
`cancellation of defendant's U.S. Trademark No.
`2793882 pursuant to 15 U.S.C. § 1051(a)(1). Plaintiffs
`also seek declaratory judgment that plaintiffs own the
`trademark and the copyright to SIGNAMAX CON-
`NECTIVITY SYSTEMS and further seek injunctive
`relief and damages based on defendant's alleged cop-
`yright violations, trademark violations, trademark
`dilution, and violation of the Lanham Act. Plaintiffs
`further allege that defendant knew plaintiffs were the
`sole owners of the SIGNAMAX CONNECTIVITY
`SYSTEMS and deliberately took advantage of a
`scrivener's error in the agreement between plaintiff
`AESP and Intelek, breaching a duty of good faith and
`fair dealing arising under the transfer agreement be-
`tween defendant's predecessor and plaintiffs. Plaintiffs
`further allege that defendant's actions in intentionally
`taking advantage of the scrivener's error in the transfer
`agreement and subsequently selling counterfeit
`products branded with the SIGNAMAX CONNEC-
`TIVITY SYSTEMS mark constitutes fraud, conver-
`sion, tortious interference with business relationships,
`and unfair competition.
`
`B.
`*3 The facts relevant to the issue of personal ju-
`risdiction are easily summarized. Plaintiffs' claim that
`personal jurisdiction exists over defendant in this
`forum is based on the following transactions:
`
`(1) In 2009, Jetwing Tech, a Taiwanese corporation
`and defendant's authorized agent, sold allegedly
`infringing products to Lynn Electronics, defendant's
`sole authorized United States dealer. Lynn Elec-
`tronics is a Pennsylvania corporation and a nation-
`wide retailer doing business through websites like
`Amazon.com. Lynn Electronics then resold the al-
`legedly infringing products to the Maryland branch
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`

`
`--- F.Supp.2d ----, 2014 WL 3348134 (E.D.Va.)
`(Cite as: 2014 WL 3348134 (E.D.Va.))
`
`of a national electronics distributor headquartered in
`Georgia, Accu–Tech Corp. Accu-tech then resold
`the products to The Software Center, a Virginia
`corporation in Culpeper, Virginia. The sale to The
`Software Center was a “drop shipment,” that is, the
`products were picked up directly from Lynn Elec-
`tronics' Pennsylvania warehouse and shipped di-
`rectly to The Software Center in Culpeper.
`
`(2) The same transaction as above also occurred
`once in 2010.
`
`(3) In 2009, two identical transactions occurred in
`which Jetwing Tech again sold allegedly infringing
`products to Lynn Electronics in Pennsylvania. Lynn
`Electronics then resold these products to Swift, Inc.,
`a Virginia company.
`
`II.
`[2][3] Choice of law is the threshold issue. As it is
`the Virginia long-arm statute that is applicable, there
`can be no doubt that the law of the Supreme Court of
`Virginia governs interpretation and application of
`Virginia's long-arm statute. As to the question of
`constitutional due process, federal law clearly ap-
`plies—that is, in this forum, Supreme Court and
`Fourth Circuit precedent. It must be noted that de-
`fendant's 19–page supplemental brief on personal
`jurisdiction cites to only one case involving Fourth
`Circuit law. Instead, defendant's brief inexplicably
`focuses on Second Circuit and New York law. Equally
`off-target, plaintiffs cite only Federal Circuit prece-
`dent on the question of personal jurisdiction. Yet, as
`the Federal Circuit itself has recognized, Federal
`Circuit law does not apply to district court cases in-
`volving solely non-patent actions.FN4 Instead, the law
`of the regional circuit controls. Thus, Federal Circuit
`law on personal jurisdiction does not apply here.
`
`[4] Under Fourth Circuit law, resolution of per-
`sonal jurisdiction challenges involves a two-step in-
`quiry. See Ellicott Machine Corp., Inc. v. John Hol-
`
`Page 6
`
`land Party Ltd., 995 F.2d 474, 477 (4th Cir.1993).
`First, it is necessary to determine whether the state

`statute—here, Va.Code Ann.
`long-arm
`8.01–328.1(A)(1) FN5—by its terms, reaches a de-
`fendant's conduct. If the long-arm statute does not
`reach a defendant's conduct, the inquiry ends; there is
`no personal jurisdiction over the defendant. Id. But if
`the long-arm statute, by its terms, reaches a defend-
`ant's conduct, then the second inquiry—the due pro-
`cess inquiry—must be pursued to determine whether
`the long-arm's reach exceeds its constitutional grasp.
`Id. See also RZS Holdings AVV v. PDVSA Petroleos
`S.A., 293 F.Supp.2d 645, 648 (E.D.Va.2003). And
`because the Supreme Court of Virginia has construed
`the “transacting business” provision of Virginia's
`long-arm statute to extend to the limits of due process,
`the statutory inquiry merges with, or collapses into,
`the constitutional due process inquiry, and thus it is
`necessary to address here only the due process in-
`quiry.FN6
`
`A.
`*4 [5] A court's exercise of personal jurisdiction
`over a non-resident defendant is consistent with due
`process if the defendant has sufficient “minimum
`contacts” with the forum such that requiring the de-
`fendant to defend its interests in the forum does not
`“offend traditional notions of fair play and substantial
`justice.” International Shoe Co. v. Washington, 326
`U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Later
`cases have clarified that the minimum contacts must
`be “purposeful.” Burger King Corp. v. Rudzewicz, 471
`U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).
`This “purposeful” requirement “helps ensure that
`non-residents have fair warning that a particular ac-
`tivity may subject them to litigation within the forum.”
`In re Celotex Corp., 124 F.3d 619, 628 (4th Cir.1997).
`
`Because defendant, a foreign corporation, has no
`presence in Virginia and did not itself sell products
`into Virginia, plaintiffs, to establish personal jurisdic-
`tion over defendant, must rely on the “stream of
`commerce” theory first articulated by the Supreme
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`

`
`--- F.Supp.2d ----, 2014 WL 3348134 (E.D.Va.)
`(Cite as: 2014 WL 3348134 (E.D.Va.))
`
`Court in World–Wide Volkswagen Corp. v. Woodson,
`444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980).
`In WorldWide Volkswagen, the Supreme Court, in
`adopting the “stream of commerce” theory, explained
`that minimum contacts may be “purposeful,” and
`hence sufficient to establish personal jurisdiction, if
`the defendant corporation “delivers its products into
`the stream of commerce with the expectation that they
`will be purchased by consumers in the forum State.”
`Id. at 297–98, 100 S.Ct. 559.
`
`The Supreme Court next addressed the “stream of
`commerce” theory in Asahi Metal Industry v. Superior
`Court, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92
`(1987). Asahi concerned California's exertion of per-
`sonal jurisdiction over the defendant, a Japanese
`manufacturer of valves. The Japanese manufacturer
`did not itself sell the valves into California but had the
`knowledge that the valves would be incorporated into
`tire tubes eventually sold into California. The Court's
`efforts to resolve the issue of whether the defendant
`had the minimum contacts with California necessary
`to confer personal jurisdiction resulted in a split deci-
`sion.
`
`Justice O'Connor's opinion, joined by three other
`Justices,FN7 stated that placing a product in the stream
`of commerce provides personal jurisdiction only if
`that placement was “an action of the defendant pur-
`posefully directed at the forum State.” Id. at 112, 107
`S.Ct. 1026. In other words, mere placement of a
`product into the stream of commerce, without more, is
`not an act purposefully directed toward a forum state,
`even when the non-resident defendant is aware that the
`product ultimately will enter the forum state. Ac-
`cordingly, Justice O'Connor stated that the exertion of
`personal jurisdiction in the forum state over the for-
`eign defendant exceeded the limits of due process
`when personal jurisdiction was based only on the
`defendant's knowledge that some of the valves would
`be incorporated into tire tubes sold in the forum state.
`
`On the other hand, Justice Brennan's concurrence,
`
`Page 7
`
`also joined by three Justices,FN8 considered that addi-
`tional showing of purposefulness unnecessary and
`explained that “jurisdiction premised on the placement
`of a product into the stream of commerce is consistent
`with the Due Process Clause,” for “[a]s long as a par-
`ticipant in this process is aware that the final product is
`being marketed in the forum State, the possibility of a
`lawsuit there cannot come as a surprise.” Id. at 117,
`107 S.Ct. 1026. Justice Brennan's concurrence stated
`that foreseeability or awareness that “the stream of
`commerce may or will sweep the product into the
`forum State” is sufficient for the exercise of personal
`jurisdiction under the stream of commerce theory. Id.
`at 112, 107 S.Ct. 1026. Accordingly, under Justice
`Brennan's version of the “stream of commerce” the-
`ory, the foreign defendant did have sufficient mini-
`mum contacts with California.FN9 The Supreme Court
`has not yet resolved this split between Justice
`O'Connor's opinion and Justice Brennan's concur-
`rence, and it is important to see which view the Fourth
`Circuit has adopted to resolve the instant case.
`
`*5 [6][7] In Lesnick v. Hollingsworth & Vose
`Co.,FN10 the Fourth Circuit firmly rejected Justice
`Brennan's approach and apparently favored Justice
`O'Connor's approach. The plaintiff in Lesnick, on
`behalf of the decedent, sued a non-resident defendant
`corporation that manufactured a particular filter used
`in a certain brand of cigarettes, which the decedent had
`smoked for years. The defendant corporation had
`manufactured approximately ten billion such filters
`with the knowledge that the filters would be incorpo-
`rated into cigarettes sold nationwide. The plaintiff
`argued that the defendant was subject to personal
`jurisdiction in the forum because the defendant placed
`the filters into the stream of commerce with the
`knowledge and expectation that cigarettes incorpo-
`rating the filters would be purchased by consumers in
`the forum state. The Fourth Circuit rejected that ar-
`gument and made clear that a non-resident defendant
`may only be subject to personal jurisdiction under the
`“stream of commerce” theory “if that defendant en-
`gaged in some activity purposely directed at the forum
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`

`
`--- F.Supp.2d ----, 2014 WL 3348134 (E.D.Va.)
`(Cite as: 2014 WL 3348134 (E.D.Va.))
`
`state.” Id. at 945–96. In this regard, the Fourth Circuit
`explained,
`
`The touchstone of the minimum contacts analysis
`remains that an out-of-state person has engaged in
`some activity purposefully directed toward the fo-
`rum state ... To permit a state to assert jurisdiction
`over any person in the country whose product is sold
`in the state simply because a person must expect that
`to happen destroys the notion of individual sover-
`eignties inherent in our system of federalism.
`
`Id. at 945. Simple “awareness that the stream of
`commerce may or will sweep the product into the
`forum State” is not enough to render the exercise of
`personal jurisdiction constitutional. Id. Thus, a de-
`fendant's placement of products into the stream of
`commerce “with the expectation that they would be
`purchased in [the forum state]” is not enough to con-
`stitute “activity purposefully directed” at that forum
`state. In re Celotex Corp., 124 F.3d at 629. In sum,
`then, Fourth Circuit law requires that, in addition to
`placing the object in the stream of commerce, a
`plaintiff must show “[a]dditional conduct of the de-
`fendant [that] indicate[s] an intent or purpose to serve
`the market in the forum State.” Asahi, 480 U.S. at 112,
`107 S.Ct. 1026. Such additional, intentional conduct
`may consist of “designing the product for the market
`in the forum advertising in the forum ... establishing
`channels for providing regular advice to customers in
`the forum ... or marketing the product through a dis-
`tributor who has agreed to serve as the sales agent in
`the forum ...” Id.
`
`This clear Fourth Circuit precedent, applied here,
`compels the conclusion that there is no personal ju-
`risdiction over defendant in this case. The only basis
`for personal jurisdiction are the four sales of allegedly
`infringing products to Lynn Electronics, a Pennsyl-
`vania corporation, and Lynn Electronics' subsequent
`sale of those products to two customers in Virginia.
`Significantly, the record reflects that defendant did not
`direct the sales of its products to Virginia or any Vir-
`
`Page 8
`
`ginia customers, nor did it require Lynn Electronics to
`sell the products to Virginia customers. Instead, the
`record reflects no more than that defendant might
`expect that the products would eventually be sold
`somewhere in the United States, including Virginia.
`There is no evidence in the record that reflects that
`defendant specifically structured its relationship with
`Lynn Electronics, its U.S. distributor, in order to fa-
`cilitate the sale of the allegedly infringing products in
`Virginia. Nor is there any evidence that defendant
`marketed the allegedly infringing products in Virginia
`or advertised in Virginia. Defendant's only contact
`with Virginia appears to be its sales to a nationwide
`distributor. The mere presence of defendant's product
`in Virginia is not a contact that subjects defendant to
`personal jurisdiction when it was Lynn Electronics,
`not defendant, that sold the products into Virginia.
`Under Asahi and Lesnick, defendant's introduction of
`its product into the stream of commerce by selling
`products to a distributor selling nationwide is, by
`itself, an insufficient basis for personal jurisdiction.
`Accordingly, personal jurisdiction over defendant
`does not comport with due process, and this matter
`must be dismissed without prejudice.FN11
`
`*6 An appropriate Order will issue.
`
`FN1. U.S. Trademark Registration No.
`2793882. The Czech trademark, No. 246216,
`was issued to Intelek on July 24, 2002.
`
`FN2. U.S. Trademark
`2,793,882.
`
`registration No.
`
`FN3. Plaintiff Signamax, Inc. received a U.S.
`copyright for the SIGNAMAX CONNEC-
`TIVITY SYSTEMS packaging on July 7,
`2009. Registration No. VA 0001684298.
`
`FN4. Silent Drive, Inc. v. Strong Indus., Inc.,
`326 F.3d 1194, 1201 (Fed.Cir.2003) (“Be-
`cause the issue of personal jurisdiction with
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`

`
`Page 9
`
`that California's exercise of personal juris-
`diction over the foreign defendant was un-
`constitutional because the exercise of per-
`sonal jurisdiction over the foreign defendant,
`based on the particular facts of that case, was
`unfair and unreasonable. Justice Stevens,
`along with Justices White and Blackmun,
`concurred in part and concurred in the
`judgment, stating that an examination of
`minimum contacts was not necessary to de-
`termine whether California's exercise of
`personal jurisdiction over Asahi was consti-
`tutional, because that exercise of personal
`jurisdiction was clearly unreasonable.
`
`FN10. 35 F.3d 939 (4th Cir.1994).
`
`FN11. Given that the central disputed is-
`sue—the
`ownership
`of
`the mark
`SIGNAMAX CONNECTIVITY
`SYS-
`TEMS—is not resolved

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