Jurisdiction for U.S. Trademark Violations
You are based in China or elsewhere outside the United States. You offer various items for sale via an online store or website. One morning you awake to discover that your Paypal account is frozen and your website has been taken down and the domain transferred to a law firm in the United States. You read the email from Paypal and from the trademark owner’s lawyer and try to make sense of it. In shock, you first blame Paypal as they were the one actually holding your account. You then read my article, 应该怪Paypal吗？Don’t Blame Paypal, and realize that no, Paypal is not to blame. You are left with one burning question: How is it that you have been sued in the United States for operating an online business from far outside the U.S.?
The method used to determine jurisdiction for U.S. trademark violations is a complicated legal process. In this article, I am going to explain how U.S. courts determine jurisdiction for U.S. trademark violations. My purpose is to inform my readers of the reasoning U.S. courts use when determining jurisdiction for U.S. trademark violations so that future liability may be avoided. I also hope to dispel what I have found to be widely held misbeliefs regarding the ability of U.S. courts to obtain jurisdiction for U.S. trademark violations over companies and individuals outside the U.S. While this article will provide an understandable explanation, there is no escaping the conclusion that under U.S. law courts properly exercise jurisdiction for U.S. trademark violations over people and entities outside the U.S. The U.S. courts have addressed this question many times and in each case have affirmed that they do in fact have jurisdiction for U.S. trademark violations under these circumstances. Challenging the ability of these courts to hear similar cases on the grounds that these courts do not or should not have jurisdiction for U.S. trademark violations is futile and a complete waste of time and resources.
The U.S. trademark law, commonly referred to as the “Lanham Act,” is a federal law enacted by the U.S. Congress under its power to regulate commerce. The order of the U.S. District Court for the Northern District of Illinois in the 2015 case of Monster Energy Company v. Wensheng, et al. provides a thorough explanation of how U.S. courts determine jurisdiction for U.S. trademark violations. The Lanham Act gives individuals and companies the ability to sue in federal courts for alleged violations. A violation occurs where something is sold or offered for sale that bears the mark of the trademark holder. It is not necessary for the seller to enter the U.S. or the state where the lawsuit is brought. It is also unnecessary for the seller to actually sell something to someone within the state or the United States. Placing an image bearing the trademark holder’s mark on a website where it can be viewed by residents of the forum state is enough for a court to determine that a violation of the Lanham Act has occurred. The plaintiffs’ allegations are often supported by evidence that the alleged infringer has actually sold items to people within the state where the lawsuit is initiated and in many cases has shipped the item into the state. This evidence is not diminished by the fact that the person who bought the items was actually an investigator for the plaintiff’s law firm.
U.S. courts reason that a person offering items for sale online to people within the forum state may be sued in that state. By offering these items for sale to people within the state, the out of state business is in fact doing business within the state. These courts reason that out of state sellers should anticipate that they may be sued in the state where they offer items for sale. By choosing to offer items for sale within the forum state, out of state sellers consent to the jurisdiction of state and federal courts within the state. The courts have rejected the argument that it is overly burdensome for out of state sellers to be required to defend lawsuits citing the ease of modern communications and transportation. In the Monster Energy case cited above, the Court specifically noted that China based online sellers had utilized an online sales platform that allowed them to choose where their items would be offered for sale. The China based online sellers had chosen not to exclude the state of Illinois from their target market designation.
A finding of jurisdiction for U.S. trademark violations is also supported by the effects that an offer of sales has on the people and businesses, including the plaintiff, within the forum state. The primary intent of the Lanham Act is to prevent confusion in the marketplace. Trademarks make buying quality products easy for consumers. The existence of goods bearing a counterfeit mark makes finding quality products difficult for consumers. The offer of sale of counterfeit products also damages the business of the plaintiffs and other businesses that sell the trademark owner’s products. Thus, U.S. courts reason that since economic effects are felt within the state, the businesses and consumers that are damaged by the sale or offer of sale of allegedly infringing products must have the ability to seek damages from the seller in order to remedy their injury. The courts reason that it would be wholly unfair to damaged trademark holders, consumers and businesses to allow an out of state online merchant to avoid liability simply because the merchant has not physically entered the jurisdiction where the lawsuit is brought.
The method of determining jurisdiction for U.S. trademark violations is well established. A legal challenge to a preliminary finding of jurisdiction for a U.S. jurisdiction for trademark violations by a U.S. court is almost certainly a wasteful and ultimately futile endeavor. The U.S. courts are not going to abandon their many previous decisions on these very questions. If an online seller wishes to completely avoid being the subject of a lawsuit in the U.S. the only ways to do this are to 1) refrain from selling or offering for sale to customers anywhere in the United States or its territories and/or 2) completely avoid infringing on a protected trademark. Online merchants who wish to avoid being subjected to U.S. court jurisdiction for U.S. trademark violations should hire staff to review the products that they offer for sale to ensure that no violations occur.
As an attorney representing online merchants for alleged violations of U.S. trademark laws, I understand the frustrations of online merchants who do not believe that they infringed a U.S. trademark or who did so accidentally due to the fact that the brand is not so well known outside the U.S. or language barriers. Litigation is a stressful and bewildering ordeal even for U.S. citizens resident in the U.S. These frustrations are magnified where the defendants are only small merchants who are being subjected to the same process and penalties as large companies that have a large volume of business. The Law Office of L. Ford Banister, II is dedicated to helping you obtain the best possible resolution of your case. If you have been sued in the U.S. for violation of U.S. trademark laws, do not wait as delay may harm your ability to defend your case. Contact The Law Office of L. Ford Banister, II today. We Defend You.
作为代表涉嫌美国商标侵权在线商家的一名律师，我明白不相信他们侵犯美国商标或者因为某品牌在美国境外不是家喻户晓或者语言障碍而意外侵权的网上商家的挫折。即使对居住在美国境内的美国公民来说诉讼都是一种很有压力和困惑的折磨。当被告只是小商人而受到和有更多销量的大企业一样的过程和处罚时，这种挫折会被放大。L. Ford Banister II 律师事务所致力于帮助你获得对你案子最好的可能的解决方案。如果你在美国被起诉违反了<<美国商标法>>，不要等待因为拖延可能会损害你的辩护能力。今天就和L. Ford Banister II律师事务所联系。我们为你辩护。