IP UPDATE
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IP UPDATE
Exploring the latest in intellectual property law
Results for "Trademark appeal"
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PTO’s Financial Benefits from IPR Don’t Render PTAB Unconstitutional

by | Oct 21, 2021 |

A split panel of the US Court of Appeals for the Federal Circuit concluded that the structure and functions of the Patent Trial & Appeal Board (PTAB) survived yet another constitutional challenge, this time based on the PTAB’s fee and compensation structure, lack of director review over the institution decision and applicability of the Takings Clause. Mobility WorkX, LLC v. Unified Patents LLC, Case No. 20-1441 (Fed. Cir.) (Dyk, J.) (Newman, J., dissenting).

With the dust barely settled after the Supreme Court’s ruling in US v. Arthrex, Inc. that the PTAB’s rendering of final written decisions without director review violated the Appointments Clause, this case presented a whole new slate of potential deficiencies with the PTAB. Although none of these deficiencies were initially raised with the PTAB, the Court exercised its discretion to nonetheless consider the challenges based on publicly available records that it could judicially notice.

The first challenge, already made in many other cases, was that the Federal Circuit remand for the director to consider a rehearing petition in view of Arthrex. This remedy, already afforded in other post-Arthrex challenges, was a simple grant. Yet, here, Mobility asked for something more, arguing that because the director did not resolve the inter partes review (IPR) within the 12-month statutory period, the director must confirm the claims or dismiss the IPR. The Court declined to rule on this issue, instructing Mobility to raise the issue on remand.

The issue receiving the most attention by the Federal Circuit was Mobility’s claims that the PTAB’s fee structure and bonus payments to administrative patent judges (APJs) based on their workload violated the Due Process Clause. According to Mobility, the APJs have a financial incentive to institute IPRs (i.e., significant fees), which provide a significant benefit to the agency. But the Court concluded that the APJs (even the leadership APJs) have only an attenuated role in budget control and thus have an insignificant interest in the financial health of the US Patent & Trademark Office as a whole. Because Congress holds the purse strings and the more significant budget responsibilities fall on the director and the president, the majority held that little connection existed between institution decisions and the agency’s overall financial health, which was consistent with the Court’s own precedent regarding reexaminations and other circuits’ precedents regarding executive agency fee collection. This attenuated connection differentiated the PTAB’s collected fees from Supreme Court cases that found due process violations based on the structure of certain executive courts presided over by a mayor who also held concomitant budget responsibilities.

Similarly, the Federal Circuit held that the APJs’ incentive to render a certain number of decisions—i.e., APJs receive bonus payments if they earn at least 84 decisional units, and the number of decisions is part of performance evaluation—did not provide an unconstitutional incentive to institute. The majority reasoned that ample alternative means existed for the APJs to earn their bonuses, namely, the ability to volunteer for non-America Invents Act (AIA) decisions (such as [...]

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Update: Absent Explicit Statutory Language? The American Rule Still Applies

by | Oct 21, 2021 |

The US Court of Appeals for the Federal Circuit updated its earlier opinion to remove language ascribing motive to a prolific inventor’s actions before the US Patent & Trademark Office (PTO). Hyatt v. Hirshfeld, Case Nos. 020-2321; -2325 (Fed. Cir. Aug. 18, 2021) (modified Oct. 12, 2021) (Hughes, J.)

The original opinion noted that Gilbert Hyatt is known for his prolific patent and litigation filings (including hundreds of extraordinarily lengthy and complex patent applications in 1995 alone) and for often “adopt[ing] an approach to prosecution that all but guaranteed indefinite prosecution delay.” The modified opinion deletes language in the original opinion ascribing to Hyatt the motive of “in an effort to submarine his patent applications and receive lengthy patent terms.”

The Federal Circuit did not alter its earlier reversal of the district court’s grant of attorneys’ fees to Hyatt (since he was not the prevailing party) or its affirmance of the district court’s denial of the PTO’s request for expert fees (after finding “[a]ll the expenses of the proceedings shall be paid by the applicant” under 35 U.S.C. § 145, not specifically and explicitly shifting expert witness fees). The rest of the text of the opinion remains unchanged.



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Party May Not Veil EU Individual’s Information under GDPR at the TTAB

by | Oct 14, 2021 | ,

In a rare precedential opinion, the Trademark Trial & Appeal Board (TTAB, Board) ruled that the EU General Data Protection Regulation (GDPR) does not apply in Board proceedings. Chicago Mercantile Exchange, Inc. v. Intercontinental Exchange Holdings, Inc., Opposition Nos. 91235909; 91254514 (T.T.A.B. Sept. 27, 2021) (Faint, Interlocutory Attorney).

This was a consolidated proceeding between Chicago Mercantile Exchange and New York Mercantile Exchange (collectively, CME) and Intercontinental Exchange Holdings (ICE) and brought before the TTAB. CME sought to amend the Board’s standard protective order (SPO) to allow in-house access to information and materials designated by ICE as “Confidential – Attorney’s Eyes Only” and asked the TTAB to find that the EU GDPR does not apply in the proceedings.

The Board’s SPO is automatically imposed in all inter partes proceedings. In order for the Board to disturb their SPO, CME needed to show that protection of ICE’s trade secrets will impair CME’s prosecution of its claims. ICE asserted that CME failed to show good cause for modification of the SPO and the Board agreed. As an initial matter, CME failed to provide information sufficient for the Board to determine in-house counsel’s responsibilities, including whether those responsibilities included competitive decision-making such that disclosure to in-house counsel would competitively harm ICE. Secondly, CME failed to clearly demonstrate that there was a need for access to the highly sensitive competitive information to adequately prepare its case. Accordingly, the Board denied CME’s motion to amend the protective order.

CME next raised the issue of whether ICE may redact names, email addresses and other information from documents and electronically stored information (ESI) originating in the European Union prior to its production on the basis that the GDPR requires such redaction. CME argued that because ICE waited more than 18 months to assert this objection, the objection is waived, that CME will be severely prejudiced if ICE’s objection stands and that the GDPR does not apply in inter partes Board proceedings.

For background, the GDPR is an EU regulation made effective May 25, 2018, in order to protect the privacy and security of EU citizens’ personal data by limiting the transfer of such information among member states of the European Union, as well as between the European Union and other countries, including the United States. The broad definition given to “personal data” in the GDPR encompasses “any information relating to an identified or identifiable person.” However, this class of information (an individual’s name, position, job title and email address) is generally required to be produced in discovery pursuant to the Fed. R. Civ. Pro. 26(b)(1).

In this precedential decision, the Board, citing the 1987 Supreme Court case Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Court, established that a foreign country’s law precluding disclosure of evidence in US courts and tribunals will generally not deprive those courts and tribunals of “the power to order a party subject to its jurisdiction to produce evidence even though the act of production may violate that statute.”. Additionally, the GDPR does not per [...]

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Ex Parte Reexamination Not Allowed After Failed IPR Challenge

by | Oct 14, 2021 |

The US Court of Appeals for the Federal Circuit found that ex parte reexamination was unavailable to a challenger who repeatedly tried and failed to raise the same arguments for the same patent in a prior inter partes review (IPR) proceeding. In re: Vivint, Inc., Case No. 20-1992 (Fed. Cir. Sept. 29, 2021) (Moore, C.J.)

Vivint sued Alarm.com in 2015 for infringement of several patents. In response, Alarm requested that the Patent Trial & Appeal Board (PTAB) institute “a litany of post-issuance review proceedings,” including three separate IPR petitions directed to one of the patents. The PTAB refused to institute two of the petitions because Alarm failed show to a reasonable likelihood that it would prevail on at least one challenged claim and also refused to institute the third petition because it represented an example of “undesirable, incremental petitioning.” According to the PTAB, Alarm had “used prior Board decisions as a roadmap to correct past deficiencies” and allowing such “similar, serial challenges to the same patent” by the same challenger risked, not only harassment of patent owners, but also frustration of congressional intent behind the America Invents Act (AIA).

More than a year later, Alarm filed a request for ex parte reexamination of the patent—a request that used repackaged versions of arguments from its unsuccessful IPR petition. Despite the striking similarity between Alarm’s prior and current arguments, including two out of the four original IPR patentability questions being copied verbatim from the failed petition into the ex parte reexamination request, the PTAB found the petition raised substantial new questions of patentability and ordered reexamination. Vivint responded by seeking dismissal of the ex parte reexamination under 37 C.F.R. § 1.181, arguing that the PTAB has the authority under 35 U.S.C § 325(d) to deny the ex parte reexamination request because that statute applies to ex parte reexaminations and IPRs with “equal force.” The PTAB rejected Vivint’s request, stating that any § 1.181 petition raising a § 325(d) challenge must be filed before reexamination is ordered.

Vivint filed a second § 1.181 petition seeking reconsideration of the § 325(d) issue, arguing that it would have been impossible for Vivint to file the § 1.181 petition before ex parte reexamination was ordered. Vivint also argued that even if the PTAB lacked general authority to terminate the reexamination, it could exercise such authority under the Administrative Procedure Act (APA). Vivint also asserted that the PTAB “acted arbitrarily and capriciously by applying the same law to the same facts and reaching a different conclusion.” The PTAB rejected Vivint’s arguments and denied its second petition, finding that Vivint could have sought a waiver of the rules having to do with the required prior-to-ex parte timing of a § 1.181 petition vis-à-vis institution of ex parte reexamination. The PTAB also noted that ex parte reexamination was not inconsistent with denying the initial IPR. Ultimately, after an examiner issued a final rejection for all claims of the patent, Vivint appealed to the PTAB. The PTAB affirmed and Vivint [...]

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No Immunity: State Right of Publicity Law is § 230 “Law Pertaining to Intellectual Property”

by | Oct 7, 2021 |

The US Court of Appeals for the Third Circuit held that § 230 of the Communications Decency Act, 47 U.S.C. § 230(c), does not preclude claims based on state intellectual property laws, reversing in part a district court’s dismissal of a plaintiff’s state law claims for violation of her right of publicity. Hepp v. Facebook, Case Nos. 20-2725; – 2885 (3d Cir. Sept. 23, 2021) (Hardiman, J.) (Cowen, J., concurring in part and dissenting in part).

In 2018, Karen Hepp, a Philadelphia newscaster, discovered a photo of herself making its way around the internet. The picture, taken without Hepp’s knowledge or consent, depicts her smiling in a convenience store and was posted in two locations online. The first post was a Facebook advertisement promoting a dating service, which encouraged users to “meet and chat with single women near you.” The second post was to Imgur and was subsequently linked to a Reddit thread, where it spurred a flurry of indecent user commentary. Hepp sued Facebook, Imgur and Reddit for violations of Pennsylvania’s right of publicity statute. The district court dismissed Hepp’s claims with prejudice, holding that all three companies were entitled to immunity as internet service providers under § 230(c). Hepp appealed.

The Third Circuit found that the district court lacked personal jurisdiction over Imgur and Reddit on a “purposeful availment” minimum contacts basis and affirmed dismissal of the claims against those parties.

With respect to Facebook, the Third Circuit considered whether it was immune under § 230(c). Section 230 of the Communications Decency Act was intended to promote the internet, specifically by preserving “the vibrant and competitive free market …unfettered by Federal or State regulation.” Accordingly, § 230(c) provides Good Samaritan protection for internet service providers, encouraging them to host and moderate third-party content by immunizing them from some publisher liability regarding certain moderation decisions. However, pursuant to § 230(e)(2), such immunization does not “limit or expand any law pertaining to intellectual property.”

The first question addressed by the Third Circuit was whether § 230(e)(2) can apply to state law claims generally. The Court acknowledged that precious few cases interpreting § 230’s intellectual property provision exist, and that the existing cases present a clear split on whether § 230(e)(2) applies only to federal intellectual property claims. The Court, adhering to what it regarded as the most natural reading of § 230(e)(2), (i.e., that a state law can be a “law pertaining to intellectual property law”) determined that application of § 230(e)(2) was not limited to federal claims. The Court was not persuaded by Facebook’s policy arguments regarding a purported increase in uncertainty regarding the contours of § 230(c) immunity if state law intellectual property claims, which vary from state to state, were exempt from such immunity.

The second question the Third Circuit addressed was whether Hepp’s right of publicity claim arose from a “law pertaining to intellectual property.” In finding that it did, the Court relied on a survey of legal dictionaries and determined that the term “intellectual property” [...]

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TTAB Cancellation Proceedings Not Preclusive in District Court, Even Between Same Parties

by | Sep 30, 2021 |

Addressing the preclusive effect of judgments by tribunals with limited jurisdiction, the US Court of Appeals for the Third Circuit held that trademark cancellation proceedings before the Trademark Trial & Appeal Board (TTAB) do not have preclusive effect against trademark infringement lawsuits in federal district courts. Beasley v. Howard, Case No. 20-1119 (3d Cir. Sept. 17, 2021) (Chagares, J.)

In 1969, Beasley started a band named The Ebonys. In the mid-1990s, Howard joined the band, and in 1997, Beasley obtained a New Jersey state service mark for “The Ebonys.” Several years later, Beasley and Howard parted ways. In 2012, Howard registered “The Ebonys” as a federal trademark with the US Patent & Trademark Office (PTO).

In 2013, Beasley filed a petition with the TTAB to cancel Howard’s mark, arguing that Howard had defrauded the PTO. The TTAB rejected Beasley’s 2013 petition. In 2017, Beasley filed a second petition with the TTAB, again arguing that Howard had defrauded the PTO and for the first time arguing that Howard’s mark could be confused with Beasley’s separate “The Ebonys” mark. The TTAB rejected Beasley’s 2017 petition, this time on claim preclusion grounds, finding that Beasley should have asserted his likelihood-of-confusion claim in his 2013 petition. Beasley did not appeal either dismissal.

In 2019, Beasley initiated a lawsuit in federal district court, requesting that the court vacate Howard’s mark, award Beasley monetary damages and permit Beasley to register his own “The Ebonys” mark with the PTO. The district court dismissed Beasley’s complaint, finding that claim preclusion applied because the complaint turned on the same factual and legal arguments litigated in the 2017 petition, even though Beasley did not seek damages in the 2017 petition. Beasley appealed.

The Third Circuit reversed the dismissal, concluding that the TTAB’ s cancellation proceedings did not preclude Beasley from bringing his § 43(a) infringement claim in the district court. The Court noted that the TTAB has limited jurisdiction to determine the right to register a trademark and does not have authority to consider questions of infringement, unfair competition, injunctions or damages. It reasoned that because the TTAB does not have jurisdiction to award any remedy beyond cancellation of the mark, a broader § 43(a) cause of action for deceptive use in commerce, as alleged by Beasley, could not have been brought in a TTAB cancellation proceeding.

The Third Circuit also rejected Howard’s argument that Beasley should have brought trademark cancellation claims in the district court in the first instance, noting that even though a federal district court has authority to order a cancellation, a TTAB petition is the primary means of securing a cancellation, and that forcing Beasley to litigate in the district court in the first instance would “encourage[] litigants to sit on their claims and undermine[] the Lanham Act’s adjudicative mechanisms.”

Practice Note: In the Third Circuit, plaintiffs are encouraged to bring their trademark cancellation claims before the TTAB in the first instance, rather than waiting to bring their trademark cancellation and trademark infringement claims together before [...]

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Not on My Watch: Disclosure of Restored Goods’ Source Obviates Consumer Confusion

by | Sep 23, 2021 |

The US Court of Appeals for the Second Circuit affirmed a ruling that a defendant’s use of a mark in connection with the sale of used goods did not create consumer confusion, finding that the district court adequately analyzed the relevant Polaroid factors and did not erroneously apply the 1947 Champion Spark Plug case. Hamilton Int’l Ltd. v. Vortic, LLC, Case No. 20-3369 (2d Cir. Sept. 14. 2021) (Cronan, J.)

Vortic is a watchmaker that specializes in the restoration and conversion of antique pocket watches into wristwatches. Hamilton International brought a trademark infringement suit against Vortic based on a watch that Vortic sold called the “The Lancaster.” The Lancaster name pays homage to Lancaster, Pennsylvania, which is where the Hamilton Watch Company was originally located. The watch was made with restored “Railroad-Era” movements (the internal mechanism of the watch with the hands and face attached) that were originally produced by Hamilton. The Hamilton mark could be seen both on the antique face of the watch and through the see-through back on the internal workings. Vortic’s mark, as well as “The Lancaster” and a serial number, were located on a ring on the rear of the watch.

The district court focused on the Polaroid factors in its likelihood of consumer confusion analysis and on the issue of disclosure under Champion. The district court found that Vortic’s labeling and disclosure were compliant with Champion, that there was no evidence of actual confusion or bad faith and that the buyers of these antique watches were sophisticated purchasers. The district court found no likelihood of confusion and entered judgment for Vortic on all claims. Hamilton appealed.

The main issue on appeal was whether the district court erred in finding no likelihood of consumer confusion. To show a likelihood of consumer confusion, “[a] plaintiff must show ‘a probability of confusion, not a mere possibility’ affecting ‘numerous ordinary prudent purchasers.’”

The Second Circuit considered the district court’s application of Champion. In that case, the Supreme Court determined that keeping the “Champion” logo on refurbished spark plugs would not mislead consumers as the plugs were originally Champion plugs and had the terms “Repaired” or “Used” stamped on them, which provided full disclosure. The Court explained that the lesson from Champion is that when a refurbished “genuine product” is resold, “the seller’s disclosures and the extent of a product’s modifications are significant factors to consider” in any infringement analysis.

Hamilton argued that the repair of the Hamilton parts that went into The Lancaster was so extensive that Champion should not have been applied. The Second Circuit disagreed, noting that the only modification to the original movement was a replacement lever, and that it was clear to consumers that The Lancaster was an “antique pocket watch modified into a wristwatch rather than an entirely new product.”

Hamilton also unsuccessfully argued that the district court erred by not first using the Polaroid factors before turning to the Champion analysis. The Second Circuit explained that since the plaintiff bears the burden [...]

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TTAB Judicial Appointments are Determined Constitutionally Sound

by | Sep 16, 2021 |

Addressing for the first time whether the Supreme Court of the United States’ recent decision in United States v. Arthrex, Inc. also applied to the Trademark Trial and Appeal Board (TTAB), the US Court of Appeals for the Federal Circuit held that it did not, upholding the constitutionality of TTAB judicial appointments and affirming the TTAB’s cancellation of the SCHIEDMAYER trademark. Piano Factory Group, Inc. v Schiedmayer Celesta GMBH, Case No. 20-1196 (Fed. Cir. Sept. 1, 2021) (Bryson, J.)

Schiedmayer Celesta is the remaining corporate entity from a centuries-old line of German keyboard instrument manufacturers that uses the SCHIEDMAYER trademark in connection with the sale of its products. Sweet 16 Musical Properties and Piano Factory Group (collectively, Piano Factory) operated Hollywood Piano retail outlets where it sold “no-name” pianos purchased from China that were affixed with “Schiedmayer” labels. The owner of Piano Factory, believing the SCHIEDMAYER mark had been abandoned, applied to register the SCHIEDMAYER mark, and the registration issued in 2007.

In 2015, Schiedmayer filed a petition to cancel Piano Factory’s registration, alleging that it falsely suggested a connection with Schiedmayer and, thus, violated Section 2(a) of the Lanham Act. After the TTAB granted the petition to cancel, Piano Factory appealed.

Between the time that the parties filed their appeal briefs and the Federal Circuit issued its decision, the Supreme Court issued its decision in United States v. Arthrex, holding that the appointment of Patent Trial & Appeal Board (PTAB) administrative judges violated the Appointments Clause of Article II of the Constitution. On appeal, Piano Factory argued that the appointment of TTAB administrative judges (specifically, the administrative judges who issued the decision Piano Factory was appealing) was likewise unconstitutional. However, the Court disagreed, citing language from the Arthrex decision that “effectively confirmed that . . . the statutory scheme governing TTAB decision-making is not subject to the Appointments Clause problem the Court identified with regard to the PTAB.”

Additionally, Piano Factory cited the Trademark Modernization Act of 2020 (TMA)—which explicitly addressed this issue—for support. Piano Factory argued that since the TMA was not enacted until after the TTAB’s decision to cancel the SCHIEDMAYER registration, its enactment indicated that the TTAB was previously flawed. Again, the Federal Circuit disagreed, stating “the 2020 legislation itself makes clear that it merely confirmed, and did not alter” the framework that was in place prior to the TMA.

Piano Factory also challenged the merits of the TTAB’s decision, including its application of the four-factor test for false association, which considers:

  1. Whether the challenged mark is identical or nearly identical to a name previously used by another person;
  2. Whether the mark would be understood as a unique and unmistakable reference to that person;
  3. Whether the person referenced by the challenged mark was connected with the applicant’s activities and
  4. Whether the earlier user’s name has sufficient fame such that a connection with applicant would be presumed when the contested mark was used to identify the applicant’s goods.

Piano Factory disputed the [...]

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Material Information Submitted to FDA but Withheld from PTO Gives Rise to Inequitable Conduct

by | Sep 16, 2021 |

The US Court of Appeals for the Federal Circuit found prior art submitted to the US Food and Drug Administration (FDA), yet withheld from the US Patent & Trademark Office (PTO) during prosecution of an asserted patent, sufficient evidence for a finding of inequitable conduct. Belcher Pharmaceuticals, LLC v. Hospira, Inc., Case No. 20-1799 (Fed. Cir. Sept. 1, 2021) (Reyna, J.)

The patent in issue relates to injectable formulations of l-epinephrine. Epinephrine is a hormone that has been on the market since approximately 1938 and is used for a variety of medical purposes. It is also known that l-epinephrine degrades into a more potent isomer known as d-epinephrine. L-epinephrine also degrades into an impurity known as adrenalone through a process called oxidation.

In 2012, Belcher first submitted a New Drug Application (NDA) for a 1 mg/mL injectable l-epinephrine formulation. The NDA was literature-based, meaning that Belcher did not perform any clinical or non-clinical studies on its epinephrine formulation to support its application. Among the materials submitted to the FDA was an article by Stepensky et al to support its statement that “racemization of the enantiomerically pure L-Epinephrine isomer in injectable formulations of epinephrine is a well-known process.” It also submitted data from Swiss pharmaceutical company Sintetica SA’s formulation that had a pH range of 3.1 – 3.3 and undetectable levels of adrenalone. Ultimately, Belcher pursued a formulation with a similar pH range of 2.8 – 3.3.

In 2014, Belcher filed a patent application that was ultimately issued as the asserted patent. The patent taught that increasing the in-process pH to 2.8 – 3.3 unexpectedly reduced the racemization of l-epinephrine to d-epinephrine at release by approximately two thirds. The asserted claims covered pharmaceutical epinephrine formulations having a pH between 2.8 – 3.3 and certain concentrations of l-epinephrine, d-epinephrine and adrenalone at the time of release and 12 months later.

The prosecution of the application involved a single office action in which the pending claims were rejected in view of Helenek. The examiner explained that Helenek taught 1 mg/ml of epinephrine injection that, among other things, had a pH range of 2.2 – 5.0. Belcher overcame this rejection by arguing that Helenek did not render obvious the claimed range of 2.8 – 3.3 because the claimed range was unexpectedly found to be critical to reduce racemization of l-epinephrine.

Hospiria also submitted an NDA seeking approval of an injectable l-epinephrine formulation, which included a certification under 21 U.S.C. § 355(b)(2)(A)(iv)(Paragraph IV) that the asserted patent’s claims were invalid, unenforceable and/or not infringed by Hospira’s NDA product. Belcher subsequently sued Hospira for patent infringement.

During trial, Darren Rubin, Belcher’s Chief Science Officer, testified that in his role at Belcher, he was involved in the drafting and development of the NDA and in the prosecution of the asserted patent—including drafting the claims and specification and responding to the examiner’s office action. Darren admitted he knew of Stepensky before the application was filed and that he possessed a label for a 1 mg/mL epinephrine product marked [...]

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Foreign Company’s Purposeful US Activities Blemishes Lack of Personal Jurisdiction Defense

by | Sep 9, 2021 |

The US Court of Appeals for the Ninth Circuit reversed a district court’s dismissal of a complaint, finding that the foreign defendant was subject to specific personal jurisdiction in the United States in light of the defendant’s marketing, sales and operations, each of which reflected a significant focus on the United States. Ayla, LLC v. Alya Skin Pty. Ltd., Case No. 20-16214 (9th Cir. Aug. 27, 2021) (Rakoff, J.)

Ayla is a beauty and wellness brand based in the San Francisco area that offers skincare and hair products through retail and online sales, as well as health and personal care advice on its website. Ayla has three registered trademarks “for use of the ‘AYLA’ word mark in connection with on-site beauty services, online retail beauty products and cosmetics services, and cosmetics.” Alya Skin is a skincare company with its place of incorporation and principal place of business in Australia. Alya Skin sells and ships its products worldwide but about 10% of its total sales are made to the United States.

Alleging a “confusingly similar” mark on its products and advertisements, Ayla sued Alya Skin for trademark infringement and false designation of origin pursuant to the Lanham Act, as well as unfair competition under the California Business & Professions Code and California common law. Alya Skin moved to dismiss the lawsuit for lack of personal jurisdiction. The district court granted Alya Skin’s motion to dismiss, finding that it did not have personal jurisdiction. Ayla appealed.

On appeal, Ayla challenged the district court’s determination that it did not have nationwide jurisdiction over Alya Skin under Fed. R. Civ. Pro. 4(k)(2). The Ninth Circuit framed the issue on appeal as a question of whether the district court “erroneously held that the exercise of nationwide jurisdiction over Alya Skin does not comport with due process.” The Court noted that the due process analysis under 4(k)(2) is “nearly identical” to the traditional personal jurisdiction analysis but “rather than considering contacts between [the defendant] and the forum state, we consider contacts with the nation as a whole.” Because trademark infringement is “treated as tort-like for personal jurisdiction purposes,” the Court focused its specific jurisdiction analysis on whether Alya Skin “purposefully directed its activities toward the United States.”

The Ninth Circuit’s inquiry focused on a totality analysis surrounding Alya Skin’s marketing, sales and operations, each of which reflected a significant focus on the United States. The Court noted that Alya Skin promoted its allegedly infringing products specifically to US individuals through “significant advertising efforts.” These efforts included, for example, an Instagram post directly referencing the “USA,” Alya Skin’s advertising efforts during “Black Friday” and Alya Skin’s reference on its website that its products were featured in US magazines. Moreover, Alya Skin presented to consumers “that its products are FDA approved,” which the Court found to be “an appeal specifically to American consumers for whom the acronym ‘FDA’ has meaning.” The Court also noted that Alya Skin’s volume of sales reflected a purposeful direction toward the United States.

[...]

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