First Circuit Affirms Personal Jurisdiction Based On Global Web Activity In Trademark Action

When does the globally available website of a foreign company subject that company to jurisdiction in the United States for purposes of a trademark infringement action? Does it make a difference if the foreign company has applied for a United States trademark registration? In Plixner International v. Scrutinizer GmbH, the First Circuit was reluctant to adopt any rules of general applicability, but did determine that the globally accessible website in question subjected the defendant to personal jurisdiction in any U.S. federal court, including the District of Maine.

Scrutinizer v. Scrutinizer

Scrutinizer is a German company doing business in Germany. It runs an English language interactive website, called a "self-service platform," for analyzing software. You upload your source code to Scrutinizer, which scrutinizes it for bugs and security vulnerabilities. Scrutinizer requires payment in Euros only, and its customer contracts provide for exclusive jurisdiction in German courts in the event a dispute arises. Scrutinizer provides services globally and has 156 customers in the United States, mostly in California, from which it has earned a total of under €200,000. However, it conducts no advertising in the United States, has no servers or offices in the U.S., and its employees have never set foot here on business.

Scrutinizer might sound like a company that does business far away from Maine, but it wasn't far enough away for Plixner International, a Maine company that owns the registered federal trademark SCRUTINZER for software analysis services. Plixner brought a trademark infringement action against Scrutinizer in the District of Maine. The German company moved to dismiss for lack of personal jurisdiction.

The Personal Jurisdiction Analysis

The District of Maine decided, and the First Circuit affirmed, that personal jurisdiction was appropriate pursuant to Federal Rule of Civil Procedure 4(k)(2), which provides that a party is subject to jurisdiction in U.S. federal courts if:

The cause of action arises under federal law (e.g., the Lanham Act); The defendant is not subject to the personal jurisdiction of any state court of general jurisdiction (e.g., a foreign company); and The federal court's exercise of personal jurisdiction comports with due process. The only disputed prong was the third one. The question under that prong was whether the German company had sufficient minimum contacts with the United States. Where the allegation is...