Dakota Industries, Inc. v. Dakota Sportswear, Inc.

742 F. Supp. 548, 17 U.S.P.Q. 2d (BNA) 1627, 1990 U.S. Dist. LEXIS 11254, 1990 WL 123932
CourtDistrict Court, D. South Dakota
DecidedAugust 27, 1990
DocketNo. CIV 90-4014
StatusPublished
Cited by1 cases

This text of 742 F. Supp. 548 (Dakota Industries, Inc. v. Dakota Sportswear, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. South Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dakota Industries, Inc. v. Dakota Sportswear, Inc., 742 F. Supp. 548, 17 U.S.P.Q. 2d (BNA) 1627, 1990 U.S. Dist. LEXIS 11254, 1990 WL 123932 (D.S.D. 1990).

Opinion

MEMORANDUM OPINION AND ORDER

JOHN B. JONES, District Judge.

Plaintiff is the holder of Federal Trademark Registration No. 941,497 for use of the trademark “DAKOTA” on snowmobile suits, jackets, coats, coveralls, ski pants and jackets, and jumpsuits and jackets, in U.S. Class 39. Plaintiff has brought this action alleging that the defendant’s use of the trademark “DAKOTA SPORTSWEAR” infringes its trademark.

This Court has federal question jurisdiction under 15 U.S.C. §§ 1051-1127 and 28 U.S.C. § 1338.

Defendant has made a motion to dismiss under Rule 12(b) for lack of personal jurisdiction, or, in the alternative, to transfer the action to the Central District of California in Los Angeles where defendant has its principal place of business.

Defendant asserts that because it did not conduct any business in South Dakota, did not solicit business in South Dakota and did not ship any goods into South Dakota, it lacks sufficient minimum contacts with South Dakota to permit suit against it in South Dakota. International Shoe Company v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945).

It appears from the record that defendant manufacturer has not made any direct sales of the allegedly infringing goods to South Dakota retailers, but it has sold to regional retailers with outlets in South Dakota, and some of the infringing goods have been shipped into and sold in South Dakota.

When an objection to venue is made, the burden is on the plaintiff to establish that venue is proper in the judicial district in which the action has been brought. 15 Wright, Miller & Cooper, Federal Practice and Procedure § 3826 at 259 (1986); Transamerica Corporation v. Trans-American Leasing Corp., 670 F.Supp. 1089 (D.Mass.1987).

Federal trademark law, as set out 15 U.S.C. §§ 1051 through 1127, does not contain any venue provisions. General venue provisions, as set out in 28 U.S.C. §§ 1391 through 1407, do not contain any venue provisions for trademark actions. 28 U.S.C. § 1400 covers the related field of patents and copyrights but there have been no eases suggesting that § 1400 should be applicable to trademark cases.

Because there are no special provisions relating to trademark cases, the general venue provisions of 28 U.S.C. § 1391 are applicable.

1. 28 U.S.C. § 1391(b)

Section 1391(b) provides:

(b) A civil action wherein jurisdiction is not founded solely on diversity of citizenship may be brought only in the judicial district where all defendants reside, or in which the claim arose, except as otherwise provided by law.

Defendant is not incorporated in South Dakota, nor does defendant maintain its principle place of business in South Dakota. Venue under this section, therefore, is possible only if this trademark infringement [550]*550claim “arose” in South Dakota, or if defendant “resides” in South Dakota as defined by § 1391(c). These two bases will be analyzed individually.

A claim of violation of trademark laws does not arise in a state merely because the defendant sells goods in that state. Johnson Creative Arts v. Wool Masters, 743 F.2d 947 (1st Cir.1984). The complaint in Wool Masters, as in this case, seeks relief based on sales made throughout the country. The purpose of § 1391(b) is not to allow plaintiff to sue in each jurisdiction in which the allegedly infringing goods were sold. Population Planning Associates v. Life Essentials, 709 F.Supp. 342, 343 (S.D.N.Y.1989). Just as the Wool Masters decisions to infringe that plaintiffs trademark took place in New York, the decisions of defendant Dakota Sportswear took place in Los Angeles. See Population Planning Associates, supra.

The Wool Masters court held that Massachusetts sales of six to fourteen per cent of its sales was insufficient to give the Massachusetts court venue under the “claim arose” provision of § 1391(b) in a trademark action. Other courts considering this issue have agreed that venue in a trademark action is not proper in a district simply because some sales have been made there. Chief Judge Alsop in Saturn Systems, Inc. v. Saturn Corp., 659 F.Supp. 865 (D.Minn.1987) held that occasional sales by the defendant in Minnesota were insufficient to create venue in Minnesota in a trademark case under § 1391(b). Judge Limbaugh in Critzas Industries v. Waterway-Creve Coeur, Inc., 652 F.Supp. 56 (E.D.Mo.1986) held that Missouri sales of $9,600 out of total sales of $2,000,000 was insufficient to give Missouri courts venue under § 1391(b) in a trademark case.

The Supreme Court set the standard by which the issue of where the “claim arose” is to be decided in Leroy v. Great Western United Corp., 443 U.S. 173, 99 S.Ct. 2710, 61 L.Ed.2d 464 (1979). In Leroy, the Supreme Court stated that

... it is absolutely clear that Congress did not intend to provide for venue at the residence of the plaintiff or to give that party an unfettered choice among a host of different districts. Rather, it restricted venue either to the residence of the defendants or to ‘a place which may be more convenient to the litigants’—i.e., both of them—‘or to the witnesses who are to testify in the case.’ In our view, therefore, the broadest interpretation of the language of § 1391(b) that is even arguably acceptable is that in the unusual case in which it is not clear that the claim arose in only one specific district, a plaintiff may choose between those two (or conceivably even more) districts that with approximately equal plausibility—in terms of the availability of witnesses, the accessibility of other relevant evidence, and the convenience of the defendant (but not of the plaintiff)— may be assigned as the locus of the claim.

Leroy at 185, 99 S.Ct. at 2717. (citations omitted) (emphasis in original)

The clear weight of authority requires a holding that sales to regional retailers, who in turn sell infringing goods in South Dakota, are insufficient to give South Dakota courts proper venue under the “claim arose” provision of § 1391(b). Therefore, venue under § 1391(b) must turn on where the defendant “resides”.

2. 28 U.S.C. § 1391(c)

Section 1391(c) reads, in pertinent part:

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Related

Dakota Industries, Inc. v. Dakota Sportswear, Inc.
946 F.2d 1384 (Eighth Circuit, 1991)

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742 F. Supp. 548, 17 U.S.P.Q. 2d (BNA) 1627, 1990 U.S. Dist. LEXIS 11254, 1990 WL 123932, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dakota-industries-inc-v-dakota-sportswear-inc-sdd-1990.