Paulsson Geophysical Services, Inc. v. Sigmar

529 F.3d 303, 86 U.S.P.Q. 2d (BNA) 1813, 2008 U.S. App. LEXIS 11175, 2008 WL 2152671
CourtCourt of Appeals for the Fifth Circuit
DecidedMay 23, 2008
Docket07-50406
StatusPublished
Cited by81 cases

This text of 529 F.3d 303 (Paulsson Geophysical Services, Inc. v. Sigmar) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Paulsson Geophysical Services, Inc. v. Sigmar, 529 F.3d 303, 86 U.S.P.Q. 2d (BNA) 1813, 2008 U.S. App. LEXIS 11175, 2008 WL 2152671 (5th Cir. 2008).

Opinion

PER CURIAM:

The Appellants appeal the district court’s grant of the Appellee’s motion for a preliminary injunction. We affirm.

I. FACTS AND PROCEEDINGS

Plaintiff-Appellee Paulsson Geophysical Services, Inc. (“Paulsson”) is a California corporation that provides seismic imaging services to the oil and gas exploration and production industry. It markets a three-dimensional vertical seismic profile service called “MASSIVE 3D VSP” and holds trademarks registered in the United States for both “P/GSI” and “MASSIVE 3D VSP”. Defendant-Appellant Axel M. Sigmar is a resident of Texas who is the registered agent for Defendants-Appellants Reservoir Systems, Inc. (“RSI”) and Sigma Research, Inc. (“SRI”), both Texas corporations. Sigmar is also the president of the board of administration for Reservoir Systems Internacional (“RSM”), a Mexican corporation. 1

In 2000, Paulsson and the Appellants began discussing the possibility of a cooperative business venture. Paulsson knew that Sigmar was in contact with Petróleos Mexicanos (“Pemex”) regarding a contract to provide seismic data acquisition services. In order to facilitate discussions between the parties, Paulsson entered into mutual nondisclosure agreements with Sig-mar and SRI in March 2000 and March 2004. In March 2005, Paulsson provided RSI with a letter of authority, allowing it to promote Paulsson’s MASSIVE 3D VSP services in Mexico. In May 2005, RSI granted all rights under the letter of authority to RSM, but the grant also indicated that it gave RSM the right to “use” Paulsson’s technology, not just promote it. The assignment to the Mexican corporation was made in Texas and filed in the Texas Secretary of State’s records and certified with an apostille. 2 Although Sig-mar and Paulsson later negotiated to amend the letter of authority to permit RSI to promote Paulsson’s technology through RSM, the amendment was not finalized. Both before and after issuing the letter of authority, Paulsson specified to the Appellants that the letter did not *306 grant RSI a license to use Paulsson’s technology or to commit Paulsson to perform services. On July 24, 2006, RSM and Pe-mex entered into a contract in which Pe-mex would receive seismic profiles using Paulsson’s MASSIVE 3D VSP technology.

Paulsson later became concerned that the Appellants had obtained the contract with Pemex by offering Paulsson’s services even though they had no authority to do so. Paulsson also became concerned about the use of its trademarks because it believed that the Appellants planned to perform the contract with Pemex by using a different system while still purporting to provide Paulsson’s technology.

Paulsson filed suit on December 4, 2006, moving for a temporary restraining order and preliminary injunction to prevent Sig-mar, RSI, SRI, and RSM from using Paulsson’s trademarks or other proprietary information. Sigmar, RSI, and SRI denied that the court had subject matter jurisdiction over the action in their answer, but they did not move to dismiss the action on that basis. The district court issued a temporary restraining order and granted the motion for a preliminary injunction. On February 23, 2007, the ease was reassigned from Judge Yeakel to Judge Sparks. On May 25, 2007, the district court granted RSM’s motion to dismiss for lack of personal and subject matter jurisdiction.

Sigmar, RSI, and SRI appeal the district court’s grant of Paulsson’s motion for a preliminary injunction. They also assert that the district court lacked subject matter jurisdiction.

II. STANDARDS OF REVIEW

This Court reviews questions of subject matter jurisdiction de novo. Lundeen v. Mineta, 291 F.3d 300, 303 (5th Cir.2002). “[T]he issue of subject matter jurisdiction may be raised for the first time on appeal.” Veldhoen v. U.S. Coast Guard, 35 F.3d 222, 225 (5th Cir.1994).

With regard to a preliminary injunction,

[a] district court’s grant of a preliminary injunction is reviewed for abuse of discretion. Each of the four elements required to support a preliminary injunction ... presents a mixed question of fact and law. Findings of fact are reviewed only for clear error; legal conclusions are subject to de novo review. Although the ultimate decision whether to grant or deny a preliminary injunction is reviewed only for abuse of discretion, a decision grounded in erroneous legal principles is reviewed de novo.

Women’s Med. Ctr. of NW Houston v. Bell, 248 F.3d 411, 418-19 (5th Cir.2001) (footnotes omitted). In reviewing a trademark claim, a “finding of a likelihood of confusion is ... a finding of fact reviewed for clear error.” Westchester Media v. PRL USA Holdings, Inc., 214 F.3d 658, 665 (5th Cir.2000).

III. DISCUSSION

A. Subject Matter Jurisdiction

“[T]he legislation of Congress will not extend beyond the boundaries of the United States unless a contrary legislative intent appears.” Steele v. Bulova Watch Co., 344 U.S. 280, 285, 73 S.Ct. 252, 97 L.Ed. 319 (1952). In Bulova, the Supreme Court addressed the issue of whether a district court had “jurisdiction to award relief to an American corporation against acts of trade-mark infringement ... consummated in a foreign country by a citizen and resident of the United States.” Id. at 281, 73 S.Ct. 252. The Court noted “the broad jurisdictional grant in the Lanham Act.” Id. at 286, 73 S.Ct. 252. The Act applies to trademark infringement in *307 “commerce” and defines that term as “all commerce which may lawfully be regulated by Congress.” Id. at 284, 73 S.Ct. 252 (quoting 15 U.S.C. § 1127).

Regarding the jurisdictional question before it, the Court concluded that “[wjhere ... there can be no interference with the sovereignty of another nation, the District Court in exercising its equity powers may command persons properly before it to cease or perform acts outside its territorial jurisdiction.” Bulova, 344 U.S. at 289, 73 S.Ct. 252. However, the Court relied in part on the fact that the infringing party’s activities “were not confined within the territorial limits of a foreign nation.” Id. at 286, 73 S.Ct. 252. The defendant had brought some of the materials used in its infringing activities from the United States to Mexico, and some of the watches he assembled were later found in Texas. Id. at 284-85, 73 S.Ct. 252.

Relying on Bulova,

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529 F.3d 303, 86 U.S.P.Q. 2d (BNA) 1813, 2008 U.S. App. LEXIS 11175, 2008 WL 2152671, Counsel Stack Legal Research, https://law.counselstack.com/opinion/paulsson-geophysical-services-inc-v-sigmar-ca5-2008.