Sunshine Distribution, Inc. v. Sports Authority Michigan, Inc.

157 F. Supp. 2d 779, 2001 U.S. Dist. LEXIS 12444, 2001 WL 930218
CourtDistrict Court, E.D. Michigan
DecidedJuly 11, 2001
DocketNo. 00-CV-75474-DT
StatusPublished
Cited by7 cases

This text of 157 F. Supp. 2d 779 (Sunshine Distribution, Inc. v. Sports Authority Michigan, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sunshine Distribution, Inc. v. Sports Authority Michigan, Inc., 157 F. Supp. 2d 779, 2001 U.S. Dist. LEXIS 12444, 2001 WL 930218 (E.D. Mich. 2001).

Opinion

OPINION

DUGGAN, District Judge.

This is a trademark infringement and unfair competition action in which Plaintiff Sunshine Distribution, Inc., alleges that Defendants’ use of its “Razor” name and mark in connection with the sale of scooters is confusingly similar to Plaintiffs “Razor” name and mark for inline skates and other accessories. Plaintiff has named the scooter manufacturer, J.D. Components Co., Ltd. (“J.D.”), J.D.’s exclusive United States distributor, Razor U.S.A., LLC (“Razor”), and a local retailer, The Sports Authority of Michigan (“Sports Authority”), as defendants to this action. This matter is currently before the Court on Defendant J.D.’s motion to dismiss for lack of personal jurisdiction.1 Oral argument regarding Defendant’s motion to dismiss was heard on April 18, 2001.2 For the reasons stated below, Defendant’s motion to dismiss shall be denied.

Background

The following background represents the facts taken in a light most favorable to Plaintiff. On January 3, 1995, Plaintiff Sunshine Distribution, Inc., began using the marks “Razor” and “Razors” in connection with its inline skates sold within th'e United States. In addition to inline skates, Plaintiff uses the mark in conjunction with various inline skate accessories and clothing, such as protective gear, wheels, carrying straps, and bags. Plaintiffs Razor products are sold at various chain and speciality sporting goods stores.

Defendant J.D. Components Co., Ltd., is a Taiwanese corporation that has traditionally manufactured bicycle frames and other speciality components. In January of 1999, Defendant began manufacturing a “Razor” brand kick scooter using a mark that, according to Plaintiff, is confusingly similar to its Razor mark.

In March 1999, Defendant began selling its Razor scooters to The Sharper Image, a California-based retailer with speciality stores throughout the United States. The Sharper Image sells Defendant’s Razor scooter through its stores, including its stores in Troy and Novi, Michigan, mail-order catalogs, and Internet website.

In February of 2000, Defendant filed a trademark application for its Razor mark in connection with platform trolleys, and in June and July of 2000, Defendant filed various “intent-to-use” trademark applications for its Razor mark in connection with, among other things, skates, skateboards, roller skates, clothing articles, protective helmets, non-motorized scooters for personal amusement, toy scooters, model scooters, rollerboards, structural parts for scooters, and platform trolleys.

In June of 2000, Razor U.S.A. was formed. On July 1, 2000, an oral agree[783]*783ment was reached whereby Razor U.S.A. became Defendant’s exclusive distributor for scooters and scooter-related products in North America. This oral agreement was confirmed by a written agreement dated August 18, 2000. Razor U.S.A. currently markets a number of Defendant’s products throughout the United States. According to Defendant, despite its exclusive agreement with Razor U .S.A., it still sells Razor scooters directly to The Sharper Image per a pre-existing agreement.

The agreement between Defendant and Razor USA also granted Razor a perpetual royalty-free license to use all of Defendants’ intellectual property rights, including trademarks, and the right to register such marks under their own name. On August 14, 2000, Razor U.S.A. filed an intent-to-use trademark application for the Razor mark in connection with sunglasses, video games, watches, backpacks, t-shirts, and caps.

Although one of Defendant’s websites refers to Razor USA as its “North American Subsiduary[sic]” (Pl.’s Resp., Ex. J at 5), Defendant asserts that it owns no interest in Razor U.S.A. and has no control over Razor U.S.A.’s day-to-day business (Wang Dec. ¶ 10). Defendant admits, however, that its President, Shue Te Tsai, independently owns 60% of Razor U.S.A. (Wang Dec. ¶ 11).

Razor U.S.A. sells Defendant’s Razor scooters to The Sports Authority Michigan, Inc., the operator of several retail sporting goods stores called “The Sports Authority” located throughout Michigan. The Sports Authority Michigan sells Defendant’s Razor brand scooters to the public through its various stores, as well as an Internet website.

On December 19, 2000, Plaintiff filed this suit against Defendant, Razor U.S.A., and The Sports Authority Michigan, asserting a violation of the Lanham Act (Count I) and unfair competition (Count II). On February 5, 2001, Defendant filed a motion to dismiss pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure for lack of personal jurisdiction, asserting that it has no direct contacts with the State of Michigan that would justify an exercise of personal jurisdiction by this Court. Plaintiff has filed a response to Defendant’s motion contending that this Court’s exercise of personal jurisdiction over Defendant is proper. This Court agrees.

Discussion

Plaintiff bears the burden of establishing personal jurisdiction over Defendant. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991). To sustain this burden, Plaintiff must set forth specific facts showing that this Court has jurisdiction. Because the Court is relying solely upon the parties’ pleadings, Plaintiff “must make only a prima facie showing that personal jurisdiction exists in order to defeat dismissal.” Id. In determining whether Plaintiff has made a prima facie showing of personal jurisdiction, the Court is obligated to examine each of Plaintiffs factual allegations made in support of exercising personal jurisdiction over Defendant and determine whether such allegations, if true, would be sufficient to establish personal jurisdiction. Id. at 1459.

Plaintiff asserts two bases for personal jurisdiction over Defendant J.D. Components: (1) limited jurisdiction under Michigan’s long-arm statute, Mioh. Comp. Laws § 600.715 and (2) the “national contacts” doctrine. Plaintiff relies upon the following facts in support of jurisdiction:

• In 1999, Defendant sold scooters directly to Viza Motors, an Arizona company, and The Sharper Image, a California-based retailer, some of which were ultimately sold in Michigan.
[784]*784• Defendant has entered into an exclusive distributor agreement with Razor U.S.A. in California.
• Defendant has filed a number of trademark registrations with the United States Patent and Trademark Office.
• Defendant hosts two interactive websites that provide information regarding the Razor scooter, allow users to e-mail Defendant and present warranty claims, and provide links to their authorized distributers.
• Defendant places its website address on the scooter’s packaging.
• Defendant provides a warranty on its scooters.
• Other non-party sporting goods stores sell Defendant’s product in Michigan.

The task before this Court is to determine whether these contacts are sufficient to support an exercise of personal jurisdiction over Defendant.

1.

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Sunshine Distrib. v. SPORTS AUTHORITY MICH.
157 F. Supp. 2d 779 (E.D. Michigan, 2001)

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Bluebook (online)
157 F. Supp. 2d 779, 2001 U.S. Dist. LEXIS 12444, 2001 WL 930218, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sunshine-distribution-inc-v-sports-authority-michigan-inc-mied-2001.