Toys "R" Us, Inc. Geoffrey, Inc. v. Step Two, S.A. Imaginarium Net, S.L

318 F.3d 446, 55 Fed. R. Serv. 3d 591, 65 U.S.P.Q. 2d (BNA) 1628, 2003 U.S. App. LEXIS 1355
CourtCourt of Appeals for the Third Circuit
DecidedJanuary 27, 2003
Docket18-2573
StatusPublished
Cited by614 cases

This text of 318 F.3d 446 (Toys "R" Us, Inc. Geoffrey, Inc. v. Step Two, S.A. Imaginarium Net, S.L) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Toys "R" Us, Inc. Geoffrey, Inc. v. Step Two, S.A. Imaginarium Net, S.L, 318 F.3d 446, 55 Fed. R. Serv. 3d 591, 65 U.S.P.Q. 2d (BNA) 1628, 2003 U.S. App. LEXIS 1355 (3d Cir. 2003).

Opinion

OPINION OF THE COURT

OBERDORFER, District Judge.

Toys “R” Us, Inc. and Geoffrey, Inc. (“Toys”) brought this action against Step Two, S.A. and Imaginarium Net, S.L. (“Step Two”), alleging that Step Two used its Internet web sites to engage in trademark infringement, unfair competition, misuse of the trademark notice symbol, and unlawful “cybersquatting,” in violation of the Lanham Act, 15 U.S.C. § 1501 et seq., and New Jersey state law. The District Court denied Toys’ request for jurisdictional discovery and, simultaneously, granted Step Two’s motion to dismiss for lack of personal jurisdiction. We hold that the District Court should not have denied Toys’ request for jurisdictional discovery. We therefore reverse and remand for limited jurisdictional discovery, relating to Step Two’s business activities in the United States, and for reconsideration of personal jurisdiction with the benefit of the product of that discovery, with a view to its renewing administration of the case, in the event the District Court finds that it does have jurisdiction.

I.

Toys, a Delaware corporation with its headquarters in New Jersey, owns retail *449 stores worldwide where it sells toys, games, and numerous other products. In August 1999, Toys acquired Imaginarium Toy Centers, Inc., which owned and operated a network of “Imaginarium” stores for the sale of educational toys and games. As part of this acquisition, Toys acquired several Imaginarium trademarks, and subsequently filed applications for the registration of additional Imaginarium marks. Prior to Toys’ acquisition, the owners of the Imaginarium mark had been marketing a line of educational toys and games since 1985 and had first registered the Imaginarium mark with the United States Patent and Trademark Office in 1989. Toys currently owns thirty-seven freestanding Imaginarium stores in the U.S., of which seven are located in New Jersey. In addition, there are Imaginarium shops within 175 of the Toys “R” Us stores in the U.S., including five New Jersey stores.

Step Two is a Spanish corporation that owns or has franchised toy stores operating under the name “Imaginarium” in Spain and nine other countries. It first registered the Imaginarium mark in Spain in 1991, and opened its first Imaginarium store in the Spanish city of Zaragoza in November 1992. Step Two began expanding its chain of Imaginarium stores by means of a franchise system in 1994. It has registered the Imaginarium mark in several other countries where its stores are located. There are now 165 Step Two Imaginarium stores. The stores have the same unique facade and logo as those owned by Toys, and sell the same types of merchandise as Toys sells in its Imaginari-um stores. However, Step Two does not operate any stores, maintain any offices or bank accounts, or have any employees anywhere in the United States. Nor does it pay taxes to the U.S. or to any U.S. state. (JA 135-36.) Step Two maintains that it has not directed any advertising or marketing efforts towards the United States. The record does, however, indicate some contacts between Step Two and the United States: for example, a portion of the merchandise sold at Step Two’s Imaginarium stores is purchased from vendors in the United States. Additionally, Felix Tena, President of Step Two, attends the New York Toy Fair once each year. (JA 314.)

In the mid-1990s, both parties turned to the Internet to boost their sales. In 1995, Imaginarium Toy Centers, Inc. (which Toys later acquired) registered the domain name <imaginarium.com> and launched a web site featuring merchandise sold at Imaginarium stores. In 1996, Step Two registered the domain name cimaginari-um.es >, and began advertising merchandise that was available at its Imaginarium stores. 1 In April 1999, Imaginarium Toy Centers registered the domain name <imaginarium.net>, and launched another web site where it offered Imaginarium merchandise for sale. In June 1999, Step Two registered two additional “Imaginari-um” domain names, cimaginarium-world.com> and <imaginarium-world. com>. In May 2000, Step Two registered three more domain names: <imaginarium-net.com>, <imaginariumnet.net>, and <imaginariumnet.org>. 2 Step Two’s web *450 sites are maintained by Imaginarium Net, S.L., a subsidiary of Step Two, S.A. formed in 2000.

At the time this lawsuit was filed, four of the aforementioned sites operated by Step Two were interactive, allowing users to purchase merchandise online. 3 When buying merchandise via Step Two’s web sites, purchasers are asked to input their name and email address, as well as a credit card number, delivery address, and phone number. At no point during the online purchase process are users asked to input their billing or mailing address. The web sites provide a contact phone number within Spain that lacks the country code that a user overseas would need to dial. Moreover, the prices are in Spanish pesetas and Buros, and goods ordered from those sites can be shipped only within Spain. Step Two’s Imaginarium web sites are entirely in Spanish.

Visitors to the four sales-oriented Step Two web sites may elect to receive an electronic newsletter, or sign up for membership in “Club Imaginarium,” a promotional club with games and information for children. Each registrant for Club Imaginarium is required to provide a name and an email address. At the time this suit was filed, there was a section for “voluntary information,” including the registrant’s home address, on the Club Imagi-narium registration page. This optional portion of the page required users to choose from a pull-down list of Spanish provinces, and did not accommodate mailing addresses in the United States. 4 After joining Club Imaginarium via the web site, registrants receive an automatic email response.

Mr. Tena submitted an affidavit stating that Step Two had not made any sales via its web sites to U.S. residents. (JA 136.) Toys, however, adduced evidence of two sales to residents of New Jersey conducted via Step Two’s Imaginarium web sites. These purchases were initiated by Toys. Lydia Leon, a legal assistant in the Legal Department of Geoffrey, Inc., made the first purchase. Ms. Leon, a resident of New^ Jersey, purchased a toy via <www.imaginariumworld.com> on January 23, 2001. (JA 167-69.) The second purchase was made in February 2001 by Luis M. Lopez, an employee of Darby & Darby P.C., attorneys for Toys. Mr. Lopez is also a resident of New Jersey, and accessed <www.imaginarium.es> to make his purchase. (JA 207-14.)

For both of these sales, the items were shipped to Angeles Benavides Davila, a Toys employee in Madrid, Spain; Ms. Be-navides Davila then forwarded the items to the offices of Geoffrey, Inc. in New Jersey. Both purchases were made with credit cards issued by U.S. banks. Additionally, both purchasers received in New Jersey an email confirming their purchases, and a subsequent email with a login and password to access Club Imaginarium.

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318 F.3d 446, 55 Fed. R. Serv. 3d 591, 65 U.S.P.Q. 2d (BNA) 1628, 2003 U.S. App. LEXIS 1355, Counsel Stack Legal Research, https://law.counselstack.com/opinion/toys-r-us-inc-geoffrey-inc-v-step-two-sa-imaginarium-net-sl-ca3-2003.