Where to Sue Trademark Infringers (Part 3): Venue
When filing a complaint for trademark infringement, the plaintiff should make sure that the court has jurisdiction to hear the case and the court is a proper venue for the lawsuit. More specifically, jurisdiction refers to a court’s legal authority to hear a case (i.e., the power to adjudicate the action) whereas venue refers to where jurisdiction should or may be exercised (i.e., the location where the lawsuit should take place).
Jurisdiction, in turn, is usually broken down into subject matter jurisdiction and personal jurisdiction. Subject matter jurisdiction refers to the court’s authority to hear a particular type of case. I have not covered subject matter jurisdiction in this series of blog posts because, when dealing with trademark infringement claims, a federal district court will always have subject matter jurisdiction pursuant to 28 U.S.C. § 1338 and 15 U.S.C. § 1121. And I would never ever ever even think about filing a trademark infringement lawsuit in state court if I could file in federal court. That’s why I began this series of blog posts with personal jurisdiction, which refers to the court’s authority to exercise jurisdiction over the defendant(s). So we’ve already gone over the two different ways in which a court can exercise jurisdiction over defendant(s): general jurisdiction and specific jurisdiction.
In this third installment of Where to Sue Trademark Infringers, we go over venue. Venue refers to the place where the lawsuit should be brought. In other words, which federal district court in the nation is proper? And the purpose of venue rules is primarily to protect the defendant against a plaintiff selecting an unfair or inconvenient place of trial. With that in mind, let’s examine venue and figure out what judicial district you can file your trademark infringement lawsuit in.
Venue in Trademark Cases Is Governed by 28 U.S.C. § 1391
Some causes of action are governed by separate, specific venue statutes. For example, patent infringement and copyright infringement lawsuits are governed by 28 U.S.C. § 1400.
Venue in trademark infringement actions, however, is governed by the general venue statute, 28 U.S.C. § 1391. Adobe Systems, Inc. v. Blue Source Group, Inc., 125 F. Supp. 3d 945, 959 (N.D. Cal. 2015). For purposes of determining whether venue is proper, the most relevant subsections of 28 U.S.C. § 1391 are subsection (b) through (d), which read as follows:
(b) Venue in General.—A civil action may be brought in—
(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court’s personal jurisdiction with respect to such action
(c) Residency.—For all venue purposes—
(1) a natural person, including an alien lawfully admitted for permanent residence in the United States, shall be deemed to reside in the judicial district in which that person is domiciled;
(2) an entity with the capacity to sue and be sued in its common name under applicable law, whether or not incorporated, shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court’s personal jurisdiction with respect to the civil action in question and, if a plaintiff, only in the judicial district in which it maintains its principal place of business; and
(3) a defendant not resident in the United States may be sued in any judicial district, and the joinder of such a defendant shall be disregarded in determining where the action may be brought with respect to other defendants
(d) Residency of Corporations in States With Multiple Districts. For purposes of venue under this chapter, in a State which has more than one judicial district and in which a defendant that is a corporation is subject to personal jurisdiction at the time an action is commenced, such corporation shall be deemed to reside in any district in that State within which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate State, and, if there is no such district, the corporation shall be deemed to reside in the district within which it has the most significant contacts.
As with jurisdiction, the plaintiff bears the burden of showing that venue is proper. Adobe, 125 F. Supp. 3d at 958 (N.D. Cal. 2015). But improper venue is a defense that must be raised by the defendant. Therefore, the plaintiff does not need to allege proper venue in its complaint. The defendant should raise improper venue by way of a motion or by preserving the objection in its answer.
Stepping Through §1391’s Venue Provisions
Basis #1: Residing in the Judicial District — § 1391(b)(1)
The first basis for proper venue is not complicated. If one defendant resides in the judicial district and all the remaining defendants, if any, reside in the State of the judicial district, venue is proper. But note that, pursuant to § 1391(c)(3), you should disregard any defendants that do not reside in the United States when making this analysis.
Residency for Individuals. Section 1391(c), in turn, defines “reside” for individuals. Individuals reside in the judicial district in which they are domiciled. 28 U.S.C. § 1391(c)(1). Domiciled refers to a legal residence which is the place where a person has fixed dwelling with an intention of making it his permanent home. For illustrative purposes, someone’s summer home doesn’t count.
Residency for Companies. Section 1391(c) also defines “reside” for companies. Companies (defending companies) reside in any judicial district in which they are subject to personal jurisdiction. 28 U.S.C. § 1391(c)(2). So you can see that, for companies that reside in the U.S., the venue analysis under § 1391(b)(1) collapses into a personal jurisdiction inquiry.
But when you are trying to decide on venue for company in a state that has more than one judicial district, you have to take an additional step under § 1391(d). In such cases, a company will reside in any district that would have personal jurisdiction over the company if that district were a separate state. And if there’s no such state, then the district in the State with which the company has the most significant contacts.
Residency for Non-U.S. Residents. And a defendant who does not reside in the U.S. can be sued in any judicial district. 28 U.S.C. § 1391(c)(3).
Basis #2: Substantial Part of Events Occur in Judicial District — § 1391(b)(2)
The second basis for proper venue is “a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated.” In a trademark infringement lawsuit, a substantial part of the events giving rise to the claim occurs in any district in which consumers are likely to be confused by the infringing goods or services, whether that occurs in one district or many districts. Lindora, LLC v. Isagenix Int’l, LLC, 2016 U.S. Dist. LEXIS 100413, *42 (S.D. Cal. 2016). If the defendant is advertising or using the infringing mark in the judicial district, then § 1391(b)(2) applies. Alto Velo Racing Club v. Rouleur Sports Group, LLC, 2015 U.S. Dist. LEXIS 124773, *13 (N.D. Cal. 2015). Likewise, a substantial part of the events occurs where the infringing labels are affixed to goods. Kaswit, Inc. v. Dogfather K9 Connections, Inc., 2014 U.S. Dist. LEXIS 93460, *12 (C.D. Cal. 2014). Alternatively, some courts are willing to conclude that a substantial part of the events takes place where the infringer is located and/or where the trademark owner is located. However, not all courts agree that a substantial part of the events takes places where the trademark owner is located (e.g., the Eighth Circuit), so if you’re relying on this basis for § 1391(b)(2), you’ll have to confirm the law in your jurisdiction.
Basis #3: Catchall—Any District in Which Defendant Is Subject to Personal Jurisdiction — § 1391(b)(3)
If there is no judicial district that qualifies for the first and second bases for venue under § 1391(b), then venue is proper in any judicial district in which any defendant is subject to the court’s personal jurisdiction. This provision rarely comes into play because it is only triggered when there is no judicial district that qualifies under § 1391(b)(1) or (b)(2). And even if all the defendants do not reside in the State of the judicial district under (b)(1), there should be a judicial district in which a substantial part of the events occurred given the lax interpretation given to (b)(2). But to the extent this provision has to be relied on, the analysis again collapses into a personal jurisdiction analysis (see the posts on general jurisdiction and specific jurisdiction).
What Happens If the Court Determines That Venue Is Improper
If the court determines that venue is improper, it can do one of two things: (1) it can dismiss the action or (2) if it is in the interests of justice, transfer the case to a proper venue. 28 U.S.C. § 1406(a). Whether to dismiss or transfer is left to the discretion of the court. Adobe, 125 F. Supp. 3d at 958-59 (N.D. Cal. 2015). Usually, if dismissal will result in plaintiff losing some right, the court will opt to transfer the case.
What Happens If the Court Determines That Venue Is Proper
But even if the court determines that venue is proper, a district court can still transfer the case to a different venue for the convenience of parties and witnesses and in the interest of justice. 28 U.S.C. § 1404(a). In this regard, the Ninth Circuit requires that the defendant make a “strong showing” of inconvenience in order to overcome the preference traditionally given to a plaintiff’s choice of forum. California Brewing Co. v. 3 Daughters Brewing LLC, 2016 U.S. Dist. LEXIS 52344, *19 (E.D. Cal. 2016).
The Ninth Circuit uses 10 non-exclusive factors to determine whether to transfer a case under § 1404: (1) the location where the relevant agreements were negotiated and executed, (2) the state that is most familiar with the governing law, (3) the plaintiff’s choice of forum, (4) the respective parties’ contacts with the forum, (5) the contacts relating to the plaintiff’s cause of action in the chosen forum, (6) the differences in the costs of litigation in the two forums, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, (8) the ease of access to sources of proof, (9) the presence of a forum selection clause, and (10) the relevant public policy of the forum state. Jones v. GNC Franchising, Inc., 211 F. 3d 495, 498-99 (9th Cir. 2000).
Because this blog post is about identifying proper venue, I’m not going to go down a rabbit hole and analyze how courts apply the Jones factors in trademark cases or motions to transfer pursuant to § 1404(a). That may be the subject for separate post in the future. For now, just be aware that a defendant can move to transfer venue even if venue is found proper.
The Last Word on Venue
Practically speaking, if you have selected a forum state that has personal jurisdiction over the infringing defendant, you should be able to select a proper venue in that forum state. If your personal jurisdiction is based on general jurisdiction, choose the judicial district where an individual defendant is domiciled or a corporate defendant’s principal place of business is located. If personal jurisdiction is based on specific jurisdiction, choose a judicial district in which the infringing goods or services are being sold. Tweak as necessary if you have multiple defendants and one does not reside in the forum state. And if you’re the plaintiff (i.e., trademark owner) and live in the forum state, just choose your judicial district.