Imaginarium is a sub of Toys R Us. It sells the kind of educational toys I wish my kids would like, instead of Transformers. In addition to stores it has a website at imaginarium.com, which re-directs to an Amazon site, per a marketing arragnement. Step Two is a Spanish company which has a sub also named IMAGINARIUM, which also sells educational toys. It’s website at imaginarium.es has a similar blue rectangular logo. Their stores allegedly have the same “unique facade” as Toys R Us’ Imaginarium stores.
Toys sued Step Two for trademark infringement in the U.S. The District Court in New Jersey dismissed for lack of personal jurisdiction. Third Circuit reviewed.
At first glance, Step Two appears to have neither systematic nor specific contacts with the U.S. Its website is in Spanisn, it’s designed for Spanish users and orders are only accepted in Spanish currency. The site states that goods can only be shipped within Spain.
Toys made two trap sales – employees (with hispanic surnames) placed orders from the U.S. which were fulfilled. Now, these sales are not going to create specific jursidiction – you cannot create your own jurisdiction, as they say.
But what the two trap sales did accomplish, it seems, was (1) undermine the affidavit from Step Two stating that it had never shipped into the U.S.; and (2) suggested that if Toys was able to conduct jurisdictional discovery, it might uncover more shipments into the U.S. (or other relevant contacts which could support personal jurisdiction – Step Two did make purchases from U.S. suppliers who Toys suspects, I suspect, of helping Step Two rip off Toys’ trade secret information).
Accordingly, the Circuit Court has reversed the dismissal and remanded to allow Toys to conduct discovery relating to jurisdictional.
Coupla points: this case now is one of the “goto” cases when researching an Internet jurisdictional issue, as it lays out the previous law nicely. Also, if you play with the metasearch, you will see that Step Two has the upper hand, registration-wise, in Europe. Don’t let this happen to you! Consult international trademark counsel! I’m one.