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Panavision Int'l, Ltd. P'ship v. Toeppen - 141 F.3d 1316 (9th Cir. 1998)

Rule:

The appeals court applies a three-part test to determine if a district court may exercise specific jurisdiction: (1) the nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or results from the defendant's forum-related activities; and (3) exercise of jurisdiction must be reasonable.

Facts:

Plaintiff Panavision Int’l, Ltd. filed suit against Defendant Denis Toeppen under the Federal Trademark Dilution Act, 15 U.S.C.S. § 1125(c), and the California Anti-dilution statute, Cal. Bus. & Prof. Code § 14330, claiming that Defendant made commercial use of Plaintiff's trademark on the internet and his conduct diluted Plaintiff's marks. Defendant engaged in a scheme of registering company trademarks as his domain name on the internet, and then, attempting to extort money from them by trading on the value of their names. The district court found that under the "effects doctrine," Defendant was subject to personal jurisdiction in California. The district court then granted summary judgment in favor of Plaintiff, concluding that Defendant’s conduct violated the Federal Trademark Dilution Act of 1995, and the California Anti-dilution statute. Defendant appealed, arguing that the district court erred in exercising personal jurisdiction over him because any contact he had with California was insignificant, emanating solely from his registration of domain names on the Internet, which he did in Illinois. Defendant further argued that the district court erred in granting summary judgment because his use of Plaintiff’s trademarks on the Internet was not a commercial use and did not dilute those marks.

Issue:

  1. Did the district court err in exercising personal jurisdiction over defendant?
  2. Can defendant be held liable for violation of plaintiff’s trademarks?

Answer:

1) No 2) Yes.

Conclusion:

The Court held that the district court’s exercise of jurisdiction was proper and comported with the requirements of due process. According to the Court, defendant did considerably more than simply register plaintiff’s trademarks as his domain names on the Internet. He registered those names as part of a scheme to obtain money from plaintiff. Pursuant to that scheme, he demanded $13,000 from Plaintiff to release the domain names to it. His acts were aimed at Plaintiff in California, and caused it to suffer injury there. The Court further held that Plaintiff was entitled to summary judgment under the federal and state dilution statutes, as Defendant made commercial use of Plaintiff’s trademarks, and Defendant’s conduct diluted those marks.

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