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In cases of trademark infringement and unfair competition, the wrong takes place not where the deceptive labels are affixed to the goods or where the goods are wrapped in the misleading packages, but where the passing off occurs; in other words, where the deceived customer buys the defendant's product in the belief that he is buying the plaintiff's.
Plaintiff manufactured women's clothing and used the trademark "Vanity Fair" on its underwear. Defendant was a Canadian clothing retailer that purchased plaintiff's branded merchandise and sold it, properly branded, in Canada, but later used the same mark upon its products. Plaintiff brought claims of trademark infringement and unfair competition under the Lanham Act (the Act), 15 U.S.C.S. § 1051 et seq. The lower court dismissed all the claims, concluding that subject matter jurisdiction over the Canadian trademark issues was lacking and that those claims were intertwined with the American issues.
Was plaintiff’s assertion that its claims arise under the laws of the United States and should be governed by those laws meritorious?
The Canadian buying public, not that of America, was likely to be confused. Neither the International Convention for the Protection of Industrial Property nor the Act gave relief in American courts against claims of infringement and unfair competition committed in foreign countries by foreign nationals. As plaintiff claimed diversity of citizenship, the lower court properly used the forum non conveniens doctrine to dismiss the case because the balance of hardships favored defendant and the more appropriate forum was in Canada.