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Indiana doesn’t have jurisdiction in IP suit, rules 7th Circuit

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The 7th Circuit Court of Appeals ordered a District judge to dismiss a case filed by a company with California ties against another California company alleging various IP violations. The judges found Indiana does not have personal jurisdiction over the matter based on emails the allegedly offending company sent.

Advanced Tactical, which manufactures and sells PepperBall branded items, filed its lawsuit against Real Action Paintball Inc. in the Northern District of Indiana, alleging violations of the Lanham Act, common law trademark infringement and unfair competition, trade dress infringement and misappropriation of trade secrets. The lawsuit stems from an email Real Action sent out in 2012 and a message on its website that announced it had acquired the machinery, recipes and materials once used by PepperBall Technologies Inc. But Advanced Tactical had acquired PepperBall Technologies after the business went into foreclosure.

Advanced Tactical claims to have a headquarters in Indiana, but that is unclear, according to the court record. After holding an evidentiary hearing, the District judge concluded the court had personal jurisdiction and that Advanced Tactical was entitled to a preliminary injunction.

The District Court found the necessary minimum contacts based on the following: Real Action fulfilled several orders of the allegedly infringing projectiles for purchasers in Indiana; it knew Advanced Tactical was an Indiana company and could foresee that the misleading emails and sales would harm Advanced Tactical in Indiana; it sent at least two misleading email blasts to a list that included Indiana residents; it had an interactive website available to residents of Indiana; and it put customers on their email list when they made a purchase, thereby giving the company some economic advantage.

But in Advanced Tactical Ordinance Systems Inc. v. Real Action Paintball Inc. and K.T. Tran, 13-3005,  the 7th Circuit found none of these meets the standards the Supreme Court of the United States has set governing specific jurisdiction.

“Specific jurisdiction must rest on the litigation-specific conduct of the defendant in the proposed forum state. The only sales that would be relevant are those that were related to Real Action’s allegedly unlawful activity. Advanced Technical – which has the burden of proof here – has not provided evidence of such sales,” Chief Judge Diane Wood wrote.

“To hold otherwise would mean that a plaintiff could bring suit in literally any state where the defendant shipped at least one item,” she continued.

The act that Real Action maintains an email list to allow it to shower past customers and subscribers with company-related emails doesn’t show a relation between the company and Indiana, the 7th Circuit ruled. “The connection between the place where an email is opened and a lawsuit is entirely fortuitous.”

The judges also found the interactivity of a website is a poor proxy for adequate in-state contacts. The case is remanded with instructions to vacate the judgment and dismiss the case for lack of personal jurisdiction.
 

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  1. As one of the many consumers affected by this breach, I found my bank data had been lifted and used to buy over $200 of various merchandise in New York. I did a pretty good job of tracing the purchases to stores around a college campus just from the info on my bank statement. Hm. Mr. Hill, I would like my $200 back! It doesn't belong to the state, in my opinion. Give it back to the consumers affected. I had to freeze my credit and take out data protection, order a new debit card and wait until it arrived. I deserve something for my trouble!

  2. Don't we have bigger issues to concern ourselves with?

  3. Anyone who takes the time to study disciplinary and bar admission cases in Indiana ... much of which is, as a matter of course and by intent, off the record, would have a very difficult time drawing lines that did not take into account things which are not supposed to matter, such as affiliations, associations, associates and the like. Justice Hoosier style is a far departure than what issues in most other parts of North America. (More like Central America, in fact.) See, e.g., http://www.theindianalawyer.com/indiana-attorney-illegally-practicing-in-florida-suspended-for-18-months/PARAMS/article/42200 When while the Indiana court system end the cruel practice of killing prophets of due process and those advocating for blind justice?

  4. Wouldn't this call for an investigation of Government corruption? Chief Justice Loretta Rush, wrote that the case warranted the high court’s review because the method the Indiana Court of Appeals used to reach its decision was “a significant departure from the law.” Specifically, David wrote that the appellate panel ruled after reweighing of the evidence, which is NOT permissible at the appellate level. **But yet, they look the other way while an innocent child was taken by a loving mother who did nothing wrong"

  5. Different rules for different folks....

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