The opinion of the court was delivered by: Arcara, District Judge.
The above-referenced case was referred to Magistrate Judge
Leslie G. Foschio pursuant to 28 U.S.C. § 636(b)(1)(B), on March
22, 1999. On February 4, 2000, Magistrate Judge Foschio filed a
Report and Recommendation, recommending that defendant's motion
to dismiss be denied and plaintiff's cross-motion for discovery
be dismissed as moot. Alternatively, the Magistrate Judge
recommended that plaintiff's cross-motion for discovery be
granted, defendant's motion to dismiss should be continued and
that plaintiff's motion for sanctions be denied.
The Court has carefully reviewed the Report and Recommendation,
the record in this case, and the pleadings and materials
submitted by the parties. No objections having been timely filed,
it is hereby
ORDERED, that pursuant to 28 U.S.C. § 636(b)(1), and for the
reasons set forth in Magistrate Judge Foschio's Report and
Recommendation, defendant's motion to dismiss is denied and
plaintiff's cross-motion for discovery is dismissed as moot.
Alternatively, plaintiff's cross-motion for discovery is granted,
defendant's motion to dismiss is continued and plaintiff's motion
for sanctions is denied. The case is referred back to the
Magistrate Judge for further proceedings.
REPORT and RECOMMENDATION
FOSCHIO, United States Magistrate Judge.
This case was referred to the undersigned on March 22, 1999 by
the Honorable Richard J. Arcara for report and recommendation on
dispositive motions. It is currently before the court on
Defendant's motion to dismiss filed March 16, 1999 (Docket Item
No. 3), Plaintiff's cross-motion for discovery filed April 19,
1999 (Docket Item No. 7), and Plaintiff's motion
for sanctions filed May 13, 1999 (Docket Item No. 16).
Plaintiff, Roberts-Gordon, LLC, successor to Roberts-Gordon,
Inc., commenced this action on February 4, 1999, alleging
Defendant, Superior Radiant Products, Ltd., infringed on
Plaintiff's rights in its trademarks names, marks and logos by
using them as "metatags" on Superior's Internet web site. Four
causes of action are asserted in the Complaint including (1)
trademark infringement in violation of the United States
trademark act ("the Lanham Act"), 15 U.S.C. § 1051-1127 and New
York General Business Law § 360-k (McKinney 1999), (2) unfair
competition in violation of the Lanham Act, 15 U.S.C. § 1125(a),
(3) unfair competition in violation of New York common law, and
(4) dilution of the distinctiveness of Plaintiff's trademark
name, mark and logo in violation of the United States Trademark
Dilution Act ("the Federal Dilution Act"), 15 U.S.C. § 1125(c)
and New York's antidilution law, New York General Business Law §
360 et seq.
By stipulation filed on March 5, 1999, the parties set March
15, 1999 as the deadline for Defendant's answer. On March 16,
1999, Defendant filed a motion to dismiss the complaint based on
lack of personal jurisdiction, supported by the Affidavit of Eric
Willms ("Willms Affidavit I") and a Memorandum of Law (Docket
Item No. 4) ("Defendant's Memorandum of Law"). In opposition to
the motion to dismiss, Plaintiff filed on April 19, 1999, a
cross-motion for discovery limited to jurisdiction, accompanied
by the Affidavit of Paul Dines (Docket Item No. 9) ("Dines
Affidavit"), and a Memorandum of Law (Docket Item No. 8)
("Plaintiff's Memorandum of Law"). In these supporting papers,
Plaintiff advised the court that it had served Defendant with a
motion under Fed.R.Civ.P. 11 alleging Defendant's motion to
dismiss was based on allegedly false and misleading factual
statements in the Willms Affidavit I; however, Plaintiff in
accordance with Fed.R.Civ.P. 11(c)(1)(A), did not intend to file
the motion for 21 days to provide Defendant with an opportunity
to withdraw the motion.
On April 30, 1999, Defendant filed another affidavit by Eric
Willms (Docket Item No. 11) ("Willms Affidavit II"), and a reply
Memorandum of Law (Docket Item No. 12) ("Defendant's Reply
Memorandum of Law"), in further support of the motion to dismiss.
On May 4, 1999, Plaintiff filed a Sur-reply Affidavit by Linda H.
Joseph, Esq., in further opposition to the motion to dismiss
(Docket Item No. 13) ("Joseph Sur-reply Affidavit"). On May 7,
1999, Defendant filed an attorney affidavit in opposition to the
cross-motion for discovery (Docket Item No. 15) ("Sullivan
Affidavit I"). Plaintiff filed, on May 13, 1999, an attorney
affidavit in further support of discovery (Docket Item No. 17)
("Joseph Discovery Affidavit"),
As Defendant did not withdraw the motion to dismiss, on May 13,
1999, Plaintiff moved for sanctions. Defendant filed another
affidavit by Mr. Sullivan in opposition to the motion for
sanctions on May 28, 1999 ("Docket Item No. 20") ("Sullivan
Affidavit II"), attesting to the truthfulness of the factual
statements made in support of the motion to dismiss. A further
affidavit by Eric Willms in opposition to sanctions was filed by
Defendant on June 1, 1999 (Docket Item No. 21) ("Willms Affidavit
III"). On June 4, 1999, Plaintiff filed a memorandum of law in
support of sanctions (Docket Item No. 22) ("Plaintiff's
Memorandum of Law in Support of Sanctions"). Informal oral
argument was conducted by telephone conference call on January
Plaintiff Roberts-Gordon, LLC, successor to Roberts-Gordon,
Inc. ("Roberts-Gordon"), a Delaware corporation, maintains its
principal place of business at 1250 William Street, Buffalo, New
York. Since the 1960s, Roberts-Gordon has used registered
trademarks in connection with its business of manufacturing and
selling low intensity infrared heating equipment throughout the
United States and elsewhere, including New York. Two such
trademarks include "GORDON-RAY" registered March 28, 1967
(U.S.Reg. No. 826,409) and "CO-RAY-VAC" registered September 27,
1966 (U.S.Reg. No. 815, 870). Roberts-Gordon asserts its
GORDON-RAY and CO-RAY-VAC names, marks and logos ("trademarks")
are "extremely well known" among infrared heating equipment
customers such that Roberts-Gordon owns valuable goodwill in its
trademarks. Complaint, ¶ 11-12.
Defendant Superior Radiant Products, Inc. ("Superior"), a
Canadian corporation, maintains its offices at 428 Millen Road,
Unit 23, Stoney Creek, Ontario, Canada. Superior is also engaged
in the manufacture and sale of low intensity infrared heating
equipment. That Roberts-Gordon and Superior are competitors is
undisputed. Both Eric Willms, President of Superior, and Timothy
Seel, who has performed product design and engineering work for
Superior in New York, were formerly employed by Roberts-Gordon.
By letter dated October 23, 1998, Roberts-Gordon requested
Superior immediately cease all further use of Roberts-Gordon's
trademarks as metatags in connection with Superior's web site and
provide written confirmation of the web site change by October
30, 1998. Roberts-Gordon also demanded an accounting with respect
to the alleged infringement and reimbursement of any related
unlawful profits. Superior responded by letter dated October 29,
1998, advising Roberts-Gordon that the challenged metatags had
been inadvertently placed in Superior's meta index file and had,
as of October 26, 1998, been deleted. Superior also asserted it
was unable to attribute any sales to its web site advertising,
but indicated its willingness to consider any evidence
Roberts-Gordon may have of such damages.
According to Roberts-Gordon, Superior never ceased using the
trademarks as metatags for its web site and that an Internet
search on March 24, 1999, using Roberts-Gordon's trademarks led
to Superior's web site. Superior asserted that such results
stemmed from the use of "old" or "cache" memory in a specific
computer which was previously used to access Superior's web site.
Roberts-Gordon disputes Superior's explanation because an
Internet search using Roberts-Gordon's trademarks, performed on a
computer that was "formatted" on April 30, 1999 and not used to
access Superior's web site, also led to Superior's web site on
May 1, 1999.
Superior has moved to dismiss the Complaint asserting that this
court lacks personal jurisdiction based on its asserted lack of
any basis to support long-arm jurisdiction in New York. In
opposition to the motion, Roberts-Gordon submitted evidence
purportedly demonstrating sufficient contacts to subject Superior
to personal jurisdiction in New York. Roberts-Gordon also
cross-moved for discovery limited to the jurisdiction issue
should the court find, based on the pleadings and moving papers,
the absence of personal jurisdiction over Superior.
Superior filed an affidavit by its President, Eric Willms, in
support of dismissal stating that Superior has no "end-user"
customers in New York, that its distributors in New York are not
authorized to contract on behalf of Superior, and generally
asserting the lack of sufficient contacts with New York to
support a finding that Superior is doing business in New York.
Roberts-Gordon moved for sanctions against Superior arguing
Superior's assertions are false and misleading.
In this case, the parties do not dispute that Superior is a
foreign corporation incorporated under the laws of Ontario,
Canada, where it maintains its principal place of business.
Personal jurisdiction over a non-domiciliary defendant in a
diversity or federal question case, like the instant action, is
determined by reference to the law of the state in which the
court sits, unless otherwise provided by federal law. Hoffritz
Cutlery, supra, at 57; Vendetti v. Fiat Auto S.p.A.,
802 F. Supp. 886, 889 (W.D.N.Y. 1992) (citing cases). As federal
trademark laws do not provide for nationwide service of process
over a non-domiciliary defendant, this court can exercise
personal jurisdiction over Superior only to the extent permitted
by New York
law. American Network, Inc. v. Access America/Connect Atlanta,
Inc., 975 F. Supp. 494, 496 (S.D.N.Y. 1997) (citing
Stabilisierungsfonds Fur Wein v. Kaiser Stuhl Wine Distribs.
Pty. Ltd., 647 F.2d 200, 204 (D.C.Cir. 1981)).
The New York laws relevant to the instant case are Sections 301
and 302 of New York's Civil Practice Law and Rules ("N.Y.CPLR"),
see N.Y.Civ.Prac.L. & R. § 301 et seq. (McKinney 1990 & 1999
Supp.), as interpreted and applied by New York courts.
Specifically, a court has personal jurisdiction over a foreign
defendant under N.Y. CPLR § 301 if the defendant "is engaged in
such a continuous and systematic course of `doing business' in
New York as to warrant a finding of its `presence' in this
jurisdiction." Delagi v. Volkswagenwerk AG of Wolfsburg,
Germany, 29 N.Y.2d 426, 328 N.Y.S.2d 653, 278 N.E.2d 895, 896
(1972). Jurisdiction over a foreign defendant may also lie in New
York under New York's long-arm statute, N.Y. CPLR § 302 based
upon the tortious act of a non-domiciliary who does not transact
business in New York. Bensusan Restaurant Corporation v. King,
126 F.3d 25, 27 (2d Cir. 1997).
A plaintiff may defeat a motion to dismiss brought prior to
discovery by making a prima facie showing of jurisdiction
either through "legally sufficient allegations of jurisdiction"
in the pleadings, Ball v. Metallurgie Hoboken-Overpelt, S.A.,
902 F.2d 194, 197 (2d Cir.), cert. denied, 498 U.S. 854, 111
S.Ct. 150, 112 L.Ed.2d 116 (1990), or through its own affidavits
and supporting materials. Marine Midland Bank, N.A. v. Miller,
664 F.2d 899, 904 (2d Cir. 1981). In deciding a motion to dismiss
for lack of personal jurisdiction, the court has discretion to
proceed either upon written submissions or through a full
evidentiary hearing on the merits. Marine Midland, supra.
Absent discovery or a full evidentiary hearing, the pleadings and
affidavits are construed, and any ambiguity resolved, in favor of
the plaintiff. Hoffritz for Cutlery, Inc. v. Amajac, Ltd.,
763 F.2d 55, 57 (2d Cir. 1985); Marine Midland, supra, at 904. Such
a prima facie showing does not, however, preclude the ultimate
requirement that the plaintiff establish personal jurisdiction by
a preponderance of the evidence either at a pretrial evidentiary
hearing or at ...