De Simone v. VSL Pharmaceuticals, Inc. et al

Filing 278

MEMORANDUM OPINION. Signed by Judge Theodore D. Chuang on 2/16/2017. (kns, Deputy Clerk)

UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND

CLAUDIO DE SIMONE,
Plaintiff/Counterclaim

Defendant,

v.
VSL PHARMACEUTICALS, INC., and
SIGMA-TAU PHARMACEUTICALS, INC.,
Defendants/Counterclaim

Plaintiffs,

Civil Action No. TDC-15-1356

v.
EXEGI PHARMA, LLC,
DANISCO USA, INC., and
MENDES SA,
Counterclaim Defendants.

MEMORANDUM OPINION
Presently pending is Counterclaim

Defendant

Mendes SA's ("Mendes")

Motion to

Dismiss Counts XII, XIII, and XIV of the Counterclaim filed by VSL Pharmaceuticals,

Inc.

("VSL").

See

Having reviewed the submitted materials, the Court finds no hearing necessary.

D. Md. Local R. 105.6 (2016). For the following reasons, the Motion to Dismiss is GRANTED.
BACKGROUND
The Court has previously set forth the underlying facts and procedural history ofthis case
in opinions on the two Motions for a Preliminary Injunction filed by VSL and Defendant and
Counterclaim Plaintiff Sigma-Tau Pharmaceuticals, Inc., De Simone v. VSL Pharm., Inc., 133 F.
Supp. 3d 776 (D. Md. 2015), and De Simone v. VSL Pharm., Inc., No. TDC-15-1356, 2016 WL
3466033 (D. Md. June 20, 2016), and the Motions to Dismiss the Counterclaim filed by Claudio

De Simone and Counterclaim Defendant ExeGi Pharma, LLC ("ExeGi"), De Simone v. VSL
Pharm., Inc., No. TDC-15-1356, 2017 WL 66323 (D. Md. Jan. 5, 2017). The Court therefore
describes only the additional background information relevant to the resolution of Mendes's
pending Motion.
Mendes, a type of corporation known as a "societe anonyme," was established and is
headquartered in Switzerland.

According to VSL, Mendes was founded by De Simone and has

sought to bring to market Vivomixx, a product designed to compete with VSL#3, the probiotic at
the center of this case. De Simone has since sold Mendes to Salvatore Orlando, who took over in
January 2013. In October 2014, Orlando formed ExeGi, a New York limited liability company
headquartered in Maryland, which obtained from De Simone the exclusive rights to market and
sell in the United States the formulation used in VSL#3. Whether those rights were De Simone's
to license is in dispute in this case, but is not at issue on this Motion.

Mendes currently sells

Vivomixx in various foreign markets.
In its Counterclaim, VSL asserts three causes of action against Mendes stemming from
the sale of Vivomixx, all of which were also pleaded against De Simone, consisting of Count
XII: Trademark Infringement, in violation of 15 U.S.C.
in violation of 15 U.S.C.

S

S

1114; Count XIII: Unfair Competition,

1125(a); and Count XIV: a declaratory judgment action seeking the

cancellation of Mendes's pending trademark applications.
Mendes's

alleged violation

"VSL3TOTAL"

of VSL's

registered

These causes of action stem from

trademark

"VSL#3"

by using the terms

and "VSL3 BY DE SIMONE" in its marketing and branding of Vivomixx,

particularly the inclusion of those terms on Vivomixx packaging and in internet advertising on
non-U.S. web sites suggesting that VSL#3 has been rebranded as Vivomixx.

VSL concedes that

Mendes registered the marks VSL3TOTAL and VSL3 BY DE SIMONE for use in the European

2

Union and Switzerland but notes that the validity of those marks is currently the subject of
separate litigation.

VSL's claims in this Court against Mendes are based not on the validity of

those foreign trademarks, but on VSL's assertion that Mendes is selling or inducing the sale of
Vivomixx in the United States, where Mendes has no trademark rights in those terms and where,
instead, Mendes's use of those marks could infringe VSL's trademark rights. Specifically, VSL
asserts that Mendes advertises on its website that Vivomixx can be purchased from Farmaline
Online Pharmacy and submits a page from the Farmaline website which inartfully states, "You
can Vivomixx of brand Vivomixx, produced by Mendes SA, can be ordered in United States by
Farmaline" [sic]. VSL 2d Am. Countercl. Ex. 55 at 3, ECF No. 153.
Mendes filed trademark applications for VSL3TOTAL and VSL3 BY DE SIMONE with
the United States Patent and Trademark Office ("USPTO") in September 2013 and June 2014,
respectively.

Both of Mendes's applications were filed on the basis that the terms had already

been trademarked in another country. See 15 U.S.C. ~ 1126(d) (2012) (as to VSL3TOTAL); 15
U.S.C. ~ 1141f (as to VSL3 BY DE SIMONE).

As part of the application for VSL3TOTAL,

Mendes stated that it had a bona fide intent to use that mark in U.S. commerce.

Those

registrations were refused based on VSL's prior registrations for the marks "VSL#3," "VSL,"
and "VSL#3-DS."

As a result, on January 19,2015, Mendes filed a petition with the Trademark

Trial and Appeal Board ("TTAB") seeking to cancel VSL's three marks. That action is currently
suspended, over VSL's

objection, based on Mendes's

assertion that the resolution

of the

trademark infringement claims in this action could be dispositive on the issues raised in the
cancellation petition.

3

DISCUSSION
Mendes asserts three grounds for dismissal.

First, Mendes argues, pursuant to Federal

Rule of Civil Procedure 12(b)(1), that this Court lacks subject matter jurisdiction over Count
XIV of VSL's

Counterclaim,

which seeks a declaratory

VSL3TOT AL and VSL#3 BY DE SIMONE applications.

judgment

to cancel Mendes's

Having previously dismissed Count

XIV as to De Simone as unripe, the Court applies the same reasoning and dismisses that count as
to Mendes as well. See De Simone, No. TDC-15-1356, 2017 WL 66323at*11
2017).

(D. Md. Jan. 5,

Second, Mendes argues, pursuant to Rule 12(b)(2), that all claims must be dismissed

because this Court lacks personal jurisdiction over Mendes.

Third, Mendes seeks dismissal,

pursuant to Rule 12(b)( 6), because VSL has failed to state a viable cause of action.
As to personal jurisdiction, Mendes asserts that VSL's claims against it cannot proceed
because Mendes lacks sufficient contacts to be properly subject to this Court's jurisdiction.

In

response, VSL asserts three factual predicates for this Court to exert personal jurisdiction over
Mendes. First, VSL offers Mendes's dealings with the USPTO, located in Alexandria, Virginia.
Although in its Counterclaim, VSL identified only Mendes's activities in the USPTO related to
the trademark applications for VSL3TOTAL and VSL#3 BY DE SIMONE, in its response to
Mendes's Motion, VSL also references 16 other trademark applications filed by Mendes from
2013 to 2015, none of which sought registration of marks using the term "VSL" in any way.
VSL also notes that Mendes, after having its applications for VSL3TOTAL and VSL#3 BY DE
SIMONE refused, chose to pursue a cancellation proceeding as to VSL's marks.
Next, VSL identifies Mendes's

dealings with Danisco, which manufactures

Madison, Wisconsin facility the product sold as Vivomixx.
Vivomixx

supply from Danisco,

Mendes takes advantage

4

at its

VSL asserts that in obtaining its
of the "labor,

facilities,

and

transportation" associated with Danisco' s fulfillment of those orders, such that Mendes could
reasonably foresee being haled into court as a result of that contact. VSL Opp'n Mot. Dismiss
("VSL Opp'n) at 9, ECF No. 201. Beginning in 2014, the supply agreement between De Simone
and Danisco, which covers the total amount of the probiotic to be delivered to locations in the
United States, Europe, and Asia, not just the supplies for Mendes, guaranteed at least $8.5
million in orders per year, with that amount gradually increasing to $10 million by 2018.
Finally, VSL argues that Mendes is subject to personal jurisdiction in this Court because
Mendes "prominently advertises" the online pharmacy Farmaline on its website, and Farmaline,
in turn, indicates on its own website that it will ship Vivomixx to the United States. VSL Opp'n
at 13. As proof that this allegedly purposeful distribution channel is active, VSL asserts that it
ordered Vivomixx from another online pharmacy, Pharmacy2go, that the order was delivered to
Maryland in June 2015, and that the text printed on the Vivomixx packaging included the mark
"VSL3TOTAL."
As set forth below, the Court finds that it lacks personal jurisdiction

over Mendes.

Accordingly, the Court will not address Mendes's alternative grounds for dismissal.
I.

Legal Standard
It is the plaintiff s burden to establish personal jurisdiction.

Mylan Labs. Inc. v. Akzo,

N V, 2 F.3d 56,59-60 (4th Cir. 1993). To carry that burden at the pleading stage and without a
hearing, the plaintiff need only make a prima facie showing that a defendant is properly subject
to this Court's jurisdiction.

Id. In evaluating the plaintiffs

showing, this Court must accept the

plaintiff s allegations as true, and it must draw all reasonable inferences and resolve any factual
conflicts in the plaintiff s favor. Id. The Court may consider evidence outside the pleadings in

5

resolving a Rule 12(b)(2) motion.

CoStar Realty Info., Inc. v. Meissner, 604 F. Supp. 2d. 757,

763-64 (D. Md. 2009).
II.

Basis for Personal Jurisdiction
Ordinarily, a federal court establishes personal jurisdiction

over a party based on a

finding that it is subject to the jurisdiction of "a court of general jurisdiction in the state where
the district court is located."

Fed. R. Civ. P: 4(k)(l)(A).

Such jurisdiction exists if that party's.

contacts with the forum state render it subject to the state's long-arm statute and the exercise of
jurisdiction is consistent with the party's constitutional due process rights. Base Metal Trading
v. OJSC Novokuznetsky Aluminum, 283 F.3d 208, 212 (4th Cir. 2002). Although VSL asserts
that Maryland courts, and thus this Court, have personal jurisdiction
primarily on the claim that personal jurisdiction

over Mendes, it relies

exists pursuant to Federal Rule of Civil

Procedure 4(k)(2), which provides that:
For a claim that arises under federal law, servmg a summons ... establishes
personal jurisdiction over a defendant if:
(A) the defendant is not subject to jurisdiction in any state's courts of general
jurisdiction; and
(B) exercising jurisdiction is consistent with the United States Constitution and
laws.
Fed. R. Civ. P. 4(k)(2).

Jurisdiction over Mendes must thus be routed through either Rule

4(k)(l )(A), which allows for personal jurisdiction through the relevant state long-arm statute, or
Rule 4(k)(2), which allows for personal jurisdiction through what amounts to a federal long-arm
statute. Saudi v. Northrop Grumman Corp., 427 F.3d 271,275 (4th Cir. 2005) ("Rule 4(k)(2) is
in essence a federal long-arm statute.").
Both Mendes and VSL focus almost exclusively on Rule 4(k)(2) in arguing for or against
personal jurisdiction.

The plain language of the rule, however, cabins its applicability to

6

instances where a defendant "is not subject to jurisdiction
jurisdiction."

Fed. R. Civ. P. 4(k)(2).

in any state's court of general

Rule 4(k)(2) is thus not a parallel route for the

establishment of personal jurisdiction; rather, it can be used only after a plaintiff has established
not only that jurisdiction

is not proper in the state courts of the forum state, but also that

jurisdiction would not be proper in the courts of any other state. Courts have thus made clear
that Rule 4(k)(2) applies only to the "relatively narrow range of cases,", United States v. Swiss
Am. Bank, Ltd., 191 F.3d 30, 40 (1st Cir. 1999), in which the plaintiff has established that the
defendant "is not subject to personal jurisdiction in any state," Base Metal Trading, 283 F.3d at
215. Cf Omni Capital Int'l v. Rudolf Wo(ff & Co., Ltd., 484 U.S. 97, 111 (1987) (noting, in a
case decided before the implementation of Rule 4(k)(2), that any federallong-arrn

statute should

be "narrowly tailored").
Litigants therefore may not, as Mendes seeks to do, bypass a jurisdictional analysis under
Rule 4(k)(1), nor may they proceed, as VSL attempts to do, under Rule 4(k)(2) while reserving
the opportunity to proceed later under Rule 4(k)(1).

The personal jurisdiction

analysis must

instead proceed first under Rule 4(k)(1), which here requires the Court to determine whether
Mendes is subject to suit in Maryland. See Base Metal Trading, 283 F.3d at 215.
III.

Personal Jurisdiction in Maryland
Mendes is incorporated and headquartered in Switzerland and thus is not a citizen of

Maryland.

For this Court to find personal jurisdiction over Mendes under Rule 4(k)(I), VSL

must make a prima facie showing that Mendes is subject to suit under both the long-arm statute
of Maryland and the Due Process Clause of the Fourteenth Amendment to the United States
Constitution.

Carejirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th

Cir. 2003). Because courts have interpreted the Maryland long-arm statute, Md. Code Ann., Cts.

7

& Jud. Proc.

S 6-103

(West 2011), to reach as far as the Constitution allows, the statutory and

due process components of the personal jurisdiction analysis merge. ALS Scan, Inc. v. Digital
Servo Consultants, Inc., 293 F.3d 707, 710 (4th Cir. 2002).
The due process analysis requires a showing that Mendes has sufficient "minimum
contacts" with Maryland such that "maintenance

of the suit [in this state] does not offend

traditional notions of fair play and substantial justice."
310, 316 (1945).

Int'l Shoe CO. V. Washington, 326 U.S.

Personal jurisdiction can be "general" or "specific."

A court has general

personal jurisdiction when the defendant maintains "continuous and systematic" contacts with
the forum state.

Helicopteros Nacionales de Colombia, S.A.

V.

Hall, 466 U.S. 408, 414-16

(1984). Here, where Mendes's only asserted contact with Maryland is the single delivery to the
state of its allegedly infringing product, VSL has failed to make the requisite showing that
Mendes has contacts with Maryland so continuous and systematic that this Court could exercise
general jurisdiction.
As for specific jurisdiction, a defendant corporation must "purposefully avail[] itself of
the privilege of conducting activities within the forum State," and its "conduct and connection
with the forum State" must be "such that [it] should reasonably anticipate being haled into court
there." World-Wide Volkswagen Corp.

V.

Woodson, 444 U.S. 286,297 (1980). Thus, a court has

specific personal jurisdiction when the defendant has established minimum contacts with the
forum state by purposefully directing its activities at the residents of that state, and the cause of
action "results from alleged injuries that arise out of or relate to those activities."
Corp.

V.

Burger King

Rudzewicz, 471 U.S. 462, 472-73 (1985). The United States Court of Appeals for the

Fourth Circuit has found that, where a non-resident defendant has not engaged in any activities
within the forum state, specific personal jurisdiction is appropriate only when the defendant "has

8

intentionally directed his tortious conduct toward the forum state, knowing that that conduct
would cause harm to a forum resident." Carefirst, 334 F.3d at 398.
Where, as here, the defendant is a non-resident company whose only alleged connection
to a forum is that its products have ended up there, the United States Supreme Court has
recognized a "stream of commerce" theory of personal jurisdiction under which the forum state
"does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over
a corporation that delivers its products into the stream of commerce with the expectation that
they will be purchased by consumers in the forum state."
297-98.

The Supreme Court's jurisprudence

World-Wide Volkswagen, 44 U.S. at

on the stream of commerce theory of personal

jurisdiction has not been univocal. See Asahi Metal Indus. Co., Ltd. v. Super. Ct. o/Cal., Solano
Cty., 480 U.S. 102 (1987) (advancing two different theories of stream of commerce personal
jurisdiction, neither of which garnered a majority of the Court).

At present, Justice Breyer's

I

concurrence in J McIntyre Mach. Ltd. v. Nicastro, 564 U.S. 873 (2011), a case in which no
majority opinion was issued, provides controlling guidance.

See Marks v. United States, 430

U.S. 188, 193 (1977) ("When a fragmented Court decides a case and no single rationale
explaining the result enjoys the assent of five Justices, the holding of the Court may be viewed as
that position taken by those Members who concurred in the judgments on the narrowest grounds
.... ") (citation omitted). In McIntyre, six justices agreed that there was no personal jurisdiction
over a British company that directed marketing and sales efforts at the United States through a
distributor, but whose only contact with the forum state was the sale of one of its machines to a
resident of that state.

McIntyre, 564 U.S. at 887-88.

In his concurrence, Justice Breyer

concluded that none of the Supreme Court's stream of commerce precedents would permit a
"single isolated sale" of a product to a customer in the forum to be sufficient to establish

9

minimum contacts on the part of the manufacturer, and that without a showing of a "regular
course of sales" in the forum state, or a showing of "something more," such as "special staterelated design, advertising, advice, marketing or anything else" that would indicate a "specific
effort" by the defendant to sell in the forum, the exertion of personal jurisdiction

over the

manufacturer would violate due process. Id. at 889 (Breyer, J., concurring).
Here, Mendes's only identified contact with Maryland is a "single isolated sale" of the
type that Justice Breyer flatly rejects. Even if a single sale could be sufficient, this particular sale
cannot establish purposeful availment of the Maryland market because it was not made from the
Vivomixx website, or any website linked to it, but from "Pharmacy2go,"
with no identified connection to Mendes or Vivomixx.

an online pharmacy

Furthermore, this single instance in

which a Mendes product was shipped into Maryland was the result of a deliberate scheme by
VSL's attorneys to place an order for Vivomixx, a product marketed and sold in Europe, to be
delivered in Maryland, for the sole purpose of manufacturing jurisdiction.

Thus, while a solitary

box of Vivo mix x has made its way to Maryland's shores, it has done so not because of Mendes's
specific effort to create and capitalize on a stream of commerce to this state, but because of
VSL's legal maneuvering.

As the equivalent of a sting operation, this tactic has been rejected as

a legitimate means to establish personal jurisdiction.

See, e.g., lSI Brands, Inc. v. KCC Intern.,

Inc., 458 F. Supp. 2d 81, 89 (E.D.N.Y. 2006) ("It is beyond dispute that jurisdiction cannot be
manufactured by the Plaintiff."); Millennium Enter., Inc. v. Millennium Music, LP, 33 F. Supp.
2d 907, 911 (D. Or. 1999) (rejecting, in a trademark infringement case, the plaintiffs

attempt to

"manufacture a contact" with the jurisdiction by having someone order the allegedly infringing
product because defendants "cannot be said to have 'purposely'

availed themselves of the

protections of this forum when it was an act of someone associated with plaintiff, rather than

10

defendants' web site advertising, that brought defendants' product into this forum"); DeSantis v.
Hafner Creations, Inc., 949 F. Supp. 419, 425 (E.D. Va 1996) (holding, when determining
whether jurisdiction was proper under Virginia's long-arm statute, that "a plaintiff to whom a
cause of action has accrued may not thereafter initiate a transaction for the sole purpose of
creating jurisdiction").

See also Carejirst, 334 F.3d at 400-01 (affirming the district court's

determination that it lacked personal jurisdiction over the defendant where one of the defendant's
alleged contacts with the forum was the defendant's interactive company website through which
the only specific exchange between the defendant and a Maryland resident was a "single
[website] donation initiated by Carefirst's counsel (and ostensibly made to bolster the position of
her client in this litigation)").
Beyond this single sale, VSL has identified no evidence of the constitutionally required
"specific effort" to sell into Maryland.

Neither the Vivomixx website nor the website of the

online pharmacy Farmaline, referenced by VSL, has any mention of any specific intention or
effort to sell Vivomixx to Maryland customers.

See McIntyre, 564 U.S. at 889 (Breyer, J.,

concurring) (requiring "special state-related design, advertising, advice, [or] marketing" for the
exercise of specific jurisdiction to satisfy due process); Care/irst, 334 F.3d at 399 (holding that
"a person's action of placing information on the Internet is not sufficient by itself to subject that
person to personal jurisdiction in each State in which the information is accessed").

To exercise

jurisdiction over Mendes in Maryland based on these facts would therefore offend traditional
notions of fair play and substantial justice. The Court concludes that Maryland courts would not
have personal jurisdiction

over Mendes, such that this Court lacks jurisdiction

4(k)(1).

11

under Rule

IV.

Rule 4(k)(2)
VSL's claim of personal jurisdiction

must therefore derive from the narrow form of

national personal jurisdiction based on Rule 4(k)(2), which has three requirements: (1) the claim
arises under federal law; (2) the defendant is not subject to personal jurisdiction in any state; and
(3) the defendant has sufficient contacts with the United States such that the exercise of
jurisdiction would be consistent with the Constitution and laws of the United States. Fed. R. Civ.
P. 4(k)(2); Base Metal Trading, 283 F.3d at 215. The first requirement, that the claim arises
under federal law, is satisfied because VSL's claims against Mendes arise under the Lanham Act.
On the second requirement, the Fourth Circuit has required that a plaintiff make a threshold
showing that the defendant is not subject to personal jurisdiction

in any state.

Base Metal

Trading, 283 F.3d at 215. If a plaintiff makes that threshold showing, the third requirement is
then considered. See id.
A.

Jurisdiction in a State

Although VSL does not specifically demonstrate that there is no personal jurisdiCtion
over Mendes in any state, neither side claims that such jurisdiction
analysis of the proffered jurisdictional

exists, and the Court's

facts reveals no basis to conclude that Mendes has

sufficient contacts with any particular state to establish personal jurisdiction

in its courts.

Beyond its allegations relating to Maryland, VSL offers two additional bases for jurisdiction over
Mendes: (1) its filings in the USPTO, and (2) its contract with Danisco to purchase the pro biotic
in Vivoinixx.
1.

Trademark Applications

VSL asserts as jurisdictional

facts Mendes's

trademark

applications

filed with the

USPTO, which is located in Arlington, Virginia, a fact of which this Court takes judicial notice.

12

Fed. R. Evid. 201 (b)(2).

These contacts, however, do not establish personal jurisdiction

in

Virginia.
The Virginia long-arm statute "has been construed to extended in personam jurisdiction
to the outmost perimeters of due process," so the statutory and due process components of the
personal jurisdiction analysis merge. Peanut Corp. of Am. v. Hollywood Brands, Inc., 696 F.2d
311, 313 (4th Cir. 1982). Alt~ough VSL alleges that Mendes has filed 18 trademark applications
with the USPTO and has sought to cancel VSL' s marks, these actions do not establish personal
jurisdiction in Virginia because of the "government contacts" exception, which provides that
"petitioning the national government does not count as a jurisdictional contact" for purposes of
establishing in personam jurisdiction over a defendant in the forum state. Zeneca Ltd. v. Myland
Pharm., 173 F.3d 829, 831 (Fed. Cir. 1999) (finding that the defendant's filing of a petition with
the Federal Drug Administration

in Maryland did not provide a basis to support personal

jurisdiction over the defendant in Maryland).

Because this exception derives from the First

Amendment, it extends to "a party's efforts to advance its commercial or proprietary interests,"
such as by seeking intellectual property protection.

Nichols v. G.D. Searle & Co., 783 F. Supp.

233, 242-43 (D. Md. 1992); see Zeneca, 173 F.3d at 831 (applying the government contacts
exception in a patent infringement case).
The government contacts exception does not apply if the defendant's government filings
were fraudulent.

See Nichols, 783 F. Supp. at 233, 243 (stating that the government contract

exception does not apply when there is evidence of "the fraudulent exercise of one's right to
petition").

As part of its request for jurisdictional discovery, VSL accuses Mendes of fraud, but

that allegation does not implicate the applicability of the government contacts exception.

VSL

claims not that Mendes falsely asserted an intent to use certain marks in U.S. commerce in its

13

USPTO filings; rather it claims that Mendes had and continues to have that intent but is now
disavowing

it in an effort to circumvent

VSL's

trademark

infringement

claims.

VSL's

allegations of fraud thus do not relate to the content of Mendes's trademark applications, but
rather to Mendes's

subsequent

conduct.

Accordingly,

based on the government

contacts

exception, the Court is satisfied that there is no basis for personal jurisdiction over Mendes in
Virginia.
2.

Danisco

Mendes's purchase of its probiotic supply from Danisco does not establish personal
jurisdiction

in any particular state.

The Danisco plant that supplies Mendes is located in

Wisconsin.

The Wisconsin long-arm statute "is intended to reach to the fullest extent allowed

under the due process clause" of the Fourteenth Amendment, so the statutory and due process
components of the personal jurisdiction

analysis merge.

Daniel J Hartwig Assoc., Inc. v.

Kanner, 913 F.2d 1213, 1217 (7th Cir. 1990). Mendes's purchases of supply from Danisco,
although regular, are not the kind of continuous and systematic interaction required for the
exercise of general jurisdiction in Wisconsin.
2012) (stating that general jurisdiction

Felland v. Clifton, 682 F.3d 665, 673 (7th Cir.

requires contacts that are "sufficiently extensive and

pervasive to approximate physical presence") (internal citation omitted).

Furthermore,

the

Supreme Court has held that, as to general jurisdiction, "mere purchases, even if occurring at
regular intervals, are not enough to warrant a State's assertion of in personam jurisdiction over a
nonresident corporation."

Helicopteros Nacionales, 466 U.S. at 418.

Nor are Mendes's purchases sufficient to establish specific jurisdiction.

The United

States Court of Appeals for the Seventh Circuit, which includes Wisconsin, has formulated the
test for specific jurisdiction to include three requirements:

14

(1) the defendant must have purposefully availed himself of the privilege of
conducting business in the forum state or purposefully directed his activities at the
state, ...
(2) the alleged injury must have arisen from the defendant's forum-related
activities, and
(3) the exercise of jurisdiction must comport with traditional notions of fair play
and substantial justice.
Felland, 682 F.3d at 673. For intentional torts, which include claims of trademark infringement
and unfair competition, courts focus on "purposeful direction."

Id. at 674; David Berg and Co.

v. Gatto Intern. Trading Co., Inc., 884 F.2d 306, 311 (7th Cir. 1989) ("[U]nfair competition and
trademark

infringement

are tortious[.]").

Purposeful

direction,

in tum, requires that the

defendant engage in (1) intentional conduct, (2) expressly aimed at the forum state, (3) with the
knowledge that "the effects would be felt-that

is, the plaintiff would be injured-in

the forum

state." Felland, 682 F.3d at 675. As to what intentional conduct may considered under the first
factor, the Seventh Circuit has previously noted a circuit split as to whether the intentional
conduct to be considered in this analysis is any intentional conduct directed at the forum state,
which, here, would include Mendes's orders from Danisco, or only allegedly tortious conduct
directed at the forum state, which would require that Mendes have directed some allegedly
infringing activity at Wisconsin.

See Tamburo v. Dworkin, 601 F.3d 693, 704 (7th Cir. 2010).

However, the Seventh Circuit recently emphasized that "[ s]pecific jurisdiction must rest on the
litigation-specific

conduct of the defendant in the proposed forum state."

Advanced Tactical

Ordnance Sys., LLC v. Real Action Paintball, Inc., 751 F.3d 796,801 (7th Cir. 2014).
By this standard, Mendes's

only intentional conduct aimed at Wisconsin, namely its

standing order with Danisco, is not related to the litigation.

VSL's causes of action against

Mendes relate only to trademark infringement and unfair competition.

Although the product that

Mendes ultimately sells as Vivomixx was obtained from Danisco, such a limited nexus does not

15

support specific jurisdiction, where there is no allegation or evidence that Danisco has any role in
the branding and marketing of that product, which are the activities that form the basis of VSL' s
claims. Cf Saudi, 427 F.3d at 276 (finding that where the plaintiff had sued for a personal injury
that occurred on a merchant ship at sea, the fact that the refurbishment of the ship had been
supervised by an American company from the United States was not a contact that provided "a
basis for the suit" that would support specific jurisdiction).
Even if Mendes's standing purchase order with Danisco could be construed as litigationspecific intentional conduct, specific jurisdiction
largely overlap.

fails on the remaining two prongs, which

Tamburo, 601 F.3d at 704. For specific jurisdiction

to be permissible,

a

defendant must either target its conduct "at a plaintiff whom the defendant knows to be a resident
of the forum state," or "the forum state [must] be the focal point of the tort."

Id. (citation

omitted). Here, VSL is not a resident of Wisconsin, and that state is not a focal point of the
alleged trademark infringement and unfair competition claims against Mendes. Thus, the Court
is satisfied that there is no personal jurisdiction over Mendes in Wisconsin.
B.

National Jurisdiction

Although VSL's claims arise under federal law, and there apparently is no state with
personal jurisdiction over Mendes, VSL has not met the third requirement under Rule 4(k)(2),
that the defendant's contacts with the United States as a whole are substantial enough that the
exercise of jurisdiction

would be consistent with the Due Process Clause. The rubric for

analyzing personal jurisdiction under Rule 4(k)(2) is no different than that under Rule 4(k)(I).
Saudi, 427 F.3d at 275 (emphasizing that Rule 4(k)(2) "does not operate to relax the requirement
that the defendant's contacts with the forum be constitutionally sufficient").
the scope-nationwide
personal jurisdiction

rather than statewide-of

All that differs is

the contacts under consideration.

Thus

under Rule 4(k)(2) must be either general or specific, and specific
16

jurisdiction continues to require that "the cause of action arisen out of the defendant's contacts
with the forum." Id. at 276 (quoting Base Metal Trading, 283 F.3d at 213).

Here, as VSL does

not contest, general jurisdiction

is inappropriate because Mendes's contacts with the United

States are not so "continuous

and systematic as to render [it] essentially at home" here.

Goodyear Dunlop Tires Ops., S.A. v. Brown, 564 U.S. 915, 919 (2011).

If Mendes is to be

subject to personal jurisdiction under Rule 4(k)(2), then, it must be through specific jurisdiction.
As a result, the only salient contacts for the jurisdictional analysis are those that "provide the
basis for the suit." Saudi, 427 F.3d at 276 (quoting Carefirst, 334 F.3d at 397).
The only Mendes contacts with the United States identified by VSL are (l) the trademark
applications and related filings to the USPTO; (2) the purchase of probiotic product from
Danisco; (3) the single sale of Vivomixx into Maryland pursuant to an order placed by VSL's
counsel; and (4) the reference on the Farmaline website to the ability to ship Vivomixx to the
United States. These factors, whether considered individually or collectively, do not provide a
basis for specific jurisdiction over Mendes.
Mendes's trademark applications with the USPTO cannot support specific jurisdiction.
As an initial matter, because VSL's claims against Mendes relate to the unlawful use of VSL's
trademarks, none of the Mendes trademark applications other than those for marks containing the
term "VSL" could arguably be jUrisdictionally relevant, leaving only the applications for the
marks VSL3TOTAL and VSL 3 BY DE SIMONE.

Even these applications, however, do not

"provide the basis for the suit." Saudi, 427 F.3d at 276.

With Count XIV dismissed on other

grounds, VSL's remaining claims against Mendes are based on Mendes's alleged infringement
of the VSL#3 mark by using it in commerce, not on the mere filing of trademark applications for
similar terms.

The statutory

language

makes this clear, requiring

17

for both trademark

infringement

and unfair competition

commerce.

15 U.S.C.

S

that the infringing mark or designation

be used in

1114(1)(a) ("Any person who shall, without the consent of the

registrant, use in commerce ... "); id.

S

1125( a)(1) ("Any persop who, on or in connection with

any goods or services, or any container for goods, uses in commerce ... ").

While a USPTO

application might be a jurisdictionally significant contact under Rule 4(k)(2) if that filing is itself
the basis of the alleged injury, see Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403 (Fed. Cir.
2009) (finding in a legal malpractice action that the Court had personal jurisdiction under Rule
4(k)(2) over attorney defendants based on their filing of the flawed patent application that gave
rise to the malpractice claims), that is not the situation here. Mendes's

filing of trademark

applications is. not commensurate with the alleged infringement of VSL's separately registered
trademark.
VSL essentially, but perhaps unwittingly, acknowledges this distinction. In responding to
Mendes's

alternative

argument that VSL has failed to state a viable claim of trademark

infringement or unfair competition based on Mendes's alleged use of the VSL#3 mark, VSL
provides a list of the conduct underlying those claims. That list consists of (1) Mendes's use of
VSL3TOTAL and VSL3 BY DE SIMONE on boxes of Vivo mix x; (2) Mendes's inclusion on its
website of a link to the Farmaline website and Farmaline's

offer on its own website to ship

Vivomixx to the United States; and (3) the shipping to Maryland of a box of Vivomixx, with the
mark VSL3TOTAL on it, by the online pharmacy Pharmacy2Go.

In articulating the factual basis

for its trademark and unfair competition claims relating to the VSL#3 mark, VSL makes no
mention of Mendes's unapproved trademark applications and thus reveals their irrelevance to
those claims.

18

The United States Court of Appeals for the Fifth Circuit reached a similar conclusion in
Quick Technologies, Inc. v. Sage Group PIC, 313 F.3d 338, 345 (5th Cir. 2002). In Quick, the
plaintiff, which held the U.S. trademark "SAGE INFORMATION SYSTEM," alleged trademark
infringement against a foreign corporation that used the mark "SAGE," which it had registered in
the United Kingdom.

Id. at 342. The plaintiff argued that personal jurisdiction existed under

Rule 4(k)(2) in part because the defendant had filed an intent-to-use application for the mark
SAGE with the USPTO and had filed an opposition to the plaintiffs trademark application.

The

Fifth Circuit disagreed, holding that the plaintiff s trademark infringement claims did not "arise
out of or relate to" the defendant's filings with the USPTO for purposes of establishing specific
jurisdiction.

Id. at 345. Likewise, VSL's trademark infringement and unfair competition claims

arise from the alleged sale of product infringing on the VSL#3 mark, not from Mendes's USPTO
filing of trademark applications and its opposition to VSL' s trademark.
As discussed above, Mendes's standing purchase order from Danisco likewise does not
provide the basis for VSL's trademark infringement claims and thus cannot support jurisdiction
under Rule 4(k)(2) any more than it could in Wisconsin.

See supra part IV.A.2.

Even if they

could support specific jurisdiction, Mendes's regular purchases from Danisco do not constitute
minimum contacts with the United States sufficient to satisfy due process requirements.
argument for jurisdiction

VSL' s

based on Mendes's contact with Danisco might be described as a

reverse stream of commerce argument, where jurisdiction

is based on a stream of products

purchased from a jurisdiction rather than distributed there for sale.

The stream of commerce

theory of personal jurisdiction, however, has repeatedly been described by the Supreme Court as
applying to defendants offering items for sale into the forum, not the other way around.

See

McIntyre, 564 U.S. at 882 (stating that the stream of commerce theory does not alter basic

19

precepts of jurisdiction,

but instead simply applies it to instances where "manufacturers

or

distributors seek to serve a given State's market" by "sending [their] goods rather than [their]
agents"); Asahi, 480 u.S. at 117 (Brennan, J., concurring) (noting, in seeking to widen the
plurality's definition of activity that would satisfy jurisdiction under the stream of commerce
theory, that "[a]s long as a participant in this process is aware that the final product is being
marketed in the forum State, the possibility of a lawsuit there cannot come as a surprise.");
World-Wide Volkswagen, 444 U.S. at297-98

(finding that the forum state "does not exceed its

powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that
delivers its products into the stream of commerce with the expectation that they will be
purchased by consumers in the forum state"). VSL has offered no authority, and the Court has
not identified any, to support a finding of specific jurisdiction based on purchases by a defendant
from a forum state or jurisdiction, rather than sales into that jurisdiction.

See, e.g., Nonpareil

Corp. v. Reddy Raw, Inc., No. CV 07-253-E-EJL, 2008 WL 711037 at *5-6 (D. Idaho Mar. 14,
2008) (in a trademark dispute in which the defendant's

alleged contacts with the forum state

included large, regular orders of products from .the forum state, considering in the personal
jurisdiction analysis only the defendant's sales of the allegedly infringing product).
reverse-stream

Even if this

of commerce theory is viable, where the purchases of probiotic product from

Danisco themselves caused no trademark infringement against VSL, they cannot be deemed to
establish "purposeful direction," expressly aimed at the United States, that was the source of
injury to the plaintiff.
jurisdiction

See supra part IV.A.2; Carefirst, 334 F.3d at 397-98 (finding that specific

over an out-of-forum defendant can be based on contacts constituting "tortious

conduct" that was "intentionally directed" toward the forum state).

20

The only remaining purported contacts with the United States are the single shipment of
Vivomixx to Maryland and the statement on the Farmaline website that Vivomixx can be
shipped to the United States. 'As discussed above, the attorney-engineered

single shipment

cannot fairly be considered both because it was procured for the sole purpose of manufacturing
jurisdiction

in this litigation

and because

it was purchased

Pharmacy2go, with no demonstrated link'to Mendes or Vivomixx.

from an online pharmacy,
See supra part III.

As for other online activity, the Vivomixx website itself, registered in the European
Union, gives no indication that it markets or ships product to the United States. Although the
website does advertise that Vivomixx is "available at [F]armaline online pharmacy,"
announcement fails to connect Mendes with the United States.

that

Farmaline is a Belgium-based

,,'

company that sells in numerous countries, including the United Kingdom and various European
nations, such that Mendes's link to the Farmaline website cannot fairly be deemed purposeful
direction of Vivomixx to the United States market. To the extent that Farmaline, in tum, notes
on one of its many websites that it will ship Vivomixx to the United States, there is no indication
that Mendes was aware of or supported such advertising by Farmaline.

Particularly where there

is no evidence of any bona fide sales of Vivomixx into the United States, through Farmaline or
otherwise, this tenuous chain of statements on various websites is insufficient to establish
specific jurisdiction

over Mendes.

See Carefirst, 334 F.3d at 400 (stating that in order for

website to bring a defendant within the jurisdiction of a forum, "the company must have done
.
something more than merely place information on the Internet" but instead must have acted with

"

"

the "manifest intent" to target residents of that jurisdiction).
Even if all of Mendes's 'contacts with the United States are taken together, they are not
sufficient to establish that the exercise of personal jurisdiction over Mendes would comport with

21

fair play and substantial justice.

Rule 4(k)(2) is an infrequently used tool that is not meant to

allow for personal jurisdiction simply because a defendant has a number of different contacts
•

"

t,

with the United States. See, e.g., Saudi, 427 F.3d at 276 (in a ship-related personal injury and
products liability case, finding no Rule 4(k)(2) jurisdiction over the defendant that owned the
foreign shipyard where the ship had been refurbished when the defendant's

contacts with the

United States consisted of an alleged on-going joint venture with the New Jersey company that
<."'.'

supervised the refurbishment

and ownership of.a subsidiary shipyard in Texas); Base Metal

Trading, 283 F.3d at 214-15 (finding no Rule 4(k)(2) personal jurisdiction

over a Russian

aluminum company where the company's contacts with the United States consisted of a few
shipments of aluminum arriving at American ports, attendance by company officials at trade
conferences in the United States, sporadic negotiations with American companies about possible
joint ventures, and a few purchases of secondary aluminum from the United States). In Quick
Technologies,

a trademark infringement case brought by a U.S. company against a foreign

company using a similar mark registered in the United Kingdom, the defendant's

contacts

consisted of filing an intent-to-use application with the USPTO; filing an opposition, through an
American attorney, to"the plaintiffs

trademark application; maintaining a website with links to

its U.S. subsidiaries; using its foreign-registered

mark in publications circulated in the United

States; and contacting and visiting U.S. companies about its rebranding efforts. 313 F.3d at 344.
The court held that these contacts were insufficient to establish personal jurisdiction under Rule
4(k)(2). Id. at 345. Likewise, this Court concludes that Mendes's USPTO activity, its purchases
of supply from Danisco, its link to the Farnlaline website on the Vivomixx webpage, and the
single sale by Pharmacy2Go

into the United States do not constitute sufficient contacts to

support specific jurisdiction in this case under Rule 4(k)(2).

22

V.

Motion for Jurisdictional Discovery
In the alternative, VSL seeks jurisdictional

discovery to secure additional facts with

which to establish personal jurisdiction over Mendes.

VSL offers two bases for this request.

First, it asserts that Mendes's "contacts with the United States are sufficient to warrant the
reasonable inference that there are probably more." VSL Opp'n at 17. Second, VSL asserts that
Mendes has engaged in "fraud or intentional misconduct."

Id.

"(T)he decision whether or not to permit jurisdictional discovery is a matter committed to
the sound discretion of the district court." Base Metal Trading, 283 F.3d at 216 n.3. "When a
plaintiff offers only speculation or conclusory assertions about contacts with a forum state, a
court is within its discretion in denying jurisdictional

discovery."

Carejirst, 334 F.3d at 402.

That is the situation here. As discussed above, the bases for personal jurisdiction that VSL offers
are insufficient to make exercise of such jurisdiction
,

justice.

comport with fair play and substantial

.

Beyond those contacts it has already alleged, VSL identifies no other possible contacts

that it believes Mendes may have with Maryland or the United States as a whole, nor does it
articulate any particular line of inquiry that would be reasonably calculated to uncover evidence
that would establish personal jurisdiction.

Thus, to permit jurisdictional discovery would amount

to authorizing a "fishing expedition in hopes of discovering some basis of jurisdiction."

Base

Metal Trading, 283 F.2d at 216 n.3. The Court declines to do so.
Rather than offering a concrete basis for jurisdictional discovery, VSL spends its energy
accusing Mendes of fraud and intentional misconduct because its statements in its trademark
applications that it had the intent to use the proposed marks in U.S. commerce are arguably at
odds with its present claims that it no longer intends to conduct business in the United States.
Fraud and misrepresentation as to jurisdictional facts may provide a basis to grant jurisdictional

23

,,;.

,

I

discovery.

See Carejirst, 334 F.3d at 403 (finding that the district court did not abuse its

discretion in refusing jurisdictional

discovery because there was "no indication of fraud or

intentional misconduct on the part of [the defendant] in its jurisdiction[al]

affidavits").

VSL's

argument, however, misses the mark for multiple reasons. First, any past or current intent on the
part of Mendes to conduct business in the United States, if proven, would be insufficient to
"

establish personal jurisd,iction.

The "minimum contacts" necessary to establish purposeful

direction to the Maryland or United States market must be an actual, not merely intended,
"regular course of sales" in or a "specific effort" to target the forum. McIntyre, 564 U.S. at.889
(Breyer, J., concurring).

Second, although VSL argues that Mendes's statement of intent to

conduct business in the United States indicates that discovery may uncover such activity, the fact
~

,~/ "

.

that VSL has been unable to identify even a single bona fide sale of a Mendes product into the
•

'

I

_

•

United States severely undercuts the force of that claim. Third, Mendes has offered an entirely
,

,

plausible explanation for why it once had, but no longer has, the intent to conduct business in the

.

.

United States, specifically, that ExeGi was established asa separate company to focus on the
United States market. ExeGi is already a counterclaim defendant in this case. Accordingly, the
,i

-

.;

,

..

Court concludes that jurisdictional discovery is not warranted.
CONCLUSION
For the foregoing reasons, Mendes's Motion to Dismiss is GRANTED.
directed to dismiss Mendes as a counterclaim defendant in this action.

,

Date: February 16,2017
THEODORED.
United States Distr

"24

'

,

. ~.

The Clerk is