THE LIMU COMPANY, LLC v. QUALITY CRAFT SPIRITS LTD.

Filing 21

MEMORANDUM AND OPINION. SIGNED BY HONORABLE JOHN R. PADOVA ON 3/13/18. 3/13/18 ENTERED & E-MAILED.(fdc)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
THE LIMU COMPANY, LLC
v.
QUALITY CRAFT SPIRITS LTD

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CIVIL ACTION

NO. 17-930

MEMORANDUM
Padova, J.

March 13, 2018

Plaintiff, the Limu Company, LLC (“Limu”), has brought this action against Quality
Craft Spirits Ltd. (“QC Spirits”), asserting that QC Spirits has infringed its registered trademark
“BLU FROG,” which Limu uses for health supplements and energy drinks. Limu has also
asserted claims against QC Spirits for unfair competition and unjust enrichment under state law.
QC Spirits has moved to dismiss the Complaint for lack of personal jurisdiction or, in the
alternative, for improper venue. For the reasons that follow, the Motion is denied.
I.

FACTUAL BACKGROUND
The Complaint alleges the following facts. Limu, a Florida limited liability company,

markets and sells nutritional supplements and energy drinks. (Compl. ¶¶ 1, 6.) Since October
2008, Limu has used the trademark BLU FROG in connection with its sales of its products in
interstate commerce. (Id. ¶ 7.) Limu sells an energy drink under the “BLU FROG mark [that]
contains a proprietary blend of Focoidan-rich limu moui extract and a host of naturally powerpacked fruits, vitamins, herbs, and minerals.” (Id. ¶ 8.) Limu’s BLU FROG energy drink is “the
largest selling seaweed based energy drink in the world.” (Id. ¶ 9.)
Limu owns “U.S. Trademark Reg. No. 3,659,163 for BLU FROG, in International Class
5 for Dietary and nutritional supplements; Dietary supplemental drinks and in International Class
32 for Energy drinks.”

(Id. ¶ 10 (internal quotation marks omitted).)

U.S. Trademark

Registration No. 3,659,163 for the trademark BLU FROG was issued on the Principal Register
of the United States Patent and Trademark Office on July 21, 2009. (Id. ¶ 11.) U.S. Trademark
Registration No. 3,659,163 “is valid, subsisting, uncancelled, and unrevoked.” (Id.) Limu has
continuously used the BLU FROG mark which is the subject of U.S. Trademark Registration No.
3,659,163. (Id. ¶ 12.) As a result of its continuous use of this mark, “as well as its marketing
and advertising efforts, [Limu] has amassed substantial goodwill and prestige in” the BLU
FROG mark. (Id. ¶ 13.)
QC Spirits, a Canadian corporation with its principal place of business in Canada, “has
adopted and is using the BLU FROG mark in connection with the sale of vodka.” (Id. ¶¶ 2, 14.)
QC Spirits’ BLU FROG designation is identical to Limu’s BLU FROG trademark, including the
unique spelling of “BLU.” (Id. ¶ 16.) QC Spirits has applied for a United States trademark
registration for BLU FROG in International Class 33 for vodka. (Id. ¶ 17.) The trademark
application originally listed QCIL International, Inc. as the owner of the application, but the
application was amended on August 2, 2016 to change the owner to QC Spirits. (Id. ¶ 18.) Both
QCIL International, Inc. and QC Spirits are subsidiaries of Quality Craft, Ltd., a Canadian
corporation with its principal place of business in British Columbia, Canada. (Id. ¶ 20.)
QC Spirits worked with a distributor in Pennsylvania to obtain approval to sell vodka
under the BLU FROG designation in Pennsylvania. (Id. ¶ 21.) On February 1, 2017, the
Pennsylvania Liquor Control Board (“PA LCB”) accepted BLU FROG vodka as a regular new
item. (Id.)
On February 28, 2017, Limu sent a letter to QC Spirits, asking that QC Spirits stop using
the BLU FROG name and mark, because QC Spirits’ mark is confusingly similar to Limu’s
registered BLU FROG mark. (Id. ¶ 22.) QC Spirits’ BLU FROG designation “is identical in
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appearance, sound, connotation, and commercial impression to Plaintiff’s registered mark BLU
FROG.” (Id. ¶ 23.) Vodka and energy drinks are related goods because energy drinks are used
as mixers for alcoholic drinks containing vodka. (Id. ¶ 24.) Consequently, QC Spirits’ use of
the BLU FROG designation for vodka has and will in the future cause harm to Limu’s business
and goodwill generated under its registered trademark BLU FROG. (Id. ¶ 25.)
The Complaint asserts six claims against QC Spirits: trademark infringement pursuant to
15 U.S.C. § 1114 (Count I); trademark infringement under Pennsylvania common law (Count II);
unfair competition pursuant to 15 U.S.C. § 1125(a) (Count III); unfair competition under
Pennsylvania common law (Count IV); violation of the Pennsylvania Unfair Trade Practices and
Consumer Protection Law (“UTPCPL”) (Count V); and unjust enrichment pursuant to
Pennsylvania common law (Count VI). Limu seeks an injunction to prevent QC Spirits from
using the BLU FROG mark or any mark containing the term “BLU” and/or “FROG,” using any
trademark that imitates or is confusingly similar to Limu’s trademark BLU FROG, or that is
likely to cause confusion, mistake, or misunderstanding of the origin of Limu’s products. Limu
also seeks compensatory damages, an accounting of all sales of QC Spirits derived from the
actions complained of in the Complaint; destruction of all materials under the control of QC
Spirits that bear the BLU FROG trademark; accounting and disgorgement of all profits made by
QC Spirits as a result of the aforementioned actions; costs and reasonable attorney’s fees; and an
order requiring QC Spirits to withdraw its pending trademark application for BLU FROG.

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II.

PERSONAL JURISDICTION
A.

Legal Standard

QC Spirits has moved to dismiss this action for lack of personal jurisdiction pursuant to
Federal Rule of Civil Procedure 12(b)(2). “Under Federal Rule of Civil Procedure 4(k), a
District Court typically exercises personal jurisdiction according to the law of the state where it
sits.” O’Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007) (citing Fed. R. Civ.
P. 4(k)(1)(A)); see also Fed. R. Civ. P. 4(k)(1) (“Serving a summons . . . establishes personal
jurisdiction over a defendant . . . (A) who is subject to the jurisdiction of a court of general
jurisdiction in the state where the district court is located . . . .”). “Pennsylvania’s long-arm
statute permits courts to exercise personal jurisdiction over nonresident defendants ‘to the fullest
extent allowed under the Constitution of the United States’ and ‘based on the most minimum
contact with this Commonwealth allowed under the Constitution.’”

Ackourey v. Sonellas

Custom Tailors, 573 F. App’x 208, 211 (3d Cir. 2014) (quoting 42 Pa. Cons. Stat. Ann. §
5322(b)). “Accordingly, in determining whether personal jurisdiction exists, we ask whether,
under the Due Process Clause, the defendant has ‘certain minimum contacts with . . .
[Pennsylvania] such that the maintenance of the suit does not offend traditional notions of fair
play and substantial justice.’” O’Connor, 496 F.3d at 316-17 (alterations in original) (quoting
Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).
“‘[C]ourts reviewing a motion to dismiss a case for lack of in personam jurisdiction must
accept all of the plaintiff’s allegations as true and construe disputed facts in favor of the
plaintiff.’” Bootay v. KBR, Inc., 437 F. App’x 140, 143 (3d Cir. 2011) (alteration in original)
(quoting Carteret Savs. Bank, FA v. Shushan, 954 F.2d 141, 142 n.1 (3d Cir. 1992)). The
plaintiff, however, “‘bears the burden to prove, by a preponderance of the evidence, facts
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sufficient to establish personal jurisdiction,’” Control Screening LLC v. Tech. Application &
Prod. Co., 687 F.3d 163, 167 (3d Cir. 2012) (quoting Carteret Savs. Bank, 954 F.2d at 146), and
“may not rest solely on the pleadings to satisfy this burden.” Gutierrez v. N. Am. Cerruti Corp.,
Civ. A. No. 13-3012, 2014 WL 6969579, at *2 (E.D. Pa. Dec. 9, 2014) (citing Simeone ex rel.
Estate of Albert Francis Simeone, Jr. v. Bombardier-Rotax GmbH, 360 F. Supp. 2d 665, 669
(E.D. Pa. 2005); and Carteret Savs. Bank, 954 F.2d at 146). “Once the defense has been raised,
‘then the plaintiff must sustain its burden of proof in establishing jurisdictional facts through
sworn affidavits or other competent evidence’ and may not ‘rely on the bare pleadings alone.’”
IBEW Local Union No. 126 Ret. Plan Tr. Fund v. Cablelinks, Inc., Civ. A. No. 15-1925, 2015
WL 8482831, at *1 (E.D. Pa. Dec. 10, 2015) (quoting Time Share Vacation Club v. Atl. Resorts,
Ltd., 735 F.2d 61, 66 n.9 (3d Cir. 1984)).
There are two types of personal jurisdiction, general and specific. O’Connor, 496 F.3d
at 317 (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15 & n.9
(1984)). The Supreme Court has explained that “[a] court may assert general jurisdiction over
foreign (sister-state or foreign-country) corporations to hear any and all claims against them
when their affiliations with the State are so ‘continuous and systematic’ as to render them
essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564
U.S. 915, 919 (2011) (citing Int’l Shoe, 326 U.S. at 317). “Specific jurisdiction, on the other
hand, depends on an affiliatio[n] between the forum and the underlying controversy, principally,
activity or an occurrence that takes place in the forum State and is therefore subject to the State’s
regulation.” Id. (alteration in original) (quotation and citations omitted). “In contrast to general,
all-purpose jurisdiction, specific jurisdiction is confined to adjudication of issues deriving from,
or connected with, the very controversy that establishes jurisdiction.” Id. (quotation omitted).
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QC Spirits argues that we lack both general and specific jurisdiction over it. Limu agrees that we
do not have general personal jurisdiction over QC Spirits, but maintains that we do have specific
jurisdiction over QC Spirits because of its contacts with the Commonwealth of Pennsylvania in
connection with this case. (Pl.’s Br. at 5-6.)
B.

Discussion

QC Spirits contends that we lack specific jurisdiction over it because it has no actual
physical presence in this Commonwealth and has not, itself, acted in Pennsylvania.

“In

determining whether there is specific jurisdiction, we undertake a three-part inquiry.” D’Jamoos
ex rel. Estate of Weingeroff v. Pilatus Aircraft Ltd., 566 F.3d 94, 102 (3d Cir. 2009). “First, the
defendant must have ‘purposefully directed [its] activities’ at the forum.” Id. (alteration in
original) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)). “Second, the
litigation must ‘arise out of or relate to’ at least one of those activities.”

Id. (quoting

Helicopteros Nacionales, 466 U.S. at 414; and O’Connor, 496 F.3d at 317). “And third, if the
first two requirements have been met, a court may consider whether the exercise of jurisdiction
otherwise ‘comport[s] with fair play and substantial justice.’” Id. (alteration in original) (quoting
Burger King, 471 U.S. at 476). “Jurisdiction may be asserted even when a party does not
physically enter the forum state.” Phoenicia Sports & Entm’t, LLC v. New York Cosmos, LLC,
Civ. A. No. 12-0772, 2012 WL 3155526, at *5 (E.D. Pa. Aug. 2, 2012) (citing Burger King, 471
U.S. at 476). This is because “‘it is an inescapable fact of modern commercial life that a
substantial amount of business is transacted solely by mail and wire communications across state
lines, thus obviating the need for physical presence within a State in which business is
conducted.’” Id. (quoting Burger King, 471 U.S. at 476).

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The evidence of record shows that QC Spirits is a Canadian company. (Devost Decl. ¶
3.) It engaged Liberty Premium Brands LLC (“Liberty”), a Delaware company that has no
offices in Pennsylvania, to market BLU FROG vodka in the United States. (Id. ¶¶ 6-7.) QC
Spirits, with Liberty’s assistance, appointed American Spirits Exchange Ltd. (“ASE”) “as its
representative to distribute BLU FROG vodka in the United States, with the right to register that
brand in each state.” (Id. ¶ 7, Ex. E.) ASE is a Pennsylvania company with an office in
Bridgeport, Pennsylvania. (Id. ¶ 8; Lavigne Decl. ¶ 4.) QC Spirits has communicated with ASE
in Pennsylvania by mail. (Devost Decl. Ex. E.) ASE submitted a request on behalf of QC Spirits
to the PA LCB for approval of the sale of BLU FROG vodka in Pennsylvania. (Id. ¶ 8; Lavigne
Decl. ¶ 4.) QC Spirits also hired “an attorney with a law firm located in Philadelphia to assist in
reaching an agreement with [the PA LCB] concerning their (QC Spirits’ and [the PA LCB]’s)
business relationship.” (Devost Decl. ¶ 9.) QC Spirits has communicated with its Pennsylvania
attorney by telephone and email. (Id.) Moreover, while QC Spirits had not yet sold any BLU
FROG vodka in Pennsylvania at the time the Complaint was filed, it has since begun to sell
vodka in this Commonwealth. QC Spirits shipped 342 cases of BLU FROG vodka, each case
containing 12 bottles, to the PA LCB in May 2017, which arrived in Pennsylvania in June 2017.
(Docket No. 15 at 1.) BLU FROG vodka has thus been available for purchase by consumers in
Pennsylvania state liquor stores since June 2017. (Id.) Indeed, counsel for Limu purchased BLU
FROG vodka at a Pennsylvania state liquor store in June 2017 (Frandsen Decl. ¶¶ 2-4), and has
learned that BLU FROG vodka is available at 187 state liquor stores in Pennsylvania. (Id. ¶ 5.)
We conclude that the record evidence establishes that QC Spirits “purposefully directed
[its] activities” at Pennsylvania, D’Jamoos, 566 F.3d at 102 (quotation omitted), by: (1)
appointing ASE, a Pennsylvania company with offices in Pennsylvania to act on behalf of QC
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Spirits to enable the distribution of BLU FROG vodka in Pennsylvania; (2) by hiring a
Pennsylvania attorney to work on behalf of QC Spirits to reach an agreement with the PA LCB
for the distribution of BLU FROG vodka in Pennsylvania; (3) obtaining approval to sell BLU
FROG vodka in Pennsylvania; (4) shipping BLU FROG vodka to Pennsylvania for sale; and (5)
selling BLU FROG vodka in Pennsylvania. 1 The record evidence also shows that the activities
that QC Spirits directed towards Pennsylvania relate to the subject matter of this litigation, since
the subject matter of this litigation is QC Spirits’ sales of vodka that allegedly infringe on Limu’s
trademark. Thus, we conclude that Limu has satisfied its obligation to prove by a preponderance
of the evidence that QC Spirits has had sufficient contacts with Pennsylvania to support our
exercise of specific personal jurisdiction in this case. See Altvater Gessler-J.A. Baczewski Int’l
v. Sobieski Destylarnia S.A., Civ. A. No. 06-6510, 2010 WL 2813617, at *5-7 (S.D.N.Y. July
16, 2010) (concluding that Polish liqueur manufacturer was subject to specific personal
jurisdiction in New York in trademark infringement suit where the Polish liqueur manufacturer
entered into an agreement with an importer located in New York for the importation of the
liqueur into the United States, the liqueur was available for purchase in New York, and
“numerous purchases of the liqueur took place” in New York).

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The record also establishes that QC Spirits purposefully contacted both ASE and its
attorney in Pennsylvania by mail, telephone, and email, and that those contacts are connected to
the subject matter of this litigation, i.e., the sale of vodka with an allegedly infringing mark in
Pennsylvania. See Phoenicia Sports & Entm’t, 2012 WL 3155526, at *5 (concluding that the
defendant purposefully directed its activities at Pennsylvania by participating in telephone and
email negotiations with the plaintiff, which was located in Pennsylvania); Toussant v. Williams,
62 F. Supp. 3d 417, 424 (E.D. Pa. 2014) (concluding that defendant’s telephone calls and emails
to plaintiff in Pennsylvania were sufficient to establish minimum contacts for specific
jurisdiction over defendant in Pennsylvania).
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QC Spirits argues that our assertion of personal jurisdiction would not “‘comport with
fair play and substantial justice.’” Isaacs v. Trustees of Dartmouth Coll., Civ. A. No. 13-5708,
2014 WL 4186536, at *8 (E.D. Pa. Aug. 25, 2014) aff’d sub nom. Isaacs v. Arizona Bd. of
Regents, 608 F. App’x 70 (3d Cir. 2015) (quoting O’Connor, 496 F.3d at 317). A defendant who
opposes the exercise of personal jurisdiction on this ground “must present a ‘compelling case
that the presence of some other considerations would render the jurisdiction unreasonable’
because once minimum contacts have been established jurisdiction is presumptively
constitutional.” Id. (quoting O’Connor, 496 F.3d at 324; and citing Pennzoil Prods. Co. v.
Colelli & Assocs., Inc., 149 F.3d 197, 207 (3d Cir. 1998)). “The Supreme Court has looked to
several factors to determine whether fairness enables or strips jurisdiction.” Id. “These factors
include: ‘the burden on the defendant, the forum State’s interest in adjudicating the dispute, the
plaintiff’s interest in obtaining convenient and effective relief, the interstate [and international]
judicial system’s interest in obtaining the most efficient resolution of controversies . . . and the
procedural and substantive interests of other nations.’” Id. (alterations in original) (quoting
O’Connor, 496 F.3d at 324). QC Spirits merely asserts that it would be significantly burdened
by having to defend this action in Pennsylvania, but does not support its assertion with any
supporting evidence.

We conclude, accordingly, that QC Spirits has failed to “present a

‘compelling case’” that our exercise of personal jurisdiction would be unreasonable in this case
and we deny the Motion to Dismiss for lack of personal jurisdiction. Id. (quotation omitted).
III.

VENUE
QC Spirits has moved, in the alternative, to dismiss this action for lack of venue pursuant

to Federal Rule of Civil Procedure 12(b)(3). The Complaint asserts that venue is proper in this
District pursuant to 28 U.S.C. § 1391(b), which provides that:
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A civil action may be brought in -(1) a judicial district in which any defendant resides, if all defendants are residents
of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions giving
rise to the claim occurred, or a substantial part of property that is the subject of
the action is situated; or
(3) if there is no district in which an action may otherwise be brought as provided
in this section, any judicial district in which any defendant is subject to the court’s
personal jurisdiction with respect to such action.
28 U.S.C. § 1391(b).
A corporation is “deemed to reside, if a defendant, in any judicial district in which such
defendant is subject to the court’s personal jurisdiction with respect to the civil action in question
. . . .” Id. § 1391(c)(2). Furthermore, “a defendant not resident in the United States may be sued
in any judicial district . . . .” Id. § 1391(c)(3). Since we have concluded that we have specific
personal jurisdiction over QC Spirits in this case, we further conclude that venue is proper in this
judicial district pursuant to 28 U.S.C. § 1391(b)(1) and (c)(3). Accordingly, QC Spirits’ Motion
to Dismiss for lack of venue is denied.
IV.

CONCLUSION
For the reasons stated above, QC Spirits’ Motion to Dismiss is denied in its entirety. An

appropriate Order follows.

BY THE COURT:

/s/ John R. Padova
____________________________
John R. Padova, J.
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