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Communico, Ltd. v. Decisionwise, Inc.

United States District Court, D. Connecticut

March 28, 2018

COMMUNICO, LTD. Plaintiff,


          Robert N. Chatigny United States District Judge

         Plaintiff Communico, Ltd., brings this suit against defendant DecisionWise, Inc., alleging trademark infringement and unfair competition in violation of the Lanham Act and the Connecticut Unfair Trade Practices Act (“CUTPA”). DecisionWise moves to dismiss the complaint under Rule 12(b)(2) for lack of personal jurisdiction and Rule 12(b)(6) for failure to state a plausible claim. For reasons that follow, the motion is denied.

         I. Background

         The complaint and other documents subject to judicial notice show the following.[1] Communico is a Connecticut company that provides employee-training programs in the fields of customer relations, communication skills, leadership development, employee engagement and coaching. Since 1986, Communico has used the trademark “MAGIC” in connection with course materials and educational services.[2] Communico registered the marks “MAGIC” and “THE MAGIC OF CUSTOMER RELATIONS” with the U.S. Patent and Trademark Office (“PTO”) in March 2011. On its website, Communico advertises a book written by the company's President and Senior Vice President entitled “How to Talk to Customers: Create a Great Impression Every Time with MAGIC.”[3]

         DecisionWise is a Utah company.[4] Like Communico, it provides employee-training programs in the fields of customer relations and communication skills. In November 2013, DecisionWise began using the marks “MAGIC” and “Engagement Magic” in connection with employee-training programs and advertising materials. See Larkin Decl. (ECF No. 23). In September 2014, DecisionWise registered the mark “Engagement Magic” with the PTO. At least one Communico customer has mistakenly believed that DecisionWise's marketing communications containing the MAGIC trademark originated from Communico, or that Communico and DecisionWise were somehow affiliated.

         DecisionWise operates and maintains a website that displays the infringing MAGIC trademark.[5] The website includes a contact button that provides a toll-free telephone number, a local telephone number, an email address, and a contact form that permits users to contact DecisionWise directly. Users can sign up for an email newsletter, which is sent by DecisionWise to subscribers on a regular basis. Users also can sign up for live webinars and view recordings of past webinars provided by DecisionWise employees.

         In the fall of 2014, DecisionWise published a book entitled “MAGIC: Five Keys to Unlock the Power of Employee Engagement” (the “infringing book”). Though DecisionWise does not directly take orders for or ship the infringing book, its website advertises the book for sale via a third-party link to The book is also available for sale at Barnes & Noble, which has locations throughout the United States, including Connecticut.[6]

         DecisionWise does not have any employees or property in Connecticut, does not file a tax return in Connecticut, and, as of 2015, had no ongoing business relationships with Connecticut clients. See Maylett Decl. (ECF No. 17-3). Through its website and other services, however, DecisionWise has done business with Connecticut residents. DecisionWise, which provides services for approximately 150 to 200 organizations per year, received approximately $13, 600 from two Connecticut companies in 2011 for conducting employee surveys. In addition, at least one Connecticut resident purchased the infringing book via a third-party link on DecisionWise's website, at least one Connecticut resident has participated in one of DecisionWise's webinars, and Connecticut residents regularly receive DecisionWise's marketing communications and email solicitations.

         Communico brought the present suit after an exchange of letters and phone calls during which the parties were unable to resolve disputes about the use of the “MAGIC” marks. The complaint alleges that DecisionWise's use of the “MAGIC” marks constitutes trademark infringement, false designation of origin, and unfair competition under the Lanham Act and CUTPA. Communico seeks to enjoin DecisionWise from using the marks, an order directing DecisionWise to recall products containing the marks, and damages stemming from DecisionWise's past use of the marks.

         II. Motion to Dismiss for Lack of Personal Jurisdiction

         On a motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2), the plaintiff bears the burden of establishing that the court has jurisdiction over the defendant. Whitaker, 261 F.3d at 208. “[T]he nature of the plaintiff's obligation varies depending on the procedural posture of the litigation.” Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990). Before discovery and in the absence of a “full-blown evidentiary hearing, ” a plaintiff “need persuade the court only that its factual allegations constitute a prima facie showing of jurisdiction.” Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., 722 F.3d 81, 85 (2d Cir. 2013) (quoting Ball, 902 F.2d at 197). “A plaintiff can make this showing through his own affidavits and supporting materials . . . containing an averment of facts that, if credited . . ., would suffice to establish jurisdiction over the defendant.” Whitaker, 261 F.3d at 208 (citations, quotations, and brackets omitted). “Where the issue is addressed on affidavits, all allegations are construed in the light most favorable to the plaintiff and doubts are resolved in the plaintiff's favor.” Id. (quotations and brackets omitted).

When, as here, a nonresident defendant challenges personal jurisdiction in a federal question case, “the Court must engage in a two-step analysis.” Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 163 (2d Cir. 2010). “First, we apply the forum state's long-arm statute.” Id. “If the long-arm statute permits personal jurisdiction, the second step is to analyze whether personal jurisdiction comports with the Due Process Clause of the United States Constitution.” Id. at 164.

         A. Connecticut's Long-Arm Statute

         The long-arm statute that applies to nonresident LLCs[7] provides:

[A] court may exercise personal jurisdiction over [a nonresident LLC] who in person or through an agent: (1) Transacts any business within the state; (2) commits a tortious act within the state . . .; [or] (3) commits a tortious act outside the state causing injury to person or property within the state . . . if such person or agent . . . expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce . . .

Conn. Gen. Stat. § 52-59b(a). Because the statute was modeled on New York Civil Practice Law § 302, Connecticut courts “find pertinent the judicial interpretation given to that New York statute.” Zartolas v. Nisenfeld, 184 Conn. 471, 474, 440 A.2d 179, 180-81 (1981).

         Communico contends that personal jurisdiction over DecisionWise is provided by subsection (a)(2) or (a)(3) of the long-arm statute based on its sale of the infringing book to Connecticut residents. As mentioned, DecisionWise advertises the infringing book on its website, which provides a link to buy the book on, and also appears to have a distribution arrangement with Barnes & Noble.[8] According to Communico, at least one Connecticut resident has purchased the infringing book after clicking on the link and discovery may reveal additional purchases.

         Viewing the record in a light most favorable to Communico, I agree that Communico has established a prima facie case under subsection (a)(2) of the long-arm statute based on an in-state tort. Trademark infringement is considered a “tort” for purposes of determining long-arm jurisdiction. See Am. Wholesalers Underwriting, Ltd. v. Am. Wholesale Ins. Grp., Inc., 312 F.Supp.2d 247, 253 (D. Conn. 2004). A trademark infringement “claim is said to arise . . . where the passing off occurs, i.e., where the deceived customer buys the defendant's product in the belief that he is buying the plaintiff's.” Id. (quotations omitted). The sale of an infringing product in a forum, even by a third-party distributor, may constitute a tort in the forum by the defendant if the distributor is acting as the defendant's “agent.” See Conn. Gen. Stat. § 52-59b(a). Courts have given the term “agent” in the long-arm statute a broad interpretation, finding the requisite agency relationship when the defendant has entered into an agreement with a distributor contemplating that the infringing product would be sold in the forum. See Evergreen Media Holdings, LLC v. Warren, 105 F.Supp.3d 192, 198 (D. Conn. 2015) (citing Dan-Dee Int'l, Ltd. v. KMart Corp., No. 99CIV.11689(DC), 2000 WL 1346865, at *4 (S.D.N.Y. Sept. 19, 2000); Blakeman v. The Walt Disney Co., 613 F.Supp.2d 288, 302 (E.D.N.Y. 2009); Editorial Musical Latino Americana, S.A. v. Mar Int'l Records, Inc., 829 F.Supp. 62, 64-65 (S.D.N.Y. 1993); Lipton v. The Nature Co., 781 F.Supp. 1032, 1035-36 (S.D.N.Y. 1992)).

         The record permits an inference that DecisionWise undertook to sell the book in Connecticut through Amazon and Barnes & Noble, both national retailers. See Evergreen, 105 F.Supp.3d at 198 (finding jurisdiction under § 52-59b(a)(2) when plaintiff's copyright infringement claim was based on sale of allegedly infringing book in Connecticut through distribution arrangement with Barnes & Noble); Dan-Dee Int'l, 2000 WL 1346865, at *4 (finding defendant “must have expected that the [infringing products] would be sold in New York” by Kmart because defendant “certainly knew or should have known that Kmart was a national chain with stores in New York”). Though Communico has not established the nature of the relationship between DecisionWise and its distributors, “[a]t this stage in the proceedings, when the Court lacks evidence detailing the nature of [DecisionWise]'s arrangements with its distributors and the extent of its involvement in the Connecticut sales, [Commmunico] is entitled to the benefit of the doubt in making [its] prima facie case that [Decisionwise] was sufficiently involved in the allegedly tortious sales to be reached by Connecticut's long-arm statute.” Evergreen, 105 F.Supp.3d at 198.

         Even if Communico cannot establish an agency relationship, and all of DecisionWise's allegedly tortious conduct occurred outside Connecticut (i.e., where DecisionWise or its publisher supplied the infringing book to Amazon or Barnes & Noble), Commmunico can establish personal jurisdiction under subsection (a)(3) of the long-arm statute based on an in-state injury. “[T]he situs of a commercial injury is generally where the plaintiff experiences a loss of business . . . .” Evergreen, 105 F.Supp.3d at 199 (citations omitted). A customer who buys the infringing book when it is offered for sale in Connecticut may be deceived into thinking she is buying a Communico product. See id. (finding in-state injury when consumers may be diverted from purchasing legitimate copies of copyrighted book). The other requirements of subsection (a)(3) are also satisfied. DecisionWise could have anticipated that the infringing book would be sold in Connecticut and it has continued to sell the book after receiving letters from Communico requesting that it refrain from using the MAGIC marks.[9] Communico has made a ...

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