An interesting case was recently decided in the Southern District of New York called Charisma World Wide Corp v. Avon Products. It appears to be a case over intellectual property rights, but decided without relying on intellectual property law. The case was over a technical analysis as to whether the court had subject matter jurisdiction to even listen to the complaint. It hinged on the court’s analyzing whether the conduct that the plaintiff was complaining about had a substantial effect on domestic (that is, U.S.) commerce.
Charisma World Wide Corp. (Charisma) is a Panamanian company that sells “renowned products” in Panama under the trademark “Charisma.” America’s own Avon, of door-to-door sales fame, had been selling similar products in Panama, also called “Charisma.” Both products are cosmetics and, to a casual observer, seem like exactly the same thing.
Charisma sought to bring a trademark infringement action in the United States — even though it is neither a U.S. citizen, resident, or company, nor owns a U.S.-registered trademark.
You might think that Charisma would have exhausted its charms in an effort to find standing, but it was undaunted in presenting the court with six different arguments in its favor.
One of the theories floated by the plaintiff was that Panamanian expatriates who live in the United States would be confused by the two products. Generally, the court said that is a question of Panamanian trademark under Panamanian law — to make the argument that the two brands existing side by side would cause confusion is nothing more than speculation as to what a particular group of people who happen to live in the United States might think. If that were a binding principle, then anytime someone infringed a trademark outside the U.S., a business could say that any of its expatriated American customers might be confused.
Instead, the court focused on and agreed with one of the more obscure arguments made by Charisma.
Since the Panamanian Charisma buys its materials from U.S. companies — and, critically, because their business outside the U.S. had been so terribly impacted by Avon’s actions — they are now buying almost nothing from their U.S. suppliers. The court saw that as impacting U.S. commerce, which means it had the jurisdictional authority to decide the case. Whether further litigation will favor either side has yet to be determined, but plaintiff at least secured its forum in a U.S. court.
What is most notable about this case is that the decision had nothing to do with trademarks. And it had nothing to do with any kind of rift between the plaintiff and the defendant. It’s just saying that if the plaintiff has contracts in the U.S. that are being adversely impacted by alleged trademark infringement — well, that’s good enough for the court to exercise U.S. jurisdiction over this matter. To me, it’s interesting because it gives an opportunity for owners of trademarks outside the U.S. to potentially bring actions in the U.S. against U.S. companies that allegedly infringe on other countries’ trademarks that may or may not be registered elsewhere.
So what’s the moral of the story? Enforcing intellectual property rights is not necessarily limited to the arrows that are included in the standard quiver. As this case shows, creativity and tenacity can go a long way in your effort to drag your opponent into court.
Mark S. Kaufman
Kaufman & Kahn
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New York, NY 10017
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