By Thomas Long, J.D.
The German manufacturer’s participation in tradeshows in Colorado was "by chance" and did not indicate "purposeful availment" of the forum state, and its efforts to enforce its asserted trade dress occurred outside Colorado.
A German company that manufactured ceramic components of medical prostheses was not subject to personal jurisdiction in Colorado, with regard to a competitor’s action seeking a declaratory judgment that its prostheses did not infringe the German company’s asserted trademark in the color pink, the U.S. Court of Appeals in Denver has decided. The court held that the German company’s attendance at tradeshows was "fortuitous" and insufficient to show purposeful availment of the forum state. Furthermore, to the extent that the German company engaged in enforcement activity, it did so outside of Colorado. The appellate court reversed a district court’s denial of the German company’s motion to dismiss for lack of personal jurisdiction and remanded with instructions that the case be dismissed (C5 Medical Werks, LLC v. CeramTec GmbH, September 11, 2019, Eid, A.).
The underlying dispute was about whether plaintiff C5 Medical Werks, LLC, infringed a trademark that defendant CeramTec GmbH purportedly held in the color pink in ceramic compounds for prostheses. CeramTec was based in Germany. It produced prosthetic components that used a composite called "BIOLOX Delta," which contained chromium, making it appear pink. C5—a Delaware company headquartered in Colorado—produced ceramic compounds for medical prostheses, which used a ceramic composite called "Cerasurf." C5’s Cerasurf product also appeared pink because it contained chromium.
CeramTec was one of the largest producers of these components in the U.S. market, although it had no physical presence in Colorado. Its website lacked any Colorado-specific content, and it asserted that it did not solicit business in Colorado, send agents into Colorado to solicit business, or conduct any business in Colorado. CeramTec’s only contact with Colorado had been its participation in three national industry conferences in Colorado, where it promoted its pink ceramic products.
CeramTec once held a patent on the use of chromium-based material in its ceramic medical implants. After the patent expired, other producers, including C5, began using the compound. In the meantime, CeramTec filed an application with the USPTO to register a mark consisting of the color pink as used in its medical devices. The USPTO refused registration of the mark on the Principal Register, but allowed CeramTec to list the mark on the Supplemental Register.
In late 2013, CeramTec sent a letter to C5 requesting that C5 cease production of pink ceramic implants. CeramTec expressed its intention to enforce its "worldwide" intellectual property rights. Around that time, according to C5, CeramTec seized C5’s products from a tradeshow in France.
On March 3, 2014, C5 filed suit against CeramTec, seeking cancellation of CeramTec’s listing in the Supplemental Register and a declaratory judgment that C5’s products did not infringe CeramTec’s asserted mark. CeramTec moved to dismiss the complaint for lack of personal jurisdiction. The district court determined that it had personal jurisdiction over CeramTec. After a bench trial, the district court found in favor of C5 and granted C5’s request for a declaration of noninfringement. CeramTec appealed, arguing that the district court lacked personal jurisdiction and that the district court erred in finding that CeramTec had no trade dress rights in the color pink.
The Tenth Circuit reviewed the personal jurisdiction ruling de novo. The appellate court found that C5 had failed to establish personal jurisdiction over CeramTec. CeramTec, a German company with no continuous physical or business presence in Colorado at the time of the trademark dispute, was not "at home" there. Therefore, the Colorado court lacked general jurisdiction over the company.
In addition, after reviewing the record, the appellate court concluded that the evidence of CeramTec’s forum contacts put forward by C5 was insufficient to establish specific jurisdiction. CeramTec’s promotional activities in Colorado did not show the purposeful availment of Colorado necessary for jurisdiction to arise. CeramTec’s attendance at various tradeshows in Colorado, as opposed to some other state, was by chance, the court said. CeramTec did not choose where the tradeshows were held; it only chose to attend.
To the extent that CeramTec engaged in enforcement activity, it did so entirely outside of Colorado. The tradeshow seizure cited by C5 occurred in France; the authorizing court and the bailiff who seized the items were French. The court noted that C5 did not point to any particular sale or transaction in Colorado that was disrupted by CeramTec’s actions in France. Merely interacting with a plaintiff "known to bear a strong connection to the forum state" is not enough to establish jurisdiction, said the court. C5 did not make a prima facie case that CeramTec’s seizure was intended to do anything more than stop C5’s immediate marketing efforts in France, that is, outside the forum.
Finally, the court held that CeramTec’s cease-and-desist letter was not a proper basis for jurisdiction, citing Federal Circuit precedent holding that a single cease-and-desist letter is insufficient to confer jurisdiction in a declaratory judgment action, such as this one. Because C5 failed to allege sufficient activities in addition to the cease-and-desist letter, the Tenth Circuit concluded that the district court’s exercise of personal jurisdiction over CeramTec was improper. The court did not, therefore, reach the merits of C5’s claims.
This case is No. 17-1173.
Attorneys: Christopher Cariello (Orrick, Herrington & Sutcliffe LLP) for C5 Medical Werks, LLC, and Coorstek Medical, LLC. Jessica Lynn Ellsworth (Hogan Lovells US LLP) for CeramTec GmbH.
Companies: C5 Medical Werks, LLC; Coorstek Medical, LLC; CeramTec GmbH
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