The U.S. District Court of Connecticut has ruled that a small Connecticut manufacturing company can sue an Indiana- based national manufacturer and wholesaler for trademark infringement in Connecticut, based on the defendant’s modest sales to distributors in Connecticut.  This illustrates how Connecticut courts provide an important forum for Connecticut business to protect their brands against out-of-state competitors that sell into Connecticut.

Plaintiff Confectionery Arts International, LLC (“CAI”) supplied its trademarked DISCO DUST® decorative food glitter to defendant CK Products (“CKP”), a manufacturer and wholesale distributor to the commercial baking industry, from 1999 to sometime in 2015 or 2016, when CKP started selling its own decorative food glitter branded as DISCO DUST.  After protest from CAI regarding CKP’s choice of brand name, CKP changed its mark in November 2016 to DISCO GLITTER as a gesture toward avoiding misappropriation of CAI’s DISCO DUST® mark.  CAI thought that CKP’s DISCO GLITTER mark was too similar to DISCO DUST® and so filed suit against CKP in District Court in Connecticut in December 2016, alleging infringement of its registered trademark as well as unfair competition under common law and CUTPA.  Meanwhile, CKP applied to the U.S. Patent and Trademark Office (USPTO) in November 2016 to register DISCO GLITTER as a mark for its product (Ser. No. 87224765). (In June 2017, the USPTO refused registration of CKP’s mark on grounds of confusing similarity with CAI’s earlier DISCO DUST® Federal Registration No. 4089733.)

CKP moved to dismiss the case for lack of jurisdiction, or alternatively to transfer venue to Indiana, but on March 1, 2018, the U.S. District Court denied CKP’s motions.  A significant element of CKP’s argument was that CKP’s sales of DISCO GLITTER in Connecticut was de minimus by several measures, and that CKP has no other connections to the state (no place of business, no sales agents or employees in Connecticut, etc.).  The court found that the sales in Connecticut were sufficient to establish personal jurisdiction over CKP in a Connecticut court under Connecticut’s Long-Arm Statute Conn. Gen. Stat. §52-59, and within the requirements of Due Process under the U.S. Constitution.  In addition, the court found that venue was proper in Connecticut, in part because CKP’s sales of DISCO GLITTER in Connecticut constituted acts of infringement in the state, making Connecticut a ‘locus of operative facts,’ and because CKP’s other arguments for venue in Indiana (paucity of sales in Connecticut, the presence of CKP’s business in Indiana, etc.) were not sufficient to make a strong argument for transfer of the case to Indiana.

This ruling reinforces the message to Connecticut-based business that they can enforce their trademark rights in Connecticut courts against out-of-state competitors who sell into Connecticut, even if the infringer does not have a business presence in the state.

In addition, the refusal by the USPTO to register DKP’s DISCO GLITTER mark due to the similarity to CAI’s already-registered DISCO DUST® mark highlights an important benefit of Federal trademark registration for Connecticut businesses: the presence of Connecticut business’s mark on the Federal register enables the USPTO to block out-of-state competitors from obtaining registration on potentially infringing marks.  This protective mechanism, which is built into U.S. trademark law, does not require the participation of the owner of the registered mark.

–Frederick Spaeth

This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. The opinions expressed in this article are those of the author only and are not necessarily shared by Dilworth IP, its other attorneys, agents, or staff, or its clients.