Sixth Circuit Finds No Personal Jurisdiction in Online Trademark Infringement Case | Practical Law

Sixth Circuit Finds No Personal Jurisdiction in Online Trademark Infringement Case | Practical Law

In Community Trust Bancorp, Inc. v. Community Trust Financial Corp., the US Court of Appeals for the Sixth Circuit reversed the district court's finding of personal jurisdiction over the defendants. The Sixth Circuit held that the plaintiff failed to prove that its trademark infringement cause of action arose from the defendant's activities in the forum state, namely, allowing a handful of Kentucky customers to access their online bank accounts with the defendants.

Sixth Circuit Finds No Personal Jurisdiction in Online Trademark Infringement Case

Practical Law Legal Update 5-521-1009 (Approx. 3 pages)

Sixth Circuit Finds No Personal Jurisdiction in Online Trademark Infringement Case

by PLC Intellectual Property & Technology
Published on 27 Aug 2012 • USA (National/Federal)
In Community Trust Bancorp, Inc. v. Community Trust Financial Corp., the US Court of Appeals for the Sixth Circuit reversed the district court's finding of personal jurisdiction over the defendants. The Sixth Circuit held that the plaintiff failed to prove that its trademark infringement cause of action arose from the defendant's activities in the forum state, namely, allowing a handful of Kentucky customers to access their online bank accounts with the defendants.
On August 23, 2012, the US Court of Appeals for the Sixth Circuit issued an opinion in Community Trust Bancorp, Inc. v. Community Trust Financial Corp., reversing the district court's finding of specific personal jurisdiction in Kentucky over the defendants. Kentucky-based plaintiff Community Trust Bancorp, Inc. sued three similarly-named out-of-state banking entities that it claimed infringed its COMMUNITY TRUST trademark.
The extent of the defendants' contacts with Kentucky were that three or four of the defendants' customers who opened bank accounts at defendants' branches outside of Kentucky, later moved to Kentucky and requested passwords to access the defendants' online banking website.
The Sixth Circuit's review on interlocutory appeal was limited to whether personal jurisdiction over the defendants met federal due process requirements. The appellate court did not review the district court's finding that specific jurisdiction was appropriate under Kentucky's long-arm statute. The Sixth Circuit applied the following three part test for federal due process:
  • The defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state.
  • The cause of action must arise from the defendant's activities.
  • The acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.
The Sixth Circuit held that the plaintiff failed to prove the second requirement requiring that the cause of action arise from the defendants' activities in the forum state. It found no substantial connection between the three or four Kentucky residents accessing their online bank accounts with the out-of-state defendants and the underlying trademark infringement claim against the defendants. The court noted that it was unlikely that when these few customers logged on to the defendants' website that they would be confused concerning the COMMUNITY TRUST mark, as they specifically requested website passwords from the defendants. The court did not reach the question of whether the defendants' issuance of a handful of passwords to Kentucky residents was purposeful availment for purposes of the first requirement.

Court Documents