121 F. Supp. 3d 828
S.D. Ind.2015Background
- Best Chairs, an Indiana furniture company, owns incontestable trademarks incorporating “BEST” (e.g., BEST CHAIRS) and sues Factory Direct Wholesale, LLC and related entities/individual (Eastern Enterprises, Pay Less Here, Hanping Liu) for Lanham Act and Indiana claims alleging sale of confusingly similar “BestChair/BestOffice” products online.
- Factory Direct operates multiple interactive storefronts (Amazon, eBay, NewEgg, Rakuten, GlobalIndustrial), ships nationwide from a Duluth, GA address, and funnels sales/fulfillment through a common facility and shared employees tied to Liu.
- From Jan 2013–Sep 2014 Factory Direct sold roughly $6 million in BestChair products nationally, about $102,500 to Indiana residents (≈1,500 units).
- Best Chairs first complained to Amazon about a “BestChair” listing in 2012 (sold by related Cavalier Wholesale); Amazon removed the listing. Best Chairs discovered Factory Direct’s use of BestChair in Jan 2014 and sent a cease-and-desist; Factory Direct later applied to register BestChair/BestOffice marks.
- Defendants moved to dismiss for lack of personal jurisdiction, failure to state a claim (arguing BEST is generic), and laches; they also requested an evidentiary hearing. The court denied all motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Factory Direct (specific) | Factory Direct purposefully directed online sales into Indiana (interactive sites, shipped into Indiana), causing injury there | Contacts with Indiana are minimal; sales too few for purposeful direction | Denied dismissal — prima facie contacts (interactive sales, sales to Indiana, targeted storefronts) satisfy Calder/Tamburo/Hemi framework |
| Personal jurisdiction over Eastern Enterprises, Pay Less Here, and Liu (conspiracy theory) | Entities are alter-egos/controlled by Liu, share address, employees, and funnel sales to Factory Direct — concerted scheme targeting Indiana | Insufficient independent forum contacts by those entities | Denied dismissal — conspiracy allegations + evidence of common control and funneling suffice for prima facie jurisdiction |
| Failure to state a claim: mark generic | BEST/BestChair is generic or merely descriptive and unprotectable | BEST CHAIRS marks are registered and incontestable; not conclusively generic here | Denied dismissal — incontestable registration and factual record preclude dismissal on genericness at this stage |
| Laches/statute-of-limitations | Best Chairs delayed suit after 2012 notice and is time-barred | Best Chairs lacked notice of Factory Direct’s role until 2014; sued promptly after discovery | Denied dismissal — no unreasonable delay or prejudicial reliance; laches not established |
Key Cases Cited
- Purdue Research Found. v. Sanofi-Synthelabo, 338 F.3d 773 (7th Cir.) (plaintiff bears burden to make prima facie showing of personal jurisdiction)
- Tamburo v. Dworkin, 601 F.3d 693 (7th Cir.) (Calder-based three-part purposeful-direction test for intentional torts)
- Calder v. Jones, 465 U.S. 783 (U.S.) (effects test: intentional, expressly aimed conduct with foreseeable forum injury)
- Walden v. Fiore, 571 U.S. 277 (U.S.) (plaintiff cannot be sole link; defendant’s own contacts with forum required)
- Hemi Group, LLC v. City of New York, 622 F.3d 754 (7th Cir.) (interactive commercial websites that hold out to the forum and ship there can create specific jurisdiction)