OPINION AND ORDER
This is an action under the Trademark Act of 1946, 15 U.S.C. § 1051 et
An evidentiary hearing on the motion was conducted before Magistrate Jacobs of this Court, and his detailed and excellent report thereon, dated March 1, 1974, has been reviewed and its findings of fact have been accepted by the Court. It is the source of the factual recitations herein.
THE OPERATIVE FACTS
Plaintiff is a New York corporation engaged in the sale of karate and judo uniforms under the trademark TOKAIDO, for which it has obtained Registration No. 845,941 on the Principal Register of the U.S. Patent Office.
Defendant is a California corporation using the same trademark on similar goods which it sells through: (1) a single retail store in Los Angeles; (2) six jobbers, all located in California, and 200 retail outlets, of which all but 4 or 5 are located in California and the remainder on the West Coast; and (3) mail order sales, of which 90 percent of the volume is done in California, with another 5 percent in the West, and the remainder distributed generally throughout the rest of the United States. The mail order sales are promoted by a catalog, of which about 1,000 copies are mailed out annually. During the last 5 years, a total of about 20 catalogs has been sent to potential customers in the State of New York in response to mail requests, principally generated by advertisements in the nationally circulated magazine, “Judo Illustrated”. The catalog, but not the magazine advertisements, use the accused trademark TOKAIDO.
During the four-year period 1970-1973, defendant received from New York State only 3 mail orders for the allegedly infringing goods, with a total retail value of $37., which represents only about 1/100 of 1 percent of its total martial arts sales and 1/300 of 1 percent of its sales of all goods during the period.
In New York State, defendant has never had an office or other property, or a bank account, post office box, mail drop or telephone listing. It has no sales representative here. > None of its officers or employees has ever visited New York for business purposes.
PERSONAL JURISDICTION
Plaintiff served defendant under the New York “long arm” statutes, correctly relying on the principle that the federal courts must determine questions of personal jurisdiction in accordance with the laws of the state in which they sit, not only in cases in which federal jurisdiction is founded on diversity, but also where, as here, it is based on the existence of a federal question. United States v. First National City Bank,
Plaintiff has cited four possibly applicable sections of the New York law, C.P.L.R. §§ 301, 302(a)l, 302(a)2 and 302(a)3. It is correct as to one of the four, which is enough. Section 302(a)2 gives the New York courts jurisdiction over any non-domiciliary who commits “a tortious act within the state.”
As the Court ruled in Vanity Fair Mills, Inc. v. T. Eaton Co.,
“ . . .in cases of trade-mark infringement . . . the wrong takes place not, where the deceptive labels are affixed to the goods or where the goods are wrapped in the misleading packages, but where the passing off occurs . . . . ”
See Marvel Products, Inc. v. Fantastics, Inc.,
Moreover, it has been ruled that the distribution of catalogs offering goods under an infringing trademark, even without actual sales, constitutes a tortious act. R.F.D. Group Limited v. Rubber Fabricators, Inc.,
Thus it appears that defendant’s mail order operations in New York fall within the “plain and precise” meaning of C.P.L.R. § 302 (a) 2, which requires no specified level of activity within the State, but only that the plaintiff suffer some damage as a result of a tortious act committed by defendant or its agent in New York. Feathers v. McLucas,
VENUE
Plaintiff’s argument in support of venue is understandably brief (two pages), because plaintiffs begins with the assumption that “This Court must necessarily conclude that venue is proper since the tests for determination of both issues [venue and personal jurisdiction] are virtually the same.”
Plaintiff’s assumption that venue more or less automatically follows personal jurisdiction perhaps explains why the complaint is devoid of any allegation of the basis for venue. However, in the short section on venue in its memorandum in opposition to the motion, plaintiff cites the general venue statute applicable to corporate defendants, 28 U.S.C. § 1391(c), which permits suit in any district in which the defendant is “incorporated or licensed to do business or is doing business.”
It has been conceded that defendant is a California corporation which is not licensed to do business in New York. However, plaintiff argues that defendant is “doing business” in New York because the same “minimum contacts” test by which the constitutionality of the State “long-arm” statutes has been determined, International Shoe Co. v. Washington,
I do not agree. The underlying rationale of the venue statutes is entirely different from that of the “long arm” statutes. The venue statutes, of course, are designed to protect defendants from the inconvenience of defending actions in areas remote from their residences or, in the case of corporations, where they have significant activities. The “long arm” statutes, on the other hand, are designed to protect
plaintiffs
by allowing them to bring local suits against foreign defendants who have sought the protection of the local laws and must accept concomitant responsibility under them. The state laws affecting personal jurisdiction thus have no effect upon the interpretation of the federal venue statutes, Murphree v. Mississippi Publishing Corp.,
Carter-Wallace, Inc. v. Ever-Dry Corp., supra, is the only case cited by plaintiff in support of its argument that defendant is “doing business” in this district. But the facts there were quite different from those in the case at bar. There the defendant had two sales representatives who regularly called on 80 customers within the Southern District, including many of the largest department stores, distributing samples, making collections, negotiating returns and investigating possible corporate acquisitions. It had conducted three annual sales meetings here; its advertising agency was located here; and it had advertised extensively here, not only through national magazines' but through local newspapers and “spot” radio commercials.
I am aware of no case in which a nonresident corporation has been ruled to be “doing business” in a district with which its only contacts have been through the mail. Indeed, in a number of cases corporations have been ruled not to be “doing business” in a state in which their “presence” was far more palpable than that of the present defendant in New York. For example, in Metropolitan Staple Corp. v. Samuel Moore & Co.,
I therefore conclude that defendant is not “doing business” in this district within the contemplation of Section 1391(c).
Although plaintiff, in its brief discussion of venue, did not rely on 28 U.S.C. § 1391(b) (curiously, it was cited in plaintiff’s discussion of personal jurisdiction), that section must also be considered, since the limitations of subsection (c) cannot be read into the other subsections of Section 1391, even where a corporate defendant is involved. See Campbell v. Triangle Corp.,
Prior to 1966, Section 1391(b) provided that a civil action not founded solely on diversity “may be brought only in the judicial district where all defendants reside, except as otherwise provided by law.” However, in 1966, it was amended by adding, before the last clause, the words “or in which the claim arose.”
Plaintiff contends that in this action the claim arose in this district because defendant, by magazine advertisements and catalogs, offered its goods bearing the infringing trademark for sale here, and received and filled mail orders from customers here.
The issue thus turns on whether the words “the claim” in subsection (b) mean the largest part of the claim, a substantial part thereof, or any part thereof.
Unfortunately, the legislative history of the 1966 amendment affords little guidance, containing nothing more informative than a statement to the effect that its purpose was to provide a place of suit more convenient to all parties than was permissible previously. However, the Supreme Court has explained
There is no more in the judicial treatment of the amendment than there was in its legislative history to suggest that it was intended to broaden the choice of venue with respect to “transitory” causes of action, like the present, which arise from a multitude of similar acts performed substantially throughout the country. If plaintiff’s argument about the meaning of the amendment is correct, a trademark infringer could be sued in cmy district into which it had shipped to a customer or prospective customer, goods or sales literature bearing the infringing mark. If the amendment had really been intended to effect such a drastic expansion of venue in transitory actions, it seems unlikely that Congress would have enacted it without appropriate comment and that the courts would have been equally silent about it in the seven years that have followed.
The 1966 amendment has been construed in only a limited number of cases, none of which is particularly instructive here. Although two of these cases were actions for trademark infringement, they involved factual situations which are not analogous to that in the ease at bar.
In R.F.D. Group Limited v. Rubber Fabricators, Inc., supra, all of the accused acts (the use of plaintiff’s photograph and logo) occurred in New York, as did all of the “passing off.”
In Car Freshner Corp. v. Broadway Mfg. Co., supra, the defendant had a sales representative in New York and defendant’s accused products were sold in many retail outlets throughout a wide area of the State.
In Carter-Wallace, Inc. v. Ever-Dry Corp.,
supra,
an action for declaratory judgment with respect to alleged trademark infringement and unfair competition, Judge Mansfield expressly declined to determine the applicability of the addition to Section 1391(b),
Of the other cases involving the 1966 amendment, only the antitrust and securities cases are sufficiently similar in nature to merit mention here. The most frequently cited decision is Philadelphia Housing Authority v. American Radiator & Standard Sanitary Corp.,
Other antitrust cases following this “weight of contacts” test are: Redmond v. Atlantic Coast Football League,
Travis v. Anthes Imperial Ltd.,
By contrast, in the present ease, a ruling of improper venue will not deprive plaintiff of any substantive rights, but merely force it into another district where a much greater volume of the allegedly infringing business has been conducted.
It is obvious that the overwhelming “weight of contacts” is in California. That is not to say that in trademark cases the “weight of contacts” rule should be applied so literally as to exclude suit in any district other than the one where the greatest volume of infringing activity occurred, but only that the claim should not be deemed to have arisen in a district in which the defendant has had only miniscule contact, and that entirely by mail.
In other words, to return to the question as originally posed, I am deciding that the right given by Section 1391(b) to sue in any district “in which the claim arose” is not the right to sue where any part of the claim, however small, arose. I need not decide which of the other two possible meansings (the largest part of the claim or a substantial part thereof) is the correct one, since neither would apply here.
However, instead of dismissing the action for want of proper venue, “in the interest of justice,” as provided in 28 U.S.C. § 1406(a), it is hereby transferred to the United States District Court for the Central District of California, clearly a venue “in which it could have been brought.”
So ordered.