Athleta, Inc. v. Sports Group Denmark A/S

Background

Athleta, Inc. sued Sports Group Denmark A/S ("SGD") for allegedly infringing Athleta’s trademarks through Athlecia-branded apparel. Athleta alleged that the products could be purchased and shipped to California consumers and had been purchased by Athleta’s agents into the district. It also attached website printouts showing Athlecia apparel offered for sale, including one website advertising trackable shipping to the United States. Athleta further alleged, based on information and belief, that SGD intended to offer its goods and services directly to U.S. consumers.

SGD moved to dismiss for lack of personal jurisdiction and failure to state a claim. Its chief financial officer stated that SGD’s principal place of business was in Denmark; that SGD had no stores, property, bank accounts, or employees in California or the United States; and that it had not advertised, promoted, sold, or discussed selling, distributing, warehousing, or manufacturing Athlecia apparel in California or the United States. He also stated that SGD’s Danish website did not accept orders for shipment to the United States and that its wholesale customers were not located in California or the United States.

Personal Jurisdiction

The court applied California law and federal due-process standards because California’s long-arm statute reaches as far as due process permits. For specific personal jurisdiction, the court considered whether SGD purposefully directed activities toward the forum, whether Athleta’s claims arose from those activities, and whether exercising jurisdiction would be reasonable. Athleta also invoked Federal Rule of Civil Procedure 4(k)(2), which can provide jurisdiction for federal claims when a defendant is not subject to jurisdiction in any state and exercising jurisdiction over the defendant would satisfy due process. Under that rule, the relevant forum is the entire United States.

Athleta did not dispute the statements in the declaration about SGD’s lack of U.S. and California contacts. The court held that Athleta’s allegations that the products could be purchased and shipped to California did not identify any action by SGD that caused the products to be available there. In light of the unrefuted declaration, the court could not assume that SGD had expressly aimed conduct at California or the United States.

The court explained that Athleta’s California residence and alleged injury in California were not enough; personal jurisdiction required conduct directly targeting the forum. The court also rejected Athleta’s argument that SGD had purposefully directed products into the forum by placing them in the stream of commerce. Placing a product into the stream of commerce, without additional forum-directed conduct, does not establish purposeful direction.

The court considered SGD’s abandoned U.S. trademark application but found that the abandonment weighed against exercising jurisdiction. The court stated that even a trademark application, without more, generally does not establish the required contacts, and SGD’s abandoned application provided an even weaker basis for jurisdiction. The court also found that Athleta’s allegation about SGD’s future intent to sell in the United States was insufficient, particularly because Athleta identified no authority holding that future intent alone establishes personal jurisdiction.

Jurisdictional Discovery and Disposition

The court denied Athleta’s request for jurisdictional discovery because Athleta’s jurisdictional claim appeared attenuated and rested on bare allegations in the face of specific denials. Athleta also had not shown how further discovery would contradict SGD’s evidence.

The court granted SGD’s motion to dismiss for lack of personal jurisdiction. It did not reach the parties’ arguments about whether the complaint stated a claim under Rule 12(b)(6). The court granted Athleta leave to amend solely to add new jurisdictional allegations, with the amended complaint due within 21 days of the order. If Athleta did not timely amend, the clerk would enter judgment and close the case.