Ayla, LLC v. Alya Skin Pty. Ltd., No. 20-16214 (9th Cir. 2021)
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Ayla, a San Francisco-based brand, is the registered owner of trademarks for use of the “AYLA” word mark in connection with on-site beauty services, online retail beauty products, cosmetics services, and cosmetics. Alya Skin, an Australian company, sells and ships skincare products worldwide. Ayla sued in the Northern District of California, asserting trademark infringement and false designation of origin under the Lanham Act, 15 U.S.C. 1114, 1125(a).
Alya Skin asserted that it has no retail stores, offices, officers, directors, employees, bank accounts, or real property in the U.S., does not sell products in U.S. retail stores, solicit business from Americans, nor direct advertising toward California; less than 10% of its sales have been to the U.S. and less than 2% of its sales have been to California. Alya Skin uses an Idaho company to fulfill shipments outside of Australia and New Zealand. Alya Skin filed a U.S. trademark registration application in 2018, and represented to potential customers that its products are FDA-approved; it ships from, and allows returns to, Idaho Alya Skin’s website listed U.S. dollars as the default currency and advertises four-day delivery to the U.S.
The Ninth Circuit reversed the dismissal of the suit. Jurisdiction under Fed.R.Civ.P. 4(k)(2) comports with due process. Alya Skin had minimum contacts with the U.S., and subjecting it to an action in that forum would not offend traditional notions of fair play and substantial justice. The company purposefully directed its activities toward the U.S. The Lanham Act and unfair competition claims arose out of or resulted from Alya Skin’s intentional forum-related activities.
Court Description: Personal Jurisdiction. Reversing the district court’s dismissal of a trademark infringement action for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), and remanding, the panel held that defendant Alya Skin Pty. Ltd., an Australian skincare company, was subject to specific personal jurisdiction under Fed. R. Civ. P. 4(k)(2). Rule 4(k)(2) provides that personal jurisdiction is proper when an action arises under federal law, the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction, and the federal court’s exercise of jurisdiction comports with due process. The panel held that the exercise of nationwide jurisdiction over the nonresident defendant comported with due process because Alya Skin had minimum contacts with the United States, and subjecting it to an action in that forum would not offend traditional notions of fair play and substantial justice. The panel held that Alya Skin’s minimum contacts gave rise to specific personal jurisdiction because the company purposefully directed its activities toward the United States; the plaintiff’s Lanham Act and unfair competition claims arose out of or resulted from Alya Skin’s forum-related activities; and the exercise of jurisdiction was reasonable. AYLA V. ALYA SKIN 3 The panel concluded that under the Calder “effects test,” Alya Skin committed an intentional act expressly aimed at the United States, causing harm that it knew was likely to be suffered there, because its marketing, sales, and operations reflected significant focus on the United States. Viewing the facts in totality and in the light most favorable to the plaintiff, the panel concluded that Alya Skin purposefully directed its activities toward and availed itself of the protections and benefits of the United States. The panel concluded that the plaintiff’s claims arose out of or resulted from Alya Skin’s forum-related activities because Alya Skin’s contacts with the United States included the very same promotions, sales, and distribution of which the plaintiff complained. The panel further concluded that Alya Skin did not present a compelling case that the exercise of jurisdiction would be unreasonable and therefore violate due process.
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