The Gibson Guitar Corp. has been making exceptionally crafted guitars since 1894. One of its most popular electric models is the “Flying V,” which was first introduced in 1958 and is characterized by its unique v-shaped design.
To protect its intellectual property rights, Gibson has secured a trademark registration for the term FLYING V for “guitars” (Registration No. 1,216,644), as well as trade dress registrations for the distinctive design of the guitar body for “stringed instruments, namely guitars” (Registration No. 2,051,790) and the guitar’s distinctive peg-head design for “stringed instruments, namely, guitars and electric guitars” (Registration No. 3,976,202).
So, when the venerable manufacturer discovered a ukulele in the familiar v-shape design, adorned with the face of the famous Nickelodeon character, SpongeBob SquarePants, and being sold as the “Flying ‘V’ Ukulele Outfit,” it saw more than “nautical nonsense” afoot. In fact, late last year Gibson filed suit against Viacom, Nickelodeon’s parent company, alleging trademark infringement, trade dress infringement, and other related causes of action.
The allegedly infringing ukulele was produced pursuant to a license agreement between Viacom and U.K.-based musical-instruments distributor, John Hornby Skewes & Co. Ltd. Viacom licensed the SpongeBob trademarks to Skewes. Skewes designed the ukulele’s body shape. Significantly, the license agreement expressly prohibited Skewes from marketing the ukuleles in the United States.
Gibson claims that Viacom intended to cause “consumer confusion, mistake or deception including the misleading of consumers into mistakenly believing that Defendants’ Unauthorized Products are made directly by Gibson pursuant to Gibson’s strict quality control standards or Gibson has authorized or licensed the use by Defendants of the Trademark for those products” and that such use “is damaging to the reputation and goodwill of Gibson and the Gibson Trademarks.”
Uncowed, Viacom moved to dismiss all claims against it in their entirety. According to the motion, the SpongeBob ukulele is neither manufactured nor sold in the United States. Thus, Gibson lacks the subject matter jurisdiction necessary to maintain its suit in federal court.
In its Complaint, Gibson alleges that the federal court has jurisdiction because Gibson’s main causes of action—namely, trademark infringement, trade dress infringement, trademark counterfeiting, unfair competition, false advertising and trademark dilution—arise under the Lanham Act, a federal statute. However, Viacom argues that the Lanham Act only applies to infringing acts performed within the United States. Moreover, citing Star-Kist Foods, Inc. v. P.J. Rhodes & Co., 769 F.2d 1393, 1395 (9th Cir. 1985), Viacom asserts that “United States courts lack subject matter jurisdiction over claims involving wholly foreign commerce.” Given that the
SpongeBob ukulele was manufactured in China and only offered for sale in countries outside the United States, the Lanham Act cannot support the court’s subject matter jurisdiction, and the case must be dismissed.
In its opposition, Gibson asserts that several online retailers advertise the SpongeBob ukulele as being available for shipment to the United States. In fact, Gibson’s own counsel ordered and received seven ukuleles, each from a different retailer, each shipped to a different address in the United States. It should be noted, however, that purchases by counsel (or counsel’s agent) typically cannot give rise to jurisdiction since counsel is not confused about the source of the goods. Gibson also cites to numerous cases in which federal courts have found extraterritorial application of the Lanham Act appropriate.
Will this court follow suit, or will it accept Viacom’s argument that the territorial limitations on the Lanham Act require dismissal, or will it punt the issue entirely?
Unlike most other pre-answer motions, a motion to dismiss for lack of subject matter jurisdiction may be brought at any time (or even on the court’s own initiative). Given the differing factual assertions by the parties, the court may well deny the motion without prejudice and allow the case to proceed to discovery. The parties can then marshal all of their evidence demonstrating whether or not the SpongeBob ukulele is in fact marketed and sold in the United States, and Viacom can renew the motion at a later date.
The case is Gibson Guitar Corp. v. Viacom International Inc., Case No. 12-CV-10870 (C.D. California). We will continue to watch for developments in this case.
