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EUROMARKET DESIGNS, INC. v. CRATE & BARREL LIMITED
May 16, 2000
EUROMARKET DESIGNS, INC. D/B/A CRATE & BARREL, PLAINTIFF,
CRATE & BARREL LIMITED, MIRIAM PETERS AND POINT BLANK MULTIMEDIA, DEFENDANTS.
The opinion of the court was delivered by: Morton Denlow, United States Magistrate Judge.
MEMORANDUM OPINION AND ORDER
Cyberselling is here to stay. The Internet makes it possible
for persons worldwide to buy, sell and ship goods to or from
anywhere in the world from their own living room using a computer
and an Internet hook-up.*fn1 Courts and legislatures must keep
pace with the ever changing world of cyberspace. This opinion
addresses the issue of whether an Irish retailer with an
interactive website allowing Illinois residents to order goods
from Illinois for shipment to a foreign address can be sued in
Illinois by an Illinois company for violation of the Lanham Act.
Plaintiff Euromarket Designs, Inc., d/b/a Crate & Barrel
("Crate & Barrel") filed a three-count complaint alleging
trademark violations under the Lanham Act, 15 U.S.C. § 1051 et
seq., and the Illinois Uniform Deceptive Trade Practices Act,
815 ILCS § 510/2 et seq. arising out of the alleged use of the
Crate & Barrel mark by Defendant Crate & Barrel Limited
("Limited" or "Defendant"). Defendants Limited, Miriam Peters
("Peters"), and Point Blank Multimedia ("Point Blank") bring this
motion to dismiss for lack of subject matter jurisdiction or
personal jurisdiction pursuant to Federal Rules of Civil
Procedure 12(b)(1) and (2). In the alternative, Defendants move
to stay the proceedings pending the disposition of related
litigation in Ireland and the United Kingdom.
At oral argument on April 20, 2000, the claims against Miriam
Peters and Point Blank Multimedia were dismissed, without
prejudice, on Plaintiff's oral motion. Therefore, the issue to be
decided is whether to dismiss the action for lack of subject
matter or personal jurisdiction as to Limited. For the reasons
set forth below, the Court denies Limited's motion to dismiss and
motion to stay proceedings because the Court has both subject
matter jurisdiction over the dispute and personal jurisdiction
A. Crate & Barrel, Plaintiff
Plaintiff Crate & Barrel is an Illinois corporation with its
principal place of business in Northbrook, Illinois. (Pl.Comp. ¶
1). Plaintiff has used the name and mark "Crate&Barrel"
exclusively for more than 35 years in connection with its
business as a retailer selling housewares and furniture.
(Pl.Comp. ¶ 8). Plaintiff is the owner of federal trademark and
service mark registrations for both "Crate&Barrel" and "CRATE
AND BARREL," and also owns a large number of foreign
registrations for the marks, including registrations in Ireland,
the United Kingdom, and the European Community. (Id.).
Plaintiff has characterized its name and mark as "one of the most
famous, celebrated, and well-regarded." (Pl.Comp. ¶ 9).
In addition to extensive advertising and sales in the United
States and abroad, Plaintiff has developed and registered an
interactive website on the Internet at the domain name
"www.crateandbarrel.com." (Pl.Comp. ¶ 14). The website contains
information about Crate & Barrel products and other business
information. (Pl.Comp. ¶ 10). Website visitors worldwide may
purchase products from Plaintiff using the website. (Id.).
B. Crate & Barrel Limited, Defendant
Peters, an Irish citizen residing in Dublin, Ireland, is
Director and Company Secretary of Limited. (D.Mot. to Dismiss,
Ex. A). According to Plaintiff, Peters visited Illinois, saw the
Crate & Barrel store in Oak Brook, Illinois, and returned to
Ireland to open a retail store of the same name. The Plaintiff's
characterization of these events has been controverted by Peters
in one of her affidavits, where she claims that "the name Crate &
Barrel Limited was selected based on the suggestion of a friend
in Ireland." (D. Reply Memo., Ex. A ¶ 6).
After the Crate & Barrel retail store was opened in Ireland,
Limited also created and registered an Internet website at the
domain name "www.crateandbarrel-ie. com." (Pl.'s Compl. ¶ 16 and
Ex. 4). The website identifies itself as Crate & Barrel, and
allows website visitors worldwide to both view and purchase the
same household goods and furniture sold in the retail store.
(Pl.Supp.Memo, Ex. A). The goods sold by Limited are similar to
the types of goods offered for sale by plaintiff.
On its website, Limited's goods were priced in U.S. dollars
until the commencement of this suit. (Pl.Memo., Ex. 8). After the
suit was filed, Limited changed the valuation of its goods to
Irish pounds and added the statement "Goods Sold Only in the
Republic of Ireland" to the opening page of its website.
(D.Supp.Submissions, Ex. C). Despite this statement, website
users who wish to purchase goods are given the opportunity to
select the United States as part of both their shipping and
billing addresses. (Pl.Supp.Memo., Ex. A6). On the website pages
containing the fields in which users are to enter their shipping
and billing address information, the fields are clearly organized
for a United States-format address. (Id.). There is an entry
window for the shipping/billing city, state, and zip code — a
format unique to the United States. (Id.). The entry window for
shipping/billing state contains a pull-down menu of the United
Limited has made and maintained connections with the United
States, and Illinois, in several ways. First, Limited has
purchased goods from vendors in Lisle, Chicago, and Hicksville,
Illinois, and has made purchases from other vendors located in
America. (Pl.Supp.Memo., Ex. D). Second, Limited, through its
Director Miriam Peters, has participated in trade shows in the
United States, including Chicago, Illinois, in order to promote
its business. (Pl.Supp.Memo., Ex. E). Third, Limited advertises
in publications, such as British Homes and Gardens and the
Irish Times, that are circulated in the United States and
specifically in Illinois. (Pl. Supp.Memo., Ex. C1). Finally, in a
transaction instigated by personnel at Plaintiff's law firm,
Limited sold goods to an Illinois resident, April Wagner, who
placed an order on Limited's website for a set of beaded
coasters. (Pl.Supp.Memo., Ex. A3). Ms. Wagner entered an Illinois
billing address, and had the package sent to an address in
Dublin, Ireland. (Pl.Supp. Memo., Ex. 6). The item's packaging
clearly indicated that the sender was "Crate & Barrel."
(Pl.Supp.Memo., Ex. A10).
Plaintiff has also filed suit against Defendants in the United
Kingdom and the Republic of Ireland. (D.Mot. to Dismiss Ex. C and
D). Trademark infringement is at least one of the claims in each
of the suits. (Id.) Plaintiff characterizes the suits as "just
beginning; they are nowhere near a final decision," but Defendant
characterizes them differently, claiming that the "proceedings in
the United Kingdom case have already closed and a trial date has
been set for October 2000." (Pl.Memo. at 13; D.Mot. to Dismiss at
II. MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION
Plaintiff alleges that this Court has subject matter
jurisdiction over this action under the Lanham Act,
15 U.S.C. § 1121, and under 28 U.S.C. § 1331, 1332, and 1338. Federal Rule
of Civil Procedure 12(b)(1) provides for dismissal of claims when
the district court lacks subject matter jurisdiction. "In
considering a motion to dismiss for lack of subject matter
jurisdiction, the district court must accept the complaint's
well-pleaded factual allegations as true and draw reasonable
inferences from those allegations in the plaintiff's favor."
United Transp. Union v. Gateway W. Ry. Co., 78 F.3d 1208, 1210
(7th Cir. 1996). In addition to the complaint, it is also proper
to consider evidentiary materials addressed to the jurisdictional
question at the dismissal stage. Id. "Once the jurisdictional
allegations have been controverted [by the defendant], it is the
plaintiff's burden to come forward with additional evidence to
support a claim of jurisdiction." MCI Telecomms. Corp. v.
Illinois Bell Tel. Co., 1998 WL 156678 *2 (N.D.Ill. March 31,
1998) (citing Seglin v. Esau, 769 F.2d 1274, 1277 (7th Cir.
The Lanham Act ("Act") provides original jurisdiction to the
district courts over all trademark actions. 15 U.S.C. § 1121. The
Act provides a civil action against "any person who shall,
without consent of the registrant, use in commerce any
reproduction, counterfeit copy, or colorable imitation of a
registered mark in connection with the sale, offering for sale,
distribution, or advertising of any goods . . . with which such
use is likely to cause confusion, or to cause mistake, or to
deceive." 15 U.S.C. § 1114(1)(a).
The Act further provides:
Any person who, on or in connection with any goods or
services, or any container for goods, uses in
commerce any word, term, symbol, or device, or any
combination thereof, or any false designation of
origin, false or misleading description of fact, or
false or misleading representation of fact which —
(A) is likely to cause confusion, or to cause
mistake, or to deceive as to the affiliation,
connection, or association of such person with
another person, or as to the origin, sponsorship, or
approval of his or her goods, services, or commercial
activities by another person, or
(B) in commercial advertising or promotion,
misrepresents the nature, characteristics, qualities,
or geographic origin of his or her or another
person's goods, services, or commercial activities,
shall be liable in a civil action by any person who
believes that he or she is likely to be damaged by
Thus, there are two essential requirements a plaintiff must
allege to survive a 12(b)(1) motion to dismiss for lack of
subject matter jurisdiction: 1) the trademark violation was in
connection with any goods or services and 2) the defendant used
the trademark in commerce. Juno Online Services, L.P. v. Juno
Lighting, Inc., 979 F. Supp. 684, 691 (N.D.Ill. 1997). The
determination is a fact specific inquiry. The Court addresses
each in turn.
1. The Alleged Trademark Violation Was In Connection With
The Court finds that Limited used the "Crate & Barrel"
trademark in connection with goods. Although at one time, the
trademark violation required that the defendant cause "goods or
services to enter into commerce," in 1988 the Act was amended,
and the "[d]efendant is no longer required actually to cause
goods or services to be placed into the stream of commerce."
Juno, 979 F. Supp. at 691.
2. The "Use In Commerce" Requirement
Limited's use of the Internet satisfies the "use in commerce"
requirement of the Lanham Act. Commerce is broadly defined by the
Lanham Act as "all commerce which may lawfully be regulated by
Congress." 15 U.S.C. § 1127. Webster is illuminating in this
area, telling us that commerce is "the buying and selling of
goods." WEBSTER'S II NEW RIVERSIDE UNIVERSITY DICTIONARY 286
"Use in commerce" is defined in 15 U.S.C. § 1127 as follows:
The term "use in commerce" means the bona fide use of
a mark in the ordinary course of trade, and not made
merely to reserve a right in a mark. For purposes of
this Chapter, a mark shall be deemed to be in use in
(A) it is placed in any manner on the goods or their
containers or the displays associated therewith or on
the tags or labels affixed thereto, or if the nature
of the goods makes such placement impracticable, then
on documents associated with the goods or their sale,
(B) the goods are sold or transported in commerce,
(2) on services when it is used or displayed in the
sale or advertising of services and the services are
rendered in commerce, or the services are rendered in
more than one State or in the United States and a
foreign country and the person rendering the services
is engaged in commerce in connection with the
The question, therefore, is (a) whether Limited used
Plaintiff's mark in commerce by placing it on goods, their
containers, the displays associated with them, or their tags or
labels and (b) whether the goods were sold or transported in
The Supreme Court, in the landmark case Steele v. Bulova Watch
Co., 344 U.S. 280, 283, 73 S.Ct. 252, 254, 97 L.Ed. 319 (1952),
has held that the "in commerce" requirement must be construed
liberally because the Lanham Act "confers broad jurisdictional
powers upon the courts of the United States."
In Intermatic Inc. v. Toeppen, 947 F. Supp. 1227, 1239
(N.D.Ill. 1996) this Court held that the defendant's use of the
Internet satisfied the "in commerce" requirement when the
defendant registered a domain name identical to the plaintiff's
trademark name and used it on the Internet with the intention of
reselling it to the plaintiff or some other party, a practice
commonly known as cyber-squatting. Even though the defendant had
no intention of selling goods or services that were similar to
the plaintiff's, the fact that he had used the Internet, and that
Internet communications transmit instantaneously on a worldwide
basis, this Court held that "there is little question that the
`in commerce' requirement would be met in a typical Internet
message, be it trademark infringement or false advertising."
Id. (citing 1 Gilson, Trademark Protection and Practice §
5.11, p. 5-234 (1996)).
In a similar case against the same defendant, the Ninth Circuit
adopted this Court's reasoning and found that the defendant's
actions of registering a domain name combined with the attempt to
resell the domain name to the trademark holder of the same name
constituted a commercial use under the Lanham Act. Panavision
Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1325 (9th Cir. 1998).
Although the court agreed that the mere registration of a
trademark as a domain name without more is not a commercial use
of the trademark, the court found Toeppen's actions went far
beyond mere registration. Toeppen's "business" was to register
trademarks as domain names through Network Solutions, Inc.
("NSI") for $100, and then sell them to the rightful trademark
owners, preventing the trademark owners from doing business on
the Internet unless they pay Toeppen's fee, which ranged between
$10,000 and $15,000. Id. at 1319.
Similarly, maintaining an interactive website that sends out
information regarding the defendant's upcoming services and
solicits names for mailing lists constitutes advertisement and
solicitation, thus meeting the "use in commerce" test under the
Lanham Act. Maritz, Inc. v. Cybergold, Inc., 947 F. Supp. at
1335. The fact that the defendant's business was not fully
operational did not sway the court's opinion, holding that a
Lanham Act claim can exist even before a defendant actually opens
for business, as long as the acts of the defendant are imminent
and impending. Id.
In this case, the facts are more compelling in favor of finding
that Defendant's acts constitute "use in commerce." Accepting
Plaintiff's factual allegations as true and drawing inferences in
favor of Plaintiff, as the Court is required to do for the
purposes of analyzing a motion to dismiss, Defendant has gone far
beyond merely registering a trademark as a domain name on the
Internet; Limited has actually entered into a sales contract with
at least one Illinois customer over the Internet using the Crate
& Barrel trademark. By anyone's definition of commerce, entering
into a sales contract, wherever the goods may be shipped,
constitutes use in commerce. Plaintiff has met its burden of
supporting its allegations. Limited satisfied both sections of
15 U.S.C. § 1127 because it (a) used Plaintiff's mark in commerce by
placing it on goods, their containers, the displays associated
with them, and their tags or labels and (b) sold and transported
the goods in commerce.
First, Limited placed Plaintiff's mark on displays associated
with Limited's goods. Plaintiff's mark permeates Limited's entire
website. Plaintiff's mark is being used as Limited's domain name,
which was originally "www.crateandbarrel.ie.com" and is now
"www.createandbarrel.ie.com"*fn2 Plaintiff's mark is also being
used as the name of the website, and appears prominently on most
pages of the website, including the home page. Plaintiff alleges
that the mark's font on Limited's website and retail store in
Ireland is identical to that used by Plaintiff, its owner.
Second, Limited placed Plaintiff's mark on the tags or labels
for Limited's goods. Limited sold goods to an Illinois resident
and a member of Plaintiff's firm, April Wagner, for delivery in
Ireland. In purchasing the goods on Limited's Internet site, Ms.
Wagner entered an Illinois billing address and an Irish shipping
address. The order was completed using Ms. Wagner's credit card,
and the goods were shipped to the Irish address, constituting a
"sale and transportation of goods in commerce." Plaintiff's mark
"Crate & Barrel" appeared on the label of this package.