Traton News, LLC v. Traton Corp.

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0570n.06
No. 12-4139 FILED
Jun 11, 2013
UNITED STATES COURT OF APPEALS DEBORAH S. HUNT, Clerk
FOR THE SIXTH CIRCUIT
TRATON NEWS, LLC, )
)
Plaintiff-Appellant, )
)
v. )
) ON APPEAL FROM THE UNITED
TRATON CORP., et al., ) STATES DISTRICT COURT FOR THE
) SOUTHERN DISTRICT OF OHIO
Defendants-Appellees. )
Before: GIBBONS and WHITE, Circuit Judges; COHN, Senior District Judge*
JULIA SMITH GIBBONS, Circuit Judge. Plaintiff-appellant Traton News, LLC appeals
the district court’s dismissal of this suit for lack of personal jurisdiction. Plaintiff claims that the
district court had personal jurisdiction over defendants based on a forum selection clause in a
browsewrap agreement1 on traton.com. Assuming, without deciding, that the browsewrap agreement
and forum selection clause are enforceable, we find that plaintiff’s Lanham Act claims against
defendant Traton Homes, LLC do not fall within the scope of the forum selection clause because
*
The Honorable Avern Cohn, Senior United States District Judge for the Eastern District of
Michigan, sitting by designation.
1
A browsewrap agreement discloses terms on a website that offers a product or service to the
user, and the user assents by visiting the website to purchase the product or enroll in the service.
Schnabel v. Trilegiant Corp., 697 F.3d 110, 129 n.18 (2d Cir. 2012). Browsewrap agreements may
be contrasted with “clickwrap” agreements, which require the user to manifest assent to the terms
by clicking on an icon. Id.
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these claims do not “arise out of or relate to” the “use” of traton.com. Without personal jurisdiction
over Traton Homes with respect to the Lanham Act claims, the district court properly exercised its
discretion to dismiss the remaining state law claims asserted against the defendants. We therefore
affirm the district court’s dismissal of this action.
I.
Defendants Traton Corporation and its affiliated company Traton Homes, LLC (collectively
referred to as “Traton defendants”) build homes and develop communities in and around Atlanta,
Georgia. Several years ago, Christopher Moses, represented by Sam Han, filed suit in Georgia state
court against Traton Corporation alleging that the company trespassed on his property. Moses v.
Traton Corp., 650 S.E.2d 353 (Ga. Ct. App. 2007). The Court of Appeals affirmed the lower court’s
entry of summary judgment for Traton Corporation. Id. at 354. In March 2006, Moses registered
Traton News, LLC as a Georgia entity (“Traton News (Georgia)”). The following month, Traton
News (Georgia) applied to register the mark “Traton” with respect to “news reporting services.” The
U.S. Patent and Trademark Office (“PTO”) registered the mark “Traton” on February 13, 2007.
Moses voluntarily dissolved Traton News (Georgia) on January 15, 2008. Meanwhile, Moses moved
from Georgia to Virginia and registered the entity Traton News, LLC in Virginia on September 10,
2007. The Commonwealth of Virginia cancelled Traton News, LLC on December 31, 2008, for
failure to pay fees. In 2011, Han registered Traton News, LLC in Ohio (“Traton News (Ohio)”).
Traton News (Ohio) is the plaintiff in this case.
Traton.com has been in operation since spring 2006. Plaintiff claims that it owns the
“Traton” mark and that it operates traton.com. According to Han, traton.com posts articles on a
variety of topics, including “chess, intellectual property, Traton Homes, other homebuilders in the
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Atlanta area, a meteor shower, Star Trek, and others.” Defendants allege that plaintiff’s only purpose
in operating traton.com is to publish false and defamatory information about the Traton defendants
and their employees. A browsewrap agreement is located on the homepage of traton.com. It states
that: “none of these materials may be used for the benefit of Traton Corp. . . . and/or its affiliates for
any reason whatsoever.” The browsewrap agreement includes a forum selection clause that provides
that the user “consent[s] to the exclusive jurisdiction and venue of courts in or nearest to the United
States District Court for the Southern District of Ohio, Western Division, in all disputes arising out
of or relating to the use of this Web site.”
In response to the negative information published on traton.com, Traton Homes consulted
with Flammer Relations, Inc., a public relations and social media firm. In August 2010, Traton
Homes hired mRELEVANCE, LLC to assist in the creation of a blog to publicize positive news and
events about Traton Homes. Flammer Relations is part owner of mRELEVANCE and worked
through mRELEVANCE to assist in the creation and maintenance of the
blog—tratonhomesblog.com. In addition, Traton Homes has maintained its regular business website,
tratonhomes.com, since before 2005. According to plaintiff, Traton Homes also has registered the
domain names tratonnews.com and tratonnews.net since 2009, but has not maintained any content
on those sites.
Traton News (Ohio) filed its amended complaint in the Southern District of Ohio on February
24, 2012, against Traton Corporation, Traton Homes, Flammer Relations, and mRELEVANCE. The
amended complaint brings the following Lanham Act claims solely against Traton Homes:
(1) cyberpiracy in violation of 15 U.S.C. § 1125(d); (2) trademark infringement in violation of 15
U.S.C. § 1114; (3) false designation in violation of 15 U.S.C. § 1125(a); and (4) false description
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in violation of 15 U.S.C. § 1125(a). The amended complaint also brings breach of contract claims
against Traton Corporation, Traton Homes, Flammer Relations, and mRELEVANCE. Plaintiff
alleges that each defendant breached the terms of the browsewrap agreement by monitoring
traton.com and using information on traton.com for the benefit of the Traton defendants.
Defendants filed motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2),
(6), and (7). The district court granted defendants’ motions to dismiss for lack of personal
jurisdiction. It found that Traton Homes did not consent to personal jurisdiction in the Southern
District of Ohio based on the forum selection clause for two independent reasons: (1) the Lanham
Act claims fall outside the scope of the forum selection clause, and (2) the browsewrap agreement
is unenforceable for lack of consideration. Next, the district court determined that plaintiff did not
make a prima facie showing that Traton Homes has sufficient contacts with the State of Ohio to
satisfy the Due Process Clause of the Fourteenth Amendment. The district court concluded that it
would be improper to exercise jurisdiction over the remaining breach of contract claims. Plaintiff
has appealed the district court’s dismissal of this action. Because we find that the Lanham Act
claims fall outside the scope of the forum selection clause, we do not address the district court’s
alternative basis for finding that it lacked personal jurisdiction over defendants. On appeal, plaintiff
has abandoned its argument that Traton Homes has sufficient contacts with the State of Ohio to
confer personal jurisdiction under the Due Process Clause.
II.
This court reviews de novo the district court’s dismissal of this action for lack of personal
jurisdiction. City of Monroe Emps. Ret. Sys. v. Bridgestone Corp., 399 F.3d 651, 664 (6th Cir. 2005).
A party may consent to the personal jurisdiction of a particular court through a forum selection clause.
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Preferred Capital, Inc. v. Power Eng’g Grp., Inc., 860 N.E.2d 741, 744 (Ohio 2007). A forum
selection clause confers personal jurisdiction on a court over only those disputes that the parties agreed
to litigate in that forum. The forum selection clause in the browsewrap agreement states: “You hereby
consent to the exclusive jurisdiction and venue of courts in or nearest to the United States District Court
for the Southern District of Ohio, Western Division, in all disputes arising out of or relating to the use
of this Web site.”
Ohio cases typically interpret the meaning of the phrases “arise out of” and “relate to” in the
context of arbitration agreements.2 Ohio has a strong public policy favoring arbitration, and when there
is doubt as to whether an arbitration clause covers a dispute, such doubts should be resolved in favor
of arbitration. Council of Smaller Enters. v. Gates, McDonald & Co., 687 N.E.2d 1352, 1356 (Ohio
1998). By contrast, there is no principle that favors application of forum selection clauses. An
arbitration clause that contains the phrase “any claim or controversy arising out of or relating to the
agreement” is considered a “broad” arbitration clause. Mak v. Silberman, No. 95590, 2011 WL 683899,
at *3 (Ohio Ct. App. Feb. 24, 2011) (slip copy). A broad arbitration clause “embraces all disputes
between the parties having a significant relationship to the contract regardless of the label attached to
the dispute.” Blanchard Valley Health Ass’n v. ProMedica Health Sys., No. 5-06-13, 2006 WL
3257716, at *6 (Ohio Ct. App. Nov. 13, 2006) (alterations omitted). However, a claim likely falls
outside the scope of a broad arbitration clause “if [the] action could be maintained without reference
to the contract or relationship at issue.” Silberman, 2011 WL 683899 at *3 (internal quotation marks
2
The browsewrap agreement provides that it is governed by Ohio law without regard to
Ohio’s conflict-of-law principles. Because we do not reach the issue whether the agreement is
enforceable and neither party disputes that Ohio law applies, we assume, without deciding, that Ohio
law controls in determining the scope of the forum selection clause.
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omitted). Broad arbitration clauses typically require arbitration of disputes arising out of or relating to
the agreement containing the arbitration clause. By contrast, the forum selection clause here requires
arbitration of “all disputes arising out of or relating to the use of this Web site.” We therefore ask
whether the Lanham Act claims have a significant relationship to the use of traton.com and whether the
action could be maintained without reference to the use of traton.com.
In count one, plaintiff claims that Traton Homes violated the Anticybersquatting Consumer
Protection Act, 15 U.S.C. § 1125(d),3 which provides for civil liability when a plaintiff proves that
“(1) the defendant registered, trafficked in, or used a domain name; (2) the domain name is identical
or confusingly similar to a protected mark owned by the plaintiff; and (3) the defendant acted ‘with bad
faith intent to profit from that mark.’” DSPT Int’l, Inc. v. Nahum, 624 F.3d 1213, 1218–19 (9th Cir.
2010) (quoting 15 U.S.C. § 1125(d)(1)(A)). Plaintiff contends that Traton Homes is liable because it
registered the domain names tratonnews.com and tratonnews.net and then failed to maintain any content
on those sites. Plaintiff further alleges that these domain names are confusingly similar to the “Traton”
mark with respect to news reporting services.
In count two, plaintiff alleges that Traton Homes violated 15 U.S.C. § 1114, which imposes
civil liability on a person who, without consent of the registrant of a trademark, uses the mark in
commerce in connection with the sale of any good or service and as a result, is likely to cause
confusion. Plaintiff claims that Traton Homes used the “Traton” mark in commerce and that its use of
the term has caused confusion.
3
The Anticybersquatting Consumer Protection Act is in Subchapter III of the Lanham Act.
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In count three, plaintiff claims that Traton Homes violated 15 U.S.C. § 1125(a), which imposes
civil liability on a person who
in connection with any goods or services . . . uses in commerce any word, term, [or]
name . . . which . . . 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 . . . services . . . by another person[.]
Specifically, plaintiff alleges that “Traton Defendants’ use of the mark [‘Traton’] in reference to a blog
and the link for News on that blog constitutes a false designation of origin of being associated with
Traton News.” Plaintiff contends that “Traton Homes’[s] use of News on its blog site is likely to cause
confusion, to cause mistake, to deceive, or a combination thereof with Traton News.”
In count four, plaintiff claims that Traton Homes violated 15 U.S.C. § 1125(a) by falsely
describing marketing on its website as news reporting services. According to plaintiff, “Traton Homes
has, in promotion, misrepresented the nature, characteristics, quality or a combination thereof by calling
the self-promotion and marketing ‘News’ of a news reporting service.”
These Lanham Act claims relate to actions taken by Traton Homes on its own
websites—tratonhomes.com, tratonhomesblog.com, tratonnews.com, and tratonnews.net. Plaintiff
alleges that by maintaining tratonnews.com and tratonnews.net, Traton Homes committed cyberpiracy.
Plaintiff also alleges that Traton Homes committed trademark infringement, false designation, and false
description by using the mark “Traton” and term “News” on tratonhomes.com and
tratonhomesblog.com. Plaintiff claims that these actions violate its rights to the mark “Traton” with
respect to news reporting services. The Lanham Act claims do not depend upon or involve anyone’s
use of traton.com. In fact, as the district court observed, counts one through four of the complaint do
not mention the use of traton.com or its browsewrap agreement. Thus, the Lanham Act claims do not
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have a “significant relationship” to the use of traton.com, and the Lanham Act claims can be maintained
without reference to the use of traton.com.
We reject plaintiff’s invitation to expand the meaning of the phrase “arise out of or relate to.”
Plaintiff argues that counts two through four relate to the use of traton.com because defendants accessed
traton.com often in the weeks leading up to the launch of tratonhomesblog.com. Plaintiff claims that
“[i]t is virtually impossible to ignore the connection between [defendants’] two-week spike in
harvesting information from Traton’s website and the creation of the [Traton Homes’s] weblog [sic]
using the harvested information, immediately following the two-week spike.” Plaintiff also argues that
count one is related to the use of traton.com because Traton Homes’s motivation for maintaining the
domain names tratonnews.com and tratonnews.net is to prevent Internet traffic from reaching
traton.com. According to plaintiff, “[r]educing web traffic to Traton’s website is directly related to the
use of Traton’s website.” Plaintiff claims that the reason Traton Homes took actions that allegedly
violate the Lanham Act was because it was unhappy with the content on traton.com. Even if this is true,
the rights plaintiff seeks to vindicate in the Lanham Act claims do not relate to the use of traton.com
because they arise from its purported ownership of the mark “Traton” and not from the browsewrap
agreement. Ohio law instructs that the Lanham Act claims fall outside the scope of this forum selection
clause if they “could be maintained without reference” to the use of traton.com. Silberman, 2011 WL
683899 at *3. As discussed above, we find that they could. Accordingly, we do not expand our inquiry
to whether there are any other underlying factual connections between the use of traton.com and the
Lanham Act claims or why Traton Homes acted in a way that allegedly violates the Lanham Act.
The contract claims may indeed arise out of the use of traton.com and the browsewrap
agreement could potentially provide a basis for personal jurisdiction over Traton Homes. Yet, we need
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not resolve that issue because no basis for federal subject matter jurisdiction exists other than the
Lanham Act claims. The district court did not abuse its discretion in refusing to exercise supplemental
jurisdiction over the breach of contract claims and dismissing them without prejudice.
III.
Because we find that the Lanham Act claims fall outside the scope of the forum selection clause,
we affirm the district court’s dismissal of this action for lack of personal jurisdiction.
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