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Cirrus Design Corp. v. Cirrus Aviation Services, LLC

United States District Court, D. Minnesota

October 5, 2017

Cirrus Design Corporation, Plaintiff,
v.
Cirrus Aviation Services, LLC, Defendant.

          REPORT AND RECOMMENDATION

          LEO I. BRISBOIS UNITED STATES MAGISTRATE JUDGE.

         This matter came before the undersigned United States Magistrate Judge pursuant to an order of referral made in accordance with the provisions of 28 U.S.C. § 636(b)(1)(B), [Docket No. 29], and upon Defendant Cirrus Aviation Services, LLC's Motion to Dismiss for Lack of Personal Jurisdiction, or to Dismiss or Stay Pending Resolution of the First-Filed Nevada Action, [Docket No. 16]. The Court held a hearing on the Motion on September 6, 2017, after which the Motion was taken under advisement. (Minute Entry, [Docket No. 32]).

         For the reasons set forth below, the Court recommends that Defendant Cirrus Aviation Services, LLC's Motion to Dismiss for Lack of Personal Jurisdiction, Or to Dismiss or Stay Pending Resolution of the First-Filed Nevada Action, [Docket No. 16], be GRANTED.

         I. BACKGROUND AND STATEMENT OF ALLEGED FACTS

         Cirrus Design Corporation (“Cirrus Design”), is a Wisconsin corporation with its principal place of business in Duluth, Minnesota. (Compl., [Docket No. 1], 1). Founded in the 1980s, Cirrus Design “develop[s] and sell[s] fully manufactured personal aircraft and structural parts, ” including the Cirrus Airframe Parachute System. (Id. at 2). Cirrus Design “has used various trademarks containing the word CIRRUS since at least as early as 1987.” (Nafziger Dec., [Docket No. 25], 1). Currently, Cirrus Design has a following on social media, and it engages in active online advertising. (Compl., [Docket No. 1], 3).

         In 1994, Cirrus Design filed its first federal application to register the trademark “CIRRUS.” (Compl., [Docket No. 1], 9). Cirrus Design owns the following trademark registrations: CIRRUS[1]; CIRRUS VISION[2]; CIRRUS AIRFRAME PARACHUTE SYSTEM[3]; CIRRUS[4]; CIRRUS[5]; and CIRRUS PERSPECTIVE[6]. Cirrus Design also provides aircraft inspection and repair services, flight instruction and training, and aircraft insurance. (Id. at 4). For use in this aspect of its business, Cirrus Design owns certain service mark registrations, including CIRRUS[7] and CIRRUS CERTIFIED.[8] (Id. at 4-5).

         After Cirrus Design filed its first federal trademark application for CIRRUS, Defendant Cirrus Aviation Services (“Cirrus Aviation”), an Arizona Limited Liability Company with its principal place of business in Las Vegas, Nevada, was formed. (Compl., [Docket No. 1], 1, 7; Woods Dec., [Docket No. 19], 1). Cirrus Aviation's predecessor was Cirrus, Aviation Services, Inc., a Washington corporation incorporated on December 12, 1994. (Id. at 7). Cirrus Aviation offers “private airline charter flights and other related services in the aircraft charter industry.” (Hansen Aff., Exh. A, [Docket No. 18-1], 2). With respect to its charter flights, Cirrus Aviation represents that it offers:

on demand aircraft charter services . . . across the Western United States and Mexico and is currently offering aviation services between Las Vegas, Nevada[, ] and other destinations including Aspen, Colorado; Provo and Salt Lake City, Utah; Reno, Nevada; Phoenix, Arizona; Sun Valley, Idaho; Las Angeles, San Francisco, Sonoma, Napa, and San Diego, California; and Monterrey, Mexico.

(Id. at 3-4).

         Since 2010, Cirrus Aviation has operated a website (www.cirrusav.com), through which it advertises its services under the name “Cirrus Aviation Services.” (Compl., [Docket No. 1], 7 Hansen Aff., Exh. A, [Docket No. 18-1], 4). Also since at least 2010, Cirrus Aviation has advertised under this name on various social media platforms. (Compl., [Docket No. 1], 7; Hansen Aff., Exh. A, [Docket No. 18-1], 4). Cirrus Aviation asserts that it first adopted and used the trademark CIRRUS AVIATION in May 2007. (Hansen Aff., Exh. A, [Docket No. 18-1], 3).

         On September 26, 2013, Cirrus Design applied for a U.S. service mark registration for CIRRUS for additional services involving employment staffing in the field of aircraft operations, including personnel recruitment and employment leasing; aircraft registration and title transfer; accident investigation reports; tracking aircraft operations; and managing training requirements for flight crews. (Compl., [Docket No. 1], 6).

         Cirrus Design served Cirrus Aviation with a cease-and-desist letter in February 2014, but Cirrus Aviation refused to cease using the name Cirrus Aviation Services. (Id. at 7-8 Hansen Aff., Exh. A, [Docket No. 18-1], 6). Instead, in June 2015, Cirrus Aviation opposed Cirrus Design's latest trademark application for the mark CIRRUS, Cirrus Aviation asserted that CIRRUS is “confusingly similar” to the CIRRUS AVIATION SERVICES trademark. (Id. at 7; Compl., [Docket No. 1], 7-8). Cirrus Aviation claimed that it was asserting “its strong Common Law trademark rights in and to the CIRRUS AVIATION marks, specifically noting that if [Cirrus Design] was permitted to register its CIRRUS mark to cover various aircraft related services, members of the public would erroneously believe that [Cirrus Design's] services originate with, or are in some manner connected or associated with, or sponsored by” Cirrus Aviation. (Hansen Aff., Exh. A, [Docket No. 18-1] 7-8).

         Cirrus Aviation alleges after receipt of the cease and desist letter, and Cirrus Design has not contested this allegation, that “[s]ubsequently, and for the next year, the parties discussed and unsuccessfully negotiated the possibility of an amicable agreement and resolution of the dispute.” (Id. at 8).

         Notwithstanding these negotiations, on November 7, 2016, Cirrus Design sent Cirrus Aviation a copy of a draft Complaint Cirrus Design intended to file if the parties could not resolve their dispute. (Id. at 8-9; Nafziger Dec., Exh. C, [Docket No. 25-3]). In an accompanying letter, Cirrus Design informed Cirrus Aviation that it was “prepared to move forward with a lawsuit if [Cirrus Aviation] is not willing to withdraw its opposition of the CIRRUS trademark application . . . and cease use of the trademark and business name CIRRUS AVIATION SERVICES.” (Id. at 2). Cirrus Design requested immediate written confirmation no later than November 21, 2016, that Cirrus Aviation would withdraw its opposition to the CIRRUS trademark application and cease the use of CIRRUS AVIATION SERVICES. (Id. at 4). Cirrus Design further stated: “If we do not hear from you by this date, or if Cirrus Aviation Services is unwilling to take the above actions, we will initiate the lawsuit in the District Court of Minnesota by serving you with the enclosed complaint.” (Id.).

         On November 18, 2016, Cirrus Aviation filed a declaratory judgment action in the United States District Court for the District of Nevada. (Hansen Aff., Exh. A, [Docket No. 18-1], 3); see, also, Cirrus Aviation Servs., LLC v. Cirrus Design Corp., No. 2:16-cv-02656-JAD-GWF (D. Nev.), [Docket No. 1]. Cirrus Aviation contended that its use of CIRRUS AVIATION and CIRRUS AVIATION SERVICES would not create confusion with Cirrus Design's use of the similar trademarks because the services and goods each party offers are distinct and separate and the names/trademarks they utilize are narrowly tailored. (Hansen Aff., Exh. A, [Docket no. 18-1], 8-9). Cirrus Aviation sought declaratory judgment that (1) its use of CIRRUS AVIATION and CIRRUS AVIATION SERVICES does not infringe any of Cirrus Design's protectable trademark rights in CIRRUS, CIRRUS AIRFRAME PARACHUTE SYSTEM, CIRRUS CERTIFIED, and CIRRUS PERSPECTIVE; and (2) Cirrus Aviation had committed no act of unfair competition through its concurrent use of CIRRUS AVIATION and CIRRUS AVIATION SERVICES.[9] (Id. at 9-10). In requesting declaratory relief, Cirrus Aviation asserted: “The substantial controversy is confirmed by the acts of [Cirrus Design] as set forth in its November 7, 2016 letter and threats of a trademark infringement and unfair competition lawsuit against [Cirrus Aviation's] use of the CIRRUS AVIATION and CIRRUS AVIATION SERVICES trademark.” (Id. at 10).

         On November 21, 2016, Cirrus Design filed its Complaint in this District. (Compl., [Docket No. 1]). Cirrus Design brings a claim of trademark infringement under the Lanham Act (Count I); a federal claim of unfair competition (Count II); and a claim for violation of the Minnesota Uniform Deceptive Trade Practices Act (Count III). (Id. at 9-11). Cirrus Design seeks declaratory relief that it has priority trademark ownership rights, damages in the amount of the profits Cirrus Aviation earned under the trademark CIRRUS AVIATION SERVICES, injunctive relief, and costs and fees. (Id. at 12-13).

         On May 24, 2017, Cirrus Aviation filed the present “Motion to Dismiss for Lack of Personal Jurisdiction, or to Dismiss or Stay Pending Resolution of First-Filed Nevada Action.”[10]([Docket No. 16]). After briefing was completed, Chief Judge John R. Tunheim referred the present Motion to the undersigned for a Report and Recommendation. (Order, [Docket No. 29]). The Court held a hearing on the Motion on September 6, 2017, after which the Motion was taken under advisement. (Minute Entry, [Docket No. 32]).

         II. CIRRUS AVIATION'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION, OR TO DISMISS OR STAY PENDING RESOLUTION OF THE ...


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