Hazelden Betty Ford Found. v. My Way Betty Ford Klinik GMBH

504 F.Supp.3d 966

HAZELDEN BETTY FORD FOUNDATION and Elizabeth B. Ford Charitable Trust, Plaintiffs,

v.MY WAY BETTY FORD KLINIK GMBH, Defendant.

No. 20-409 (JRT/TNL)

United States District Court, D. Minnesota.

Signed December 1, 2020

Laura L. Myers and Nirmani Chethana Perera, Fredrikson & Byron PA, 200 South 6th Street, Suite 4000, Minneapolis, MN 55402.

Alan M. Anderson, Matthew R. Palen, and L. Reagan Florence, Alan Anderson Law Firm LLC, 11100 Wayzata Boulevard, Suite 545 Minneapolis, MN 55305.

MEMORANDUM OPINION AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS

JOHN R. TUNHEIM, Chief Judge

Plaintiffs Hazelden Betty Ford Foundation ("Hazelden"), a Minnesota nonprofit corporation that provides alcohol and drug addiction treatment, and the Elizabeth B. Ford Charitable Trust (the "Betty Ford Trust"), the successor-in-interest to Elizabeth B. Ford's copyrights and trademarks, brought an action against Defendant My Way Betty Ford Klinik GmbH ("MWBF Klinik") for statutory and common law trademark infringement, unfair competition, false advertising, cybersquatting, and infringement of the right to publicity under California law. MWBF Klinik operates a private clinic and rehabilitation facility in Bad Brückenau, Germany. MWBF Klinik filed a Motion to Dismiss pursuant to Rule of Civil Procedure 12(b)(2), arguing that the Court lacks personal jurisdiction. Because Plaintiffs have made a prima facie showing that Defendant has minimum contacts with the forum, pursuant to Rule 4(k)(2), the underlying action arises out of these contacts, and it is reasonable for MWBF Klinik to defend itself in Minnesota, the Court will deny Defendant's Motion to Dismiss.

BACKGROUND

I. FACTUAL BACKGROUND

A. THE BETTY FORD MARKS

Former First Lady Elizabeth B. Ford ("Mrs. Ford") was a public advocate for addiction awareness and treatment during her lifetime. (Am. Compl. ¶ 10, Feb. 5, 2020, Docket No. 6.) Although she died in 2011, her name continues to be associated with addiction treatment and recovery worldwide. (Id. ¶¶ 19–20.) The Betty Ford Trust holds the rights to all service marks and trademarks that include the Betty Ford name (the "Betty Ford Marks" or "the Marks"), and is the successor-in-interest to all rights and title that Mrs. Ford owned or acquired during her life. (Id. ¶ 2.) The Betty Ford Trust is based in California and governed by the laws of the State of California. (Id. ¶ 4.) In 2019, the Betty Ford Trust registered the name, voice, signature, photograph, and likeness of Mrs. Ford, pursuant to California Civil Code § 3344.1. (Id. ¶¶ 14–15.) From 1992 to 2013, the Betty Ford Center ("BFC"), a former California nonprofit public benefit corporation, held a limited license from the Betty Ford Trust permitting BFC to use the Betty Ford name and Marks in connection with its substance abuse treatment services. (Id. ¶ 11.)

In 2013, BFC merged with Hazelden, a Minnesota nonprofit corporation with a principal place of business in Center City, Minnesota. (Id. ¶¶ 1, 12.) Hazelden operates alcohol and drug treatment programs in Minnesota, California, Oregon, Illinois, Florida, Washington, and New York. (Id. ¶ 16.) Hazelden has provided treatment for nearly forty years and has a strong association with the Betty Ford Marks. (Id. ¶ 18.) While the Betty Ford Trust continues to own the "Betty Ford Center" trademark for uses related to education, treatment, and other drug and alcohol treatment services, Hazelden has the exclusive right to use the Betty Ford Name and Marks. (Id. ¶¶ 13–14.)

B. DISCUSSIONS BETWEEN THE PARTIES

MWBF Klinik is a German entity that operates a drug and alcohol addiction clinic and rehabilitation facility in Bad Brückenau, Germany. (Id. ¶ 5.) In 2012, MWBF Klinik contacted BFC to explore the possibility of a cooperative relationship. (Id. ¶ 21; Decl. of Laura L. Myers ("Myers Decl.") ¶ 2, Ex. A ("Outreach") at 4, Aug. 24, 2020, Docket No. 25-1.) MWBF Klinik stated that a separate German entity owned the trademark for the name "My Way Betty Ford Klinik" and that the trademark owner had terminated its license with MWBF Klinik. (Am. Compl. ¶ 22–23.) MWBF Klinik disclosed that it was engaged in litigation with the trademark owner regarding rights to the name and that cooperation with BFC would be a "preferred option" to secure its rights to use the Betty Ford Marks and concept. (Outreach at 2.) MWBF Klinik posited that a cooperative arrangement could empower MWBF Klinik to "stop[ ] infringements and violations of the name Betty Ford" in Germany. (Id. )

On January 5, 2013, MWBF Klinik representatives Sigurd Gawinski and Sven Marquardt¹ contacted BFC's then-President and CEO John Schwarzlose, proposing that Gawinski and Marquardt visit BFC to discuss various aspects of a potential cooperative relationship, including exchanging medical concepts and experts, joint research, business objectives, protection of intellectual property, and licensing. (Myers Decl. ¶ 3, Ex. B at 10–11, Aug. 24, 2020, Docket No. 25-1.) Schwarzlose responded that BFC could discuss a consulting arrangement but cautioned that it could not license the Betty Ford name. (Id. at 10.) Gawinski and Marquardt expressed concern that the German licensor could open a new clinic in Germany with the same name, proposing instead that MWBF Klinik could potentially "change[ ] its name after a reasonable transition period and at the same time [BFC] provides for appropriate legal protection of the name Betty Ford Klinik in Germany (or even Europe)." (Id. at 9.)

In 2013, Marquardt and Gawinski traveled to California on behalf of MWBF Klinik to discuss their ideas and deliver a letter of intent for the proposed partnership. (Am. Compl. ¶ 24; Myers Decl. ¶ 4, Ex. C ("Post-Visit Corresp.") at 19, Aug. 24, 2020, Docket No. 25-1.) After the 2013 visit, Schwarzlose communicated to MWBF Klinik that BFC was not interested in pursuing a business arrangement because MWBF Klinik was too small an operation to cover BFC's consultation costs. (Am. Compl. ¶ 27; Post-Visit Corresp. at 18.) In response, Marquardt and Gawinski urged Schwarzlose to reconsider, arguing that MWBF Klinik could "easily offer a license fee of [$0.325 million] per year if we receive full license rights for the medical concept and enforceable name/trademark rights," and touting their reputation among healthcare facilities in Europe and the Middle East. (Post-Visit Corresp. at 16.) MWBF Klinik again acknowledged the value of the Betty Ford Brand and the need to protect it from other German infringers. (Id. )

In the fall of 2013, BFC and Hazelden commenced the merger of the two entities. In September and again in November of that year, MWBF Klinik urged BFC to resume talks about licensing the Betty Ford Marks and establishing protections for BFC's rights in Europe. (Am. Compl. ¶ 31; Post-Visit Corresp. at 14–15.) MWBF Klinik cautioned that the Betty Ford name may be damaged in Germany and in the European Union and asserted it would have to continue its operations under a new name, unrelated to Betty Ford, if the parties could not reach an agreement. (Am. Compl. ¶ 31; Myers Dec. ¶ 5, Ex. D ("Transition") at 23, Aug. 24, 2020, Docket No. 25-1.) BFC declined to resume discussions with MWBF Klinik at that time. (Am. Compl. ¶ 32; Transition at 22.)

After the BFC-Hazelden merger was complete, MWBF Klinik contacted Hazelden, stating that it had terminated its license to the German trademark "My Way Betty Ford Klinik," effective June 30, 2015 and was aware that the German trademark owner had never received permission to use the name. (Am. Compl. ¶ 33; Myers Decl. ¶ 6, Ex. E ("Termination") at 25, Aug. 24, 2020, Docket No. 25-1.) MWBF Klinik represented that it "had reached principal agreement with BFC in all major issues" but that Schwarzlose, who had since retired, "did not pursue this opportunity with high priority." (Termination at 26.) MWBF Klinik again indicated that it would adopt a new name and brand if it could not come to agreement with Hazelden. (Am. Compl. ¶¶ 31, 34; Termination at 26.) MWBF Klinik also stated its intention to expand capacity at its facility and further develop its brand in the European and Middle Eastern markets. (Termination at 28.)

On April 8, 2014, Marquardt and Gawinski traveled to Minnesota and met with three Hazelden employees, at Hazelden's invitation. (Decl. of Sven Marquardt ¶¶ 10–14, Aug. 3, 2020, Docket No. 20.) Hazelden informed MWBF Klinik in writing at that meeting that it would not provide a license to use the Betty Ford name and reiterated its reliance on the statement that MWBF Klinik would change its name and cease using references to "Betty Ford" as of July 1, 2015. (Am. Compl. ¶¶ 36–37; Myers Decl. ¶ 8, Ex. G at 32, Aug. 24, 2020, Docket No. 25-1.)

C. MWBF KLINIK'S CONTINUED USE OF THE "BETTY FORD" NAME

After July 2015, MWBF Klinik continued to use the "Betty Ford" name. (Am. Comp. ¶ 38.) Plaintiffs allege that MWBF Klinik's website was translated into English in late 2015, at mywaybettyford.com/en. (Id. ¶ 39.)² Though the translated version has since been removed, Plaintiffs allege that MWBF Klinik made representations on the site suggesting that it was affiliated with Hazelden, used therapy concepts based on those of "the Betty Ford Center in California, USA," and included references to MWBF Klinik's 40 years of experience with "proven Betty Ford therapy." (Id. ¶¶ 40–44.) Plaintiffs state that they have received communication from prospective patients, MWBF Klinik patients, and contacts of MWBF Klinik patients expressing confusion about the relationship between Hazelden and MWBF Klinik. (Id. ¶¶ 45–48.)

II. PROCEDURAL HISTORY

On January 30, 2020, Plaintiffs Betty Ford Trust and Hazelden filed suit against Defendant MWBF Klinik in the District of Minnesota. Plaintiffs’ Amended Complaint alleges six counts of trademark infringement under 15 U.S.C. § 1114, unfair competition under 15 U.S.C. § 1125(a), false advertising under 15 U.S.C. § 1125(b), common law trademark infringement,...