Tribal Court Could Not Hear Dispute over Cigarette Packaging

by Thomas Long, Legal Editor, CCH Trademark Law Guide

A Native American tribal court lacked jurisdiction over a declaratory judgment action brought by tribal members seeking a declaration that the packaging for their "King Mountain" brand cigarettes did not infringe or dilute tobacco company Philip Morris's "Marlboro" trademarks and trade dress, the U.S. Court of Appeals in San Francisco has held. The declaratory judgment action was filed after Philip Morris filed a trademark infringement and dilution action against the tribe members in federal district court.

There was no contract or consensual relationship between Philip Morris and the tribal members that would give the tribal court a colorable claim to jurisdiction, the court said. The parties were, in fact, market competitors. Philip Morris did not otherwise consent to tribal jurisdiction by voluntarily litigating its infringement claims in tribal court.

There was no nexus between Philip Morris's commercial relationship with various stores operated by tribal members and the events that gave rise to Philip Morris's trademark infringement suit. The mere fact that a nonmember had some consensual commercial contacts with a tribe did not mean that the tribe has jurisdiction over all suits involving that nonmember, or even over all such suits that arose within the tribe's reservation, according to the court. The suit would have to arise out of those consensual contacts for jurisdiction to be conferred.

The infringement lawsuit arose from the alleged nationwide sales, including sales on the Internet and on other reservations, of King Mountain cigarettes, not from the marketing contracts between Philip Morris and a handful of stores on the reservation. In addition, the claims were not of the type the U.S. Supreme Court had in mind when it carved out an exception for tribal jurisdiction over "conduct [that] threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe." The tribe itself was not a party to this case. Pursuit of federal and state trademark claims did not pose a direct threat to tribal sovereignty, the court concluded.

Philip Morris USA, Inc., 9th Cir., ¶61,361

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