Kirby Morgan Dive Systems v. Hydrospace Ltd. et al, 2010 U.S. Dist. LEXIS 9657 (C.D. Cal., 2010)
Plaintiff entered into a distribution agreement with Defendant wherein defendant would promote, market, and sell Plaintiff’s products in the Brittish Isles and Defendant would not participate in the manufacturing of any competitive products. The agreement included an arbitration clause governed by the American Arbitration Association and California law.
Plaintiff terminated the contract on an alleged breach by Defendant of the manufacturing provision and instigated arbitration including claims for trademark and copyright infringement. Defendant did not participate in the arbitration. After default, Plaintiff sought to have the arbitration award entered as a judgment. Defendant opposed this motion, in part, on grounds of lack of subject matter jurisdiction.
Plaintiff argued that its trademark claims gave rise to subject matter jurisdiction under 28 USC 1338. However, because Plaintiff had not technically filed a trademark cause of action, but rather a petition to confirm an arbitral award under 9 USC 9, the issue is that it is not readily apparent on the face of the petition whether it falls under 28 USC 1338. Based on the reasoning in Vaden v. Discover Bank, 128 S.Ct. 1262 (2009), that adopts a “look through” approach with regard to petitions to compel arbitration, the court found that there was subject matter jurisdiction because the arbitration involved claims of copyright and trademark infringement.