Judge seats accused Best Chairs trademark infringer in Indiana

Online merchants who have sold more than $6 million worth of chairs with names that allegedly infringe on a longtime Indiana manufacturer’s trademarks will have to answer the claims in federal court in Evansville, a judge ruled Tuesday.

Ferdinand-based Best Chairs Inc. has named seven defendants, and the company suspects more may be discovered that could be liable for damages. The company accuses defendants of infringing on its longstanding trademarks that include Best Chairs Inc., Best Home Furnishings, The Power of Best and Best-Max.

Best Chairs alleges Hanping Liu as owner and CEO of Factory Direct Wholesale LLC and several other corporations and entities sold chairs labeled “BestChair,” “Best Chair” and “BestOffice” on their own websites and through other online retailers such as Amazon, eBay and others, according to the record.

“Limited discovery to date reflects that from January 2013 through September 2014, Factory Direct sold $6,000,000 worth of ‘BestChair’ product throughout the United States,” wrote Chief Judge Richard Young of the U.S. District Court for the Southern District of Indiana. Sales in Indiana were about $102,500, or roughly 1,500 infringing products, according to the record.

Young ruled the Evansville Division was proper jurisdiction for the case to proceed, rejecting Georgia-based Factory Direct defendants’ motions to dismiss.

“The court finds that exercising specific personal jurisdiction over Factory Direct and the Newly-Added Defendants is consistent with due process and does not offend traditional notions of fair play and substantial justice,” Young wrote in Best Chairs Inc. v. Factory Direct Wholesale, LLC, et al., 3:14-cv-67.

“The court further finds that Best Chairs’ trademarks are not generic, and that Best Chairs did not unreasonably delay in filing this lawsuit,” Young wrote in denying defendants’ motions to dismiss. Separately Tuesday, Young also denied Best Chairs’ motions for default judgment against several of the defendants.

Young noted Best Chairs has been manufacturing chairs for more than 50 years from its base in southwest Indiana. The company became aware of “BestChair” merchandise being sold on Amazon in 2012 and ordered a chair. Because no other “BestChair” identifiers were found on the product or shipping materials, Best Chairs sent a cease and desist letter to Amazon, which discontinued use of the “BestChair” identifier. The record indicates Best Chairs considered the matter resolved at that point.

But in 2014, Best Chairs received a Better Business Bureau complaint from a customer who had purchased a defective office chair on Rakuten.com identified as “BestChair.” The record says Best Chairs claims its investigation revealed product in both cases was being sold by Factory Direct or related entities, after which Best Chairs sent Factory Direct a cease and desist letter.

“Factory Direct responded that it could not find any evidence of Best Chairs’ use of the mark and would take no steps to prevent customer confusion,” Young wrote, after which Factory Direct applied with the Patent and Trademark Office to use “BestChair” as its own trademark.

Three more cases of customer confusion apparently occurred after the cease and desist letter was sent to Factory Direct, according to Young’s ruling.

“The court finds that exercising jurisdiction over Factory Direct in Indiana is fair,” Young wrote. “Factory Direct set up an expansive internet presence for the purpose of selling its ‘BestChair’ products to consumers in 48 states, including Indiana. While Factory Direct may be burdened by litigation in Indiana, Indiana has a strong interest in providing Indiana businesses like Best Chairs with a forum in which to seek relief.”