Toys “R” Us is a Delaware corporation headquartered in New Jersey that owns and operates retail stores worldwide. In 1999, Toys “R” Us acquired Imaginarium Toy Centers, including the rights to various trademarks held by Imaginarium. Step Two, a corporation based in Spain, owns franchised toy stores operating under the Imaginarium name in several Spanish cities but does not maintain any offices or stores outside of Spain. Each corporation registered multiple e-mail addresses under the Imaginarium name. Step Two’s sites were interactive and allowed users to purchase toys online, but the company would ship only within Spain. If users signed up for Step Two’s electronic newsletter, they were prompted to enter personal information and were provided with a drop-down menu of various Spanish provinces to indicate their location. This menu did not accommodate mailing addresses within the United States, and Step Two maintains that it has never made a sale in the United States. Toys “R” Us claimed that it had evidence that a resident of New Jersey made two purchases via the website, but it conceded that these purchases were delivered to a Toys

“R” Us employee in Spain, who then forwarded the items to the purchaser in New Jersey. Toys “R” Us filed a trademark infringement suit in a federal district court in New Jersey.

CASE QUESTIONS

1. Does the federal court in New Jersey have subject matter jurisdiction over this case?

2. Has Step Two purposefully availed themselves in New Jersey, thus having the requisite minimum contacts? Why or why not?

3. Analyze this case under both the Zippo and Asahi frameworks.

Describe the analysis and potential outcome under each. Which is the correct test to use and why?