P sells specialty goods at reasonable prices from its distinctive, South Pacific-themed stores. About eighty percent of the goods are branded products that are available only at P. P does not operate outside of the United States, but Canadian consumers regularly travel across the border to shop at P's stores located in northern Washington. D visited the store several times per week to buy large quantities of products. D admitted that he drives the goods he purchases across the Canadian border where he distributes them to Canadian customers. D opened a store in Canada named Transilvania Trading (which he later renamed 'Pirate Joe's') where he resells, at substantially inflated prices, P's goods purchased in Washington. D advertises his wares with P's trademarks, operates a website accessible from the United States, displays an exterior sign at Pirate Joe's that uses a font similar to the trademarked 'Trader Joe's' insignia, and designed the Pirate Joe's store to mimic P's trade dress. P has received at least one complaint from a consumer who became sick after eating a P-branded product she purchased from Pirate Joe's. P declined to serve D as a customer but kept on purchasing in disguise or from different stores. D pays third parties to buy Trader Joe's goods on his behalf. P sued D for trademark infringement. The district court granted D's motion to dismiss for lack of subject-matter jurisdiction, concluding that the Lanham Act did not apply to D's conduct in Canada. P appealed.

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