Jurisdiction Cases

Personal Jurisdiction on the Internet -- A Survey of the Cases

David G. Post/Cyberspace Law Institute

Updated June 1998

[go to outline of personal jurisdiction]

The following cases discuss the propriety of a court's exercise of personal jurisdiction over defendants based upon the defendants' Internet activities.

American Network Inc. v Access America/Connect Atlanta, Inc., 975 F. Supp. 494; 1997 U.S. Dist. LEXIS 12030 (SDNY 1997)

Bensusan Restaurant Corp. v. King, 937 F. Supp. 295 (S.D.N.Y. 1996).

Bensusan Restaurant Corp. v. King, 126 F.3d 25 (CA2 1997).

Blackburn v. Walker Oriental Rug Galleries, Inc., 1998 US Dist LEXIS 4517 (ED PA 4/9/98)

Bunn-O-Matic Corp. v. Bunn Coffee Service Inc., 1998 U.S. Dist. LEXIS 7819; 46 U.S.P.Q.2D (BNA) 1375
(C.D. IL 1998)

CompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996)

Cybersell, Inc. v. Cybersell, Inc. et al., 130 F.3d 414 (9th Cir. 1997)

Digital Equipment Corporation v. Altavista Technology, Inc. 960 F.Supp. 456 (D. Mass. March 12, 1997)

EDIAS Software Int'l, L.L.C. v. BASIS Int'l Ltd., 947 F. Supp. 413 (D. Ariz. 1996)

Hearst Corporation v. Goldberger, 1997 U.S. Dist. LEXIS 2065 (S.D.N.Y. Feb. 26, 1997)

Heroes, Inc. v. Heroes Foundation, 958 F.Supp. 1 (D.D.C. Dec. 19, 1996)

Inset Systems, Inc. v. Instruction Set, Inc., 937 F. Supp. 161 (D. Conn. 1996)

McDonough v. Fallon McElligott, Inc., 1996 U.S. Dist. LEXIS 15139, No. 95-4037, slip op. (S.D. Cal. Aug. 6, 1996)

Maritz, Inc. v. CyberGold, Inc., 947 F. Supp. 1328 (E.D. Mo. 1996)

Minnesota v. Granite Gates Resorts, Inc., 568 NW 2d 715 (Minn. Ct. App. 1997)

Panavision Int'l, L.P. v. Toeppen, 938 F. Supp. 616 (C.D. Cal. 1996)

Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc., 939 F. Supp. 1032 (S.D.N.Y. 1996)

Resuscitation Technologies, Inc. v. Continental Health Care Corp., 1997 U.S. Dist. LEXIS 3523 (S.D. Ind. 1997)

Telco Communications Inc. v. An Apple A Day Inc., 977 F. Supp. 404; 1997 U.S. Dist. LEXIS 14543 (ED VA 1997)

Weber v. Jolly Hotels, et al., 977 F. Supp. 327 (D NJ 1997)

Zippo Manufacturing Company v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D.Pa., Jan 16, 1997) (NO. CIV. A. 96-397 ERIE)

American Network Inc. v Access America/Connect Atlanta, Inc., 975 F. Supp. 494; 1997 U.S. Dist. LEXIS 12030 (SDNY 1997).

Plaintiff is a New York ISP. Defendant is a Georgia ISP. Defendant has its only office and all of its business facilities in Alpharetta, Georgia, and all of its employees are Georgia residents. It owns no property in New York. Its World Wide Web server, used to provide its customers with access to the Internet, is located in Georgia. Defendant claims that it has 7500 subscribers worldwide but only six in New York. It claims that those New York subscribers constitute only 0.08% of its customer base and contribute only $ 150 per month out of its monthly revenue of $ 195,000.

Plaintiff asserts claims of trademark infringement and unfair competition arising out of Defendant's use of the name "America.Net." Defendant moved to dismiss the complaint for lack of personal jurisdiction. The court DENIED the motion.

Analysis under NY Long-Arm Statute

Plaintiff relies on New York's longarm statute, N.Y. CPLR @ 302, for personal jurisdiction over Defendant. Relevant provisions provide that a "court may exercise personal jurisdiction over any nondomiciliary" who

"commits a tortious act without the state causing injury to person or property within the state . . . if he . . . expects or reasonably should expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce"

N.Y. CPLR @ 302(a)(3)(ii) (1997).

The court concluded that:

1. Defendant committed a tortious act (the allged trademark infringement) outside New York from which plaintiff's claims arise;
2. Plaintiff suffered injury in New York (the alleged "harm in the New York market resulting from the confusion and deception of New York computer users");
3. It was "reasonably foreseeable to defendant that publishing its home page on its Web site, with the offending mark, would have New York consequences" because there were "tangible manifestations that defendant was attempting to reach a New York market. It stated twice on its home page that it could help customers "across the U.S." It had signed up six New York subscribers. Accordingly, it was a reasonable inference that its publication of its home page might have New York consequences"; and
4. Defendant "derives substantial revenue from international commerce" (undisputed by Defendant).

Constitutional Analysis
The court went on to hold that asserting jurisdiction over Defendant here would not violate the limitations of the 14th Amendment.

1. Purposeful availment. The court declined to hold that the establishment of a web page accessible to NY residents was alone sufficient to demonstrate "some act by which the defendant purposefully avails [itself] of the privilege of conducting activities with the forum state," citing Hanson v. Denckla, 357 U.S. 235, 253, (1958). But other contacts were sufficient to find "purposeful availment," viz. signing up six New York subscribers to the services advertised on its home page, sending software and a written copy of a service agreement to those subscribers, receiving subscription fees from those subscribers, and stating on its home page that it could aid customers "across the U.S.."

2. Plaintiff must also show that "the defendant's contacts with the forum are continuous and systematic, or that the suit arises out of or is related to those contacts," citing Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 415-16 (1984). The court held that "There is a sufficient nexus here between defendant's contacts with its subscribers and plaintiff's claims. The subscriptions are evidence of defendant's effort to market its services in New York. That effort is closely related to the basis of plaintiff's claims, because it is defendant's effort to sell its services under its mark that has allegedly caused the confusion of which the plaintiff complains."

3. Third, due process requires "that the defendant's conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there." WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). Here, the court concluded that it "was reasonable for defendant to anticipate being haled into New York to defend itself from claims arising from the use of its mark in selling its services, because defendant sold its services there . . .sent [customers] materials, provided services to them, and received payment from them."

4. Finally, as to the "other factors" that a court "may evaluate" in determining whether the assertion of jurisdiction over a party is so unreasonable as to violate due process, such as the burden on the defendant, the forum state's interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective relief, the interstate judicial system's interest in obtaining the efficient resolution of controversies, and the shared interest of the states in furthering fundamental substantive social policies, see Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-77 (1985), the court found that the defendant had not presented a "compelling case that the presence of some other considerations would render jurisdiction unreasonable." Id. at 477.

Bensusan Restaurant Corp. v. King, 937 F. Supp. 295 (S.D.N.Y. 1996)
Internet web page is not sufficient to establish long-arm jurisdiction in New York. This case involved a trademark infringement suit brought by the owner of the famous New York jazz club (and of the federally registered trademark) "The Blue Note" against the owner of a small Missouri jazz club with the same name, based on alleged infringement on defendant's Internet web site. The court found personal jurisdiction over defendant lacking under both New York statute and constitutional due process, holding that "the mere fact that a person can gain information on the allegedly infringing product is not the equivalent of a person advertising, promoting, selling or otherwise making an effort to target its product in New York," and that "mere foreseeability of an in-state consequence and a failure to avert that consequence [by restricting New Yorkers' access to the web site] is not sufficient to establish personal jurisdiction." Even if jurisdiction were proper under New York's long-arm statute, asserting jurisdiction would violate constitutional due process: [Defendant] King has done nothing to purposefully avail himself of the benefits of New York. King, like numerous others, simply created a Web site and permitted anyone who could find it to access it. Creating a site, like placing a product into the stream of commerce, may be felt nationwide -- or even worldwide -- but, without more, it is not an act purposefully directed towards the forum state. There are no allegations that King actively sought to encourage New Yorkers to access his site, or that he conducted any business -- let alone a continuous and systematic part of its business -- in New York. There is in fact no suggestion that King has any presence of any kind in New York other than the Web site that can be accessed worldwide.

Bensusan Restaurant Corp. v. King, 126 F.3d 25 (CA2 1997)

The Court of Appeals affirmed the district court's finding that King was not subject to personal jurisdiction in New York based on the use of his Internet web site. Without resorting to a due process analysis, the court determined that Bensusan had failed to allege that King had committed a tortious act in New York; an act which is required to exercise personal jurisdiction over a non-resident defendant. The court stated that King was neither present in the state when the allegedly tortious act (posting of the allegedly infringing trademark) occurred, nor did King reasonably expect that posting his web site would have consequences in New York.

Blackburn v. Walker Oriental Rug Galleries, Inc., 1998 US Dist LEXIS 4517 (ED PA 4/9/98)

Plaintiff is a dealer of oriental rugs in Lancaster PA. Plaintiff created an Internet Web Site, located at the Internet address, www.wholesalerug.com, which contains graphics illustrating the various types of rugs sold by the plaintiff, accompanied by text that gives a description of each rug. Plaintiff alleges that Defendants, a Pittsburgh PA rug dealer and a Pittsburgh ISP, copied parts of Plaintiff's Web Site in violation of federal copyright law.

Defendant moved to dismiss for improper venue in the ED PA. For a copyright claim, venue is proper anywhere Defendant "may be found," i.e., in any federal court that has personal jurisdiction over the Defendant. Plaintiff argued that defendant has sufficient contacts with the Eastern District of Pennsylvania to support personal jurisdiction in ED PA, but the court disagreed.

With regard to Internet contacts, the court applied the framework set forth in the Zippo and Weber cases.

Three types of contacts have been identified in order to determine the existence of personal jurisdiction. Weber v. Jolly Hotels, 977 F. Supp. 327, 333 (D.N.J. 1997). The first type of contact is when the defendant clearly does business over the Internet. Id. "If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper." Zippo, 952 F. Supp. 1119 at 1124 (citing CompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996)). The second type of contact occurs when "a user can exchange information with the host computer. In these cases, the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Website." Zippo, 952 F. Supp. 1119 at 1124 (citing Maritz, Inc. v. Cybergold, Inc., 947 F. Supp. 1328 (E.D.Mo. 1996)); Weber, 977 F. Supp. at 333. The third type of contact involves the posting of information or advertisements on an Internet Web Site "which is accessible to users in foreign jurisdictions." Zippo, 952 F. Supp. at 1124; see Weber, 977 F. Supp. at 333; Bensusan Restaurant Corp. v. King, 937 F. Supp. 295 (S.D.N.Y. 1996). Personal jurisdiction is not exercised for this type of contact because "a finding of jurisdiction . . . based on an Internet web site would mean that there would be nationwide (indeed, worldwide) personal jurisdiction over anyone and everyone who establishes an Internet web site. Such nationwide jurisdiction is not consistent with personal jurisdiction case law. . . ." Weber, 977 F. Supp. at 333 (quoting Hearst Corp. v. Goldberger, 1997 U.S. Dist. LEXIS 2065, at *2, 1997 WL 97097, at *1 (S.D.N.Y. Feb. 27, 1997)).

Defendant's web site, the court held, was essentially an advertisement for oriental rugs, and therefore fell into the "passive" category (analogous to the site in the Cybersell case). Although the site allowed users to send email to the Defendant, "there is no option to purchase rugs from defendant, nor have any purchases from the Eastern District been alleged. The email link alone is not enough to establish jurisdiction and plaintiff has not demonstrated that the nature and quality of the commercial activity was sufficient to classify the defendants' Web Site as anything more than passive. Because defendants' Web Site was only passive, defendant does not have sufficient contacts with the Eastern District of Pennsylvania to be susceptible to personal jurisdiction."

Bunn-O-Matic Corp. v. Bunn Coffee Service Inc., 1998 U.S. Dist. LEXIS 7819; 46 U.S.P.Q.2D (BNA) 1375
(C.D. IL 1998)

Plaintiff BunnOMatic is an Illinois corporation engaged in the business of manufacturing and selling beverage processing and dispensing equipment throughout the country. Defendant Bunn Coffee Service is a New York corporation maintaining its sole place of business in Hicksville, New York, and is engaged in the business of providing office services, including coffee services, bottled beverages, snacks and paper goods in the Greater New York Metropolitan area, which includes parts of New York, New Jersey, and Connecticut. The dispute between the two parties involves an alleged trademark or service mark infringement by Bunn Coffee Services Plaintiff alleges that Defendant has used the infringing marks in nationally distributed publications, advertisements, on signs on trucks, on products and supplies, as a recorded greeting on all telephone calls to Defendant's business, and on Plaintiff's website on the Internet.

Defendant's website provides general information about Defendant and is accessible all over the country, including Illinois. The website is passive, in the sense that customers cannot place orders with Defendant by accessing the site. People can, however, enter a contest online to win free coffee but no Illinois residents have done so. The site contains toll free numbers, although these numbers are not accessible to residents of Illinois and elsewhere. The site also contains local phone numbers which can be accessed from anywhere in the country, including Illinois. Aside from its website, Defendant does not advertise, sell or ship any of its goods or services in Illinois.

Defendant moved to dismiss on the ground that the court did not have in personam jurisdiction. The court applied the Illinois long arm statute, which extends jurisdiction to the limits of that permitted under the constitution, 735 ILCS 5/2209(c), and concluded that asseting jurisdiction over the Defendant would not violate the federal constitutional limits.

"It is ... clear that the state in which a victim of a tort suffers the injury may exercise personal jurisdiction over the alleged tortfeasor. Janmark, Inc. v. Reidy, 132 F.3d 1200, 1202 (7th Cir. 1997) (noting that "there can be no serious doubt . . . that the state in which the victim of a tort suffers the injury may entertain a suit against the accused tortfeasor") (citing Calder v. Jones, 465 U.S. 783, 79 L. Ed. 2d 804, 104 S. Ct. 1482 (1984)). The court, relying on Indianapolis Colts, Inc. v. Metropolitan Baltimore Football Club Limited Partnership, 34 F.3d 410 (7th Cir. 1994), concluded that, because Plaintiff is an Illinois corporation with its principal place of business in Illinois, the injury of trademark infringement will be felt "mainly" in Illinois.

Defendant argued that some form of actual "entry" in the jurisdiction is required before jurisdiction can be asserted. The Indianapolis Colts decision "explicitly left open the question of whether some form of entry is required to establish personal jurisdiction when the defendant has brought about an injury to an interest located in a particular state." The court found that establishment of Defendant's "passive" website, accessible to residents of IL, satisfied this "very low "entry" threshold."

CompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996) Sixth Circuit found personal jurisdiction in Ohio proper over an Internet user from Texas who subscribed to a network service based in Ohio. User "specifically targeted" Ohio by subscribing to the service and entering into a separate agreement with the service to sell his software over the Internet, and advertised his software through the service and repeatedly sent his software to the service in Ohio. Court concluded that the user "reached out" from Texas to Ohio and "originated and maintained" contacts with Ohio.

Cybersell, Inc. v. Cybersell, Inc. et al., 1997 US LEXIS App. 33871, 130 F.3d 414 (9th Cir. 1997)
Plaintiff, an AZ corporation, sued an identically-named Florida corporation for trademark infrignement, arising out of the defendant's use of the (federally registered) "Cybersell" mark on its web page. The court dismissed for lack of personal jurisdiction over the defendant, holding that the defendant's contacts with the forum state were insufficient to qualify as "purposeful activity invoking the protections of Arizona." The court, following the formulation in the Zippo case, noted that the "likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet." Here, the defendant

"has conducted no commercial activity over the Internet in Arizona. All that it did was post an essentially passive home page on the web, using the name "Cybersell." While there is no question that anyone, anywhere, could access that home page and thereby learn about the services offered, we cannot see how from that fact alone it can be inferred that the defendant deliberately directed its merchandising efforts toward Arizona residents. The defendant did nothing to encourage people in Arizona to access its site, and there is no evidence that any part of its business (let alone a continuous part of its business) was sought or achieved in Arizona. . . . No Arizonan except for [plaintiff] 'hit' defendant's web site. There is no evidence that any Arizona resident signed up for defendant's . . . services. [Defendant] entered into no contracts in Arizona, made no sales in Arizona, and sent no messages over the Internet to Arizona."

Digital Equipment Corporation v. Altavista Technology, Inc.
960 F.Supp. 456 (D. Mass. March 12, 1997) (http://zeus.bna.com/e-law/cases/alta.html)

Digital Equipment Corporation has successfully obtained an injunction against AltaVista Technology, Inc.'s use of the "AltaVista" trademark on the ATI web site. Digital operates the well-known and very successful AltaVista search service (http://altavista.digital.com). In March, 1996, Digital purchased an assignment of ATI's rights to the AltaVista trademark, and immediately licensed back to ATI the right to use the AltaVista name as part of ATI's corporate name and as part of ATI's Website address (http://www.altavista.com). The license agreement, however, precluded ATI from using "AltaVista" as "the name of a product or service offering." Shortly thereafter, however, ATI began using the AltaVista name on its own Web site, including at that site, for example, a link that would allow users to "receive demo versions of the AltaVista software." Digital then sued in federal district court (D. Mass), alleging a violation of the license agreement and trademark infringement.
ATI moved to dismiss the lawsuit on the ground that the Massachusetts court lacked personal jurisdiction over ATI, a California corporation. The district court denied the motion. The court noted the difficulties of applying traditional jurisdictional concepts to Internet activity:

"The Internet has no territorial boundaries. . . . Physical boundaries typically have framed legal boundaries, in effect creating signposts that warn that we will be required after crossing to abide by different rules. [citing Johnson & Post, "Law & Borders," 48 Stan. L. Rev. at 1370-71]. To impose traditional territorial concepts on the commercial uses of the Internet has dramatic implications, opening the Web user up to inconsistent regulations throughout fifty states, indeed, throughout the globe."

This case, however, the court noted, does not raise the difficult issue of whether "any Web activity, by anyone, absent commercial use, absent advertising and solicitation of both advertising and sales, absent a contract and sales and other contacts with the forum state, and absent the potentially foreseeable harm of trademark infringement, would be sufficient to permit the assertion of jurisdiction over a foreign defendant." Here, because of ATI's prior licensing agreement with Digital and its sales of software to Massachusetts residents, the court found that jurisdiction was permissibly exercised. [The court then went on to hold that ATI had breached its license agreement with Digital and had, therefore, infringed the trademark rights that Digital had
purchased from ATI.]

EDIAS Software Int'l, L.L.C. v. BASIS Int'l Ltd., 947 F. Supp. 413 (D. Ariz. 1996) In this suit, defendant's contacts with forum state Arizona included a contract with an Arizona company [the plaintiff EDIAS], phone, fax and e-mail communications with EDIAS in Arizona during the business relationship, sales to EDIAS and other Arizona customers, and visits to Arizona. In addition, the defendant had a CompuServe web page on which it posted the allegedly defamatory statement about plaintiff. Because the statement identified plaintiff by name, and Arizona was plaintiff's principal place of business, the Court held that the web page messages "were both directed at Arizona and allegedly caused foreseeable harm to EDIAS" in Arizona. The Court exercised jurisdiction based on all of these contacts with Arizona.

In Hearst Corp. v. Goldberger 1997 WL 97097, 1997 US Dis. Lexis 2065) (SDNY Feb. 26, 1997), the federal court decided another in a growing line of Internet personal jurisdiction cases, holding that the New York long-arm statute did not permit a federal court to exercise personal jurisdiction over an out of state defendant solely because the defendant's website is accessible to, and has been electronically "visited" by, computer users in New York. Plaintiff Hearst Corporation, owner and publisher of Esquire Magazine, brought a trademark infringement action against defendant Ari Goldberger, who has established an Internet domain name and web site, "ESQWIRE.COM." Goldberger's website offers law office infrastructure network services and legal information services. Goldberger lives in Cherry Hill, New Jersey and works in Philadelphia. The court first held that Goldberger did not "transact business within New York" within the meaning of NY CPLR ºº301(a)(1) because Goldberger's website is "most analogous to an advertisement in a national magazine," and "New York law is clear . . . that advertisements in national publications are not sufficient to provide personal jurisdiction under Section 302(a)(1)." Nor was jurisdiction proper under CPLR º302(a)(2) ("Committing a Tortious Act in New York"). The court noted that the tort of trademark infringement occurs within New York in satisfaction of CPLR º302(a)(2) if the "passing off" occurs within New York. But the court held that "Even if Goldberger's Internet web site could be considered an 'offer for sale' where, as here, Goldberger has no produce or service yet available for sale, jurisdiction does not exist in New York based merely on his placing the offer on the Internet outside New York." Nor, finally, could the court exercise jurisdiction under CPLR º302(a)(3) ("Tortious Act Outside New York Causing Injury in New York"). For CPLR º302(a)(3) to be applicable the defendant must be one who either (i) regularly transacts business or "derives substantial revenue from goods used or consumed or services rendered, in the state" or (ii) expects his act "to have consequences in the state and derives substantial revenue from interstate or international commerce." Regular solicitation in New York, plus a tortious injury in New York, will suffice for personal jurisdiction under 302(a)(3)(i) even if there is no causal relationship between the advertisement \ and the injury. But here, even if Goldberger's present Internet web site is considered a solicitation (since he does not yet have any product or service to sell), it did not "occur in" New York, thus rendering º302(a)(3)(i) inapplicable. And under º302(a)(3)(ii), Goldberger does not derive "substantial revenue from interstate or international commerce" -- indeed, as the court noted, "it is undisputed that [Goldberger's] business has not derived any revenue at this point."

McDonough v. Fallon McElligott, Inc., 1996 U.S. Dist. LEXIS 15139, No. 95-4037, slip op. (S.D. Cal. Aug. 6, 1996).
Refusing to exercise personal jurisdiction over the defendant solely on the basis of its maintenance of a web site, explaining: Plaintiff has alleged that [defendant] maintains a World Wide Web ("Web") site. Because the Web enables easy world-wide access, allowing computer interaction via the Web to supply sufficient contacts to establish jurisdiction would eviscerate the personal jurisdiction requirement as it currently exists; the Court is not willing to take this step. Thus, the fact that [defendant] has a Web site used by Californians cannot establish jurisdiction by itself.

Heroes, Inc. v. Heroes Foundation, 958 F.Supp. 1 (D.D.C. Dec. 12, 1996) http://zeus.bna.com/e-law/libindex.html In this case the defendant charity had placed an advertisement seeking donations in the Washington Post and also had an Internet web page that was nationally accessible. The Court found that defendant transacted business and caused tortious injury (based on trademark infringement) in the forum jurisdiction based on the combination of the local newspaper advertisement and the Internet site. While the Court held that, because of the newspaper advertisement, it need not decide if the Internet web site alone would support jurisdiction, the opinion appeared to leave little doubt that it would have sustained jurisdiction based upon the web site alone.

Inset Systems, Inc. v. Instruction Set, Inc., 937 F. Supp. 161 (D. Conn. 1996) Sustaining exercise of jurisdiction over defendant where defendant's only contacts with Connecticut were an Internet web site and an 800 telephone number, both of which advertised defendant's services. The web site and 800 number were accessible to anyone with Internet access or a telephone including Connecticut residents.

Maritz, Inc. v. CyberGold, Inc., 947 F. Supp. 1328 (E.D. Mo. 1996) Sustaining exercise of jurisdiction over defendant where defendant's only contact with Missouri was a web site "published" on a computer in California that "provided information about CyberGold's new upcoming [Internet] service." Court noted that defendant's web site was accessible to any Internet user, including those in Missouri, and in fact had been accessed by people in Missouri.

Minnesota v. Granite Gates Resorts, Inc., 568 NW 2d 715 (Minn. Ct. App. 1997). Court upholds personal jurisdiction in an action by the State Attorney General to enjoin defendant's gambling web site under the state's gambling and consumer protection laws. Minnesota's long-arm statute, Minn. Stat. § 543.19 (1996), "permits courts to assert jurisdiction over defendants to the extent that federal constitutional requirements of due process will allow." Domtar, Inc. v. Niagara Fire Ins. Co., 533 N.W.2d 25, 29 (Minn.), cert. denied, 116 S. Ct. 583 (1995). Defendant's wagering site, the court held, can be viewed as an "advertisement" by which "[the foreign corporation] distributes its pictorial images throughout the United States. Minnesota courts have concluded that defendants "who know their message will be broadcast in this state are subject to suit here." See, e.g., Tonka Corp. v. TMS Entertainment, Inc., 638 F. Supp. 386, 391 (D. Minn. 1985).

"Internet advertisements are similar to broadcast and direct mail solicitation in that advertisers distribute messages to Internet users, and users must take affirmative action to receive the advertised product. Here, the WagerNet site itself stated that it was "open to International markets," indicating an intent to seek customers from a very broad geographic area.. . . The fact that WagerNet had apparently paid for advertising in English on an American commercial site indicates an intent to reach the American market, and by advertising their services with a toll-free number, appellants indicated their intent to solicit responses from all jurisdictions within that market, including Minnesota. . . . Through their Internet advertising, defendants have demonstrated a clear intent to solicit business from markets that include Minnesota and, as a result, have had multiple contacts with Minnesota residents, including at least one successful solicitation. The cause of action here arises from the same advertisements that constitute appellants' contacts with the state and implicates Minnesota's strong interest in maintaining the enforceability of its consumer protection laws. Defendants have not demonstrated that submission to personal jurisdiction in Minnesota would subject them to any undue inconvenience. For these reasons, we hold that appellants are subject to personal jurisdiction in Minnesota because, through their Internet activities, they purposefully availed themselves of the privilege of doing business in Minnesota to the extent that the maintenance of an action based on consumer protection statutes does not offend traditional notions of fair play and substantial justice."

Panavision Int'l, L.P. v. Toeppen, 938 F. Supp. 616 (C.D. Cal. 1996) Defendant Toeppen, an Illinois resident, was an individual who "attempts to profit from the Internet by reserving and later reselling or licensing domain names back to the companies that spent millions of dollars developing the goodwill of the trademark." Toeppen had registered, as his Internet domain name, Panavision's trademark, as well as the trademarks of numerous other well-known companies. When Panavision later attempted to establish a web site using its own trademarked name, it was prevented from doing so by Toeppen's prior registration. Rather than acquiesce to Toeppen's extortionate demand for $13,000 to release the domain name, Panavision sued in California for trademark infringement. The California court held that jurisdiction was "proper because Toeppen's out-of-state conduct was intended to, and did, result in harmful effects in California." It reasoned that "Toeppen allegedly registered Panavision's trademarks as domain names with the knowledge that the name belonged to Panavision and with the intent to interfere with Panavision's business. Toeppen expressly aimed his conduct at California," which is Panavision's principal place of business.

Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc., 939 F. Supp. 1032 (S.D.N.Y. 1996) Contempt proceeding against defendant for violation of a 1981 judgment enjoining it from publishing or distributing in the United States its "Playmen" magazine. The court found that defendant had violated the injunction because defendant "actively solicited United States customers to its Internet site, and in doing so has distributed its product within the United States." One of defendants' web sites, however, was not just a source of passive information but was a "pay" site; thus, to access the site, the customer had to subscribe affirmatively to the service and pay defendant, and the customer would receive from defendant a "password" allowing access to the site. Thus, defendant knew that people in the United States were accessing its site. Id. at 1039. Court found the site to be a United States distribution in violation of the injunction: Defendant has actively solicited United States customers to its Internet site, and in doing so has distributed its product within the United States. When a potential subscriber faxes the required form to [defendant] Tattilo, he receives back via e-mail a password and user name. By this process, [defendant] distributes its product within the United States. . . . [Defendant] may of course maintain its Italian Internet site. The Internet is a world-wide phenomenon, accessible from every corner of the globe. [Defendant] cannot be prohibited from operating its Internet site merely because the site is accessible from within one country in which its product is banned. To hold otherwise would be tantamount to a declaration that this Court, and every other court throughout the world, may assert jurisdiction over all information providers on the global World Wide Web. Such a holding would have a devastating impact on those who use this global service. The Internet deserves special protection as a place where public discourse may be conducted without regard to nationality, religion, sex, age, or to monitors of community standards of decency. However, this special protection does not extend to ignoring court orders and injunctions. If it did, injunctions would cease to have meaning and intellectual property would no longer be adequately protected.

Resuscitation Technologies, Inc. v. Continental Health Care Corp., 1997 U.S. Dist. LEXIS 3523 (S.D. Ind. 1997) Plaintiff initiated contact with defendant via a solicitation at plaintiff's web site. the solicitation indicated that plaintiff was an Indiana start-up company in the medical device field, and was seeking sources of capital. Defendant responded to the solicitation by e-mail. Subsequently, plaintiff and defendant corresponded by e-mail, telephone, and regular mail; their communications included some 80 e-mail messages. The parties met face-to-face (though only in New York), and engaged in intense negotiations for several months. After those negotiations soured, plaintiff filed an action in federal court, seeking a declaratory judgment that there was no contract formed between the parties regarding certain technology belonging to plaintiff. Defendant moved to dismiss on the ground that the court lacks personal jurisdiction. Defendant argued that it neither owns property nor conducts business in Indiana; moreover, defendant argued that because it plaintiff first solicited its business via its web site, it had not "purposefully availed [itself] of the privilege of doing business in Indiana" and that therefore the exercise of jurisdiction would contravene the due process clause. The court rejected the motion to dismiss, holding that defendant could not defeat jurisdiction merely by showing that plaintiff initiated the contact between the parties via the World Wide Web. "The parties continued to communicate extensively through electronic mail, the goal of which was to combine their resources to form a new company for purposes of funding the development of [plaintiff's] medical device technology. A continuing and long-term relationship was contemplated, as indicated by the non-binding letter of intent dated August 21, 1996. Even though their face-to-face meetings were out of state, the negotiations and discussions during those meetings were directed towards setting in motion a business operation that would have a significant commercial impact on Indiana. This Court finds that the intended object of the contacts by [defendant] with [plaintiff] and with the State of Indiana were to transact business in Indiana." The issue, the court noted, "is not, as suggested by defendants' counsel, 'who started it.' Neither is the matter disposed of by the fact that no defendant ever set foot in Indiana. The "footfalls" were not physical, they were electronic. They were, nonetheless, footfalls. The level of Internet activity in this case was significant" enough to subject the defendant to jurisdiction in Indiana. While "one or two inquiries about some Indiana goods or services would not support local jurisdiction," here the "electronic mail messages were numerous and continuous,." Because defendants "unquestionably reached beyond the boundaries of their own states to do business in Indiana, it is not unreasonable for them to be haled into an Indiana forum." The defendant here tried to persuade the court that somehow the Internet is "different," that because the plaintiff initiated the contact with the defendant over the Internet, the court somehow lacked jurisdiction over the defendant, notwithstanding the *many* subsequent contacts between the parties. The court correctly, applying traditional and long-standing notions of personal jurisdiction, rejected the claim.

Telco Communications Inc. v. An Apple A Day Inc., 977 F. Supp. 404; 1997 U.S. Dist. LEXIS 14543 (ED VA 1997)

Defendant Apple is a Missouri corporation that claims to be the owner of the service mark "DIAL & SAVE." Plaintiff TELCO is a Virginia corporation, with a subsidiary, Dial & Save of Missouri, which is involved in selling discount long distance telephone service in Missouri. In December 1996, Apple sued TELCO in the United States District Court for the Eastern District of Missouri, alleging trademark infringement; that suit was pending when the current action was filed.

In this suit, Plaintiff alleges that Defendants issued two press releases and made calls to a securities analyst in Maryland, that these releases and calls defamed TELCO, and that TELCO's stock price was depressed as a result. Plaintiff asserts that this conduct constitutes (1) Defamation under Section 8.0145 of the Virginia Code; (2) Common Law Defamation; (3) Tortious Interference with a Contractual Relationship and Reasonable Business Expectation; (4) Conspiracy to Harm Business in violation of Sections 18.2499 and 18.2500 of the Virginia Code; and (5) Common Law Conspiracy to Harm Business.

Defendant moved to dismiss on the ground that the court lacked personal jurisdiction.

Virginia law [Section 8.01328.1(A)(4)] ("subsection (4)") permits personal jurisdiction to be exercised over a defendant who caused a tortious injury in Virginia by an act or omission outside Virginia if the defendant "regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered" in Virginia. The court, acknowldeging that this case presents a "complex question of what conduct occurred [because] unlike in most cases, the allegedly improper behavior transpired on the Internet," held that the Defendant did engage in a "persistent course of conduct" in Virginia. Following the Inset Systems decision, the court held that " Because they conducted their advertising and soliciting over the Internet, which could be accessed by a Virginia resident 24 hours a day, the Defendants did so regularly for purposes of the longarm statute. Accordingly, the Court finds that posting a Web site advertisement or solicitation constitutes a persistent course of conduct, and that the two or three press releases rise to the level of regularly doing or soliciting business, thus satisfying subsection 4" of the Virginia statute.

As to the constitutional limitations, the court held that "conferring jurisdiction in this case does not upset the Due Process Clause." The Court found that the Defendants "could reasonably have anticipated being haled into court" in Virginia, because they "should have reasonably known that their press releases would be disseminated here, and they certainly knew that TELCO is based in Virginia. Their activities were sufficient to serve as an analogue for physical presence. Accordingly, they are subject to jurisdiction here."

WEBER v. JOLLY HOTELS, et al., 977 F. Supp. 327 (D NJ 1997)

http://lw.bna.com/#1014

Defendant is an Italian corporation that owns 32 hotels in Italy. Defendant does not conduct any business in New Jersey. However, it does provide "photographs of hotel rooms, descriptions of hotel facilities, information about numbers of rooms and telephone numbers" on its World Wide Web site on the Internet.

Plaintiff sustained injuries when she fell at a hotel owned by Defendant. She filed suit in New Jersey, and Defendant moved to dismiss the case for lack of personal jurisdiction. The court agreed that it lacked jurisdiction over the Defendant (although it did not dismiss the case, transferring it instead to the Southern District of New York).

The accessibility of Defendant's web site to consumers in NJ does not constitute the kind of "continuous and substantial" contacts with the forum state to sustain general personal jurisdiction over the defendant. "[E]xercising jurisdiction over a defendant who merely advertises its services or product on the Internet would violate the Due Process Clause of the Fourteenth Amendment [and] would disrespect the principles established by International Shoe and its progeny. "

Defendant placed information about its hotels on the Internet as an advertisement, not as a means of conducting business. In the past year, two district courts have refused to exercise jurisdiction over defendants who have a passive connection to the Internet. In Smith v. Hobby Lobby Stores, Inc., 968 F. Supp. 1356 (W.D. Ark. 1997), the Court found that an advertisement in a trade publication was an insufficient contact with the forum state because the defendant "did not contract to sell any goods or services to any citizens of Arkansas over the Internet site." Id. at 1365. In Hearst, supra, the Court concluded that advertising services on the Internet was equivalent to advertising in a national magazine, and that under New York law, such advertisements do not provide the requisite contacts to provide personal jurisdiction. 1997 U.S. Dist. LEXIS 2065, 1997 WL 97097 at *10; see also Bensusan, 937 F. Supp. at 301 (finding that creation of Web site is not sufficient to find that defendant purposefully availed himself of forum).

This Court agrees with the finding in Hearst that advertising on the Internet falls under the same rubric as advertising in a national magazine. This Circuit has consistently held that advertising in national publications "does not constitute 'continuous and substantial' contacts with the forum state." See, e.g., Gehling v. St. George's School of Medicine, 773 F.2d 539, 542 (3d Cir. 1985); see also Giangola v. Walt Disney World Co., 753 F. Supp. 148, 156 (D.N.J. 1990) [*334] ("In an age of modern advertising and national media publications and markets, plaintiffs' argument that such conduct would make a defendant amenable to suit wherever the advertisements were aired would substantially undermine the law of personal jurisdiction."). In addition, advertising on the Internet is not tantamount to directing activity at or to purposefully availing [**17] oneself of a particular forum.

Zippo Manufacturing Company v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D.Pa., Jan 16, 1997)
Plaintiff, manufacturer of tobacco lighters with its principal place of business in Pennsylvania, sued defendant, an Internet subscription news service with its principal place of business in California, for trademark infringement and dilution arising out of Defendant's use of the domain names "zippo.com", "zippo.net" and "zipponews.com" on the Internet.

Defendant's contacts with Pennsylvania "have occurred almost exclusively over the Internet. Dot Com's offices, employees and Internet servers are located in California. Dot Com maintains no offices, employees or agents in Pennsylvania. Dot Com's advertising for its service to Pennsylvania residents involves posting information about its service on its Web page, which is accessible to Pennsylvania residents via the Internet. Defendant has approximately 140,000 paying subscribers worldwide. Approximately two percent (3,000) of those subscribers are Pennsylvania residents. These subscribers have contracted to
receive Dot Com's service by visiting its Web site and filling out the application. Additionally, Dot Com has entered into agreements with seven Internet access providers in Pennsylvania to permit their subscribers to access Dot Com's news service. Two of these providers are located in the Western District of Pennsylvania."

Court discusses "sliding scale" for exercise of personal jurisdiction based upon Internet contacts.
At one end of the spectrum are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper. E.g. Compuserve, Inc. v. Patterson, 89 F.2d 1257 (6th Cir.1996). At the opposite end are situations where a defendant has simply posted information on an Internet Web site which is accessible to users in foreign jurisdictions. A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise personal jurisdiction. E.g. Bensusan Restaurant Corp., v. King, 937 F.Supp. 296 (S.D.N.Y.1996). The middle ground is occupied by interactive Web sites where a user can exchange information with the host computer. In these cases, the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Website.
The court finds that jurisdiction is proper because the Defendant:
"has done more than create an interactive Web site through which it exchanges information with Pennsylvania residents in hopes of using that information for commercial gain later. We are not being asked to determine whether Dot Com's Web site alone constitutes the purposeful availment of doing business in Pennsylvania. This is a "doing business over the Internet" case in the line of Compuserve, supra. We are being asked to determine whether Dot Com's conducting of electronic commerce with Pennsylvania residents constitutes the purposeful availment of doing business in Pennsylvania. We conclude that it does. Dot Com has contracted with approximately 3,000 individuals and seven Internet access providers in Pennsylvania. The intended object of these transactions has been the downloading of the electronic messages that form the basis of this suit in Pennsylvania."