V. Beyond Copyright: Information Liability and the Communications Decency Act

Lockheed Martin Corp. v. Network Solutions, Inc., 985 F. Supp. 949, 956. (CD. Cal. 1997). Nor did Toeppen undertake any steps to implement his plan in California, such as initiating contact with Panavision to extract a payment. Under the circumstances, the holding in this case effectively permits jurisdiction on no more than a mere presence on the Internet.
Eventually Internet jurisdiction jurisprudence began to reject the notion that mere domain name piracy, in the absence of additional contacts with the subject forum, is an appropriate basis for personam jurisdiction. For example, in K.C.P.L., Inc. v. Nash, 49 U.S.P.Q. 2d 1584 (S.D.N.Y. 1998), defendant had no contacts with New York whatsoever, and thus his alleged cyber squatting was plaintiff's sole basis for asserting personal jurisdiction. Rejecting plaintiff's assertion, the New York court both distinguished and disagreed with Toeppen, noting that, inter alia, (i) California's long-arm statute is broader in scope than the New York statute, (ii) the actual evidence indicated that defendant in this case had some legitimate claim to the domain name, and (iii) in any event, simply registering a domain name and allegedly asking to be paid to release it is activity insufficient to be characterized as the commission of a tortious act within a particular forum state. 49 U.S.P.Q. 2d at 1589-91.
In Hearst Corporation v. Goldberger, 1997 U.S. Dist. LEXIS 2065 (S.D.N.Y.) the New York District Court directly confronted the question as to whether a mere presence on the Internet can provide a proper basis for in personam jurisdiction in a particular forum. In this case, a New Jersey lawyer advertised to provide legal services via his web site, but had not yet actually provided any services to anyone, anywhere, when trademark infringement litigation was filed against him in New York.
Reviewing the prior federal and state decisions addressing the issue, the court concluded that it lacked personal jurisdiction over the defendant, notwithstanding the fact that New Yorkers had at least accessed defendant's web site and he had used it to send e-mails to and receive e-mails sent from New York. While acknowledging that "[t]he issue of personal jurisdiction and the Internet has split the federal districts courts that have addressed the issue to date" the court nonetheless ruled that "[defendant's] Internet web site... is most analogous to an advertisement in a national magazine. Like such an ad, [defendant's] Internet web site may be viewed by people in all fifty states (and all over the world too for that matter), but it is not targeted at the residents of New York or any other particular state." 1997 WL97097 at *7, *10.
In declining to follow those courts that found sufficient basis for forum jurisdiction upon little or no more than an Internet presence, "[t]he Court recognizes that [although] there is some truth in the [position of some other courts] that "while modern technology has made nationwide commercial transactions simpler and more feasible,... it must broaden correspondingly the permissible scope of jurisdiction exercisable by the courts"... this court, however, agrees [that such] 'would be tantamount to a declaration that this court, and every other court throughout the world, may assert [personal] jurisdiction over all information providers on the global Worldwide Web.'" 1997 WL97097 at *20. See also, Bensusan Restaurant Corp., v. King, 937 F. Supp. 295, 299 (S. D. N.Y. 1996). ("The mere fact that a person can gain information [from the Internet] 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."); Cybersell, Inc. V. Cybersell, Inc., 130 F.3d 414, 415, 420 (9th Cir. 1997) (reviewing prior Internet forum jurisdiction cases and holding that "we conclude that it would not comport with traditional notions of fair play and substantial justice" ... for Arizona to exercise personal jurisdiction over an allegedly infringing Florida web site advertiser who has no contacts with Arizona other than maintaining a home page that is accessible to Arizonans, and everyone else, over the Internet ... Otherwise, every complaint arising out of alleged trademark infringement on the Internet would automatically result in personal jurisdiction wherever the plaintiff's principal place of business is located.")
Finally, in Zippo MFG. Co. v. Zippo Dot.Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997) the Pennsylvania District Court analyzed the spectrum of possible jurisdiction bases arising in the Internet context, focusing on the quality and context of the specific Internet activity, and synthesized and refined the analysis set out in AltaVista, CompuServe and Hearst:
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... 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... A passive web site that does little more than make information available to those are interested in it, is not grounds for the exercise of personal jurisdiction... 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 web site.
952 F.Supp. at 1124, citing Pres-kap, Inc. v. System One, Direct Access, Inc. 636 So.2d 1351 (Fla. App. 1994) (distinguishing between consumer and commercial transactions on the Internet in analyzing forum jurisdiction issues).
The court concluded that although defendants' offices and employees were all located in California and its contacts with Pennsylvania occurred exclusively over the Internet, there was sufficient basis for personal jurisdiction in that defendant had signed up more than 3,000 Pennsylvania residents as subscribers to its Internet information service, and had entered into agreements with seven Internet access providers in the state to provide subscriber access. 952 F. Supp. at 1121.
Accord, Gary Scott Intern Inc. v. Baroudi, 981 F.Supp. 714 (D. Mass. 1997 (advertising on Internet and sale of humidors in the forum state a basis for jurisdiction); Heros, Inc. v. Heros Foundation, 958 F. Supp. 1 (D.D.C. 1996) (advertisement on Internet coupled with advertising in local forum newspaper); Resuscitation Technologies, Inc. v. Continental Health Care Corp., 1997 U.S. Dist. LEXIS 3523 *17 ("Certainly, one or two inquiries about some Indiana goods or services would not support local jurisdiction. Here, however, the electronic mail messages [and business negotiations] were numerous and continuous over a period of months. The purpose of that activity was for the defendants and the plaintiff to unite in a joint venture to capitalize production of certain medical devices. Without question [defendants] reached beyond the boundaries of their own states to do business in Indiana"); National Football League v. Miller, 2000 WL 335566 (S.D.N.Y.) (unauthorized use of plaintiff's trademarks and copyrighted material in domain name and on a website, coupled with hyperlink to an "electronic bookie", held sufficient basis for finding that defendant "must have recognized that in using the NFL mark to attract people to a site that could pass them on to an electronic bookie...could do significant damage to the image of the NFL ...in [its forum state]"); Dagesse v. Plant Hotel N.V., 2000 WL 1371381 (D.N.H. 2000); Aero Products International, Inc. v. Intex Corp., 2002 U.S. Dist. LEXIS 17948; 64 U.S.P.Q. 2D (BNA) 1772 (although passive website is an insufficient basis for jurisdiction, actual sales through a separate, interactive website supplies a proper basis for Illinois jurisdiction over California defendant); Andrew Greenberg, Inc., v. Sir-Tech Software, Inc., 297 A.D. 2d 834 (App. Div. 2002) (passive website insufficient basis for jurisdiction); Auid AG v. Izumi, 204 F. Supp. 2d 1014 (E.D. Mi. 2002); Verizon Online Services, Inc. v. Ralsky, 203 F. Supp. 2d 601 (E.D. Va. 2002) ("spamming" trespass on to computer network a proper basis for long-arm jurisdiction); Pavolvich v. DVD Copy Control Association, Inc, 58 P. 3d 2 (Sup. Ct. Ca. 2002) (posting of misappropriated trade secret on passive website insufficient basis for jurisdiction); Systems Designs, Inc., v. New Customware Company, Inc., 2003 U.S. Dist. LEXIS 3271 (D. Utah).
At the same time, it should be noted that the standardized contract term that generates extensive litigation is that denoting forum selection and choice of law. Although many courts were initially reluctant to enforce such terms, increasingly courts have applied a reasonableness test on a case-by-case basis. See America Online, Inc. v. Booker, 781 So. 2d 423 (Fla. Dist. Ct. of App. 2001); America Online, Inc. v. Superior Court of Alameda County, 108 Cal. Rptr. 2d 699 (Cal. Ct. of App. 2001); Forest v. Verizon Communications, Inc., 805 A. 2d 1007 (D.C. Ct of App. 2002). Net2Phone, Inc. v. Superior Court of Los Angeles, 109 Cal. App. 4th 583 (Cal. Ct. of App. 2003). Courts have become increasingly comfortable with the notion that requiring consumers to litigate their claims in a single forum convenient to an e-commerce vendor is not unreasonable per se, and appear to require some bona fide hardship before invalidating such clauses.
In sum, while the Zippo decision reflects the prevailing approach in assessing Internet activity as the basis for personam jurisdiction, the astute practitioner must also account for the Toeppen line of domain name piracy cases as well. Where tortious conduct or intellectual property infringement is alleged, some courts continue to interpret state long-arm statutes or traditional "intellectual property injury occurs where the trademark owner is" analysis as permitting jurisdiction on little more than a presence on the Internet. See e.g. Northern Light Technology, supra, 97 F. Supp. at 104-09; Bird v. Parsons, 289 F. 3d 865 (6th Cir. 2002) (allegation that domain name registrar registered Ohio residents' domain names on the Internet provides sufficient basis for long-arm jurisdiction); Metro-Goldwyn-Mayer Studios Inc. v. Grotsker, 2003 U.S. Dist. LEXIS 800 (CD. Cal.) (dissemination of peer to peer music sharing software via website provides sufficient basis for both long-arm and "copyright injury occurs where defendants know the copyright owner is" jurisdiction); but cf. AOL, Inc. v. Chih-Hshen Huang, 106 F. Supp. 2d 848 (E.D. Va. 2000) (delineation, analysis, and application of tests for jurisdiction based on registration of domain name as (i) doing business in (ii) aiming long-arm conduct at and/or (iii) trademark injury occurring in forum state).
Arguably, the weight of authority will continue to amass in favor of requiring some actual activity or injury in the subject forum beyond improper domain name registration, to support long-arm jurisdiction. On the other hand, while the advent of the Internet has highlighted the deficiencies of the traditional intellectual property jurisdiction approach (are the New York customers of my New York based business actually aware that a competitor is using my mark in California- if not, isn't it more accurate to assess my injury as having occurred in California?) it also raises the question as to whether the traditional approach might not be the best approach for intellectual property injury that occurs exclusively cyberspace (when customers who are familiar with the owner's mark log on to an infringer's website, where does the resulting injury occur-in the forum of each viewing customer or where the intellectual property owner resides?) Finally, it should be noted that specifically in so far as trademark injury is concerned, the Internet Corporation for Assigned Names and Numbers (ICANN) provides a Uniform Domain Name Dispute Resolution Policy, which further mandates that the parties agree to submit to a court of "mutual jurisdiction" in connection with the ultimate resolution of the dispute.
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