Cybersell, Inc. v. Cybersell, Inc.
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| Cybersell, Inc. v. Cybersell, Inc | |
|---|---|
 | |
| Court | United States District Court for the District of Arizona |
| Decided | Dec. 2, 1997 |
| Citation | 130 F.3d 414 |
| Holding | |
| The order granting Cybersell AZ's motion to dismiss for lack of personal jurisdiction was affirmed because appellees' use of an Internet Web page name was passive and did not constitute commercial activity within the state; appellees had not purposefully availed themselves such that they could expect to be subject to the court's jurisdiction. | |
| Court membership | |
| Judge sitting | Pamela Ann Rymer |
| Keywords | |
| Personal Jurisdiction | |
Cybersell, Inc. v. Cybersell, Inc was a trademark infringement case based on the use of an internet service mark. The United Stated District Court for the District of Arizona was asked to review whether the allegedly infringing use of a service mark in a home page on the World Wide Web suffices for personal jurisdiction in the state where the holder of the mark has its principal place of business. The Cybersell holding illustrates that passive websites do not establish personal jurisdiction in outside the state in which they are based. [1][2]
Facts of the Case
Plaintiff Cybersell, Inc. (Cybersell AZ), an Arizona corporation, was incorporated in May 1994 providing advertisements for commercial services over the Internet. In August 1994, Cybersell AZ filed an application to register the name “Cybersell” as a service mark, and was approved for trademark registration using cyber.sell.com in October 1995. In February 1995, the site was then taken down for reconstruction.
In May 1995, while Cybersell AZ was in the process of registering as a federal service mark, Cybersell, Inc. (Cybersell FL), a Florida corporation formed “to provide business consulting services for strategic management and marketing on the web” established a website advertising its services at cybsell.com. [3] Cybersell FL used their website to provide contact information for their business, including their phone number and email address.
After Cybersell AZ learned of Cybersell FL's website and use of their "Cybersell" service mark, Cybersell AZ notified Cybersell FL that they were infringing on Cybersell AZ's mark. As a result, Cybersell FL their name to WebHorizons, and later to WebSolvers, Inc., “to disassociate themselves” from Cybersell AZ, however, they left “Welcome to Cybersell!” on their web page.[4]
Cybersell AZ then filed the complaint in this action alleging trademark infringement, unfair competition, fraud, and Racketeer Influenced and Corrupt Organizations Act (RICO) violations violations in the U.S. District Court for Arizona.[5] Cybersell AZ alleged that personal jurisdiction over Cybersell FL was proper because the internet is without borders, and a website which advertises a product or service is necessarily intended for use on a worldwide basis. Cybersell FL moved to dismiss for lack of personal jurisdiction. The court granted the motion and Cybersell AZ appealed.[6]
Opinion
The court applied the normal “minimum contacts” analysis using three-part test to determine whether a district court may exercise specific jurisdiction over a nonresident defendant: (1) The nonresident must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections (2) The claim must be one which arises out of or results from the defendant’s forum-related activities (3) Exercise of jurisdiction must be reasonable.
When the court looked at the first prong which is the most critical one, it is essential to be able to establish what conduct is equal to the “purposeful availment” so they can continue looking at the other prongs. The court explained in Ballard that the “purposeful availment” requirement is satisfied if the defendant has taken deliberate action within the forum state or if he has created continuing obligations to forum residents. “It is not required that a defendant be physically present within, or have physical contacts with the forum, provided that his efforts ‘are purposefully directed’ toward forum residents.” [7]
The court also looked at other cases to determine how personal jurisdiction exercised in the cyberspace and they experienced a broad spectrum of Internet use on the one hand, and contacts with the forum on the other, representing opposite ends of the spectrum by CompuServe and Bensusan. In CompuServe case, the court ruled that the defendant purposefully availed himself of the privilege of doing business in Ohio when the defendant transmit his product from Texas to CompuServe’s system in Ohio, and the system provided access to his software to others to whom he advertised and sold his product. On the contrary, the defendant in Bensusan created a general access web page containing information about its service and ticketing information. The court ruled that the defendant’s action doesn’t purport to purposeful availment, rather it is just passive web page.
In the event of “Interactive” web sites, the court will consider them differently by looking at the “level of interactivity and commercial nature of the exchange of the information that occurs on the Web site” to determine if sufficient contacts exist to warrant the exercise of jurisdiction. From providing interactive web site and contracting with 3000 individuals and seven internet access providers in Pennsylvania is purported to purposeful availment. [8] To advertising in trade journal posted on the Internet without sale of goods or services in Arkansas does not purport to purposeful availment. [9]
Sited by Cybersell AZ, in Inset, which the defendant only advertising its good and services using the telephone number 1-800-US-INSET, the court found purposeful availment here because it directed its advertising activities via the Internet and its toll-free number toward the state. [10]
Therefore when the court analyzed the case here, when Cybersell FL only passively advertises on the Internet using the name “Cybersell”, the court cannot see the deliberately directed merchandising effort toward Arizona residents. Cybersell FL did nothing to encourage people in Arizona to access its site, no signed up for Cybersell FL’s web construction services, no sales, no telephone calls, no income, no message, and no hit from Arizonan except by Cybersell AZ. Moreover, Cybersell FL did not have an “800” number. In sum, Cybersell FL has done no act and has consummated no transaction, nor has it performed any act by which it purposefully availed itself of the privilege of conducting activities, in Arizona, thereby invoking the benefits and protections of Arizona law. Cybersell FL lacks sufficient minimum contacts with Arizona for personal jurisdiction. According its motion to dismiss for lack of personal jurisdiction was properly granted.
“Effects” test invoked by Cybersell AZ is not the test here because Cybersell AZ does not suffer harm in a particular geographic location in the same sense that an individual does. Cybersell FL’s web page simply was not aimed intentionally at Arizona knowing that harm was likely to be caused there to Cybersell AZ.
Further Reading
- Zippo Manufacturing Co. v. Zippo Dot Com, Inc.
- Personal jurisdiction in internet cases in the United States
References
- ^ Personal jurisdiction in internet cases in the United States
- ^ Zippo Manufacturing Co. v. Zippo Dot Com, Inc.
- ^ Cybersell, 130 F.3d at 415.
- ^ Cybersell, 130 F.3d at 416.
- ^ On the same day, Cybersell FL filed for declaratory relief in the United States District Court for the Middle District of Florida. The action was transferred to the Arizona District Court where it was consolidated with the action filed by Cybersell AZ. Cybersell, 130 F.3d at 416.
- ^ Cybersell, 130 F.3d. at 416.
- ^ Ballard, 65 F.3d at 1498.
- ^ Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. (W.D. Pa. 1997).
- ^ Smith v. Hobby Lobby Stores, 968 F. Supp. 1356 (W.D. Ark. 1997).
- ^ Inset Systems, Inc. v. Instruction Set, Inc., 937 F. Supp. 161 (D. Conn. 1996).