ZIPPO MFG. CO. v. ZIPPO DOT COM
952 F. Supp. 1119 (WD Pa. 1997)
FACTS:
Internet Domain Name Dispute. Zippo Mfg. is a PA corporation that is most known for manufacturing lighters. Zippo Dot Com is a CA corporation with its principal place of business in Sunnyvale, CA. Dot Com operates a web-site and an Internet news service and has obtained the exclusive rights to use the domain name zippo.com, zippo.net, zipponews.com. The site contains info about the company, advertisements, and an application for its news service—which consists of three levels of membership. Dot Com’s contacts with PA occurred mainly over the Internet with its data stored on a server in CA. Out of approx. 140,000 paying subscribers, 2 percent (3,000) are PA residents. Dot Com also entered into agreements with 7 Internet Access providers in PA.
PROCEDURAL HISTORY:
Zippo Mfg. filed complaint against Zippo Dot Com alleging trademark dilution, infringement, and false designation under the Federal Trademark Act. The suit is based on Dot Com’s use of the word ZIPPO. DOT COM moved to dismiss the complaint for lack of personal jurisdiction.
HOLDING:
DEFENDANT’S MOTION IS DENIED. Court may appropriately exercise personal jurisdiction over the Defedant.
REASONING:
Dot Com contracted to supply internet news services to approx. 3000 PA residents.
Three Pronged Test for Specific Jurisdiction—1) The defendant must have sufficient minimum contacts with the forum state; 2) the claim asserted against the defendant must arise out of those contacts; 3) the exercise of jurisdiction must be reasonable.
Internet and Jurisdiction:
SLIDING SCALE FOR WEBSITES:
“Active Websiteâ€â€”Defendant clearly does business over the internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve transmission of computer files over the internet. JURISDICTION ALLOWED
“Passive Websiteâ€â€”Defendant simply posts info on the Web site which is accessible to users in a foreign jurisdiction. JURISDICTION NOT ALLOWED.
“Middle Groundâ€â€”Interactive web sites where user can exchange info with the host computer. JURISDICTION IS DETERMINED BY EXAMINING THE LEVEL OF INTERACTIVITY AND COMMERCIAL NATURE OF THE EXCHANGE.
Burger King Corp.—If the business/entity reached outside its boundaries to conduct business in a foreign jurisdiction, and thereby avails itself of the laws of that jurisdiction, the exercise of specific jurisdiction is proper. Internet should not make a difference.
COMPUSERVE, INC.—6TH Circuit: Reasoned that business was purposely directed toward Ohio by knowingly entering into a contract with an Ohio resident and then transmitting files to OH “deliberately and repeatedlyâ€. (ie: DOING BUSINESS OVER THE INTERNET)
952 F. Supp. 1119 (WD Pa. 1997)
FACTS:
Internet Domain Name Dispute. Zippo Mfg. is a PA corporation that is most known for manufacturing lighters. Zippo Dot Com is a CA corporation with its principal place of business in Sunnyvale, CA. Dot Com operates a web-site and an Internet news service and has obtained the exclusive rights to use the domain name zippo.com, zippo.net, zipponews.com. The site contains info about the company, advertisements, and an application for its news service—which consists of three levels of membership. Dot Com’s contacts with PA occurred mainly over the Internet with its data stored on a server in CA. Out of approx. 140,000 paying subscribers, 2 percent (3,000) are PA residents. Dot Com also entered into agreements with 7 Internet Access providers in PA.
PROCEDURAL HISTORY:
Zippo Mfg. filed complaint against Zippo Dot Com alleging trademark dilution, infringement, and false designation under the Federal Trademark Act. The suit is based on Dot Com’s use of the word ZIPPO. DOT COM moved to dismiss the complaint for lack of personal jurisdiction.
HOLDING:
DEFENDANT’S MOTION IS DENIED. Court may appropriately exercise personal jurisdiction over the Defedant.
REASONING:
Dot Com contracted to supply internet news services to approx. 3000 PA residents.
Three Pronged Test for Specific Jurisdiction—1) The defendant must have sufficient minimum contacts with the forum state; 2) the claim asserted against the defendant must arise out of those contacts; 3) the exercise of jurisdiction must be reasonable.
Internet and Jurisdiction:
SLIDING SCALE FOR WEBSITES:
“Active Websiteâ€â€”Defendant clearly does business over the internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve transmission of computer files over the internet. JURISDICTION ALLOWED
“Passive Websiteâ€â€”Defendant simply posts info on the Web site which is accessible to users in a foreign jurisdiction. JURISDICTION NOT ALLOWED.
“Middle Groundâ€â€”Interactive web sites where user can exchange info with the host computer. JURISDICTION IS DETERMINED BY EXAMINING THE LEVEL OF INTERACTIVITY AND COMMERCIAL NATURE OF THE EXCHANGE.
Burger King Corp.—If the business/entity reached outside its boundaries to conduct business in a foreign jurisdiction, and thereby avails itself of the laws of that jurisdiction, the exercise of specific jurisdiction is proper. Internet should not make a difference.
COMPUSERVE, INC.—6TH Circuit: Reasoned that business was purposely directed toward Ohio by knowingly entering into a contract with an Ohio resident and then transmitting files to OH “deliberately and repeatedlyâ€. (ie: DOING BUSINESS OVER THE INTERNET)