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Does Operating a Web Site Confer Jurisdiction?
Posted by Steven Wu on Saturday, February 01 @ 04:01:26 EST Governance
That's one of the questions in a recent Third Circuit case where Toys 'R' Us sued a foreign corporation on charges of trademark infringement, unfair competition, and more.

In the case of Toys 'R' Us, Inc. v. Step Two [PDF], filed January 27, 2003, the Third Circuit lays down some general guidelines for when the operation of a web site will give rise to specific jurisdiction. Basically, the Third Circuit rules that a defendant's operation of an interactive web site that is merely accessible to members of a state does not automatically allow the defendant to be sued in that state. Instead, a plaintiff must show that the defendant's web site specifically, intentionally, and knowingly targeted or conducted business with people in a state in order for the defendant to be sued there.

Key excerpts from the opinion are inside.

The question of the case:

The precise question raised by this case is whether the operation of a commercially interactive web site accessible in the forum state is sufficient to support specific personal jurisdiction, or whether there must be additional evidence that the defendant has "purposefully availed" itself of the privilege of engaging in activity in that state.
And the answer:
Prior decisions indicate that such evidence is necessary, and that it should reflect intentional interaction with the forum state. If a defendant web site operator intentionally targets the site to the forum state, and/or knowingly conducts business with forum state residents via the site, then the "purposeful availment" requirement is satisfied. . . . [T]he exercise of personal jurisdiction [is] proper where the commercial web site's interactivity reflected specifically intended interaction with residents of the forum state.
(emphasis added)
Even if the web site's interactivity is not specifically and intentionally targeted at a forum state, a court can still exercise personal jurisdiction over a defendant if traditional non-Internet contacts exist, such as:
[S]erial business trips to the forum state, telephone and fax communications directed to the forum state, purchase contracts with forum state residents, contracts that apply the law of the forum state, and advertisements in local newspapers.
In this case, the Third Circuit did not find personal jurisdiction in New Jersey over the defendant, Step Two, for the following reasons:
Step Two’s web sites, while commercial and interactive, do not appear to have been designed or intended to reach customers in New Jersey. Step Two’s web sites are entirely in Spanish; prices for its merchandise are in pesetas or Euros, and merchandise can be shipped only to addresses within Spain. Most important, none of the portions of Step Two’s web sites are designed to accommodate addresses within the United States. While it is possible to join [Step Two's club] and receive newsletters with only an email address, Step Two asks registrants to indicate their residence using fields that are not designed for addresses in the United States.
 
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Re: Does Operating a Web Site Confer Jurisdiction? (Score: 0)
by Anonymous (Name Withheld on Advice of Counsel) on Saturday, February 01 @ 13:20:05 EST
This makes sense.

It confirms what the 4th circuit recently said in Young, what the 5th circuit said in Quick v. Sage, and what the California Supreme Court said in Pavlovich.

Moreover, there is a trend where courts are somewhat distancing themselves from the Zippo standard, instead looking more to the actual intent of the website.

The other reason this makes sense is now the standard for PJ for online content is almost the same as for offline acts.


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