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Cybersell, Inc. (AZ) v. Cybersell, Inc. (FL) Case Brief

Summary of Cybersell, Inc. (AZ) v. Cybersell, Inc. (FL), U.S. Ct. of Appeals, 9th Circ. (1997)

Cause of action: The following is a cause of action for trademark infringement by PL, who alleges FL has personal jurisdiction by its simply having a website which can be accessed by everyone.

Procedural History: District Court granted FL’s motion to dismiss for lack of personal jurisdiction.  Reversed in Court.

Facts: In summer of 1995, when AZ had no name on its home page and PTO grant to the same effect, FL stepped in and applied and were approved.  AZ creator found out and called FL, who decided to change it rather than worry about it, which it did to WebHorizons, followed by WebSolvers in December 1995.  As of 1/4/96, there was a new logo on the WebSolvers page, except “welcome to Cybersell!” just like the AZ site.  AZ filed trademark infringement complaint thereafter.

Issue(s): Under federal rules of civil procedure (AZ as well), does a FL company with an internet website which can be reached anywhere in the world have cause to be brought into an AZ court when the AZ argument is that FL has personal jurisdiction by its being on the web for all to use?

Court’s Rationale/Reasoning: Flat out, the court said it would not “comport with traditional notions of fair play and substantial justice (borrowing from Int’l Shoe) for AZ to exercise personal jurisdiction over an allegedly infringing FL web site advertiser who has no contacts with AZ other than maintaining a home page that is accessible.

Court looked to the first part of its test, and case law to that effect showed that a party is actually using the web to access customers in one part of the country, or one state, or one anything, the law of personal jurisdiction applies.  The court also found no other court has ever ruled in favor of personal jurisdiction solely on the basis of a web link.

Consequently, the court found AZ’s claim against FL fails on its face b/c of the first prong.  FL has no malicious intent towards AZ, and is not using anything to contact AZ customers.  There are no sales contracts on the part of FL in AZ, made no sales in AZ, received no phone calls from AZ, earned no income from AZ, and sent no messages over the Internet to AZ (received one from AZ).  Thus, Cybersell FL has not purposefully availed itself of the privilege of conducting activities, thereby invoking the protections of AZ law.

This also is not a Calder case situation, b/c FL is not defaming AZ in any way here, and the effects test in Calder would not apply to a business in one part of the country, whereas a person would be significantly more damaged, and besides, there was no malice on the part of FL towards AZ.

Rule: (1) the nonresident DF 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 of and protections; (2) the claim must be one which arises or arrives out of the DF’s forum-related activities; and (3) exercise of jurisdiction must be reasonable.

(rule from Zippo) “The likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that entity conducts over the Internet.”

Holding: No. FL’s contacts are insufficient to establish “purposeful availment.”  AZ’s claim fails on the first part of the 3-prong test for specific jurisdiction (nonresident DF must do some act or consummate some transaction withe the forum or perform some act by which they purposefully avail themselves of the privilege of conducting activities in the forum, thereby invoking the benefits and protections…”



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