Saturday, September 02, 2006

Still no light in Internet jurisdiction

The recent US Court of Appeals for the Ninth Circuit’s ruling in Pebble Beach v. Caddy, holding that the U.S. District Court lacks personal jurisdiction over a citizen and resident of the United Kingdom (UK) who operates a passive website that a U.S. claimant (plaintiff in US terminology) asserts infringes and dilutes its trademark rights, is a new development that might seem to follow the sliding scale established in Zippo v. Zippo and further clarify the issue of assertion of personal jurisdiction over a defendant using a website, but when coupled with other recent cases reaffirms the need for the US Supreme Court to intervene in the matter. The case, where the Court of Appeal concluded that the defendant did not satisfy the test established in Calder v Jones (expressly aiming the conduct at the forum) seems to contradict Luv N' Care v. Insta Mix, an also very recent case where the US Court of Appeals for the Fifth Circuit borrowed the stream commerce theory from product liability law to find that a district court of Louisiana had personal jurisdiction over a Colorado defendant who also did not expressly aim his conduct at the forum. It might be argued that this later case does not relate to Internet (it was a copyright infringement, trademark dilution and unfair competition under the Lanham Act suit over a bottle cap) but if the stream of commerce theory can be borrowed in that case, nothing would pre-empt the use in Internet personal jurisdiction situations, and the issue is whether expressly aiming the conduct at the forum is relevant or not. Needless to say that there is no contradiction with the same court (9th Circuit) ruling in Panavision v Toeppen, where the defendant was cyber squatting with the express intent to extract money from the claimant by selling its domain name for which the claimant had a valid trademark.
The 9th Circuit Court said that it had no doubt that there was a requirement “that 'something more' than just a foreseeable effect to conclude that personal jurisdiction is proper” and that “an internet domain name and passive website alone are not 'something more' and, therefore, alone are not enough to subject a party to jurisdiction,” to then conclude that the defendant did not purposefully aim his actions at California. This seems in accordance with ALS Scan v. Digital Services Consultants but contradicts Gorman v. Ameritrade, where the US Court of Appeal for the District of Columbia Circuit found that personal jurisdiction based on a website could exist and said that cyberspace "is not some mystical incantation capable of warding off the jurisdiction of courts built from bricks and mortar."
The uncertainty seems to extend to defamation cases, where the 9th Circuit court held in Northwest Healthcare Alliance v. (unpublished) that the District Court has personal jurisdiction over an out-of-state defendant in a defamation case, based solely upon its publication of the allegedly defamatory statements in its "passive" internet web site, situation that seems to mirror the High Court of Australia’s decision in Dow Jones v. Gutnick, saying that because of publication on the Internet, the Australian courts have jurisdiction, that Australian law applies, and that the case should proceed in the trial court in the Australian state of Victoria. However, these decisions don’t suit very well with the US Court of Appeals for the Fourth Circuit opinion in Young v. New Haven Advocate, where it said that that a court in Virginia did not have jurisdiction over defendants located in Connecticut, who wrote allegedly defamatory stories about a Virginia claimant and published them on the Internet.
In Carefirst Maryland v. CPC the 4th Circuit court found that the district court did not have personal jurisdiction based on the operation of a website, but in v. L.L.Bean the 9th Circuit court found that it did have based on the same operation of a website, which added to MGM v Grokster where the US District Court of the Central District of California found that making software available for download justified personal jurisdiction

We could actually have a blog specialized in jurisdiction cases and probably most of them will contradict each other even when the opinion is given by the same court. The only way to stop this madness and the creativity of Court of Appeal’s judges when they have to justify their own contradictions will be for the US Supreme Court to finally give certiorari for one of these cases and tell us what is the law of the land.

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