Cybersell, Inc. v. Cybersell, Inc.
97 Daily Journal DAR 14545, 130 F.3d 414, 44 U.S.P.Q. 2d (BNA) 1928 (1997)
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Rule of Law:
A passive website, without additional deliberate action to target residents of a forum state, is insufficient to establish purposeful availment for specific personal jurisdiction, even if accessible nationwide and allegedly infringing a service mark in that state.
Facts:
- In May 1994, Cybersell, Inc., an Arizona corporation (Cybersell AZ), was incorporated to provide Internet and web advertising and marketing services.
- On August 8, 1994, Cybersell AZ filed an application to register the name "Cybersell" as a service mark, which was approved and published on October 30, 1995.
- In the summer of 1995, Matt Certo and his father, Dr. Samuel C. Certo, both Florida residents, formed Cybersell, Inc., a Florida corporation (Cybersell FL), with its principal place of business in Orlando, to provide business consulting services for strategic management and marketing on the web.
- Cybersell FL created a web page featuring a "CyberSell" logo, professional services for the World Wide Web, and a local phone number, which invited browsers to introduce themselves or inquire about getting on the web.
- On November 27, 1995, Laurence Canter of Cybersell AZ discovered the Cybersell FL web page and sent an e-mail to Dr. Certo notifying him that "Cybersell" was a service mark of Cybersell AZ.
- To avoid association with Canter and Siegel, the Certos changed Cybersell FL's name to WebHorizons, Inc. on December 27, 1995, and by January 4, 1996, replaced the "CyberSell" logo on their webpage with "WebHorizons, Inc.," though the page still contained the greeting "Welcome to CyberSell!".
Procedural Posture:
- Cybersell AZ filed a complaint in the United States District Court for the District of Arizona, alleging trademark infringement, unfair competition, fraud, and RICO violations against Cybersell FL.
- On the same day, Cybersell FL filed suit for declaratory relief regarding the use of the name "Cybersell" in the United States District Court for the Middle District of Florida.
- The action filed by Cybersell FL in Florida was transferred to the District of Arizona and consolidated with the action filed by Cybersell AZ.
- Cybersell FL moved to dismiss for lack of personal jurisdiction.
- The district court denied Cybersell AZ's request for a preliminary injunction.
- The district court granted Cybersell FL's motion to dismiss for lack of personal jurisdiction.
- Cybersell AZ (appellant) timely appealed the district court's dismissal to the United States Court of Appeals for the Ninth Circuit.
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Issue:
Does maintaining an "essentially passive" website, accessible to users in a forum state and allegedly infringing a service mark, constitute sufficient "purposeful availment" to establish specific personal jurisdiction over a nonresident defendant in that forum state?
Opinions:
Majority - Rymer, Circuit Judge
No, maintaining an "essentially passive" website, accessible to users in a forum state and allegedly infringing a service mark, does not constitute sufficient "purposeful availment" to establish specific personal jurisdiction over a nonresident defendant in that forum state. The court applied the traditional "minimum contacts" analysis for specific jurisdiction, requiring purposeful availment, a claim arising from forum activities, and reasonableness. It found that Cybersell FL's website was "essentially passive" because it merely posted information and offered limited interactivity, primarily receiving names and addresses rather than enabling actual sales or service sign-ups from Arizona. The court distinguished this situation from cases like CompuServe, Inc. v. Patterson, where the defendant actively transacted business with the forum state by sending software and collecting fees through an Ohio-based service. Instead, it aligned with cases like Bensusan Restaurant Corp. v. King, where a passive informational website without active targeting was deemed insufficient. The court emphasized that merely operating a globally accessible website, without more to indicate deliberate targeting, does not purposefully direct commercial activity towards every state. Furthermore, the "effects" test from Calder v. Jones did not apply because Cybersell FL's web page was not intentionally aimed at Arizona knowing that harm was likely to be caused there to Cybersell AZ, especially considering a corporation does not suffer harm in a specific geographic location in the same way an individual does.
Analysis:
This case established a foundational framework for analyzing personal jurisdiction over Internet activities, particularly by distinguishing between "passive" and more "interactive" or "active" websites. It prevents a "nationwide, or perhaps worldwide, jurisdiction" trap for entities merely maintaining an accessible online presence. By requiring "something more" than just a web page to show purposeful availment, the court provided crucial guidance for businesses operating online, encouraging them to design their web presence with jurisdictional implications in mind. Future cases would build on this "sliding scale" approach, refining what constitutes sufficient commercial activity or directed targeting for specific jurisdiction in the digital age, particularly in the context of trademark infringement claims.
