uBID, Inc. v. GoDaddy Group, Inc.
2010 U.S. App. LEXIS 20073, 96 U.S.P.Q. 2d (BNA) 1777, 623 F.3d 421 (2010)
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Rule of Law:
An internet-based company that lacks a physical presence in a forum state but deliberately and extensively exploits the state's market through advertising and derives substantial revenue from its residents is subject to specific personal jurisdiction for claims arising from its business activities in that state.
Facts:
- uBID, Inc. is a Chicago-based company that operates an online auction business.
- The GoDaddy Group, Inc. is an Arizona-based company that provides internet domain name registration services.
- GoDaddy conducted an extensive nationwide advertising campaign, including Super Bowl commercials and billboards in Chicago sports venues, which reached millions of potential customers in Illinois.
- As a result of its marketing, GoDaddy acquired hundreds of thousands of customers in Illinois, generating millions of dollars in annual revenue from the state.
- GoDaddy offers a 'parked pages' service, where it places advertising on undeveloped domain names registered by its customers.
- Some of GoDaddy's customers, including at least two with Illinois addresses, registered domain names that were confusingly similar to uBID's trademarks.
- uBID alleged that GoDaddy profited by placing ads, including for uBID's competitors, on these parked pages, thereby harming uBID's trademark value and business.
Procedural Posture:
- uBID, Inc. filed a lawsuit against The GoDaddy Group, Inc. in the United States District Court for the Northern District of Illinois, alleging violations of the Anti-Cybersquatting Consumer Protection Act.
- GoDaddy filed a Rule 12(b)(2) motion to dismiss the lawsuit for lack of personal jurisdiction.
- The district court (trial court) granted GoDaddy's motion, finding it lacked both general and specific personal jurisdiction in Illinois, and dismissed the case.
- uBID, as the appellant, appealed the dismissal to the United States Court of Appeals for the Seventh Circuit, with GoDaddy as the appellee.
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Issue:
Does an internet-based company that lacks a physical presence in a state but extensively and deliberately markets to and derives substantial revenue from that state's residents have sufficient minimum contacts to be subject to specific personal jurisdiction there for claims arising from its business activities?
Opinions:
Majority - Hamilton, Circuit Judge.
Yes. An internet-based company that purposefully avails itself of a state's market has sufficient minimum contacts for a court in that state to exercise specific personal jurisdiction over claims arising from those contacts. GoDaddy's contacts with Illinois are not random or fortuitous; it deliberately and successfully exploited the Illinois market through extensive advertising and business transactions. Citing Keeton v. Hustler Magazine, the court found that by continuously exploiting the Illinois market and earning millions of dollars from hundreds of thousands of Illinois customers, GoDaddy purposefully availed itself of the privilege of conducting activities within the state. The lawsuit, which alleges harm from GoDaddy's domain registration and parked page services, arises directly out of the very business activities GoDaddy directed at Illinois. Therefore, exercising jurisdiction comports with traditional notions of fair play and substantial justice.
Concurring - Manion, Circuit Judge.
Yes. While agreeing with the outcome, personal jurisdiction is proper for the more limited reason that GoDaddy's alleged intentional tort of cybersquatting was expressly aimed at Illinois. The proper framework is the 'effects test' from Calder v. Jones, not the broader analysis from Keeton. uBID's claim requires showing bad-faith intent, making it an intentional act. This conduct was aimed at Illinois because GoDaddy knew uBID was headquartered there and that the economic harm from trademark dilution and customer diversion would be felt in Illinois. The fact that the plaintiff is located in the forum and suffered the harm there is the critical link establishing jurisdiction.
Analysis:
This decision clarifies that the traditional specific personal jurisdiction analysis applies with full force to large-scale internet commerce, rejecting the need for a special, separate test. It establishes that extensive, deliberate marketing and substantial revenue within a forum state are sufficient to constitute purposeful availment, even without a physical presence. The ruling signals to internet companies that they cannot evade jurisdiction in states where they actively cultivate a market, thereby ensuring that plaintiffs can seek redress in their home forums for harms arising from such targeted business activities.
