Zippo Mfg. Co. v. Zippo Dot Com, Inc.
952 F. Supp. 1119 (1997)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
The exercise of personal jurisdiction over a non-resident defendant based on internet activities is directly proportional to the nature and quality of the commercial activity conducted. A defendant who purposefully avails itself of a state's market by actively conducting business with its residents over the internet can be subject to specific personal jurisdiction in that state.
Facts:
- Zippo Manufacturing Corporation ('Manufacturing') is a Pennsylvania corporation that produces 'Zippo' tobacco lighters.
- Zippo Dot Com, Inc. ('Dot Com') is a California corporation operating an Internet news service using the domain names 'zippo.com' and 'zippo.net'.
- Dot Com's website allows users to subscribe to its news service by filling out an application and paying with a credit card over the internet.
- Dot Com processed applications and sold passwords to approximately 3,000 paying subscribers who were residents of Pennsylvania.
- Dot Com also entered into agreements with seven Internet access providers in Pennsylvania to permit their subscribers to access Dot Com's news service.
- The name 'Zippo' appeared in the message headings of newsgroup posts from Dot Com subscribers, some of which contained sexually explicit subject matter.
Procedural Posture:
- Zippo Manufacturing Corporation sued Zippo Dot Com, Inc. in the U.S. District Court for the Western District of Pennsylvania, alleging federal and state trademark claims.
- Defendant Dot Com filed a motion to dismiss the complaint for lack of personal jurisdiction and improper venue.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a California-based company's operation of a commercial website that actively sells subscriptions and enters into contracts with thousands of Pennsylvania residents subject it to personal jurisdiction in Pennsylvania for a trademark dispute?
Opinions:
Majority - McLaughlin, J.
Yes, a company that actively conducts commercial transactions with residents of a particular state over the internet subjects itself to personal jurisdiction there. The court established a 'sliding scale' framework to determine if internet activities constitute sufficient minimum contacts. At one end of the scale are 'passive' websites that merely post information, which are insufficient for jurisdiction. At the other end are defendants who clearly 'do business over the Internet,' such as entering into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files; in these cases, jurisdiction is proper. This case falls on the 'doing business' end of the spectrum. Dot Com purposefully availed itself of doing business in Pennsylvania by selling subscriptions to 3,000 residents and contracting with seven Pennsylvania Internet service providers. These were not random or fortuitous contacts; Dot Com consciously chose to process applications from Pennsylvania residents, and the resulting injury from the alleged trademark infringement occurred in Pennsylvania.
Analysis:
This case is a landmark decision in cyberlaw, establishing the influential 'Zippo sliding scale' test for personal jurisdiction based on internet activities. This analytical framework provided much-needed clarity on how traditional 'minimum contacts' principles apply to the borderless nature of e-commerce. The test has been widely adopted by courts across the United States to distinguish between passive websites that do not create jurisdiction and interactive or commercial websites that do. The ruling confirmed that purposefully conducting commercial transactions with residents of a state online is equivalent to establishing a physical presence for jurisdictional purposes.
Unlock the full brief for Zippo Mfg. Co. v. Zippo Dot Com, Inc.