Maritz Inc. v. Cybergold, Inc.
(947 F. Supp. 1328)
Summary prepared by Devashish Bharuka
For the full version of the case, click here
Plaintiff, Missouri corpn., brought the action alleging that defendant, California corpn., is infringing on Maritz's trademark in violation of the Lanham Act in connection with CyberGold's internet activities. Question is whether the court has personal jurisdiction on the basis of the website of Cybergold.
CyberGold maintains a website which provides information about CyberGold's new upcoming service. The website explains that the forthcoming service will maintain a mailing list of internet users, presumably including many residents of Mussouri. An internet user who wants to be on CyberGold's mailing list provides CyberGold with his or her particular aras of interest. CyberGold will then provide the user with a personal electronic mailbox and will forward to the user advertisements that match the users selected interests. CyberGold plans to charge advertisers for access to the internet users on its mailling list. CyberGold's actual service is not yet in operation though the website is operational. CyberGold has no other contacts with the state of Missouri.
Plaintiff: Website acts as a state-wide advertisement. CyberGold is also actively soliciting advertising customers from Missouri. The website has been accessed 311 times although 180 of the 311 times were by Maritz and its employees.
Court Analysis:
Court compared the telephone and
the internet mode of communication and observed that the former provides
a less rapid and more limited means of information exchange than a computer
with information downloading and printing capabilities.
1) Under Missouri's long-arm statute, court has personal jurisdiction in case of "transaction of any business" within the state which includes conducting promotional activities directed towards recipients located in Missouri. Held, plaintiff's comparison of the maintenance of a website to the active solicitation through mass maillings is to some extent unsatisfactory in resolving the question of whether defendant's internet activities amount to the "transaction of any business". There are considerable differences in the two mediums of communication and information exchange.
2) However, violation of the Lanham Act is tortious in nature. Infringement is causing economic harm and injury to the plaintiff. Such a tortious act would allow personal jurisdictio where the sole basis for jurisdiction was an extraterritorial act of tortious interference with a contract which produced an effect in the State of Missouri. However, this is subject to due process clause.
3) Due process requires "minimum
contacts". Five-part test:
a) the nature
and quality of the contacts with the forum state - By analogy, if a Missourti
resident would mail a letter to CyberGold in California requesting information
from CyberGold regarding its service, CyberGold would have the option as
to whether to mail information to the Missouri resident and would have
to take some active measures to respond to the mail. In contrast, the website
automatically responds to every request. CyberGold has consciously decided
to trasmit advertising information to all internet users, knowing that
such information will be transmitted globally. CyberGold's contacts are
of such a quality and nature, albeit a very new quality and nature for
personal jurisdiction jurisprudence, that they favor the exercise of personal
jurisdiction over defendant.
b) the quantity
of those contacts - 131 times. The information transmitted is clearly intended
as a promotion of CyberGold's upcoming service and a solicitation for internet
users, CyberGold's potential customers.
c) the relation
of the cause of action to the contacts - The litigation articulated by
the Eighth Circuit, the litigationin this action against CyberGold results
from alleged injuries, that arise out of or relate to CyberGold's website
and the information posted at the website. CyberGold's service and the
promotional efforts that it is employing by posting the information on
its website are allegedly infringing on plaintiff's alleged trademark.
d) the interest
of the forum state in providing a forum for its residents - Exists here.
e) the convenience
of the parties - the defendant is not so burdened by defendng itself in
this forum that traditional notions of fair play and substantial justice
are implicated.