Maritz Inc. v. Cybergold, Inc.
(947 F. Supp. 1328)
Summary prepared by Devashish Bharuka
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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 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.
Held, there is personal jurisdiction.