The New World of the World Wide Web: Internet Liability Issues
Brady, Michael J., Monin, Lawrence O., Tingley, Curtis R., Skelton, Timothy L., Defense Counsel Journal
The Internet has created new means of communication and information distribution. Will the old law keep up with the new technology ?
IN THE brave new world of the Internet, the liability and litigation issues fall under these categories:
* intellectual property,
* privacy, and
A. Jurisdictional Issues
1. Type of Website
Rules for establishing jurisdiction over defendants in foreign states or countries based on an Internet presence are finally settled to some degree. As the law currently stands, jurisdiction over website hosts depends in large part on the type of site at issue.
The first significant case to address personal jurisdiction and the Internet was the 1996 case of CompuServe Inc. v. Patterson.(1) Decided by the Sixth Circuit, CompuServe has become the cornerstone of Internet jurisdictional law regarding "active" websites. In that case, the defendant, based in Texas, specifically targeted and solicited business in the purchaser's state, Ohio. The court determined that the defendant's active conduct toward that state was sufficient to create personal jurisdiction. Numerous courts since then have followed this ruling.(2)
On the opposite end of the spectrum is Bensusan Restaurant Corp. v. King,(3) in which the Second Circuit determined that an entirely passive Missouri-based website, one that merely advertised goods or services, was not sufficient to impose New York personal jurisdiction on the webmaster residing in Missouri. The limitation for "passive" websites has been followed in Blackburn v. Walker Oriental Rug Galleries(4) and SF Hotel Co. v. Energy Investments Inc.(5)
Between these two extremes lies a range of cases in which the website was neither solely passive nor solely active. Perhaps the site listed a toll-free number, or visitors to the site could input their addresses to receive more information on the products being sold but could not purchase them through the site. In Cybersell Inc. v. Cybersell Inc.,(6) the Ninth Circuit held that a website that allowed visitors to leave names and contact information was not active enough to warrant imposing personal jurisdiction on the site owner. However, in 1998, a year later, the Ninth Circuit found jurisdiction in Panavision International L.P. v. Toeppen,(7) in which the defendant purposefully registered the plaintiff's trademarked name as a domain name, with the alleged intent to extort money from the plaintiff. The court ruled that while the website itself may not have been active, the webmaster's intent in creating the site was designed specifically to cause harm in California and thus personal jurisdiction over him could be found in that state.
The significance of toll-free telephone numbers posted on websites apparently depends on whether the numbers are given with the intent to solicit business from users in a specific state or whether they are merely informational. In Shapiro v. Santa Fe Gaming Corp.,(8) an Illinois federal district court refused to allow jurisdiction, finding that the mere existence of a toll-free number on an otherwise completely passive website was not sufficient to warrant imposing the long-arm statute. But in Inset Systems v. Instruction Set Inc.,(9) the Connecticut federal district court determined that imposing jurisdiction was appropriate after the defendant company solicited business in Connecticut using the toll-free number posted on its website.
E-mail can be a contributing factor in finding personal jurisdiction over an out-of-state defendant, but it is unlikely that e-mail alone will be enough if it is used merely as a way of contacting the company operating the website. Even in a case in which a majority of the business was conducted via e-mail, the court did not impose jurisdiction.(10) However, if the number of e-mails sent to a party is large, courts may be more willing to impose jurisdiction. …