Sunday, May 18, 2014

Zippo Manufacturing Co v. Zippo Dot Com, Inc. case brief summary

Zippo Manufacturing Co v. Zippo Dot Com, Inc.

Facts:  The plaintiff, Zippo Manufacturing Corporation (PA corp. makes lighter) filed a complaint in the Western District of Pennsylvania against Zippo Dot Com (CA corp. operated an Internet website and Internet news service – with 3 levels of membership: public/free, original, and super, each of which successively offered access to a greater number of Internet newsgroups) under the Federal Trademark Act, alleging trademark dilution, infringement, and false designation. Does conducting electronic commerce with Pennsylvania residents over the Internet constitute purposeful availment for jurisdiction?
                                                                                                                   
            
Holding: Yes, conducting electronic commerce with Pennsylvania residents over the Internet 
constitutes purposeful availment for jurisdiction.
 
1. This introduced the three-category sliding scale or spectrum of purposeful availment over the 
Internet.
 
a. The first category includes situations where a defendant clearly does business over the Internet by 
entering into contracts with residents of a foreign jurisdiction that involve the knowing and repeated 
transmission of computer files over the Internet
 
b. At the opposite end are the websites that simply post information on the Internet which people 
from other jurisdictions can see
 
c. The middle ground are those websites characterized as interactive.
 
i. The court held that in the case of interactive websites, the exercise of jurisdiction is determined by 
examining the level of interactivity and commercial 
nature of the exchange of information that occurs on the Web.
 
ii. Here, the court determined Dot Com's Internet activities were within the first category of the 
sliding scale, i.e., doing business over the Internet.

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