Personal jurisdiction on the internet

A common issue for internet law cases is jurisdiction. What court has authority over the disputing parties. Unfortunately, it is not always clear where a plaintiff should file suit.

Advanced Tactical Ordinance Systems

The last major internet based case touching, or actually purposefully avoiding, personal jurisdiction for out-of-state actors was, arguably, Carlson v. Fidelity Motor Group, LLC, 622 F.3d 754 (7th Cir. 2010).  But more recent cases have touched on the issue.

As the reader might imagine, courts may be quite reluctant to assert personal jurisdiction over every company in the world that has a website.  In Advanced Tactical Ordinance Systems v. Real Action Paintball, Inc. & Tran, Appellate Judges Wood, Posner, and Kanne examined this very issue. The case involved paintball rounds.  Advanced Tactical sold “Pepperball” rounds for use in paintball guns, which may be familiar because similar rounds were used in the infamous 2004 quelling of riots generated from the Boston Red Sox World Series victory.

The Plaintiff, Advanced Tactical, was previously a supplier of irritant projectile rounds to a non-party, Pepperball Technologies.  When Pepperball Technologies went out of business, Advanced Tactical bought the trademark rights to “Pepperball” and started selling the product on its own.  However, another supplier of irritant projectiles to the, now out-of-business, Pepperball Technologies was Real Action Paintball, Inc.  

Real Action Paintball announced, via an email blast and its website, that it had the recipe and means to that “Pepperball Technologies, Inc.” previously utilized – a fact no doubt true, considering it supplied Pepperball Technologies, Inc.  However, Advanced Tactical, who had purchased the rights to the Pepperball name sued Real Action paintball for claims under the Lanham (Trademark) Act, in an Indiana federal court.

This is where the issue arises.  Advanced Tactical was headquartered in Indiana, but doing business in California.  The Defendant, Real Action, was based in California.  The United States District Court for the Northern District of Indiana, concluded that it could exercise jurisdiction over Real Action, despite it not being located in Indiana. It based its decision upon the fact it had Indiana clients, email lists, email blasts, and a website accessible by Indiana residents.  The Seventh Circuit Court of Appeals determined otherwise.  The Seventh Circuit sought out a substantial connection with Indiana, a requirement to exercise jurisdiction.  It did not find one. Accordingly, it reversed the district court.

Email blasts do not create contacts

The District Court found sufficient contacts because some emails, from a mass email list, landed in the inboxes of Indiana residents.  The Seventh Circuit differentiated email from traditional “snail” mail.  Snail mail is a physical document that lands at, and exists at, a particular address.  To the contrary, the Seventh Circuit believes that email exists nowhere.  

Email does not exist in any location at all; it bounces from one server to another, it starts wherever the account-holder is sitting when she clicks the ‘send’ button, and it winds up wherever the recipient happens to be at that instant.

Interactive websites are not a sufficient connection

The Seventh Circuit also considered the fact that the defendants website Indiana residents to interact with it.  The Seventh Circuit seemed to accept that the residents interacted with the site. Having reversed the district court, the Seventh Circuit determined that an interactive website did not necessarily create sufficient contacts to allow for a suit in Indiana.  Further, the Appellate Court noted that if it did accept that such a site created sufficient contacts, then the suits could be filed anywhere at all.

Non-infringing sales do not create contacts

The Seventh Circuit also determined that only infringing sales were relevant to the analysis. So, the other non-infringing sales the District Court relied upon, were irrelevant.

In conclusion, it seems that, in the Seventh Circuit, a Plaintiff cannot simply fix venue in his or her home district simply because the Defendant operates a website and email blasts individuals within his or her district.

- Jonathan LA Phillips