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Facts. Zippo Manufacturing Company Pennsylvania corporationIt makes well-known tobacco lighters Zippo Dot ComCalifornia corporationIt operates an internet website and an internet news serviceIt has the exclusive right to use the domain names zippo.com, zippo.net, zipponews.com over the intern
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1. Zippo Manufacturing Company vs. Zippo Dot Com, Inc. Ardak
Kaskyrbayev
2. Facts Zippo Manufacturing Company
Pennsylvania corporation
It makes well-known tobacco lighters
Zippo Dot Com
California corporation
It operates an internet website and an internet news service
It has the exclusive right to use the domain names zippo.com, zippo.net, zipponews.com over the internet
3. Facts Zippo Dot Com
Corporations contacts with Pennsylvania occurred almost exclusively over the internet
Corporations offices, employees, internet services were located in California - it did not maintain any services, employees, agents in Pennsylvania
Advertisement of the corporations services information about them posted on the website, which was accessible to all users including from Pennsylvania
140,000 subscribers worldwide, 2% (3000 subscribers) of which were Pennsylvania residents
By filling out application on the website, subscribed received corporations services
Also, the corporation concluded contracts with 7 internet access providers to allow their subscribers to access the corporations news service (2 of providers from Pennsylvania)
4. Facts Zippo Manufacturing Company
It filed a lawsuit in Pennsylvania against Zippo Dot Com alleging trademark dilution, infringement, and false designation under Lanham Act
It also alleged causes of action based on state law trademark dilution under Pennsylvania Statute 1124
Basis of claims Dot Coms use of the word zippo in the domain names in numerous locations in its website and in the heading of internet newsgroup messages posted by its subscribers
Zippo Dot Com
It moved to dismiss for lack of personal jurisdiction
5. Issue Do Zippo Dot Coms contacts with Pennsylvania residents and Internet service providers over the internet equate to purposeful availment of the privilege of conducting activities within Pennsylvania?
Holding
Yes, Zippo Dot Coms contacts with Pennsylvania residents and Internet service providers over the internet constitute purposeful availment of the privilege of conducting activities within Pennsylvania
6. Reasoning The court established a three-pronged test to establish jurisdiction over Zippo Dot Com:
There must be sufficient minimum contacts with the forum
The claim must arise out of those contacts
Exercise of jurisdiction must be reasonable
Analysis
Conducting e-commerce and entering into agreements with PA residents and ISPs over the internet were sufficient minimum contacts
The claims by Zippo Manufacturing Co. arose out of those contacts since Zippo Dot Coms object of transactions was downloading of electronic messages that contained the word zippo.
Since Zippo Dot Com contracted approximately 3,000 individuals and 7 internet access providers in Pennsylvania in order to sell its services, exercise of jurisdiction was proper
7. Sliding Scale Test Sliding Scale test is used to analyze minimum contacts
The likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet
Passive websites, which merely provide information
No minimum contacts may be established to exercise jurisdiction
Interactive websites, which allow website owner and visitor to exchange information
Minimum contacts are established depending on the level of interactivity and the commercial nature of exchange of information on the website
Commercial websites, which conduct business over the internet
Minimum contacts are surely established
8. Conclusion Given that:
Zippo Dot Com conducted e-commerce and entered into agreements with PA residents and ISPs,
the claim by Zippo Manufacturing Co. was the result of Zippo Dot Coms contacts with Pennsylvania
And therefore, Zippo Dot Com freely chose to sell its services
Zippo Dot Coms contacts constituted purposeful availment