Cybersquatting Law Update: Even something as passive as a web site parking page showing advertising links can subject a defendant to personal jurisdiction in another state. Just ask Navigation Catalyst, Epic Media, Connexus, First Look and Basic Fusion. These California and New York based companies could not extradite themselves from the exercise of personal jurisdiction in Michigan on allegations of mass typo-squatting of incontestable trademarks.
Domainers who target typographical variations of registered trademarks and famous brands with parked pages filled with PPC advertisements should be aware of the risk they are taking. Not all trademark owners simply go away when you transfer the domain name. And, yes, you can be dragged into a far-away court to answer allegations of cybersquatting under the right set of facts.
Some more highlights from the Judge's decision.
When a federal court’s subject matter jurisdiction over a case stems from the existence of a federal questions, two requirements must be met for the court to exercise personal jurisdiction over a defendant: (1) the defendant must be amenable to service of process under the forum state’s long-arm statute, and (2) the exercise of personal jurisdiction must not deny the defendant due process. Bird v. Parsons, 289 F.3d 865, 871 (6th Cir. 2002).
In Hanson v. Denckla, 357 U.S. 235, 250-51 (1958), the Supreme Court recognized that the duty of a federal court in assessing personal jurisdiction must be sensitive to changes in technology. Here, the Court must consider whether to exercise jurisdiction over Added Defendants, who did not physically enter Michigan, but used the Internet to commit the challenged conduct.
The Sixth Circuit has used the sliding scale approach. See Neogen Corp., 282 F.3d at 890 (“A defendant purposefully avails itself of the privilege of acting in a state through its website if the website is interactive to a degree that reveals specifically intended interaction with residents of the state.”).
Here, a nexus exists between the website and the cause of action in that defendants used their typosquatted website with the intent to harm Plaintiff in Michigan. Under these facts, the Court concludes that Added Defendants purposefully availed the forum, and were on notice that they may be subject to suit in Michigan.