Zippo Mfg. Co. v. Zippo Dot Com

Zippo Mfg. Co. v. Zippo Dot Com, 952 F. Supp. 1119 (W.D. Pa. 1997)

Zippo Manufacturing Company, a Pennsylvania corporation, brought suit for trademark dilution, infringement, and false designation under the Federal Trademark Act, against Zippo Dot Com, an internet website with its primary place of business in California. Manufacturing filed suit in Pennsylvania and Dot Com contends that a Pennsylvania court cannot exercise personal jurisdiction over it. Dot Com’s contacts with Pennsylvania occurred almost exclusively through the internet – by contracting to provide subscription website access to nearly 3,000 Pennsylvania residents and by entering into agreements with seven internet access providers in Pennsylvania. Dot Com objected to the Pennsylvania court’s exercise of personal jurisdiction.

Procedural Posture
Zippo Manufacturing filed suit in the Western District of Pennsylvania. Dot Com contested Pennsylvania jurisdiction, moving to dismiss on the grounds that Pennsylvania lacked personal jurisdiction. Dot Com’s motion was denied.

Does the Due Process Clause of the Fourteenth Amendment allow a forum state to exercise jurisdiction over an out-of-state defendant when the plaintiff is a corporation of the forum state, the defendant has over 3,000 paying subscribers in the forum state, and the defendant has contracted with internet service providers in the state?

Yes. Pennsylvania has a vested interest in exercising jurisdiction over an out-of-state defendant whose actions resulted in tortuous activity in Pennsylvania and it is the appropriate jurisdiction for the litigation.

Dot Com purposely established contacts with Pennsylvania when it accepted the subscription payments from PA residents. Dot Com reached out to Pennsylvania to fulfill these subscription requests, and it doesn’t matter that Pennsylvania residents may have initiated the requests. There are three types of internet-jurisdiction cases: 1) where a defendant clearly does business over the internet (as in CompuServe,) 2) where a defendant has simply posted information on the internet which is accessible to users in foreign jurisdictions (as in Bensusan,) or 3) where a defendant controls a website where a user can exchange information with the host computer (as in Maritz.) In the present case, the court likened Dot Com to CompuServe because Dot Com clearly established business relations with Pennsylvania by providing services in the state for a fee. By using the “minimum contacts” standard along with the traditional notions of “fair play and substantial justice,” the Court reasoned that Dot Com’s conducting electronic commerce with Pennsylvania residents constituted the purposeful availment of doing business in Pennsylvania. Therefore, Pennsylvania had sufficient grounds to assert personal jurisdiction over Dot Com because Dot Com had clear notice that it would be subject to suit there.

Jessica L. Cook
April 22, 2010

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