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    CYBERSELL INC. v CYBERSELL, INC., 9617087

    U.S. 9th Circuit Court of Appeals

    CYBERSELL INC. v CYBERSELL, INC.
    9617087

    CYBERSELL, INC., an Arizona
    corporation,
    Plaintiff-Appellant,
    
    v.
    
    CYBERSELL, INC., a Florida
    No. 96-17087
    corporation; WEBHORIZONS, INC., a
    D.C. No.
    Florida corporation; WEBSOLVERS,
    CV-96-00089-EHC
    INC., a Florida corporation;
    SAMUEL C. CERTO, husband; JANE                        OPINION
    DOE CERTO, wife; MATT CERTO,
    husband; JANE DOE II CERTO, wife;
    CYBERGATE, INC., a corporation;
    SPRINTNET, a corporation,
    Defendants-Appellees.
    
    
    Appeal from the United States District Court
    for the District of Arizona
    Earl H. Carroll, District Judge, Presiding
    
    Argued and Submitted
    November 6, 1997--San Francisco, California
    
    Filed December 2, 1997
    
    Before: Harlington Wood, Jr.,* Pamela Ann Rymer, and
    A. Wallace Tashima, Circuit Judges.
    
    Opinion By Judge Rymer
    SUMMARY 
    
    _________________________________________________________________
    COUNSEL
    
    Connie J. Mableson, Phoenix, Arizona, for the plaintiff-
    appellant.
    
    Michael R. Levin and Christopher T. Hill, Rumberger, Kirk
    & Caldwell, Orlando, Florida, for the defendants-appellees.
    
    _________________________________________________________________
    
    OPINION
    
    RYMER, Circuit Judge:
    
    We are asked to hold that the allegedly infringing use of a
    service mark in a home page on the World Wide Web suffices
    for personal jurisdiction in the state where the holder of the
    mark has its principal place of business. Cybersell, Inc., an
    Arizona corporation that advertises for commercial services
    over the Internet, claims that Cybersell, Inc., a Florida corpo-
    ration that offers web page construction services over the
    Internet, infringed its federally registered mark and should be
    amenable to suit in Arizona because cyberspace is without
    borders and a web site which advertises a product or service
    is necessarily intended for use on a world wide basis. The dis-
    trict court disagreed, and so do we. Instead, applying our nor-
    mal "minimum contacts" analysis, we conclude that it would
    not comport with "traditional notions of fair play and substan-
    tial justice," Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d
    1482, 1485 (9th Cir. 1993) (quoting International Shoe Co. v.
    Washington, 
    326 U.S. 310, 316
      (1945)), for Arizona to exer-
    cise personal jurisdiction over an allegedly infringing Florida
    web site advertiser who has no contacts with Arizona other
    than maintaining a home page that is accessible to Arizonans,
    and everyone else, over the Internet. We therefore affirm.
    
    I
    
    Cybersell, Inc. is an Arizona corporation, which we will
    refer to as Cybersell AZ. It was incorporated in May 1994 to
    provide Internet and web advertising and marketing services,
    including consulting. The principals of Cybersell AZ are Lau-
    rence Canter and Martha Siegel, known among web users for
    first "spamming" the Internet.1 Mainstream print media car-
    ried the story of Canter and Siegel and their various efforts to
    commercialize the web.
    
    On August 8, 1994, Cybersell AZ filed an application to
    register the name "Cybersell" as a service mark. The applica-
    tion was approved and the grant was published on October 30,
    1995. Cybersell AZ operated a web site using the mark from
    August 1994 through February 1995. The site was then taken
    down for reconstruction.
    
    Meanwhile, in the summer of 1995, Matt Certo and his
    father, Dr. Samuel C. Certo, both Florida residents, formed
    Cybersell, Inc., a Florida corporation (Cybersell FL), with its
    principal place of business in Orlando. Matt was a business
    school student at Rollins College, where his father was a pro-
    fessor; Matt was particularly interested in the Internet, and
    their company was to provide business consulting services for
    strategic management and marketing on the web. At the time
    the Certos chose the name "Cybersell" for their venture,
    Cybersell AZ had no home page on the web nor had the PTO
    granted their application for the service mark.
    
    As part of their marketing effort, the Certos created a web
    page at http://www.cybsell.com/cybsell/index.htm. The home
    page has a logo at the top with "CyberSell" over a depiction
    of the planet earth, with the caption underneath "Professional
    Services for the World Wide Web" and a local (area code
    407) phone number. It proclaims in large letters "Welcome to
    CyberSell!" A hypertext link2 allows the browser to introduce
    himself, and invites a company not on the web -- but inter-
    ested in getting on the web -- to "Email us to find out how!"
    
    Canter found the Cybersell FL web page and sent an e-mail
    on November 27, 1995 notifying Dr. Certo that "Cybersell"
    is a service mark of Cybersell AZ. Trying to disassociate
    themselves from the Canters, the Certos changed the name of
    Cybersell FL to WebHorizons, Inc. on December 27 (later it
    was changed again to WebSolvers, Inc.) and by January 4,
    1996, they had replaced the CyberSell logo at the top of their
    web page with WebHorizons, Inc. The WebHorizons page
    still said "Welcome to CyberSell!"
    
    Cybersell AZ filed the complaint in this action January 9,
    1996 in the District of Arizona, alleging trademark infringe-
    ment, unfair competition, fraud, and RICO violations. On the
    same day Cybersell FL filed suit for declaratory relief with
    regard to use of the name "Cybersell" in the United States
    District Court for the Middle District of Florida, but that
    action was transferred to the District of Arizona and consoli-
    dated with the Cybersell AZ action. Cybersell FL moved to
    dismiss for lack of personal jurisdiction. The district court
    denied Cybersell AZ's request for a preliminary injunction,
    then granted Cybersell FL's motion to dismiss for lack of per-
    sonal jurisdiction.3 Cybersell AZ timely appealed.
    II
    
    [1] The general principles that apply to the exercise of per-
    sonal jurisdiction are well known. As there is no federal stat-
    ute governing personal jurisdiction in this case, the law of
    Arizona applies. Under Rule 4.2(a) of the Arizona Rules of
    Civil Procedure, an Arizona court
    
           may exercise personal jurisdiction over parties,
           whether found within or outside the state, to the
           maximum extent permitted by the Constitution of
           this state and the Constitution of the United States.
    
    The Arizona Supreme Court has stated that under Rule 4.2(a),
    "Arizona will exert personal jurisdiction over a nonresident
    litigant to the maximum extent allowed by the federal
    constitution." Uberti v. Leonardo, 181 Ariz. 565, 569, 892
    P.2d 1354, 1358, cert. denied, 116 S. Ct. 273 (1995). Thus,
    Cybersell FL may be subject to personal jurisdiction in Ari-
    zona so long as doing so comports with due process.
    
    [2] A court may assert either specific or general jurisdiction
    over a defendant. See Helicopteros Nacionales de Colombia,
    S.A. v. Hall, 
    466 U.S. 408, 414
      (1984). Cybersell AZ con-
    cedes that general jurisdiction over Cybersell FL doesn't exist
    in Arizona, so the only issue in this case is whether specific
    jurisdiction is available.
    
    [3] We use a three-part test to determine whether a district
    court may exercise specific jurisdiction over a nonresident
    defendant:
    
           (1) The nonresident defendant must do some act or
           consummate some transaction with the forum or per-
           form some act by which he purposefully avails him-
           self of the privilege of conducting activities in the
           forum, thereby invoking the benefits and protec-
           tions[;] (2) [t]he claim must be one which arises out
           of or results from the defendant's forum-related
           activities[; and] (3) [e]xercise of jurisdiction must be
           reasonable.
    
    Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995) (cita-
    tions omitted).
    
    Cybersell AZ argues that the test is met because trademark
    infringement occurs when the passing off of the mark occurs,
    which in this case, it submits, happened when the name
    "Cybersell" was used on the Internet in connection with
    advertising. Cybersell FL, on the other hand, contends that a
    party should not be subject to nationwide, or perhaps world-
    wide, jurisdiction simply for using the Internet.
    
    A
    
    [4] Since the jurisdictional facts are not in dispute, we turn
    to the first requirement, which is the most critical. As the
    Supreme Court emphasized in Hanson v. Denckla, "it is
    essential in each case that there be some act by which the
    defendant purposefully avails itself of the privilege of con-
    ducting activities within the forum State, thus invoking the
    benefits and protections of its laws." 
    357 U.S. 235
    , 253
    (1958). We recently explained in Ballard that
    
           the "purposeful availment" requirement is satisfied if
           the defendant has taken deliberate action within the
           forum state or if he has created continuing obliga-
           tions to forum residents. "It is not required that a
           defendant be physically present within, or have
           physical contacts with, the forum, provided that his
           efforts `are purposefully directed' toward forum
           residents."
    
    Ballard, 65 F.2d at 1498 (citations omitted).
    
    We have not yet considered when personal jurisdiction may
    be exercised in the context of cyberspace, but the Second and
    Sixth Circuits have had occasion to decide whether personal
    jurisdiction was properly exercised over defendants involved
    in transmissions over the Internet, see CompuServe, Inc. v.
    Patterson, 89 F.3d 1257 (6th Cir. 1996); Bensusan Restaurant
    Corp. v. King, 937 F. Supp. 295 (S.D.N.Y. 1996), aff'd, No.
    96-9344, 1383, 1997 WL 560048 (2d Cir. Sept. 10, 1997), as
    have a number of district courts. Because this is a matter of
    first impression for us, we have looked to all of these cases
    for guidance. Not surprisingly, they reflect a broad spectrum
    of Internet use on the one hand, and contacts with the forum
    on the other. As CompuServe and Bensusan seem to represent
    opposite ends of the spectrum, we start with them. 4
    
    CompuServe is a computer information service head-
    quartered in Columbus, Ohio, that contracts with individual
    subscribers to provide access to computing and information
    services via the Internet. It also operates as an electronic con-
    duit to provide computer software products to its subscribers.
    Computer software generated and distributed in this way is
    often referred to as "shareware." Patterson is a Texas resident
    who subscribed to CompuServe and placed items of
    "shareware" on the CompuServe system pursuant to a
    "Shareware Registration Agreement" with CompuServe
    which provided, among other things, that it was "to be gov-
    erned by and construed in accordance with" Ohio law. During
    the course of this relationship, Patterson electronically trans-
    mitted thirty-two master software files to CompuServe, which
    CompuServe stored and displayed to its subscribers. Sales
    were made in Ohio and elsewhere, and funds were transmitted
    through CompuServe in Ohio to Patterson in Texas. In effect,
    Patterson used CompuServe as a distribution center to market
    his software. When Patterson threatened litigation over alleg-
    edly infringing CompuServe software, CompuServe filed suit
    in Ohio seeking a declaratory judgment of noninfringement.
    The court found that Patterson's relationship with Compu-
    Serve as a software provider and marketer was a crucial indi-
    cator that Patterson had knowingly reached out to Compu-
    Serve's Ohio home and benefitted from CompuServe's han-
    dling of his software and fees. Because Patterson had chosen
    to transmit his product from Texas to CompuServe's system
    in Ohio, and that system provided access to his software to
    others to whom he advertised and sold his product, the court
    concluded that Patterson purposefully availed himself of the
    privilege of doing business in Ohio.
    
    By contrast, the defendant in Bensusan owned a small jazz
    club known as "The Blue Note" in Columbia, Missouri. He
    created a general access5 web page that contained information
    about the club in Missouri as well as a calendar of events and
    ticketing information. Tickets were not available through the
    web site, however. To order tickets, web browsers had to use
    the names and addresses of ticket outlets in Columbia or a
    telephone number for charge-by-phone ticket orders, which
    were available for pick-up on the night of the show at the
    Blue Note box office in Columbia. Bensusan was a New York
    corporation that owned "The Blue Note," a popular jazz club
    in the heart of Greenwich Village. Bensusan owned the rights
    to the "The Blue Note" mark. Bensusan sued King for trade-
    mark infringement in New York. The district court distin-
    guished King's passive web page, which just posted
    information, from the defendant's use of the Internet in
    CompuServe by observing that whereas the Texas Internet
    user specifically targeted Ohio by subscribing to the service,
    entering into an agreement to sell his software over the Inter-
    net, advertising through the service, and sending his software
    to the service in Ohio,
    
           King has done nothing to purposefully avail himself
           of the benefits of New York. King, like numerous
           others, simply created a Web site and permitted any-
           one who could find it to access it. Creating a site,
           like placing a product into the stream of commerce,
           may be felt nationwide-or even worldwide-but, with-
           out more, it is not an act purposefully directed
           toward the forum state.
    
    Bensusan, 937 F. Supp. at 301 (citing the plurality opinion in
    Asahi Metal Indus. Co. v. Superior Court, 
    480 U.S. 102
    , 112
    (1992)). Given these facts, the court reasoned that the argu-
    ment that the defendant "should have foreseen that users
    could access the site in New York and be confused as to the
    relationship of the two Blue Note clubs is insufficient to sat-
    isfy due process." Id. at 301.
    
    [5] "Interactive" web sites present somewhat different
    issues. Unlike passive sites such as the defendant's in
    Bensusan, users can exchange information with the host com-
    puter when the site is interactive. Courts that have addressed
    interactive sites have looked to the "level of interactivity and
    commercial nature of the exchange of information that occurs
    on the Web site" to determine if sufficient contacts exist to
    warrant the exercise of jurisdiction. See, e.g., Zippo Mfg. Co.
    v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa.
    1997) (finding purposeful availment based on Dot Com's
    interactive web site and contracts with 3000 individuals and
    seven Internet access providers in Pennsylvania allowing
    them to download the electronic messages that form the basis
    of the suit); Maritz, Inc. v. Cybergold, Inc., 947 F. Supp.
    1328, 1332-33 (E.D. Mo.) (browsers were encouraged to add
    their address to a mailing list that basically subscribed the
    user to the service), reconsideration denied, 947 F. Supp.
    2448 (1996).
    
    [6] Cybersell AZ points to several district court decisions
    which it contends have held that the mere advertisement or
    solicitation for sale of goods and services on the Internet gives
    rise to specific jurisdiction in the plaintiff's forum. However,
    so far as we are aware, no court has ever held that an Internet
    advertisement alone is sufficient to subject the advertiser to
    jurisdiction in the plaintiff's home state. See, e.g., Smith v.
    Hobby Lobby Stores, 968 F. Supp. 1356 (W.D. Ark. 1997) (no
    jurisdiction over Hong Kong defendant who advertised in
    trade journal posted on the Internet without sale of goods or
    services in Arkansas). Rather, in each, there has been
    "something more" to indicate that the defendant purposefully
    (albeit electronically) directed his activity in a substantial way
    to the forum state.
    
    Inset Systems, Inc. v. Instruction Set, Inc., 937 F. Supp. 161
    (D. Conn. 1996), is the case most favorable to Cybersell AZ's
    position. Inset developed and marketed computer software
    throughout the world; Instruction Set, Inc. (ISI) provided
    computer technology and support. Inset owned the federal
    trademark "INSET"; but ISI obtained "INSET.COM" as its
    Internet domain address for advertising its goods and services.
    ISI also used the telephone number "1-800-US-INSET." Inset
    learned of ISI's domain address when it tried to get the same
    address, and filed suit for trademark infringement in Connect-
    icut. The court reasoned that ISI had purposefully availed
    itself of doing business in Connecticut because it directed its
    advertising activities via the Internet and its toll-free number
    toward the state of Connecticut (and all states); Internet sites
    and toll-free numbers are designed to communicate with peo-
    ple and their businesses in every state; an Internet advertise-
    ment could reach as many as 10,000 Internet users within
    Connecticut alone; and once posted on the Internet, an adver-
    tisement is continuously available to any Internet user.
    
    Cybersell AZ further points to the court's statement in
    EDIAS Software International, L.L.C. v. BASIS International
    Ltd., 947 F. Supp. 413 (D. Ariz. 1996), that a defendant
    "should not be permitted to take advantage of modern tech-
    nology through an Internet Web page and forum and simulta-
    neously escape traditional notions of jurisdiction. " Id. at 420.
    In that case, EDIAS (an Arizona company) alleged that
    BASIS (a New Mexico company) sent advertising and defam-
    atory statements over the Internet through e-mail, its web
    page, and forums. However, the court did not rest its mini-
    mum contacts analysis on use of the Internet alone; in addi-
    tion to the Internet, BASIS had a contract with EDIAS, it
    made sales to EDIAS and other Arizona customers, and its
    employees had visited Arizona during the course of the busi-
    ness relationship with EDIAS.
    
    [7] Some courts have also given weight to the number of
    "hits" received by a web page from residents in the forum
    state, and to other evidence that Internet activity was directed
    at, or bore fruit in, the forum state. See, e.g., Heroes, Inc. v.
    Heroes Found., 958 F. Supp. 1 (D.D.C. 1996) (web page that
    solicited contributions and provided toll-free telephone num-
    ber along with the defendant's use on the web page of the
    allegedly infringing trademark and logo, along with other
    contacts, provided sustained contact with the District),
    amended by No. Civ.A. 96-1260(TAF) (1997); Pres-Kap, Inc.
    v. System One, Direct Access, Inc., 636 So.2d 1351 (Fla. Dist.
    Ct. App. 1994) (declining jurisdiction where defendant con-
    sumer subscribed to plaintiff's travel reservation system but
    was solicited and serviced instate by the supplier's local rep-
    resentative).
    
    [8] In sum, the common thread, well stated by the district
    court in Zippo, is that "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." Zippo, 952 F. Supp. at 1124.
    
    B
    
    [9] Here, Cybersell FL has conducted no commercial activ-
    ity over the Internet in Arizona. All that it did was post an
    essentially passive home page on the web, using the name
    "CyberSell," which Cybersell AZ was in the process of regis-
    tering as a federal service mark. While there is no question
    that anyone, anywhere could access that home page and
    thereby learn about the services offered, we cannot see how
    from that fact alone it can be inferred that Cybersell FL delib-
    erately directed its merchandising efforts toward Arizona resi-
    dents.
    
    [10] Cybersell FL did nothing to encourage people in Ari-
    zona to access its site, and there is no evidence that any part
    of its business (let alone a continuous part of its business) was
    sought or achieved in Arizona. To the contrary, it appears to
    be an operation where business was primarily generated by
    the personal contacts of one of its founders. While those con-
    tacts are not entirely local, they aren't in Arizona either. No
    Arizonan except for Cybersell AZ "hit" Cybersell FL's web
    site. There is no evidence that any Arizona resident signed up
    for Cybersell FL's web construction services. It entered into
    no contracts in Arizona, made no sales in Arizona, received
    no telephone calls from Arizona, earned no income from Ari-
    zona, and sent no messages over the Internet to Arizona. The
    only message it received over the Internet from Arizona was
    from Cybersell AZ. Cybersell FL did not have an"800" num-
    ber, let alone a toll-free number that also used the "Cybersell"
    name. The interactivity of its web page is limited to receiving
    the browser's name and address and an indication of interest
    -- signing up for the service is not an option, nor did anyone
    from Arizona do so. No money changed hands on the Internet
    from (or through) Arizona. In short, Cybersell FL has done no
    act and has consummated no transaction, nor has it performed
    any act by which it purposefully availed itself of the privilege
    of conducting activities, in Arizona, thereby invoking the ben-
    efits and protections of Arizona law.
    
    [11] We therefore hold that Cybersell FL's contacts are
    insufficient to establish "purposeful availment. " Cybersell AZ
    has thus failed to satisfy the first prong of our three-part test
    for specific jurisdiction. We decline to go further solely on the
    footing that Cybersell AZ has alleged trademark infringement
    over the Internet by Cybersell FL's use of the registered name
    "Cybersell" on an essentially passive web page advertisement.
    Otherwise, every complaint arising out of alleged trademark
    infringement on the Internet would automatically result in
    personal jurisdiction wherever the plaintiff's principal place
    of business is located. That would not comport with tradi-
    tional notions of what qualifies as purposeful activity invok-
    ing the benefits and protections of the forum state. See
    Peterson v. Kennedy, 771 F.2d 1244, 1262 (9th Cir. 1985)
    (series of phone calls and letters to California physician
    regarding plaintiff's injuries insufficient to satisfy first prong
    of test).
    
    III
    
    [12] Cybersell AZ also invokes the "effects" test employed
    in Calder v. Jones, 
    465 U.S. 783
     (1984), and Core-Vent Corp.
    v. Nobel Industries, 11 F.3d 1482 (9th Cir. 1993), with respect
    to intentional torts directed to the plaintiff, causing injury
    where the plaintiff lives. However, we don't see this as a
    Calder case. Because Shirley Jones was who she was (a
    famous entertainer who lived and worked in California) and
    was libeled by a story in the National Enquirer, which was
    published in Florida but had a nationwide circulation with a
    large audience in California, the Court could easily hold that
    California was the "focal point both of the story and of the
    harm suffered" and so jurisdiction in California based on the
    "effects" of the defendants' Florida conduct was proper.
    Calder, 
    465 U.S. at 789
    . There is nothing comparable about
    Cybersell FL's web page. Nor does the "effects " test apply
    with the same force to Cybersell AZ as it would to an individ-
    ual, because a corporation "does not suffer harm in a particu-
    lar geographic location in the same sense that an individual
    does." Core-Vent, 11 F.3d at 1486. Cybersell FL's web page
    simply was not aimed intentionally at Arizona knowing that
    harm was likely to be caused there to Cybersell AZ. 6
    
    IV
    
    [13] We conclude that the essentially passive nature of
    Cybersell FL's activity in posting a home page on the World
    Wide Web that allegedly used the service mark of Cybersell
    AZ does not qualify as purposeful activity invoking the bene-
    fits and protections of Arizona. As it engaged in no commer-
    cial activity and had no other contacts via the Internet or
    otherwise in Arizona, Cybersell FL lacks sufficient minimum
    contacts with Arizona for personal jurisdiction to be asserted
    over it there. Accordingly, its motion to dismiss for lack of
    personal jurisdiction was properly granted.
    
    AFFIRMED.
    _______________________________________________________________
    
    FOOTNOTES
    
    *Honorable Harlington Wood, Jr., Senior Circuit Judge, United States
    Court of Appeals for the Seventh Circuit, sitting by designation.
    1 Spamming refers to the posting indiscriminately of advertisements to
    news groups on the web. Unlike crossposting, spamming individually
    posts the advertisement to each news group, requiring the recipient to
    delete the message from each news group to which she has subscribed.
    2 A hypertext link allows a user to move directly from one web location
    to another by using the mouse to click twice on the colored link.
    3 In its October 21, 1996 judgment, the district court dismissed both of
    the consolidated actions.
    4 Since Bensusan was decided on the basis of New York's long-arm stat-
    ute (which requires presence in the forum and is therefore more stringent
    than due process), its holding is not instructive, but the district court's
    analysis is. The district court dismissed for lack of personal jurisdiction
    under the long-arm statute as well as on due process grounds, while the
    Second Circuit affirmed on the statute and did not discuss the constitu-
    tional issue.
    5 A general access site requires no authentication or access code for
    entry. Bensusan, 937 F. Supp. at 297. Thus, the site is accessible to anyone
    who has access to the Internet.
    6 Likewise unpersuasive is Cybersell AZ's reliance on Panavision Inter-
    national v. Toeppen, 938 F. Supp. 616 (C.D. Cal. 1996), where the court
    found the "purposeful availment" prong satisfied by the effects felt in Cal-
    ifornia, the home state of Panavision, from Toeppen's alleged out-of-state
    scheme to register domain names using the trademarks of California com-
    panies, including Panavision, for the purpose of extorting fees from them.
    Again, there is nothing analogous about Cybersell FL's conduct. the end
    
    
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