Court Cases Clarify Jurisdiction Over Internet Legal Disputes

Published November 8, 2010

Two recent rulings by the Seventh Circuit Court have cleared up some confusion regarding the federal Anti-Cybersquatting Consumer Protection Act.

The court dismissed a suit brought against Houston, Texas anesthesiologist Dr. Eric Chan by an Illinois-based company with a similar Web address, notding Chan’s site specifically gave a Houston address and phone number and sought contracts from Houston-area doctors.

The Chicago-based firm Mobile Anesthesiologists had filed suit against the Texas doctor’s use of the Web address, claiming his address violated the Chicago company’s trademark.
“If a doctor in Chicago stumbled upon Dr. Chan’s Web site and called for an appointment, their conversation would be very short,” the court wrote.

In a separate decision regarding the same two parties, the court ruled GoDaddy—the Arizona Web-hosting company hosting the Texas doctor’s Web site—could be sued in Illinois because it conducts national advertising campaigns.

The ruling in the GoDaddy case reversed a lower court’s decision that had dismissed a suit against GoDaddy by the Web hosting company uBID in Illinois. The appeal determination notes GoDaddy sold a domain name very similar to that of Mobile Anesthesiologists, and it states a lawsuit was allowable because of GoDaddy’s successful solicitation of local clients on a national basis.
‘Right Result’
Maureen Martin, legal analyst for The Heartland Institute, which publishes Infotech & Telecom News, agrees with the Circuit Court’s decisions.

“The test [for determining jurisdiction] traditionally has been whether the defendant has maintained contacts with the state in which the court is located or has done business in the state,” said. “These cybercases are tricky ones in which to gauge whether a court has jurisdiction over a particular defendant, because the Internet is available anywhere and everywhere.

“In pre-Internet days, doing business in a state often meant having a physical presence in that state. So the Seventh Circuit updated it, asking whether it would be fair to subject a defendant to lawsuits in a state in which it has extensively done business or deliberately tried to do so by advertising,” Martin explained.

“The results in both cases are logical,” she said. “The Houston doctor was seeking Houston-area referrals. GoDaddy was seeking customers with quite localized advertising in Illinois. The court applied the correct test and got the right result.”

Bruce Edward Walker ([email protected]) is managing editor of Infotech & Telecom News.