(WEB HOST INDUSTRY REVIEW) — In a decision that could have a significant impact on the future of online companies, an Illinois court ruled that Go Daddy (www.godaddy.com) was not subject to personal jurisdiction in the state because it does not have a physical presence in the state, nor had it targeted its advertising and solicitation efforts specifically at residents of the state.
According to its announcement this week, Wilson Sonsini Goodrich & Rosati won a dismissal with prejudice on behalf of Go Daddy in the US District Court for the Northern District of Illinois, a suit filed by uBID (www.ubid.com), claiming Go Daddy violated the US Anticybersquatting Consumer Protection Act by including domain names containing its trademarks in Go Daddy’s parked page, cash parking, and domain auction services.
Go Daddy moved to dismiss the action for lack of personal jurisdiction, and, ultimately, the court held that Go Daddy is not subject to personal jurisdiction in the state of Illinois.
The court agreed that in order to exercise general jurisdiction over an Internet company that offers services to anyone in the world, the company must either have a physical presence in the state or have advertising and solicitation efforts targeted specifically at residents of the state.
The US legislation dictates that when a webpage infringes on a trademark, the owner of the trademark can sue in any jurisdiction where the webpage can be viewed – but only for the remedy of transferring ownership of the webpage to the trademark-holder.
The court also found that the widely used “Zippo test” for determining whether jurisdiction exists over Internet companies does not apply to the issue of general jurisdiction. Based on a 1996 ruling (Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119), the Zippo test bases jurisdiction over a nonresident website on the degree of interactivity between the website and the forum, however, it has come upon criticism for lacking precision.
As well, the court agreed with Go Daddy’s position that Illinois residents’ unilateral activity in purchasing its services did not satisfy the requirements for specific jurisdiction.
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