Zippo Manufacturing Co.v.Zippo Dot Com, Inc.

Whether the court may exercise personal jurisdiction over Zippo Dot Com, Inc.¹¹ based on its Internet activities and contracts with Pennsylvania residents?¹²

A three-pronged test determines whether specific personal jurisdiction exists over a non-resident defendant: (1) the defendant must have sufficient minimum contacts with the forum state, (2) the claim asserted must arise out of those contacts, and (3) the exercise of jurisdiction must be reasonable.¹³ For Internet activities, a sliding scale applies.¹⁴ Under this scale, jurisdiction is proper when the defendant clearly does business over the Internet by entering into contracts with residents of the forum that involve the knowing and repeated transmission of computer files over the Internet.¹⁵

Yes. Zippo Manufacturing Company is a Pennsylvania corporation with its principal place of business in Bradford, Pennsylvania, where it manufactures Zippo tobacco lighters. Zippo Dot Com, Inc. is a California corporation with its principal place of business in Sunnyvale, California. Dot Com operates an Internet website and news service and holds the domain names zippo.com, zippo.net, and zipponews.com.

Dot Com's website provides information about the company, advertisements, and an online application for its Internet news service. The service offers three membership levels, with paid subscribers receiving passwords to access newsgroup messages stored on servers in California after submitting personal information and paying by credit card. Approximately 3,000 of Dot Com's 140,000 paying subscribers reside in Pennsylvania. Dot Com has also entered into agreements with seven Internet access providers in Pennsylvania, two of which are in the Western District, allowing their subscribers to access the news service.

These contacts occurred through the Internet, as Dot Com maintains no offices, employees, or agents in Pennsylvania. Manufacturing filed a five-count complaint in the United States District Court for the Western District of Pennsylvania alleging trademark dilution, infringement, and false designation under federal law, as well as state law claims, based on Dot Com's use of the word Zippo in its domain names, website, and newsgroup message headers. Dot Com moved to dismiss the action for lack of personal jurisdiction and improper venue or, alternatively, to transfer the case. Dot Com contracted with approximately 3,000 Pennsylvania residents and seven Internet access providers in Pennsylvania to provide its news service, which constitutes doing business over the Internet.¹⁶

These contacts satisfy the minimum contacts prong because Dot Com consciously chose to process applications from Pennsylvania residents and transmit electronic messages into the state.¹⁷ The trademark claims arise out of these forum-related activities because the alleged infringement occurred when the messages were transmitted into Pennsylvania and viewed by residents there.¹⁸ The exercise of jurisdiction is reasonable given Pennsylvania's interest in protecting its resident corporation's trademarks and Dot Com's voluntary decision to conduct business in the state.¹⁹

The court may exercise personal jurisdiction over Zippo Dot Com, Inc.

Whether venue is proper in the Western District of Pennsylvania under 28 U.S.C. § 1391?²⁰

Under 28 U.S.C. § 1391(b)(1) and (c), venue is proper in a judicial district where the defendant resides, and a corporate defendant resides in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced.²¹

Yes. Because the court has personal jurisdiction over Dot Com as a result of its contracts with Pennsylvania residents and access providers, Dot Com is deemed to reside in the Western District of Pennsylvania under 28 U.S.C. § 1391(c), making venue proper there under the statute.²²

Venue is proper in the Western District of Pennsylvania.²³