Thursday, July 13, 2006
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Business Web Site Insufficient to Confer U.S. Jursidiction—C.A.
By a MetNews Staff Writer
The fact that a foreign business operates an Internet site and caters to American customers overseas does not give U.S. courts personal jurisdiction over it, the Ninth U.S. Circuit Court of Appeals ruled yesterday.
The court affirmed the dismissal of a trademark infringement action brought by the owners of the Pebble Beach golf club and resort against an English bed and breakfast of the same name.
Pebble Beach Company has used the name “Pebble Beach” for its Monterey County golf course and resort for 50 years, and operates a web site located at www.pebblebeach.com.
Michael Caddy is a dual U.S./U.K. citizen who resides in the U.K. and operates a three-room bed and breakfast, restaurant, and bar located on a cliff overlooking the pebbly beaches of England’s south shore. He calls his establishment, which does not include a golf course, “Pebble Beach.”
Caddy has a web site, located at www.pebblebeach-uk.com, which does not allow potential customers to reserve rooms or make payments online.
Pebble Beach Company, claiming that its trade name had acquired secondary meaning in the United States and the U.K., filed suit against Caddy in the U.S. District Court for the Northern District of California.
Judge Phyllis J. Hamilton dismissed the suit for lack of personal jurisdiction, saying Caddy’s contacts with California were insufficient to confer long-arm jurisdiction, even under state law conferring personal jurisdiction over a party to the maximum extent permitted by federal due process requirements.
Schwarzenegger Suit
On appeal, the company argued that Caddy was subject to specific personal jurisdiction in California because he aimed his tortuous conduct at California.
But Judge Stephen S. Trott, writing for the Ninth Circuit, said:
“We conclude that Caddy’s actions were not expressly aimed at California. The only acts identified by Pebble Beach as being directed at California are the website and the use of the name ‘Pebble Beach’ in the domain name. These acts were not aimed at California and, regardless of foreseeable effect, are insufficient to establish jurisdiction.”
Trott said the case is analogous to one that was brought in California by Arnold Schwarzenegger against an Ohio car dealership, claiming it had improperly used his “Terminator” image in newspaper advertisements in Ohio.
Trott noted that the Ninth Circuit affirmed the district court’s dismissal of the Schwarzenegger suit for lack of jurisdiction, concluding that “even though the advertisement might lead to eventual harm in California this ‘foreseeable effect’ was not enough because the advertisement was expressly aimed at Ohio rather than California.”
Trott explained:
“Pebble Beach, like Schwarzenegger, relies almost exclusively on the possible foreseeable effects. Like Schwarzenegger, Pebble Beach’s arguments depend on the possible effects of a non-interactive advertisement—here, Caddy’s passive website. Notably absent in both circumstances is action that can be construed as being expressly aimed at California.”
Primary Target
The company also sought to establish jurisdiction under a rule that allows any forum in the United States to have jurisdiction if the party’s conduct was aimed at the United States, and no state has jurisdiction.
It argued that Caddy’s use of the famous U.S. trademark “Pebble Beach” showed that the United States was his primary target.
But Trott said:
“The fact that the name ‘Pebble Beach’ is a famous mark known world-wide is of little practical consequence when deciding whether action is directed at a particular forum via the world wide web.”
The company argued that use of a “.com” web domain, rather than a United Kingdom or European Union domain, shows that the web site was geared primarily toward the United States.
Trott wrote:
“To suggest that ‘.com’ is an indicator of express aiming at the United States is even weaker than the counter assertion that having ‘U.K.’ in the domain name, which is the case here, is indicative that Caddy was only targeting his services to the United Kingdom.”
Trott also opined that arguments that the effect that Caddy caters to American tourists shows that he directed his conduct to the Unites States “fail for the same reasons they go to effects rather than express aiming.”
Chief Judge Mary M. Schroeder and Judge Andrew J. Kleinfeld concurred in the opinion.
The case is Pebble Beach Company v. Caddy, 04-15577.
Copyright 2006, Metropolitan News Company