The World in U.S. Courts: Winter 2015 - Personal Jurisdiction
U.S. Plaintiff Bittorrent is a provider of peer-to-peer digital delivery software. It filed a motion seeking a default judgment against German defendant Bittorrent Marketing, asserting trademark infringement, state law unfair competition, and violation of anti-cyber-squatting statutes based on Bittorrent Marketing’s acquisition of web domains using Bittorrent’s trademark and misspellings thereof, and its alleged attempts to demand money from Bittorrent for release of those names.
The Court assessed Bittorrent’s claim that specific personal jurisdiction existed over Bittorrent Marketing using a three part test, examining whether (1) Bittorrent Marketing purposefully directed its activities to California, or otherwise availed itself of the privilege of conducting activities in California; (2) whether Bittorrent’s claim arose out of or was related to the Bittorrent Marketing's California-related activities; and (3) whether the exercise of jurisdiction was reasonable.
The Court found that Bittorrent Marketing’s alleged activities satisfied all prongs of this test. The Court found that Bittorrent Marketing had intentional and systematic conduct with the forum, dating back to 2003, including the registration of an ever-increasing number of domain names incorporating the California-based plaintiff's trademark, undertaken in an effort to extort money from that plaintiff. The Court further noted that in cybersquatting actions, specifically, personal jurisdiction exists in the forum where a trademark owner is located. Finally, there was no doubt that the alleged injury arose out of Bittorrent Marketing’s registration of domain names incorporating Bittorrent’s trademark.
After Bittorrent established the first two prongs of the test, the burden of proof shifted to Bittorrent Marketing to present a compelling case that exercising jurisdiction would be unreasonable. Bittorrent Marketing did not appear in the case to make this argument, however, and the Court held that it had personal jurisdiction to enter a default judgment against Bittorrent Marketing.