Dispute Resolution And Contracts.

The new age of technology presents much opportunity for litigation. The Internet is no exception. When operating Internet websites, an important part of it is owning the domain name (www.example.com). Anyone in the world can own any domain name that is available and the facts of this case arise from this concept.

The plaintiff in this case, Weather Underground Corporation (Weather Underground), a Michigan corporation, is a commercial weather service. It owns and operates several domain names so that people can access their company through their websites. Defendants in this case, Navigation Catalyst Systems, Incorporated (“NCS”), a Delaware corporation, owns many domain names that are similar to the plaintiff’s company name (some would result from people misspelling the correct domain name for Weather Underground). NCS profits from consumers going to one of these websites and clicking on links that are on them.

Plaintiff filed suit against NCS and several of its companies in the District Court for the Eastern District of Michigan. As defendants were not incorporated in Michigan, the issue of personal jurisdiction arise. The courts of appeals have held that in order to establish specific personal jurisdiction (showing that this company has established contacts with the forum state), one must show three things: (1) the defendant purposefully availed himself of the privilege of acting in the forum state, (2) the cause of action arises from the defendant’s activities there, and (3) the defendant’s acts were so substantial as to make the exercise of personal jurisdiction there reasonable.

The district court is considering whether the exercise of personal jurisdiction is proper. What should it decide and why?67

Full Answer Section

   
  • Substantiality: While NCS's physical presence is absent, its online activities targeting Michigan residents are substantial enough to justify jurisdiction:
    • The domain names directly target Michiganders searching for weather information.
    • NCS derives revenue from clicks within the state, creating economic ties.
    • The harm to Weather Underground, a Michigan company, occurs at least partially within the state.

Uncertainties:

  • Minimum Contacts: While the factors above suggest NCS has sufficient minimum contacts with Michigan, the court might need further evidence (e.g., number of Michigan visitors, click-through rates) to definitively establish their substantiality.
  • Fairness: The court will also consider if exercising jurisdiction is fair to NCS. Issues like burden of appearing in court in Michigan and lack of physical presence in the state can be weighed against the interests of Weather Underground and the state's interest in adjudicating the dispute.

Conclusion:

The court faces a close call but is likely to find personal jurisdiction over NCS reasonable due to their purposeful targeting of Michigan residents through their domain names and profiting from the state's online traffic. However, the final decision depends on the specific details of the case and the court's interpretation of the minimum contacts and fairness tests.

Sample Answer

   

In this case involving Weather Underground and Navigation Catalyst Systems, the exercise of personal jurisdiction over NCS by the District Court for the Eastern District of Michigan is likely reasonable but not definitively guaranteed.

Here's why:

Arguments for Personal Jurisdiction:

  • Purposeful Availing: NCS, though not physically present in Michigan, purposefully directed its commercial activity towards residents of the state by:
    • Owning domain names containing variations of Weather Underground's name, which is likely to attract Michigan residents searching for the company.
    • Profiting from clicks on those websites, indicating an intention to benefit from the Michigan market.
  • Cause of Action: The lawsuit arises directly from NCS's activities - namely, owning and profiting from domain names resembling Weather Underground's in Michigan.