ISSUES IN ELECTRONIC CONTRACTING

1. ISSUES IN ELECTRONIC CONTRACTING Michael K. Stewart Friend, Hudak & Harris, LLP3 Ravinia Drive, Suite 1450Atlanta, Georgia 30346-2117(770) 399-9500mstewart@fh2.com © Friend, Hudak & Harris, LLP 2003

2. UETA, E-Sign and Georgia Electronic Records and Signatures Act

3. PRIMARY ISSUE ADDRESSED BY UETA, E-SIGN AND GEORGIA ELECTRONIC RECORDS AND SIGNATURES ACT: Does an electronic record or signature constitute a “writing”?

4. GEORGIA EXAMPLE: THE “BEEPS AND CHIRPS” CASE – • Dept. of Transportation v. Norris, 474 S.E.2d 216 (Ga. Ct. App. 1996). • Plaintiff attempted to satisfy statutory requirement of “written” ante-litem notice by delivering notice via facsimile, which was received by the defendant within the applicable period of limitation. • The Georgia Court of Appeals ruled that the facsimile copy of the notice did not satisfy the requirement that such notice be “in writing”, stating that the facsimile was not itself a writing, but rather merely “a series of beeps and chirps” “from which a writing may be accurately duplicated.” • Overruled by the Supreme Court of Georgia on other grounds - did not resolve the question of whether plaintiff’s facsimile - or any other similar electronic communication - constituted a legally effective “writing”.

5. UETA – The Uniform Electronic Transactions Act • Drafted by the National Conference of Commissioners on Uniform State Laws (NCCUSL) and finalized in 1999 • UETA is not binding law in any given state unless and until expressly adopted by such state through its standard legislative processes • A given state’s “version” of UETA may contain significant state-specific variations • All references to the text of UETA in this presentation refer to the NCCUSL’s “form” statute

6. UETA • Elevates electronic signatures and electronic records to functional equivalency with “pen and paper” counterparts for purposes of satisfying legal requirements of a “writing.” • Section 7 of UETA: • (a) A record or signature may not be denied legal effect or enforceabilitysolely because it is in electronic form. • (b) A contract may not be denied legal effect or enforceabilitysolely because an electronic record was used in its formation. • (c) If a law requires a record to be in writing, an electronic record satisfies the law. • If a law requires a signature, an electronic signature satisfies the law

7. UETA DEFINITIONS • ELECTRONIC RECORD:information: • created, generated, sent, communicated, received, or stored by electronic means • that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form • ELECTRONIC SIGNATURE:any sound, symbol, or process: • attached to or logically associated with a record and • executed or adopted by a person with the intent to sign the record

8. LIMITS ON APPLICABILITY OF UETA • UETA applies only to electronic signatures or records relating to “transactions”, which are defined to mean: • interactions between two or more persons relating to the conduct of business, commercial, or governmental affairs • where each party has agreed to conduct such transactions by electronic means • UETA § 5(b) – This agreement may be determined by reference to “the context and surrounding circumstances, including the parties’ conduct” with respect to such transaction. • Parties to a transaction may generally vary the requirements of UETA by contract.

9. LIMITS ON APPLICABILITY OF UETA • UETA § 3 - Even where a “transaction” is involved, UETA does not require that electronic records and signatures be given effect with respect to: • Laws governing the creation and execution of wills, codicils, or testamentary trusts • The Uniform Commercial Code (other than Sections 1-107 and 1-206, Article 2, and Article 2A) • The Uniform Computer Information Transactions Act (UCITA) • Any other law specifically exempted by a given state when enacting UETA • May effect preemption by E-Sign - More on this later

10. LIMITS ON APPLICABILITY OF UETA • UETA does NOT require the use of electronic records of signatures • UETA expressly provides that all “transactions” are still “subject to other applicable substantive law” – • Contract relevance - Except to the limited extent that it places electronic signatures and records on equal legal footing with “hard-copy” counterparts, UETA does not displace the substantive principles of contract law • e.g., prerequisites of contract formation other than a “writing” requirement; • performance

11. CONTRACT FORMATION VIA ELECTRONIC AGENTS • AND AUTOMATED TRANSACTIONS • ELECTRONIC AGENTS: “a computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual.” • AUTOMATED TRANSACTIONS: • A valid contract may be formed “by the interaction of electronic agents of the parties” • A party may be bound by the actions of such party’s electronic agent - “even if no individual was aware of or reviewed the electronic agents’ actions or the resulting terms and agreements.” • “Automatic Transactions” include transactions where only one party to the transaction utilized an electronic agent to propose or accept an offer or to render performance

12. ATTRIBUTION OF ELECTRONIC RECORDS AND SIGNATURES TO AN INDIVIDUAL “[S]o long as the electronic record or electronic signature resulted from a person’s action it will be attributed to that person”  A “person’s actions” include “actions taken by human agents of the person, as well as actions taken by an electronic agent, i.e., the tool, of the person.”

13. WHERE HAS UETA BEEN ENACTED? • As of Fall 2003, 42 states and the District of Columbia (including variations) • Alabama Iowa Montana Pennsylvania • Arizona Indiana Nebraska Rhode Island • Arkansas Kansas Nevada South Dakota • California Kentucky New Hampshire Tennessee • Colorado Louisiana New Jersey Texas • Connecticut Maine New Mexico Utah • Delaware Maryland North Carolina Vermont • D.C. Michigan North Dakota Virginia • Florida Minnesota Ohio West Virginia • Hawaii Mississippi Oklahoma Wyoming • Idaho Missouri Oregon

14. THE GEORGIA ELECTRONIC RECORDS AND SIGNATURES ACT (“GERSA”) - O.C.G.A. § 10-12-1 et seq. (Enacted 1997) O.C.G.A. § 10-12-4 provides: (a) Records and signatures shall not be denied legal effect or validity solely on the grounds that they are electronic. (b) In any legal proceeding, an electronic record or electronic signature shall not be inadmissible as evidence solely on the basis that it is electronic. [all other substantive prerequisites to admissibility remain] (c) When a rule of law requires a writing or signature, an electronic record or electronic signature satisfies that rule of law.

15. LIMITS ON APPLICABILITY OF GERSA • Unlike UETA, GERSA is not expressly limited to “transactions” • Only expressly limited in applicability with respect to: • (i) laws governing wills and certain trusts, living wills, and/or powers of attorney • (ii) any “record that serves as a unique and transferable physical token of rights and obligations”, including “negotiable instruments and instruments of title wherein possession of the instrument is deemed to confer title” • (iii) any law subsequently passed or amended by the General Assembly which “expressly refers to and limits the application of” GERSA with respect to such law

16. ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT (“E-Sign”) • 15 U.S.C.A. §§ 7001-31 • Enacted in June 2000, became effective in October 2000 • In enacting E-Sign, Congress: • Stated an express intent to create a national uniform standard to apply while states moved toward enactment of UETA and similar laws, and • Acted to address a perceived insecurity as to the legal effect any given state might give to an interstate electronic transaction, due to disparities among state-enacted variations on UETA.

17. E-SIGN • 15 U.S.C.A. § 7001 provides that: • Notwithstanding any other law:, with respect to any transaction in or affecting interstate or foreign commerce • (1) a signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and • a contract relating to such transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation; and • no contract or other record relating to such transaction be denied legal effect, validity, or enforceability solely because its formation, creation, or delivery involved the action of one or more electronic agents so long as the action of any such electronic agent is legally attributable to the person to be bound.

18. LIMITS ON APPLICABILITY OF E-SIGN • Does not apply to intra-state transactions which do not affect interstate or foreign commerce • Does not apply to a contract or other record to the extent such contract or record is governed by: • law pertaining to the creation and execution of wills, codicils, or testamentary trusts • law applicable to adoption, divorce, or other matters of family law; or • the Uniform Commercial Code “as in effect in any State” other than sections 1-107 and 1-206 and Articles 2 and 2A

19. CONSUMER PROTECTION LIMITS ON E-SIGN • E-Sign does not currently mandate the legal validity of electronic records with respect to any notice of • cancellation or termination of utility services, • default, acceleration, repossession, foreclosure, or eviction, or the right to cure, under a credit agreement secured by, or a rental agreement relating to, an individual’s primary residence • cancellation or termination of health insurance benefits or life insurance benefits (excluding annuities), or • recall of a product, or material failure of a product, that risks endangering health or safety. • However, E-Sign also permits any federal regulatory agency to effectively strike a given exception from the scope of E-Sign “with respect to matters within [such agency’s] jurisdiction,” upon a finding that deletion of such exception “will not increase the material risk of harm to consumers.”

20. CONSENT TO USE OF ELECTRONIC RECORDS AND SIGNATURES UNDER E-SIGN I. REQUIRED EVIDENCE OF CONSENT UETA – Agreement to use electronic records and signatures is required before UETA applies, and may be evidenced by “the context and surrounding circumstances, including the parties’ conduct.” CONTRAST E-SIGN – GENERAL RULE - Does not affirmatively require that the parties to a given transaction agree to use or accept electronic records in order for those electronic records to have legal effect (except for certain consumer notices). In contrast, E-Sign merely provides that parties are not required to use such electronic records (a negative rule, rather than an affirmative one).

21. CONSENT TO USE OF ELECTRONIC RECORDS AND SIGNATURES UNDER E-SIGN • E-SIGN RULE FOR CONSUMER NOTICES • Where a statute, regulation or rule of law requires that consumer information be provided “in writing.” a consumer must give affirmative consent to the use of electronic records before such electronic records will be deemed to satisfy those legal requirements • The consent must not have been withdrawn. • The consumer must provide, or at least confirm, the consent electronically, to demonstrate that the consumer has the capability to receive the relevant information in electronic form.

22. CONSENT TO USE OF ELECTRONIC RECORDS AND SIGNATURES UNDER E-SIGN • II. SCOPE OF CONSENT • UETA – “A party that agrees to conduct a transaction by electronic means may refuse to conduct other transactions by electronic means. [This right] may not be waived by agreement.” • E-SIGN - • The consumer need only be notified of the scope of the consent required by the other party (e.g., whether the consent sought applies only to the particular transaction or to all transactions. • The consumer is entitled to withdraw consent at any time.

23. PREEMPTIVE EFFECT OF E-SIGN • 15 U.S.C.A. § 7002 • A state may “modify, limit or supersede” E-Sign only by • Adopting an exact version of UETA as finalized by the NCCUSL in 1999. • OR • 2. Enacting other legislation governing electronic transactions which • is consistent with the provisions of E-Sign, • is technology-neutral and • if enacted or adopted after June 30, 2000, specifically references E-Sign. • WHAT ABOUT GERSA (1997)? • Appears consistent with E-Sign (not validated yet) • Is technology neutral • Was amended in 2001 to specifically reference E-Sign

24. Assent To, And Enforceability Of, Electronic Agreements: Click-Wrap and Browse-Wrap Agreements.

25. SOME HISTORY – SHRINKWRAP AGREEMENTS • Shrink-wrap agreements – usually provided to the offeree on paper within the product’s packaging. Generally provide that use or retention of the software constitutes assent to the terms of the shrink-wrap agreement. Usually not available for review until after the offeree had completed the purchase transaction. • Early trend against enforcement - Step-Saver Data Systems, Inc. v. Wyse Technology, 939 F. 2d 91 (3d Cir. 1991) - court refused to enforce shrink-wrap agreement on the grounds that agreement constituted “additional terms” not part of the original contract, which additional terms must often be expressly assented to before binding the offeree (UCC § 2-207.) Merely using the purchased software did not constitute such express assent to additional terms. • 3rd Circuit applying Georgia and Arizona law – unclear whether an accurate view of Georgia law.

26. THE PROCD CASE - TREND REVERSED • ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996). • Shrink-wrap agreements enforceable so long as those agreements • comply with standard contracting principles (e.g., notice of additional terms prior to performance, valid assent to those terms) and • are not unconscionable or violative of other principles of law. • Cited UCC § 2-204, which provides that a contract for the sale of goods may be made in any fashion sufficient to show that an agreement between the parties had been reached, including by the conduct of one or both of the parties. • The ProCD court concluded that, because user in that case had sufficient pre-purchase notice that use of the software was subject to additional terms and a right to return the software if he did not agree to those terms, his subsequent conduct in using and retaining the software constituted express assent to the terms of the shrink-wrap agreement within the meaning of UCC § 2-204.

27. “CLICK-WRAP” AND “BROWSE-WRAP” DEFINED • CLICK-WRAP: • Electronic agreement in which the offeree must affirmatively record assent to the terms of the agreement (usually by “clicking” button marked “yes” or “I agree” or by typing “I agree” into a pre-designated onscreen field). • BROWSE-WRAP: • Often specifies that the offeree’s actions in continuing to “browse” or access the resources or services to be governed by the agreement will be deemed to signify assent to that agreement. • If online - usually available for review only via a hyperlink, often situated “below the fold” of the applicable web page.

28. CLICK-WRAP AGREEMENTS • Generally looked upon much more favorably by the courts than browse-wrap agreements • Like shrink-wraps, generally enforceable where the traditional principles of contract formation are followed • Offeree has notice of - and an opportunity to review - the relevant terms prior to performance • Offeree signifies his assent to terms • Terms do not violate other provisions of law which would render them unenforceable (e.g., unconscionability)

29. CLICK-WRAPS – • IMPORTANCE OF • AFFIRMATIVE ASSENT • Because click-wrap agreements require offeree to expressly and unequivocally signify provable assent or rejection of terms prior to using the subject goods or services, courts have almost uniformly enforced click-wrap agreements, even where notice of additional terms was less than ideal.WHY? • Proof of express assent (e.g., signature, clicking “I agree”) gives rise to presumption that offeree agreed to be bound by any terms which he had an opportunity to review prior to giving assent. See 2 Williston on Contracts §6:43 (4th ed.)

30. CLICK-WRAPS – EXPRESS ASSENT PLUS OPPORTUNITY TO REVIEW • Recent cases holding that offeree who expressly assents to click-wrap terms will be bound so long as the he had a reasonable opportunity to review terms, even if he did not in fact review them: • Forrest v. Verizon Comm., Inc.,[805 A.2d 1007 (D.C. 2002) • Click-wrap agreement was set forth in a “scroll box”. • By giving express assent to terms which offeree had opportunity to review, the offeree was bound by a forum selection clause which was only visible to offeree if he “scrolled down”. Court cited presumption that offeree read the contract. • Evidence of notice of terms - conspicuous statement directing the offeree to “PLEASE READ THE FOLLOWING AGREEMENT CAREFULLY.” • EXTENDED INDeJohn v. The .TV Corp., Register.com et al., 245 F. Supp. 2d 913 (C.D. Ill. 2003). • Enforced terms only available for review via hypertext link near “assent” button • Court - where offeree expressly assents to terms, failure to actually review those terms will not prevent enforcement

31. CLICK-WRAPS – EXPRESS ASSENT CURES DEFECTIVE NOTICE • I.Lan Systems, Inc. v. Netscout Service Level Corp., 183 F.Supp. 2d 238 (D. Mass. 2002). • Click-wrap agreement did not appear on the relevant website until after the contract for purchase of software had been concluded. • Offeree claimed that - notwithstanding affirmative, express assent – the terms were unenforceable because it had no notice that additional terms were applicable to the purchase at the time the purchase contract was performed. (UCC 2-207 argument) • Court held that, even if click-wrap agreement constituted “additional terms” not set forth in the original purchase contract, offeree could not deny his express agreement to be bound by those terms where he had an opportunity to review those terms and had expressly assented to them.

32. BROWSE-WRAP AGREEMENTS • Usually reviewed by courts by reference to the same traditional principles applicable to contract formation. • But courts split over whether browse-wrap agreements afford sufficient notice of their terms and proof of the offeree’s assent thereto to form an enforceable agreement

33. CASES FINDING BROWSE-WRAP AGREEMENTS ENFORCEABLE • Register.com, Inc. v. Verio, Inc.,126 F. Supp. 2d 238 (S.D.N.Y. 2000). • Offeree had assented to additional terms set forth on the offeror’s web site where such terms (i) were clearly posted on the offeror’s website and (ii) expressly provided that use of the website signified assent to terms. • Court expressly rejected requirement of an “I agree” button in all cases • Pollstar v. Gigmania, Ltd., 170 F. Supp. 2d 974 (E.D. Cal 2000). • Posture: motion to dismiss based on assertion that browse-wraps were prima facie unenforceable. • The court cited UCC § 2-204, which provides that parties may form a contract in any manner which is sufficient to show that the parties had reached agreement, as support for proposition that “I agree” button not a prerequisite to enforceability. • However, court did express concern with the inconspicuous nature of the notice of additional terms applicable to the offeree’s use of the website.

34. CASES FINDING BROWSE-WRAP AGREEMENTS UNENFORCEABLE • Ticketmaster v. Tickets.com, 2000 U.S. Dist. LEXIS 4553 (C.D. Cal. 2000). • Insufficient proof that the offeree knew of and assented to terms • Site had only a general statement that use of the website signified agreement to additional terms. • Court distinguished browse-wrap agreements from shrink- wrap and click-wrap agreements on the grounds that the latter were “open and obvious and in fact hard to miss.” • However, court noted that an offeror may be able to prevail on enforcing browse-wraps by presenting evidence of the offeree’s actual knowledge of terms and implied agreement to same.

35. CASES FINDING BROWSE-WRAP AGREEMENTS UNENFORCEABLE • Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002). • Court cited two defects that demonstrated that the offeree was not put on notice that he would become subject to a legally binding agreement containing additional terms when he downloaded certain software: • Notice of additional terms for software was “below the fold” – court considered such terms “hidden” • Website proprietor did not require affirmative assent to those terms before downloading the software at issue.

36. ADDITIONAL NOTES • CONSCIONABILITY OF TERMS: • Enforceability of specific terms will still be reviewed for substantive conscionability. • Brower v. Gateway 2000, Inc., 246 A.D.2d 246 (1st Dep’t 1998) • Court found a shrink-wrap agreement enforceable, but refused to enforce an arbitration provision therein as unconscionable under New York law. • 2. GEORGIA LAW: • No cases on point, but other courts applying Georgia law have found shrink-wraps unenforceable - BUT pre-ProCD • Step-Saver Data Systems, Inc. v. Wyse Technology, 939 F. 2d 91 (3d Cir. 1991). • Arizona Retail Systems, Inc. v. Software Link, Inc., 831 F. Supp. 759 (D. Ariz. 1993

37. TIPS FOR ONLINE AGREEMENTS • Put offeree on notice of additional terms during the initial formation of the contract for relevant goods or services. • Make offeree aware that the additional terms constitute an offer to enter into a legally binding relationship - use prominent statements to the effect of “PLEASE READ THE FOLLOWING AGREEMENT CAREFULLY”, “THE FOLLOWING CONSTITUTES A LEGALLY BINDING AGREEMENT”, or “YOUR USE OF THIS SITE CONSTITUTES ACCEPTANCE OF OUR TERMS AND CONDITIONS.” • Click-wrap – place “I accept” and “I do not accept” near additional terms or with a hypertext link, scroll box or other access to those terms. • Browse-wrap – place notice of additional terms “above” the fold, in a typeface no less prominent than the surrounding text.

38. TIPS FOR ONLINE AGREEMENTS • 2. Require affirmative assent to additional terms prior to permitting offeree to use or access the product or service • Browse-wrap - conspicuously specify that use of the product or service constitutes acceptance of those terms, so that offeree’s assent may reasonably be implied from offeree’s subsequent actions. • Always specify how offeree must REJECT offer to foreclose argument that offeree rejected the additional terms simply by failing to agree to them • Click-wrap - always include an “I do not accept” button. • Browse-wrap - specify the mechanism by which rejection must be signified - e.g., relinquishment of the product or service within a specified time or refraining from use of the product or service. • Avoid potentially unconscionable terms or illegal terms • Online agreements often scrutinized as “take-it-or-leave-it” contracts,

39. UCITA UNIFORM COMPUTER INFORMATION TRANSACTIONS ACT A BRIEF LOOK AT WHAT MIGHT HAVE BEEN REGARDING UNIFORMITY IN STATE LAWON ELECTRONIC AGREEMENTS

40. OVERVIEW • Originally drafted and approved by NCCUSL in 1999 • Provides “default terms” for certain transactions related to computer information, including agreements to create, modify, license or, transfer “computer information” - “data, text, images, sounds, mask works, or computer programs” • Criticized for being pro-vendor/anti-licensee. Revised in 2002 to remove or limit certain objectionable terms such as: • Wholesale prohibition on licensee reverse engineering • Wholesale restrictions on transferability of license • Licensor’s right to use electronic self-help to reclaim information upon licensee’s breach of the license (i.e., self-help in a contract dispute • Other provisions which appeared to override consumer-protection laws

41. UCITA ON SHRINKWRAP/CLICKWRAP AGREEMENTS – FINAL DRAFT • MASS MARKET LICENSE – a standard form used in a transaction with an end-user licensee if directed to the general public as a whole, including consumers, under substantially the same terms for the same information; • EXCLUDES : • transactions for customized or specially prepared information, or information earmarked for a business or professional audience and which is not ordinarily acquired by consumers. GENERALLY ENFORCEABLE IF: • 1. Licensee has an opportunity to review the terms, and agrees to them, before or during the first use of or access to the information. • 2. If terms not available for review by the licensee before the licensee becomes obligated to pay, licensee has right to reject, return information and receive refund and certain reimbursements

42. WHERE IS UCITA NOW? • · Enacted only in Virginia (2001) and Maryland (2000) • · Four states have enacted “bomb shelter” legislation to prevent application of UCITA against residents - Iowa, North Carolina, West Virginia, and Vermont • · In August 2003, citing widespread political opposition to UCITA, NCCUSL announced it would no longer seek its adoption in any state. • · IS UCITA DEAD? – NO. • · UCITA is the law in Maryland and Virginia – subject to “bomb shelter” laws, vendors may be able to choose those states as the governing law in a software contract. • · Courts can use UCITA as a roadmap to craft decisions. • · Proponents may still seek state UCITA adoptions without the help of the NCCUSL.

43. ENFORCING AN ONLINE CONTRACT SOME PERSONAL JURISDICTION ISSUES

44. Specific inquiries where the Defendant's "presence" in the forum state consists mainly or solely of Internet-based contacts • 1. Do the Defendant's Internet-based contacts with the forum state constitute purposeful minimum contacts with the State necessary to satisfy the Constitutional requirements of due process? • 2. Does the forum state's Long Arm Statute permit personal jurisdiction over the Defendant based on the Internet-based contacts?

45. TRENDS IN EVALUATING WHETHER INTERNET-BASED CONTACTS WITH THE FORUM STATE CONSTITUTE PURPOSEFUL MINIMUM CONTACTS

46. Introductory Rule regarding "purposeful" minimum contacts: "Minimum contacts" will not be found where the relevant contacts are random, fortuitous or attenuated. - Burger King Corp. v. Rudzewicz, 471 U.S.462 (1985). BASELINE - To support personal jurisdiction via Internet contacts, the contact with a forum state must be due to some activity purposefully directed at that forum. Generally speaking, merely posting information on the Internet does not subject the author to personal jurisdiction in every locale in which that information may be accessed.

47. CONSTITUTIONAL INQUIRY EVALUATING QUALITY AND QUANTITY OF INTERNET CONTACTS TO DETERMINE WHETHER PURPOSEFUL MINIMUM CONTACTS EXIST Seminal case: Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D.Pa.1997) Rule: "the likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet."

48. THE ZIPPO "SLIDING SCALE APPROACH" EXERCISING PERSONAL JURISDICTION WHERE CONTACT WITH FORUM IS VIA 1. PASSIVE INTERNET PRESENCE 2. INTERACTIVE INTERNET PRESENCE 3. TRANSACTING BUSINESS VIA THE INTERNET Approach adopted in the in the Third, Fourth, Fifth, Sixth, Ninth and Tenth Circuits

49. ONE END OF SPECTRUM- CONTACT WITH FORUM IS VIA PASSIVE INTERNET PRESENCE • Defined: Merely placing non-interactive information/advertising on the Internet for access by anyone, anywhere • Purposeful Minimum Contacts with the Forum State? • Generally courts say NO. Zippo: "A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise of personal jurisdiction." • - Like national advertising, not necessarily purposefully directed at a given forum • - On Internet, no real way to control locale in which information/advertising is accessed • NOTE - If additional contact with forum arises as a result of "passive" advertising - e.g., online or offline sales - may begin to amass evidence of purpose availment of specific forum • Caveat- DEFAMATION via a “passive’ internet presence”

50. OTHER END OF SPECTRUM- CONTACT WITH FORUM IS VIA TRANSACTING BUSINESS VIA THE INTERNET • Defined: Entering into contracts via the Internet, including the purchase or sale of goods or services online • Purposeful Minimum Contacts with the Forum State? Generally courts say YES. • - Direct purchases or sales over Internet demonstrate purposeful contact with forum • - Even where defendant did not purposefully target state, at least one court has said that merely securing the economic benefit of doing business with a resident of given state may demonstrate that the defendant availed itself of the privilege of doing business within the forum - and thereby accepted the consequences thereof. - Int'l Star Registry of Illinois v. Bowman Haight Ventures, Inc., 1999 WL 300285 (N.D. Ill. 1999).