Zippo Manufacturing Company vs. Zippo Dot Com, Inc.

1. Zippo Manufacturing Company vs. Zippo Dot Com, Inc. Ardak Kaskyrbayev

2. Facts Zippo Manufacturing Company Pennsylvania corporation It makes well-known tobacco lighters Zippo Dot Com California corporation It operates an internet website and an internet news service It has the exclusive right to use the domain names zippo.com, zippo.net, zipponews.com over the internet

3. Facts Zippo Dot Com Corporation�s contacts with Pennsylvania occurred almost exclusively over the internet Corporation�s offices, employees, internet services were located in California - it did not maintain any services, employees, agents in Pennsylvania Advertisement of the corporation�s services � information about them posted on the website, which was accessible to all users including from Pennsylvania 140,000 subscribers worldwide, 2% (3000 subscribers) of which were Pennsylvania residents By filling out application on the website, subscribed received corporation�s services Also, the corporation concluded contracts with 7 internet access providers to allow their subscribers to access the corporation�s news service (2 of providers from Pennsylvania)

4. Facts Zippo Manufacturing Company It filed a lawsuit in Pennsylvania against Zippo Dot Com alleging trademark dilution, infringement, and false designation under Lanham Act It also alleged causes of action based on state law trademark dilution under Pennsylvania Statute 1124 Basis of claims � Dot Com�s use of the word �zippo� in the domain names in numerous locations in its website and in the heading of internet newsgroup messages posted by its subscribers Zippo Dot Com It moved to dismiss for lack of personal jurisdiction

5. Issue Do Zippo Dot Com�s contacts with Pennsylvania residents and Internet service providers over the internet equate to purposeful availment of the privilege of conducting activities within Pennsylvania? Holding Yes, Zippo Dot Com�s contacts with Pennsylvania residents and Internet service providers over the internet constitute purposeful availment of the privilege of conducting activities within Pennsylvania

6. Reasoning The court established a three-pronged test to establish jurisdiction over Zippo Dot Com: There must be sufficient �minimum contacts� with the forum The claim must arise out of those contacts Exercise of jurisdiction must be reasonable Analysis Conducting e-commerce and entering into agreements with PA residents and ISPs over the internet were sufficient �minimum contacts� The claims by Zippo Manufacturing Co. arose out of those contacts since Zippo Dot Com�s object of transactions was downloading of electronic messages that contained the word �zippo�. Since Zippo Dot Com contracted approximately 3,000 individuals and 7 internet access providers in Pennsylvania in order to sell its services, exercise of jurisdiction was proper

7. �Sliding Scale� Test �Sliding Scale� test is used to analyze minimum contacts �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� Passive websites, which merely provide information No minimum contacts may be established to exercise jurisdiction Interactive websites, which allow website owner and visitor to exchange information Minimum contacts are established depending on the level of interactivity and the commercial nature of exchange of information on the website Commercial websites, which conduct business over the internet Minimum contacts are surely established

8. Conclusion Given that: Zippo Dot Com conducted e-commerce and entered into agreements with PA residents and ISPs, the claim by Zippo Manufacturing Co. was the result of Zippo Dot Com�s contacts with Pennsylvania And therefore, Zippo Dot Com freely chose to sell its services � Zippo Dot Com�s contacts constituted purposeful availment