On November 13, 2009, the United States District Court for the Eastern District of Michigan applied the Calder effects test in granting a defendant's motion to dismiss for lack of personal jurisdiction, pursuant to Fed. R. Civ. P. 12(b)(2), or, in the alternative, to transfer venue. Weather Underground, Inc. v. Navigation Catalyst Systems, Inc., 2009 WL 3818191 (E.D. Mich. Nov. 13, 2009).
The Plaintiff, Weather Underground, Inc. ("Weather Underground"), is a commercial weather services that indexes information provided to it by multiple weather stations and generates revenue from subscriptions and advertisements. The primary Defendant, Navigation Catalyst Systems, Inc. ("NCS"), is a domain name holding company which acquires generic and descriptive domain names in bulk. After registering domain names through a subsidiary, who was a also a Defendant, NCS submitted the domain names to another subsidiary and Defendant which created automatically-generated Web pages based on the domain name text. These Web pages contained hyperlinks to third-party pay-per-click advertisers. Accordingly to the Complaint, the links redirected users to competitors of the Plaintiff.
Weather Underground alleged that the Defendants' business model leverages Internet users' errors in typing the Web addresses for businesses whose websites they intended to visit and further alleged that Defendants infringed its trademarks by registering domain names featuring various misspellings of Plaintiff's Web properties. The purpose of these sites was to redirect Plaintiff's customers and potential customers to competitors who advertised with the Defendants.
Weather Underground filed suit against Defendants, alleging violations of the AntiCybersquatting Consumer Protection Act, trademark infringement under the Lanham Act, false designation of origin under the Lanham Act, dilution by blurring and tarnishing under the Lanham Act, and related common law claims. Defendants filed a motion to dismiss for lack of personal jurisdiction, under Fed. R. Civ. P. 12(b)(2), or, in the alternative, to transfer venue.
Though Defendants argued that their websites were wholly passive, which would not be ground for personal jurisdiction under the sliding scale approach first articulated in Zippo Mfg. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1997), the court noted that "[e]ven if Defendants were correct that the facts here do not demonstrate purposeful availment, Plaintiff may satisfy its burden through the effects test." Weather Underground, 2009 WL 3818191, at *6. The effects test, articulated by the U.S. Supreme Court in Calder v. Jones, 465 U.S. 783 (1984), permits a court to exercise personal jurisdiction where the Defendant: "(i) commits intentionally tortious actions; (ii) which are expressly aimed at the forum state; (iii) which cause harm to the plaintiff in the forum state which the defendant knows is likely to be suffered." Id. at * 7 (citations omitted).
The court found that the Weather Underground had clearly satisfied the first of these criteria. The court also found that the "scope of the [Defendants'] conduct [involving 41 websites encompassing a number of typographical errors to the mark owned by Weather Underground] suggests that Weather Underground was a target of the activities engaged in by NCS." Id. As a result of Defendants' "purposeful targeting and poaching Plaintiff's successful mark," the court found that NCS had entered into the forum and that the injury to Weather Underground occurred in Michigan, Weather Underground's principal place of business. Having found that the claims set forth in the Complaint arose from Defendants' activities in the forum state and that the exercise of personal jurisdiction was reasonable, the court denied the motion to dismiss as to NCS.