Court Explains Limits On Internet Personal Jurisdiction

A doctor in Texas with a website soliciting customers only in Houston can’t be sued in Illinois, but the Arizona-based GoDaddy Group, with a national advertising campaign, can.

The Seventh Circuit explained the limits of personal jurisdiction in two recent cases, both involving the federal Anti-Cybersquatting Consumer Protection Act.

In the case of the doctor, Mobile Anesthesiologists Chicago, LLC attempted to sue Anesthesia Associates of Houston Metroplex, PA, in Chicago, under the federal anti-cybersquatting act. The Chicago entity claimed that the Houston doctor’s URL, mobileanesthesia.com, was confusingly similar to “Mobile Anesthesiologists,” a term trademarked by the Chicago entity. The Chicago entity filed suit in Chicago and the Houston doctor moved to dismiss based on lack of personal jurisdiction. Chicago Mobile claimed that the Houston doctor maintained “minimum contacts” with Illinois because the website could be viewed in Illinois and because Chicago Mobile sent a cease and desist letter to Houston after which the Houston doctor continued to maintain the website. The trial court dismissed the case.

In affirming the trial court, the appellate court said personal jurisdiction could not be found “simply by showing that the defendant maintained a website accessible to residents of the forum state and alleging that the defendant caused harm through that website.”

“Dr. Chan is not licensed to practice medicine outside of Texas. His website does not contain much, but it does contain a Houston-area phone number, an e-mail address, and an invitation to doctors in the ‘greater Houston area’ to contract for his services. If a doctor in Chicago stumbled upon Dr. Chan’s website and called for an appointment, their conversation would be very short,” the court wrote.

On the other hand, the appellate court found that GoDaddy could be brought into court in Chicago. The internet domain and hosting company was sued by uBID, Inc., an Illinois-based company under the anti-cybersquatting act because GoDaddy sold domain names that uBID claims are confusingly similar to its trademarks and domain names.

GoDaddy claimed that it could not be sued in Illinois because it was an Arizona-based company and all of the servers were located in Arizona. The trial court agreed with GoDaddy, but the appellate court reversed.

“In Illinois, GoDaddy has put up billboards in the home ballparks of the Chicago Cubs and White Sox, and fans who attend Chicago Bulls or Blackhawks games or races at the Chicagoland Speedway have been treated to GoDaddy ads as well,” the appellate court found. “This nationwide advertising campaign has paid dividends for GoDaddy from the Illinois market. In 2008, the company counted its Illinois customers in the hundreds of thousands, and those customers delivered many millions of dollars in revenue to GoDaddy that year.”

In addition, the appellate court found that GoDaddy receives a fee when it registers websites and parks them. “Where GoDaddy chooses to locate its servers that complete the task is irrelevant. The claim brought by uBID in Illinois arises directly out of GoDaddy’s registration of the infringing domain names bought by customers it has solicited in Illinois and many other states. The claim bears a sufficient relationship to GoDaddy’s business activities in Illinois to expect GoDaddy to defend itself in Illinois without violating the due process clause.”

Mobile Anesthesiologists Chicago, LLC v. Anesthesia Associates of Houston Metroplex, P.A., Seventh Cir. No. 09-2658, issued October 1, 2010.

uBID, Inc. v The GoDaddy Group, Inc., Seventh Cir. No. 09-3927, issued September 29, 2010.