Summary prepared by Devashish Bharuka
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David Mink is a Texas resident who works in the retail furniture business. Mink claimed that he had developed a program, the Opportunity Tracking Computer System ("OTC"), designed to track information on sales made and opportunities missed on sales not made. He had submitted a patent application as well. Mink claimed that he met Richard Stark, a Colorado resident, who showed interest in Mink's product. After some discussions, Mink gave Stark a full demonstration of his product. Start allegedly shared all Mink's ideas with AAAA Development and other companies and conspired to copy Mink's copyrighted and patent-pending OTS system and create an identical system of their own for financial gain.

AAAA Development is a Vermount corporation with no sales in Texas or any agents or employees travelling to Texas or represent it in Texas. The company has advertised in a national furniture trade journal and maintains a website advertising its sales management software on the Internet.

The court observed that a federal court sitting in diversity may exercise personal jurisdiction over a non-resident defendant if (1) the long-arm statute for the forum state confers personal jurisdiction over that defendant; (2) exercise of such jurisdiction by the forum state is consistent with due process under the United States Constitution. Since Texas's long-arm statute has been interpreted to extend to the limits of due process, the court need only determine whether subjecting the defendant to suit in Texas would be constitutionally permissible. Courts addressing the issue of whether personal jurisdiction can be constitutionally over a defendant look to the "nature and quality of commercial activity that an entity conducts over the Internet".

Applying the Zippo principles in the case, the court concluded that AAAA's website is insufficient to subject it to personal jurisdiction. Essentially, AAAA maintains a website that posts information about its products and services. While the website provides users with a printable mail-in order form, AAAA's toll-free telephone number, a mailing address and an electronic mail address, orders are not taken through AAAA's website. This does not classify the website as anything more than passive advertisement which is not grounds for the exercise of personal jurisdiction. Absent a defendant doing business over the Internet or sufficient interactivity with residents of the forum state, the court concluded that that the personal jurisdiction is not appropriate.