Interactive Use v. Passive Use

Although no bright-line test exists, most courts have applied an "interactive-passive" distinction when determining personal jurisdiction over someone operating a Web Site. Generally, courts have conferred personal jurisdiction in cases where "interactive" uses of the Internet have taken place within the state. Interactive contact encompasses two-way online communication which fosters an ongoing business relationship, while "passive" contacts are those that
simply make information available to interested viewers. A Web Site can be characterized as interactive
if business transactions can be conducted over the Internet or if information can be exchanged with users
for the purpose of soliciting business. In making an "interactive vs. passive" determination, the greater the
commercial nature and level of interactivity associated with the Site, the more likely it is that the Web
Site operator is "purposefully availing itself" of the forum state's jurisdiction.

Courts generally have declined to assert personal jurisdiction solely on the basis of Web Site advertising.
However, courts have exercised jurisdiction over Web Site operation where additional and more active
contacts with the forum took place, such as Internet sales to the forum residents,   [1]   conducting
business in the forum state through numerous contacts,   [2]   or entering into specific dealings with forum
residents.   [3]

In cases where the operator maintains a passive Web Site that merely makes information available for
browsing, courts have been hesitant to exercise personal jurisdiction (finding an insufficient basis to
assert jurisdiction where the defendant's Web Site simply posted the future availability of his services and
never sought to contract with the residents of the forum state). The seminal case in this regard is
Bensusan Restaurant Corp. v. King , 126 F.3d 25 (2d Cir. 1997). See, also, Hearst Corp. v.
Goldberger , 1997 WL 97097 (S.D.N.Y. 1997). In Bensusan, a trademark infringement case brought
by the Blue Note Club in New York against a similarly named club in Missouri, a federal court declined
to assert personal jurisdiction in New York because the Web Site operator received no revenue from
the forum state, did not advertise in the forum state, and did not even disseminate a telephone contact
number to the residents of the forum states. The site only provided general information about shows and
ticket sales and its Missouri location, but did not permit on-line purchases.   [4]   The result in Bensusan
supports the principle that the simple creation of a general access Web Site, without more, is an
insufficient basis to find "purposeful availment" directed towards a forum state as required by
constitutional standards. Bensusan; International Shoe Co. v. Washington , 326 U.S. 310 (1945);
See also K.C.P.L., Inc. v. Nash , 1998 WL 823657 (S.D.N.Y. 1998) (announcing the future
availability of services on a Web Site will not subject a Web Site owner to personal jurisdiction absent a
showing that the Web Site owner actually sold his products in the forum state) ; Cybersell, Inc. v.
Cybersell, Inc. , 130 F.3d 414 (9th Cir. 1997) (noting that "no court has ever held that an Internet
advertisement alone is sufficient to subject the advertiser to jurisdiction in the plaintiff's home state.")

The Middle Spectrum: Neither Interactive nor Passive

One end of the spectrum of judicial decisions involves holdings that financially-motivated, interactive contacts with a foreign state will give rise to personal jurisdiction; the other end of the spectrum reflects holdings that a strictly passive, informational Web Site will not give grounds to assert jurisdiction. Many cases have fallen in the middle, being neither strictly interactive nor passive. These cases include situations where a defendant operates an informational Web Site, but also allows a user to exchange information with the host computer by providing an e-mail address, a toll-free telephone number or other forms of activity that would enable an ongoing relationship with the user to emerge or the opportunity to solicit business in the future. In these instances, courts have examined a variety of other factors in determining the level of interactivity and the commercial nature of the exchange of information that occurs on the Web Site.

For example, in Rannoch, Inc v. Rannoch Corporation , 52 F. Supp. 2d 681 (E.D. Va. 1999), even
an interactive Web Site accessible in Virginia was an insufficient basis upon which to base personal
jurisdiction where there was no evidence that the Internet activities were directed at Virginia and no
evidence of actual use of the Web Site by Virginia residents.

By contrast, in Inset Systems, Inc. v. Instructions Set, Inc. , 937 F. Supp. 161 (D. Conn. 1996), the
only activity that the Web Site operator engaged in besides maintaining its Internet Site was providing a
toll-free number on the Site. Although seemingly innocuous, the court perceived the toll-free number as
an attempt to solicit business in the forum state and extended personal jurisdiction over the defendant.
Similarly, in Heroes, Inc. v. Heros Foundation , the district court found that a charity organization
purposefully availed itself of the privilege of doing business in the forum state by expressly soliciting
donations and providing a toll-free number on its Internet Web Site.   [5]   And, in Minnesota v. Granite
Gate Resorts , a criminal case, the court conferred jurisdiction based on the number of "hits" that a Web
Site received, the number of different locations within the forum states that accessed the Web Site, and
the fact that the Web Site's mailing list included residents of the forum state.   [6]

However, in a recent copyright infringement case, Mink v. AAAA Development , the Fifth Circuit
declined to exercise personal jurisdiction even though the Web Site operator provided a printable mail-in
order form, a toll-free number and an e-mail address on their Web Site.   [7]   Although the Web Site
provided an e-mail address that permitted consumers to interact with the company, the court held that
the Web Site nonetheless was passive since no orders could be placed on-line, no business was ever
conducted over the Internet with forum residents, and no evidence existed that the defendant did
anything more than simply respond to e-mails sent by users. The key distinction between Mink and other
cases that fall in the middle spectrum seem to hinge on whether a court is willing to view factors such as
e-mail addresses and toll-free telephone numbers posted on Web Sites as attempts to transact business
with users.

Conclusion

Absent actual business transactions in the forum state, or evidence that residents are targeted, the distinction between active and passive contact becomes blurred in the context of interactive Web Sites that allow users to exchange information with the host computer. Courts generally have followed a pattern of not extending personal jurisdiction where the Web Site operator simply provides an informational Web Site that can be accessed in the forum state, but which does not serve as a platform for soliciting business or conducting electronic commerce. As the Internet evolves, so will the body of Internet law – including that relating to personal jurisdiction.
 

Notes

[1]   CompuServe, Inc. v. Patterson , 89 F.3d 1257 (6th Cir. 1996) (asserting personal jurisdiction
where the defendant sold software over the Internet to twelve people in the forum state). Return to Text
 
[2]   Maritz, Inc. v. CyberGold, Inc. , 947 F. Supp. 1328 (E.D. Mo. 1996) (exercising personal jurisdiction on grounds Web
Site operator engaged in "active measures" in placing Internet users on a mailing list and "indiscriminately respond[ing] to. . .
every user.") Return to Text

[3]   Zippo Manufacturing Co. v. Zippo Dot Com, Inc. , 952 F. Supp. 1119 (W.D. Pa. 1997) (noting that in addition to
operating a web-site, the operator's conduct in charging a fee to enter its web-site amounted to electronic commerce with the
forum state's residents). Return to Text

[4]   See Bensusan at 128. Return to Text

[5]   Heroes, Inc. v. Heroes Foundation , 958 F. Supp. 1 (D.D.C. 1996). Return to Text

[6]   Minnesota v. Granite Gate Resorts, Inc. , 568 N.W.2d. 715 (Ct. App. MN, 1997) (finding that
the forum state's residents were regular visitors to the web-site, as there were over 248 different locations in the forum state that
accessed the defendant's web-site). Return to Text

[7]   http://www.ca5.uscourts.gov/opinions/pub/98/98-20770-CV0.HTM , (September 17, 1999) Return to Text