Maryland Court Finds No Personal Jurisdiction over Egyptian “Semi-Interactive” Website

Plaintiff, Electronic Broking Services, Limited (“Electronic Broking”), a British company, has brought suit before the U.S. District Court for the District of Maryland against defendants, E-Business Solutions & Services (“E-Business Solutions”), an Egyptian company based in Cairo, and its director of business and CTO, claiming federal trademark infringement in violation of the Lanham Act, 15 U.S.C. §1125(a), and unfair competition under Maryland state law, arising from the defendants’ use of the trademark “Electronic Broking Services, Limited” (“EBS”). Defendants moved to dismissed for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2). On September 30, 2003, the court granted the motion.Both Electronic Broking and E-Business Solutions provide IT products and services to banking and financial services industry. The former conducts this business under the trademark “Electronic Broking Services, Limited” (“EBS”), and the latter through its website under the trademark “eBS”, which it owns in Egypt.

Plaintiff argued for specific personal jurisdiction based on the fact that the defendants posted an e-mail address on their website to contact them, and that the defendants had transacted business with Emerging Markets, Inc., a corporation based in Randallstown, Maryland.

In examining personal jurisdiction, the court concluded that general jurisdiction is not established over the defendants since their activities in Maryland were not continuous and systematic. The court also declined to assert specific jurisdiction, on the following grounds:

First, determining the extent to which the defendants “purposely availed” themselves of the privilege of conducting activities in Maryland, the court, adopting the sliding scale articulated in Zippo Manufacturing v. Zippo Dot Com, characterized the defendants’ website as “semi-interactive”, since it contained an e-mail address to facilitate the exchange of information between visitors and the host computer. Consequently, to determine the exercise of jurisdiction, it examined the website’s level of interactivity and the commercial nature of the exchange of information. It found that the defendants had business contacts with just one Maryland entity, and that there was no indication that they intentionally targeted residents in Maryland through their website or directed its electronic activity into Maryland with the manifested intent of conducting business within Maryland.

Second, as regards the requirement that plaintiff’s claim arise out of the defendants’ activities at stake directed at the state, the court noted that the defendants had engaged in business with one Maryland corporation, Emerging Markets, but it referred to the defendants’ arguments (1) that they pursued that alliance for the purpose of business to be conducted in Kenya, not Maryland, (2) that ultimately no business was ever consummated with Emerging Markets, as no services were rendered, and (3) that at no time had the director of business, the CTO, or any E-Business Solutions employee entered Maryland in relation to these business negotiations. Consequently, the court found that plaintiff had failed to allege facts regarding the nature and extent of such business dealings sufficient to show a “substantial connection” between the defendants and Maryland.

Third, the court was of the opinion that asserting jurisdiction would violate traditional notions of fair play and substantial justice. It said that, since all of the defendants are located in Egypt and maintain a presence in the US only through their website, the burden that the defendants would bear in litigating in Maryland would be great. It also found that Maryland had little interest in adjudicating a claim brought by a British company against Egyptian defendants, and that plaintiff’s interest, as a British company doing business internationally, in obtaining relief in Maryland seemed unsubstantial. It also pointed out that it was unclear that adjudicating the dispute in Maryland would result in the most efficient resolution of the controversy, since E-Business Solutions owns the “eBS” trademark in Egypt and may continue to use it in Egypt and perhaps others, despite some resolution of the dispute in Maryland.

href=”http://www.mdd.uscourts.gov/Opinions152/Opinions/ebs_op1003.pdf”>Electronic Broking Services, Limited, v. E-Business Solutions & Services, et al., 2003 WL 22298059 (D.Md. 2003).

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