Personal Jurisdiction Found Where Online Sales to Few Forum Residents

Plaintiff, Brach's Confections, Inc. ("Brach's"), a Delaware corporation with its principal places of business in the Northern District of Illinois and Chattanooga, Tennessee, has filed a six-count complaint alleging cybersquatting, trademark infringement, federal false designation and unfair competition under the Lanham Act, as well as violations of the Illinois Trademark Dilution Act, Consumer Fraud and Deceptive Business Practices Act and the Illinois Uniform Deceptive Trade Practices Act against defendants Eric Keller ("Keller"), a New Jersey resident, and Candy Sites, LLC ("Candy Sites"), a New Jersey corporation. Keller moved to dismiss Brach's complaint for lack of personal jurisdiction and improper venue pursuant to Fed.R.Civ.P. 12(b)(2) & (3). Brach's moved for default judgment against both defendants. In its complaint, Brach’s alleged that defendants unlawfully registered and used 9 domain names related to its trademark, including , and . Defendant Keller is a CEO of Candy Sites and owns various “interactive” websites where consumers may purchase several of Brach’s products. The sites, which contain graphic images of various of Brach’s trademarks, enable consumers to purchase bulk candy over the Internet by clicking on an e-mail link and making payment either by check or using the PayPal online payment service. These websites are not directed to consumers in any one particular state, and at least four purchases have been made by Illinois consumers.

In examining the personal jurisdiction, the court concluded that the general jurisdiction is not established over Keller since his activities in the forum were not continuous and systematic, but specific jurisdiction can be found as Brach’s established that Keller had minimum contacts with Illinois forum state under the principles of International Shoe and its progeny, because it demonstrated that (1) the defendant is amenable to service of process; and that (2) haling defendant into court is consistent with the Fifth Amendment’s due process clause. Firstly, in accordance with the Illinois long-arm statute, Keller is found to be amenable to process despite his active efforts to avoid service. Secondly, using the sliding scale analysis, the court ruled that the defendant purposefully directed its activities at residents of the forum state by conducting his candy business over the Internet through its active web site; the plaintiff’s claims arose from or relates to Keller’s activities within the forum, since the harm came from defendant’s alleged trademark infringement; and the exercise of personal jurisdiction is reasonable and fair, as Illinois has strong interest in adjudicating injuries such as trademark infringement, cybersquatting and unfair trade practices within its borders. For the same reasons, it concluded that the Northern District is the proper venue for the lawsuit. The court suggested, however, that the site could have avoided personal jurisdiction by limiting its offer to those states in which it wished to do business.

The court denied Keller’s motion to dismiss for lack of personal jurisdiction and improper venue. It granted Brach’s motion for default judgment against Candy Sites but not against Keller, exercising leniency over Keller’s pro se status.

Court's slip copy

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