COURT LIMITS LEGAL REACH OF INTERNETPosted On: Sep. 21, 1997 12:00 AM CST
NEW YORK-A federal appellate court has upheld a lower court decision that a business cannot be sued in a state just because it has a World Wide Web site that can be accessed by residents of that state.
The Sept. 10 decision by the 2nd U.S. Circuit Court of Appeals in New York in Bensusan Restaurant Corp. vs. Richard B. King agreed with the dismissal of a trademark infringement case brought by New York-based Bensusan Restaurant Corp., the operator of The Blue Note jazz club in New York City against the operator of a Columbia, Mo., jazz club with the same name that had posted a home page on the World Wide Web to promote his club (BI, Sept. 30, 1996).
Robert Bourque, an attorney with Simpson Thacher & Bartlett in New York who represents Mr. King, said the case had caused some concern and uncertainty about whether local and regional businesses could be successfully sued outside the areas in which they do business "merely because they happen to establish a Web site that can be viewed anywhere in the world."
In April 1996, Mr. King had posted a home page with the World Wide Web to promote his Missouri club, which he had operated since 1980. The Web site contained a disclaimer that the club "should not be confused" with the New York club. The Missouri club's Web page also initially contained a hypertext link to Bensusan's Web page but was removed after Bensusan objected to the Web site.
The Sept. 9, 1996, decision by the federal district court in Manhattan dismissing the case said there is "no suggestion that King has any presence of any kind in New York other than the Web site that can be accessed worldwide."
In upholding that decision, the three-judge panel said, "Although we realize that attempting to apply established trademark law in the fast-developing world of the Internet is somewhat like trying to board a moving bus, we believe that well-established doctrines of personal jurisdiction law support the result reached by the district court."
Mr. Bourque said previous court decisions on this issue have gone both ways, although they have tended to be based on the facts of each case, with the intended target of the Web site the determining factor.
The attorney for the New York club, Dorothy Weber of Shukat Arrow Hafer & Weber in New York, said she did not plan to appeal the appellate decision to the U.S. Supreme Court.
"This was just a procedural decision. It didn't go to the merits of the case," she said. "We still have a trademark infringement case against these people." The case will be refiled in federal court in Missouri, Ms. Weber said.
Bensusan Restaurant Corp., plaintiff-appellant, v. Richard B. King, individually and doing business as The Blue Note, defendant-appellee, 2nd U.S. Court of Appeals for the Second Circuit, Docket No. 96-9344.