DIGITAL EQUIPMENT CORPORATION, Plaintiff,

v.

ALTAVISTA TECHNOLOGY, INC., Defendant.

960 F. Supp. 456 (Mass. 1997)

OPINION BY: NANCY GERTNER

I. INTRODUCTION

This case involves a dispute between two corporations over rights and commercial interests on the Internet. [footnote omitted] Both parties operate electronic services and distribute software over the Internet. The plaintiff, Digital Equipment Corporation ("Digital"), has brought suit against defendant AltaVista Technology, Incorporated ("ATI"), for breach of a trademark licensing agreement, trademark and servicemark infringement, unfair competition, and trademark dilution.

Digital owns an Internet and World Wide Web "search-engine" service known as AltaVista.² Digital purchased ATI's rights in its trademark "AltaVista"; Digital then licensed back to ATI the right to use "AltaVista," in certain defined ways, as part of both ATI's corporate name and its Uniform Resource Locator ("url"), "http://www.altavista.com."³ The license precludes ATI from using AltaVista as "the name of a product or service offering."

Digital seeks a preliminary injunction, claiming that ATI's Web-site breaches its licensing agreement and infringes its trademark rights in "AltaVista." ATI opposes Digital's motion on the merits and moves to dismiss for lack of personal jurisdiction.

First, I find that this Court has jurisdiction over ATI, whose Web-site, in the context of the specific facts of this case, meets both the statutory and constitutional standards. Second, I find that Digital has met the requisite standards for a preliminary injunction.

ATI is hereby ENJOINED from using the trademark AltaVista in any way that does not comport with the specific terms of the licensing agreement, as set forth in the opinion below and the accompanying Order.

BACKGROUND

In December, 1995, Digital, a Massachusetts corporation, launched an Internet search service using the servicemark "AltaVista." Since that time, Digital's AltaVista Internet search service has become one of the leading search services on the Internet and, indeed, one of the most frequently visited sites on the World Wide Web ("Web"). Currently, Digital's AltaVista Web-site receives millions of "hits" (or visits) per day. Digital also markets and sells computer software products and services related to the Internet under names such as AltaVista Directory, AltaVista Firewall, AltaVista Forum, AltaVista Mail, etc. Its marketing strategy, however, did not then include soliciting advertising revenues from advertisers on its Web-site.

At the same time, Digital claims two sources for its right to use the service and trademark "AltaVista": its own use of the mark under common law, and its acquisition by assignment of ATI's trademark rights in AltaVista.

ATI is a California corporation, formerly known as Tree Full of Owls, Inc.; it changed its name to AltaVista Technology, Inc., by amendment to its Articles of Incorporation, in May of 1994. In March of 1996, Digital paid for an assignment of ATI's rights to the trademark AltaVista; it immediately licensed-back to ATI the right to use AltaVista both as part of ATI's corporate name, AltaVista Technology, Inc., and as part of ATI's Web-site address "www.altavista.com." The license agreement, however, precludes ATI from using "AltaVista" as "the name of a product or service offering."

The scope and meaning of this license are hotly contested by the parties. ATI contends that its agreement with Digital was formed with the specific intention of allowing it to benefit from the popularity of Digital's AltaVista, and the strong brand identity the "AltaVista" search service had created. In contrast, Digital maintains that ATI's licensing agreement strictly limited ATI's ability to use "Altavista" -- as part of its corporate name and its url -- and not as "the name of a product or service offering."

Consistent with its broad interpretation of the agreement, ATI dramatically changed the appearance of its Web-site,⁴ moving it markedly closer to the appearance of Digital's AltaVista Web-site.⁵ By the time this lawsuit was brought by Digital, ATI's Web-site looked like, and could effectively function as, Digital's AltaVista search service.

As of May 22, 1996, less than two months after the Digital-ATI agreement, a visitor to "www.altavista.com," ATI's Web-site, would see the word "AltaVista" by itself at the top of the page, apparently not attached to ATI's corporate name. One would see an offer of free ATI software. Using a link, [footnote omitted] one could "click" [footnote omitted] to receive "demo versions of AltaVista software." [footnote omitted] One would also have been offered a link to an unnamed "Search Engine" where one could "Search the Internet. . ." This link was to Digital's AltaVista search service.

By August 8, 1996, ATI's page changed again. Again, the visitor would see the word "AltaVista" at the top of the page, again not as part of ATI's corporate name. Below that there was a banner ad⁹ selling an unrelated party's products. This time, however, directly beneath the "Search Engine" line were the words "Digital's Alta Vista," rather than merely "Search the Internet. . ."

On the same date as these changes were implemented, Digital's trademark counsel, Lawrence Robins ("Robins") sent ATI's president, Jack Marshall, a letter claiming that the appearance of ATI's Web-site constituted a breach of Clause 1.1 of their license agreement. . .

A month later, on September 5, 1996, a visitor to ATI's Web-site would have been greeted by "AltaVista" in large, bold letters at the top of the page, with "Technology" immediately under it in smaller, plain type; beneath this was a banner ad and link through which one could "Search the Net with AltaVista" (again, presumably, but not explicitly, Digital's search service) by "Clicking here." [footnote omitted] In addition, the site retained a second, clearly designated link to Digital's AltaVista search site, as well as ATI's AltaVista logo by itself in bold near the bottom of the page.

By October 28, 1996, three days before Digital brought its present motion for preliminary injunction, ATI's Web-site had been altered again: beneath the AltaVista logo in big, bold letters (with a small, plain "Technology" placed immediately below it) sat a "banner ad" for an unrelated product; beneath the banner ad is a solicitation encouraging one to "Click here for advertising information-reach millions every month!" Immediately below that sits an almost identical graphical representation of Digital's AltaVista search engine interface (i.e. the appearance of Digital's AltaVista Web-site, including the logo, etc.). Below that is a statement informing users that they can "Search with Digital's AltaVista" (using Digital's AltaVista search engine while still, to all appearances, being at the ATI Web-site). In short, a visitor to ATI's site could easily have the impression that they were actually at Digital's AltaVista site.¹²

By October 28, 1996, ATI's Web-site was designed to look, feel, and function very much like Digital's AltaVista Web-site. At the same time, ATI derived revenues from the site and its ties to Digital's Altavista. It displayed banner ads and solicited other advertisers, who could get information about how they, too, could reach millions of users everyday by advertising on ATI's Web-site. Digital expressly eschewed providing advertising space to others for its Web-site at that time.

Digital claims that ATI's Web-site is now a service that provides both a search engine, and advertising space. ATI thus breaches the license agreement by attaching the word "AltaVista" to both of these services. Digital further contends that ATI's Web-site infringes Digital's trademark rights in AltaVista, and that the ATI site constitutes unfair competition both under the Lanham Act @ 43(a) and at common law. ATI argues its usage of AltaVista is permitted by its license with Digital. It also contends this Court lacks personal jurisdiction over it.

PERSONAL JURISDICTION

Burden Of Proof

ATI has moved under Fed.R.Civ.P. 12(b)(2) to dismiss for lack of personal jurisdiction over it. Digital, as the plaintiff, bears the burden of demonstrating both that ATI's conduct satisfies Massachusetts's (the forum state's) Long-Arm statute, and that the exercise of jurisdiction pursuant to this statute "comports with the strictures of the Constitution." [footnote omitted]¹³ Though ATI acknowledges that it has a contract with Digital, a Massachusetts corporation, which contract gives rise to this litigation, it contends that in toto it has insufficient "minimum contacts" with Massachusetts to allow this Court to assert jurisdiction over it. I disagree. Digital has met its burden.

Personal Jurisdiction And The Internet

Regardless of whether this is a diversity case based on breach of contract, or a case involving a federal question such as trademark infringement [footnote omitted] I find the assertion of jurisdiction over ATI by this Court to be entirely appropriate. I so conclude under the traditional approaches dictated by the Supreme Court and First Circuit precedents, approaches which have been characterized as "territorially based." [footnote omitted] I have evaluated the totality of ATI's minimum contacts with Massachusetts -- a contract with a Massachusetts corporation, reflecting an agreement to apply Massachusetts law, soliciting business through its Web-site, including Massachusetts business, and three sales to Massachusetts residents, etc.

At the same time, I cannot ignore the fact that the medium through which many of the significant Massachusetts contacts occurred is anything but traditional; it is a site in cyberspace, a Web-site. It has been said that the Courts have had to re-evaluate traditional concepts of personal jurisdiction in the light of the increasing globalization of the economy. See CompuServe v. Patterson, 89 F.3d 1257, 1262 (6th Cir. 1996). The commercial use of the Internet tests the limits of these traditional, territorial-based concepts even further.

The Internet has no territorial boundaries. To paraphrase Gertrude Stein, as far as the Internet is concerned, not only is there perhaps "no there there," the "there" is everywhere where there is Internet access. When business is transacted over a computer network via a Web-site accessed by a computer in Massachusetts, it takes place as much in Massachusetts, literally or figuratively, as it does anywhere. As one commentator noted: The Internet breaks down barriers between physical jurisdictions. When a buyer and seller consummate a commercial transaction through a World Wide Web site, there is no need for the traditional physical acts that often determine which jurisdiction's law will apply and whether the buyer or seller will be subject to personal jurisdiction in the courts where the other is located. Bradley A. Slutsky, Jurisdiction Over Commerce on the Internet, available at http://www.kslaw.com/menu/jurisdic/html, (page 2). [footnote omitted] On the Internet, "messages can be transmitted from any physical location to any other location. . .without any physical cues or barriers that might otherwise keep certain geographically remote places and people separate from one another." Law and Borders, 48 Stan. L. Rev. at 1370-71.

The change is significant. Physical boundaries typically have framed legal boundaries, in effect creating signposts that warn that we will be required after crossing to abide by different rules. Id. To impose traditional territorial concepts on the commercial uses of the Internet has dramatic implications, opening the Web user up to inconsistent regulations throughout fifty states, indeed, throughout the globe. It also raises the possibility of dramatically chilling what may well be "the most participatory marketplace of mass speech that this country -- and indeed the world -- has yet seen." ACLU v. Reno, 929 F. Supp. 824, 881 (E.D. Pa. 1996). As a result courts have been, and should be, cautious in applying traditional concepts.

Given the very new and unique nature of the technology, this Court will take heed of a Supreme Court plurality's recent recognition "of the changes taking place in the law, the technology, and the industrial structure, related to telecommunications, [that] we believe [make] it unwise and unnecessary definitively to pick one analogy or one specific set of words now." Denver Area Education Telecommunications Consortium, Inc. v. FCC, 135 L. Ed. 2d 888, 116 S. Ct. 2374, 2385 (1996) (Breyer, J., plurality opinion) (citation omitted); see also Cass R. Sunstein, Forward: Leaving Things Undecided, 110 Harv. L. Rev. 6, 30-33 (1996) (approving of Justice Breyer's refusal to lay down a broad rule in Denver Area Consortium as an example of a reasonable, "minimalist" judicial approach to contentious questions regarding rapidly changing technologies).

While this case raises some of these concerns, they are not, in the final analysis, dispositive. There is no issue of inconsistent regulations suddenly imposed on Web users without notice. There is no issue of parties being haled into the courts of a given jurisdiction solely by virtue of a Web-site, without meaningful notice that such an outcome was likely. Nor is there a great risk of chilling the Internet's "participatory marketplace" by affirming jurisdiction here.

The parties at bar are corporations who have attempted to tame the "Wild West" of the Internet through their private ordering. They have entered into a contract governing their commercial activities on the Internet. Digital sought (and indeed bought) all rights to a trademark identifying its search engine, with certain express exceptions; ATI agreed to enter into a licensing agreement. They both agreed that Massachusetts law would apply to its provisions. While ATI may have tried to structure its relationship with Digital so that it would not be susceptible to jurisdiction in Massachusetts, its subsequent Web activities bring ATI "over the line," and render jurisdiction appropriate.

This case does not reach the issue of whether any Web activity, by anyone, absent commercial use, absent advertising and solicitation of both advertising and sales, absent a contract and sales and other contacts with the forum state, and absent the potentially foreseeable harm of trademark infringement, would be sufficient to permit the assertion of jurisdiction over a foreign defendant. While it raises some troubling issues, and while the traditional analyses must be informed by this new technology, ultimately, this is not the day nor the forum to resolve them.

Methods Of Determining Personal Jurisdiction

The First Circuit has outlined three approaches to a motion to dismiss for want of personal jurisdiction. Foster-Miller, 46 F.3d at 145. . . .

The First Circuit has offered this Court a "middle course" which I will follow: To engage "in some differential factfinding, limited to probable outcomes as opposed to definitive findings of fact. . ." in order to determine whether "the plaintiff has shown a likelihood of the existence of each fact necessary to support personal jurisdiction." Id. at 146 (quoting Boit, 967 F.2d at 677). Since the preliminary injunction motion presently before me also requires findings of fact based on a comparable standard, and since some facts supporting jurisdiction may be "bound up with the claim on the merits," id., the intermediate test seems a particularly appropriate course. See Boit, 967 F.2d at 677-78; Foster-Miller, 46 F.3d at 146.

I find the following jurisdictional facts necessary and sufficient to support personal jurisdiction over ATI are likely to exist: [footnote omitted] ATI entered into a contract with Digital that includes a clause requiring this contract to be interpreted "under and in accordance" with the laws of Massachusetts; this contract (the "AltaVista" license) and ATI's alleged breach of it gives rise to the present litigation; ATI operates a Web-site accessible to Massachusetts computer-users; it solicits advertising and its own products through the site; it made at least three sales to Massachusetts residents of software products in the course of and related to its operation of a Web-site; finally, Digital alleges ATI's Web-site has infringed its trademark and caused considerable confusion in Massachusetts.

The Massachusetts Long-Arm Statute

The Massachusetts Long-Arm statute, M.G.L. ch. 223A @ 3 ("Section 3"), provides several bases for asserting jurisdiction.

Section 3 reads in pertinent part:

A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's (a) transacting any business in this commonwealth;. . . (c) causing tortious injury by an act or omission in this commonwealth; (d) causing tortious injury in this commonwealth by an act or omission outside this commonwealth if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this commonwealth. . . .

ch. 223A @ 3(a, c-d). Any one of these grounds would be sufficient. The facts which I have found could be construed to confer personal jurisdiction over ATI based on all three: (1) ATI's transacting business in the Commonwealth of Massachusetts; (2) ATI's Web-site allegedly causing tortious injury by acts or omissions in this Commonwealth; or (3) ATI allegedly causing tortious injury in this Commonwealth based on the act of maintaining a Web-site outside Massachusetts, while engaging in what I consider to be a persistent course of conduct here.

. . .

Constitutional Due Process Concerns

In order to establish personal jurisdiction over a nonresident defendant in a way consistent with due process, the defendant must either have 1) "substantial, continuous and systematic" presence in the forum state which would give the court general jurisdiction over the defendant or 2) certain "minimum contacts" with the forum state such that maintenance of the suit does not offend "traditional notions of fair play and substantial justice." See International Shoe Co. v. Washington, 326 U.S. 310, 314, 90 L. Ed. 95, 66 S. Ct. 154 (1945). The former confers general jurisdiction: the latter, specific. See Burger King Corp v. Rudzewicz, 471 U.S. 462, 472-73 & n.15, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985) (citations omitted). Plainly, this case involves specific jurisdiction, framed by the "minimum contacts" test.

In order to find "minimum contacts," a non-resident defendant must meet the following requirements:

First, the claim underlying the litigation must directly arise out of, or relate to, the defendant's forum state activities. Second, the defendant's in-state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's courts foreseeable. Third, the exercise of jurisdiction must, in light of the gestalt factors, be reasonable.

United Electrical, Radio and Machine Workers of America v. 163 Pleasant St. Corp., 960 F.2d 1080, 1089 (1st Cir. 1992). These three tests have been called relatedness, purposeful availment, and reasonableness. See Burger King, 471 U.S. at 472-78.

Relatedness

As an initial matter, "we know . . . that the [relatedness] requirement focuses on the nexus between the defendant's contacts and the plaintiff's cause of action." Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 206 (1st Cir. 1994). As the First Circuit noted in Nowak v. Tak How Investments, Ltd., 94 F.3d 708, 712 (1st Cir.), reh'g denied en banc (1996), the requirement serves two purposes: First, relatedness is the "divining rod that separates specific jurisdiction cases from general jurisdiction cases." Id. Second, it ensures that "the element of causation remains in the forefront of the due process investigation." Id.

It cannot be disputed that the underlying claims in this litigation arise directly from and relate to ATI's forum-state activities, both in the form of its contract with Digital, and in its subsequent maintenance of a Web-site which allegedly breached that contract and caused torts in Massachusetts. [footnote omitted]

Purposeful Availment

Unlike the "relatedness" test, the purposeful availment test focuses on the deliberateness of the defendant's contacts. Ticketmaster, 26 F.3d at 207. The contacts with the forum state must be voluntary -- not based on the unilateral actions of another party or a third person. Burger King, 471 U.S. at 475. And they must be foreseeable; the defendant's contacts must be such that he should reasonably be able to anticipate "being haled into court" in the forum state. World Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 62 L. Ed. 2d 490, 100 S. Ct. 559 (1980).

ATI argues that it should not be subject to jurisdiction here because rather than "purposefully availing" itself of the Massachusetts forum, it did everything in its power to structure its affairs to avoid this forum. The contract was solicited by Digital; negotiations were conducted by phone or in California; the contract was not signed in Massachusetts; while it indicated that Massachusetts law would be the choice of law, it expressly included no forum selection clause. To the extent that ATI crossed Massachusetts boundaries at all, it argues, it was because Massachusetts users chose to dial in.

True enough. ATI may well have done everything possible to avoid jurisdiction in terms of its contract and non-Web contacts with Massachusetts. ATI's Web-site, its design, the extent to which it infringed Digital's trademark, and breached the contract, however, necessarily changes the equation: This Web-site, in context, creates minimum contacts.

Where the minimum contacts on which jurisdiction is allegedly based are unrelated to the acts comprising the cause of action, the courts have applied a strict test to determine whether the defendant's transactions suffice to amount to "purposeful availment." In Hanson v. Denckla, 357 U.S. 235, 251, 253, 2 L. Ed. 2d 1283, 78 S. Ct. 1228 (1958), for example, where the cause of action did not arise from the defendant's contacts with the forum state, the Court noted that "it is essential. . . that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws."

Where the case involves torts that create causes of action in a forum state (even torts caused by acts done elsewhere), however, the threshold of purposeful availment is lower. The defendant allegedly causing harm in a state may understandably have sought no privileges there; instead the defendant's purpose may be said to be the targeting of the forum state and its residents. In Calder v. Jones, 465 U.S. 783, 79 L. Ed. 2d 804, 104 S. Ct. 1482 (1984), for example, the Supreme Court found that those responsible for an article published by the National Enquirer about the actress Shirley Jones, where the reporters knew that Jones lived and worked in California, and that she would bear the brunt of the injury in California, should "anticipate being haled into court there to answer for the truth of their statements." 465 U.S. at 789-90. [citations and footnote omitted]

The First Circuit addressed what it called the "classic analogy for an out of state libel: the gunman firing across a state line." Ticketmaster, 26 F.3d at 208.²⁷ In that case, as in the case before me, it was the action of a resident of Massachusetts (a reporter calling a source in California who allegedly made libelous statements which were then printed in the Boston Globe here) that arguably formed the basis of the assertion of jurisdiction over the foreign defendant.²⁸ See id. at 208-12. Therefore that court held the defendant's action of answering the phone and making an allegedly libelous comment during an interview initiated by the Massachusetts reporter constituted purposeful availment, although only by a "bare minimum." Id. at 212.[footnote omitted]

Similarly, in Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 781, 79 L. Ed. 2d 790, 104 S. Ct. 1473 (1984), the Court held: "Respondent produces a national publication aimed at a nationwide audience. There is no unfairness in calling it to answer for the contents of that publication wherever a substantial number of copies are regularly sold and distributed." Web-sites are modern analogs of national publications; potentially innumerable "copies" can be (and are) regularly "distributed" wherever there is access to the World-Wide Web.

Trademark infringement is similar to libel. Burger King, 471 U.S. at 469-70 n.11. Indeed, a similar question to the one before me, namely the extent to which trademark infringement outside a state may provide the basis for jurisdiction, has been explicitly left open by the Supreme Court. Id. ("We need not address the extent to which the tortious act provisions of Florida's long arm statute. . . may constitutionally extend to out-of-state trademark infringement" (citing Calder, 465 U.S. at 788-89; Keeton, 465 U.S. at 776.)).³⁰ In an analogous case, Thomas Jackson Publishing, Inc. v. Buckner, 625 F. Supp. 1044 (D. Neb. 1985), the Court applied Calder's "effects" test to sustain jurisdiction when it found that the defendant's alleged infringement of plaintiff's copyrighted song was conduct "purposefully directed" at the plaintiff.

Here, when ATI posted a Web-site which over time more and more mirrored the site of a Massachusetts corporation, arguably in violation of Digital's trademark rights and the licensing agreement, a site that plainly would attract Massachusetts residents, and did so, it, like the petitioners in Calder, should have anticipated being haled into a Massachusetts court to answer for its acts. Every day, potentially thousands of Massachusetts residents visit ATI's Web-site; and each "call" is "answered" by the display of allegedly tortious materials that cause harm here, there, and everywhere (but especially here). Since ATI knows that Digital is located here, the purposeful availment prong is met: ATI's conduct, by allegedly causing trademark infringement that it knows will have an effect on consumers in this state, and an especially harmful effect on Digital, whose trademark rights are at issue, see Panavision Int'l, L.P. v. Toeppen, 938 F. Supp. 616, 621-22 (C.D. Ca. 1996), satisfies the constitutional "purposeful availment" due process tests.

"Reasonableness" Test (Featuring Gestalt Factors)

Satisfying the purposeful availment tests does not end the due process inquiry. Jurisdiction must still comport with "traditional notions of 'fair play and substantial justice.'" Nowak, 94 F.3d at 717 (citing International Shoe, 326 U.S. at 320 (which quoted Milliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed. 278, 61 S. Ct. 339 (1940))). The First Circuit enumerated the following five "gestalt factors" to be used to determine the fairness and reasonableness of asserting personal jurisdiction:

the defendant's burden of appearing, (2) the forum state's interest in adjudicating the dispute, (3) the plaintiff's interest in obtaining convenient and effective relief, (4) the judicial system's interest in obtaining the most effective resolution of the controversy, and (5) the common interests of all sovereigns in promoting substantive social policies.

Id. (citing 163 Pleasant St. Corp., 960 F.2d at 1088 (citing Burger King, 471 U.S. at 477)). While "the gestalt factors may tip the constitutional balance," id., in this case they serve to buttress the constitutionality of this Court's assertion of jurisdiction. Moreover, "a strong showing of reasonableness may serve to fortify a more marginal showing of relatedness and purposefulness." Id. (citing Ticketmaster, 26 F.3d at 210 (citing Donatelli v. National Hockey League, 893 F.2d 459, 465 (1st Cir. 1990))).

The "Onerous" Burden Of Appearance

While ATI does have to cross the continent to appear in this Court, and this is somewhat "onerous," Ticketmaster, 26 F.3d at 210, that may well be the price of its agreeing to do business involving the Internet under the circumstances of this case; if one does something that could cause a tort in another state, then this inconvenience should be considered by potential foreign defendants before they act. The First Circuit recently indicated "this factor is only meaningful where a party can demonstrate some kind of special or unusual burden." Pritzker v. Yari, 42 F.3d 53, 64 (1st Cir. 1994). This burden was not found simply in the need to travel from New York to Puerto Rico, where the forum state in that case was. Id. The distance by plane between California and Boston can scarcely be more onerous than that between Puerto Rico and New York. Also, there is no evidence that Digital chose this forum to "harass" or "vex" ATI. See Ticketmaster, 26 F.3d at 211. This factor neither supports nor undermines the reasonableness of this Court's jurisdiction.

Massachusetts's Interest In This Lawsuit

Clearly this factor heavily favors the assertion of jurisdiction. Trademark infringement allegedly occurs here, and "a forum state has a significant interest in obtaining jurisdiction over a defendant who causes tortious injury within its borders." Nowak, 94 F.3d at 718 (citing Ticketmaster, 26 F.3d at 211); see Keeton, 465 U.S. at 776 (holding that "it is beyond dispute that New Hampshire has a significant interest in redressing injuries that actually occur within the State"). Digital is one of the largest corporations in Massachusetts, and it is the one that suffers the most from the alleged tort of its trademark rights in AltaVista being infringed.

The Convenience Of This Particular Venue

This Court will "accord deference to" Digital's "choice of a Massachusetts forum," a forum that is more convenient for it than any other. Nowak, 94 F.3d at 718. Its primary counsel is situated here, as are its executives who negotiated the license agreement that ATI allegedly breached. This factor too, weighs heavily in favor of jurisdiction.

The Administration of Justice

"Usually this factor is a wash." Id. So too here. The only aspect of this factor that cuts in favor of the assertion of jurisdiction is that the trademark license agreement that gives rise to this litigation contains a provision which states, in "General Provisions" @ 10.3, that this "Agreement is made and shall be construed and interpreted under and in accordance with the laws of the Commonwealth of Massachusetts (but not including the choice of law rules thereof)." While I have no doubt that other federal district courts could construe this agreement in accordance with Massachusetts law effectively, this Court does, of necessity, have somewhat more experience in the area. Thus, to the extent that this factor weighs in at all, it, too, supports jurisdiction here.

Some Pertinent Policy Arguments

The policy questions are somewhat more complicated. On the one hand, it is troubles me to force corporations that do business over the Internet, precisely because it is cost-effective, to now factor in the potential costs of defending against litigation in each and every state; anticipating these costs could make the maintenance of a Web-based business more expensive. On the other hand, it is also troublesome to allow those who conduct business on the Web to insulate themselves against jurisdiction in every state, except in the state (if any) where they are physically located.

Massachusetts has an interest in protecting its citizens from confusion, and its corporations from trademark infringement. It has a further interest in alerting its citizens who maintain Web-sites for business purposes that there is a chance that they may be haled into court in any state where their Web-site potentially causes harm or transacts business. On the whole, this factor leans toward this Court's assertion of jurisdiction over ATI.

Other Internet Personal Jurisdiction Cases

Digital has met its burden of adducing facts likely to support this Court's proper assertion of jurisdiction over ATI. Four other district courts, faced with various versions of this issue, have reached the same conclusion: In certain situations, maintenance of a Web-site can subject one to personal jurisdiction in foreign courts. See Panavision, 938 F. Supp. at 622-23; Inset Systems, Inc. v. Instruction Set, Inc., 937 F. Supp. 161, 163-65 (D. Conn. 1996); Maritz, Inc. v. Cybergold, Inc., 947 F. Supp. 1328, 1996 U.S. Dist. LEXIS 14978, at *6-7 (E.D. Mo. 1996); Edias Software Int'l v. Basis Int'l Ltd., 947 F. Supp. 413, 419-20 (D. Az. 1996). A case that reached a different conclusion, Bensusan Restaurant Corp. v. King, 937 F. Supp. 295, 299 (S.D.N.Y. 1996), did so because it found that the allegedly infringing activity of the Web-site at issue (maintained by a local club in Missouri, and targeting only that local area) neither caused confusion in New York, nor was aimed at New York residents. In effect, in Bensusan, the Web-site functioned like a local paper; it was not intended to reach a national audience, and had no effect on New York citizens. Id.

ATI, in contrast, targets a national audience. It may not have made many sales or transacted much business in Massachusetts, but it has made at least three sales to residents here involving its Web-site. ATI does and seeks business in Massachusetts. And in the context of trademark infringement, it has long been the law that harm is caused by the very offer of an infringing work, even if not one single sale is made. See Editorial Musical Latino Americana v. Mar Int'l Records, Inc., 829 F. Supp. 62, 64-65 (S.D.N.Y. 1993) (collecting cases).

Taking into account all the relevant facts which are likely to exist, this Court's assertion of jurisdiction over ATI is proper. ATI's motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(2) is therefore DENIED.

PRELIMINARY INJUNCTION

. . .

 

ATI is therefore ENJOINED as set forth in the accompanying ORDER.

 

SO ORDERED.