Web site in a way as to make it accessible to users in some jurisdictions but not others, arguably a defendant should not be subject to jurisdiction in New York simply because its home page could be viewed by users there.
However, defendant has additional contacts with New York. It has signed up six New York subscribers to the services advertised on its home page. Since the service agreement published at defendant's site states that parties seeking to subscribe to its services are mailed a software package and a written copy of the agreement, it is a reasonable inference that defendant has mailed software packages and agreements to its New York subscribers. Defendant also receives a total of $ 150 per month from those subscribers.
Those contacts show defendant's purposeful availment of New York. In sending the agreements and software packages to New York computer users and entering into agreements with those users, defendant purposefully directed activity towards New York. If defendant sought to avoid subjecting itself to suit in New York, it could have chosen not to send those materials there. See World-Wide, 444 U.S. at 297, 100 S. Ct. at 567 (a party that purposefully establishes contacts with a state "can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State"). Through its contacts with New York, defendant availed itself of a commercial benefit, since it receives monthly payments from its New York subscribers for the services it provides them. The statements published by defendant on its home page that advertise its ability to aid customers "across the U.S." further support the inference that the New York subscriptions are not random or fortuitous, but are rather the result of defendant's purposeful efforts to avail itself of the benefits of New York as part of a nationwide market.
2. Nexus between contacts and suit
Due process also prevents the exercise of jurisdiction over a nonresident unless its contacts with the forum are continuous and systematic or the suit arises out of or is related to those contacts. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 415-16, 80 L. Ed. 2d 404, 104 S. Ct. 1868, 1872-73 & nn.9-10 (1984). There is a sufficient nexus here between defendant's contacts with its subscribers and plaintiff's claims. The subscriptions are evidence of defendant's effort to market its services in New York. That effort is closely related to the basis of plaintiff's claims, because it is defendant's effort to sell its services under its mark that has allegedly caused the confusion of which the plaintiff complains.
3. Reasonable foreseeability
Due process further requires that "the defendant's conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there." World-Wide, 444 U.S. at 297, 100 S. Ct. at 567 (where a sale of a product "arises from the efforts of the manufacturer or distributor to serve directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or others").
It was reasonable for defendant to anticipate being haled into New York to defend itself from claims arising from the use of its mark in selling its services, because defendant sold its services there. When defendant published the statements on its home page that it can help customers "across the U.S." and other indications of its aim of serving customers nationwide, it was foreseeable that it might be haled to defend itself in a jurisdiction where those publications were not only seen but where, as here, it actually secured customers and sent them materials, provided services to them, and received payment from them.
Defendant points out that its six New York subscribers provide only a minuscule portion of its total revenue. That does not result from any effort to avoid marketing its services here. Nor is it essential for jurisdictional purposes that defendant's contacts with New York result in substantial revenue. In cases where Supreme Court has observed that a defendant's efforts to market its products in a forum may make it reasonable to hale it into court there on claims relating to those products, it has not suggested that the exercise of jurisdiction would be reasonable only if the efforts achieved substantial success. See, e.g., Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 111, 107 S. Ct. 1026, 1031, 94 L. Ed. 2d 92 (1987) (O'Connor, J.); World-Wide, 444 U.S. at 297, 100 S. Ct. at 567. It is reasonable for a corporation deriving substantial revenue from interstate commerce, like defendant, to anticipate that its efforts to serve a market with a particular product may subject it to suit there on claims, like those here, relating to such efforts, even if those efforts have not resulted in much revenue in that market.
There is another factor that made it reasonable for defendant to anticipate being sued in New York: its alleged awareness of plaintiff's mark and location. Such awareness can be inferred from ANI's president's statement that in 1994 he gave a representative of defendant a business card showing plaintiff's mark and New York place of business. Assuming that defendant indeed knew of plaintiff's mark and New York place of business, it became more reasonable for defendant to assume that publishing its similar mark on its Web page, which could be viewed from anywhere, might cause harm to a New York corporation and that defendant might then be sued there.
4. Other factors
There are other factors that the court "may evaluate" in determining whether the assertion of jurisdiction over a party is so unreasonable as to violate due process. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-77, 105 S. Ct. 2174, 2184, 85 L. Ed. 2d 528 (1985). Those factors include the burden on the defendant, the forum state's interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective relief, the interstate judicial system's interest in obtaining the efficient resolution of controversies, and the shared interest of the states in furthering fundamental substantive social policies. Id. Where, as here, it has already been determined that the defendant has minimum contacts with the forum state, the defendant must "present a compelling case that the presence of some other considerations would render jurisdiction unreasonable." Id. at 477, 105 S. Ct. at 2184-85.
Those factors do not compel the conclusion that asserting jurisdiction over defendant would violate due process. While the inconvenience to defendant of litigating in this forum may be substantial, it is not shown to rise to such a level as to render the exercise of jurisdiction over it unconstitutional. New York has a clear interest in adjudicating this dispute involving harm to one of its residents caused, in part, by confusion among New York residents, and it is an efficient forum for resolution of those claims. Plaintiff's principal place of business in New York makes the convenience for it of a New York forum obvious. Finally, defendant has not identified substantive social policies that require a different forum.
Defendant argues that this court should follow Bensusan Restaurant Corp. v. King, 937 F. Supp. 295 (S.D.N.Y. 1996), where the court found that due process prevented the exercise of jurisdiction over a Missouri resident who owned a club named the Blue Note and posted a page on the Web about the club, and was then sued for trademark infringement by a New York club of the same name. 937 F. Supp. at 300-01. That case was decided on facts far different from those here. In finding that the Missouri resident had not taken any acts purposefully availing itself of New York's laws, the court observed that there was no evidence that he had done any business with New York residents or that either he or his club derived substantial revenue from interstate commerce. 937 F. Supp. at 299-300. Here, in contrast, defendant derives substantial revenue from interstate commerce, it makes clear on its home page (which bears its allegedly infringing mark) that it can serve customers across the United States, and it has done business with New York residents and has sent them software packages and agreements, provided them services, and has received revenue from them.
Defendant claims that because its documents, equipment, and employees are located in Georgia, transferring the action there would better serve the convenience of the parties and witnesses and the interests of justice. See 28 U.S.C. § 1404(a). However, defendant does not identify, as it must, the witnesses that would be difficult to transport to New York. See Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir. 1978). Its asserted burdens in litigating the action in New York do not appear any more substantial than the burdens plaintiff says it would bear in litigating it in Georgia. Defendant therefore has not met its heavy burden of showing that transfer is warranted. See United States Barite Corp. v. M.V. Haris, 534 F. Supp. 328, 330-31 (S.D.N.Y. 1982) ("A plaintiff's choice of forum is entitled to great weight and will not be disturbed except upon a clear-cut showing by defendant that convenience and justice for all parties demands that the litigation proceed elsewhere.").
The motions to dismiss or transfer the action are denied.
Dated: New York, New York
August 13, 1997
LOUIS L. STANTON