Forum Selection Clause in Browsewrap Agreement Does Not Confer Personal Jurisdiction: Sixth Circuit | Practical Law

Forum Selection Clause in Browsewrap Agreement Does Not Confer Personal Jurisdiction: Sixth Circuit | Practical Law

In Traton News, LLC v. Traton Corp., the US Court of Appeals for the Sixth Circuit affirmed the district court's dismissal of the plaintiff's action, ruling that the district court correctly determined that the plaintiff's browsewrap agreement forum selection clause did not properly accord the court personal jurisdiction over the defendants with respect to their Lanham Act claims.

Forum Selection Clause in Browsewrap Agreement Does Not Confer Personal Jurisdiction: Sixth Circuit

by PLC Intellectual Property & Technology
Published on 14 Jun 2013USA (National/Federal)
In Traton News, LLC v. Traton Corp., the US Court of Appeals for the Sixth Circuit affirmed the district court's dismissal of the plaintiff's action, ruling that the district court correctly determined that the plaintiff's browsewrap agreement forum selection clause did not properly accord the court personal jurisdiction over the defendants with respect to their Lanham Act claims.
On June 11, 2013, the US Court of Appeals for the Sixth Circuit issued an opinion in Traton News, LLC v. Traton Corp., affirming the district court's dismissal of the plaintiff's suit for lack of personal jurisdiction.
The defendants in the case, Traton Corp., and Traton Homes, LLC, build houses and residential communities in and around Atlanta, Georgia. The plaintiff, Traton News, LLC, a limited liability company registered in Ohio, claims it owns the domain name traton.com as well as the Traton mark. Traton News uses traton.com to post articles on a variety of topics, including Traton Homes and other home builders in the Atlanta area. Traton News has a browsewrap agreement on the home page of its traton.com website that both:
  • Specifies that none of the material on the website may be used for the benefit of Traton Corp. or its affiliates.
  • Includes a forum selection clause that states that the user consents to jurisdiction in the Southern District of Ohio for all disputes "arising out of or relating to the use of this Web site."
The dispute began when, in response to Traton News's posting negative information about Traton Homes on traton.com, Traton Homes started its own blog on which it published positive news items about Traton Homes.
In February 2012, Traton News filed a complaint in the Southern District of Ohio, alleging that Traton Corp. and Traton Homes:
  • Violated the Anticybersquatting Consumer Protection Act by registering tratonnews.com and tratonnews.net and failing to maintain any content on those sites.
  • Infringed Traton News's trademark rights in the Traton mark by using the mark in commerce and causing confusion.
  • Made false designations of origin in violation of Section 43(a) of the Lanham Act by using the Traton mark in Traton Homes' blog and the link for News on the blog.
  • Violated the Lanham Act by falsely describing marketing on its website as news reporting services.
The US District Court for the Southern District of Ohio granted the defendants' motion to dismiss for lack of personal jurisdiction finding:
  • Traton Homes did not consent to personal jurisdiction in Ohio based on the forum selection clause of the browsewrap agreement on the traton.com website because:
    • Traton News' Lanham Act claims are outside of the scope of the browsewrap agreement; and
    • the browsewrap agreement is unenforceable for lack of consideration.
  • Traton News did not make a prima facie showing that Traton Homes and Traton Corp. have sufficient contacts in the State of Ohio to confer personal jurisdiction over the defendants.
On appeal, the Sixth Circuit reviewed the district court's decision de novo and focused on whether the forum selection clause in the plaintiff's website browsewrap agreement conferred personal jurisdiction on it. The Sixth Circuit focused on the part of the clause stating that a user consents to personal jurisdiction "in all disputes arising out of or relating to the use of this Web site." The Sixth Circuit, adopting Ohio law as controlling its interpretation of the browsewrap agreement, noted that, while this law generally interprets phrases like "arising out of" and "relat[ing] to" broadly in the context of arbitration agreements, it did not favor the broad application of this language in forum selection clauses. The Sixth Circuit further observed that even broad arbitration clauses are subject to a "significant relationship" test to determine whether a dispute is sufficiently related to the parties' agreement to be covered by its arbitration provisions. Under the significant relationship test, an action would be deemed to fall outside the scope of the arbitration clause if it could be maintained without reference to the contract to which the clause is addressed.
Applying this significant relationship test to the plaintiff's forum selection clause, Sixth Circuit reasoned that for the forum selection clause to apply to Traton News's Lanham Act claims, the claims would need to have a significant relationship to the use of traton.com website and domain name. Because these Lanham Act claims related to actions taken by the defendant Traton Homes on its own websites (tratonhomes.com, tratonhomesblog.com, tratonnews.com, and tratonnews.net), the court ruled that these claims did not arise out of or relate to the plaintiff's website and therefore fell outside of the scope of the browsewrap agreement's forum selection clause as construed under Ohio law.
Accordingly, the Sixth Circuit affirmed the district court's dismissal of the action, ruling that the district court:
  • Correctly determined that it did not have personal jurisdiction over the defendants.
  • Did not abuse its discretion in declining to exercise supplemental jurisdiction over the plaintiff's state law breach of contract claims.
Court documents: