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SDNY Considers Semi-Interactive Website in Personal Jurisdiction Determination
Practical Law Legal Update 8-560-4294 (Approx. 3 pages)
SDNY Considers Semi-Interactive Website in Personal Jurisdiction Determination
by Practical Law Intellectual Property & Technology
| Published on 11 Mar 2014 • USA (National/Federal) |
In Two's Company, Inc. v. Hudson, the US District Court for the Southern District of New York denied the defendant's motion to dismiss trademark infringement and unfair competition claims for lack of personal jurisdiction because of the defendant's semi-interactive website in combination with some actual sales in New York.
On March 6, 2014, in Two's Company, Inc. v. Hudson, the US District Court for the Southern District of New York concluded that it could properly exercise personal jurisdiction over the defendant in view of her:
- Semi-interactive website, which allows out-of-state consumers to begin a purchase through the website.
- Actual sales of products to New York.
The plaintiff, Two's Company, Inc., is a New York company that develops, manufactures and sells home goods products. Two's Company obtained the trademark TWO'S COMPANY INC. for certain home goods in 1992 and for jewelry in 2001.
The defendant, Jane Hudson, owns Two's Company Needlepoint, located in South Carolina. Hudson has used "Two's Company" since 1977 and "Two's Company Needlepoint" on her website since 2002. Hudson launched her company website in 2002 with the domain name "twoscompanyneedlepoint.com." None of the defendant's employees has ever worked or lived in New York. In addition, Hudson claimed that neither she nor her business:
- Owned any facilities or properties in New York.
- Leased any offices or other rental facilities in New York.
- Had any affiliated companies or subsidiaries in New York.
- Had any bank accounts or telephone listings in New York.
- Was registered or licensed to do business in New York.
In 2010-2012, Hudson made 18 total sales in New York. These sales:
- Totaled $1721.45.
- Amounted to 0.4% of the total sales during that period.
In 2013, Two's Company sued Hudson for several claims, including federal and common law trademark infringement and unfair competition. Hudson filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and to transfer the case to the US District Court for the District of South Carolina.
Although Hudson conceded that New York's long-arm statute conferred personal jurisdiction based on her sales of goods into New York State, the court still discussed its exercise of personal jurisdiction over the defendant. Notably, the court concluded that Hudson purposefully directed acts toward New York subjecting her to personal jurisdiction by a New York court because:
- Her website was semi-interactive (citing Best Van Lines, Inc. v. Walker, 490 F.3d 239 (2nd Cir. 2007)) since:
- it allowed customers to fill out a purchase order form online, indicating the product or products the consumer wants to purchase; and
- Hudson or one of her employees would contact that person to fulfill the order, taking the person's credit card information over the phone, and then shipping the order.
- Of the sales in New York.
Additionally, the court determined that exercising personal jurisdiction did not violate due process and declined to transfer the case to South Carolina.