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VP Intellectual Properties, LLC v. Imtec Corporation

CIV-A-99-9136, 53 U.S.P.Q.2d 1269, 1999 WL 1125204 (D. N.J. 1999)

JURISDICTION; INTERNET—The court analyzes the relationship between a business’ Internet website and the ability to get personal jurisdiction over the company.

A company was sued in New Jersey for patent infringement. The alleged infringer moved to dismiss for lack of personal jurisdiction and improper venue. In doing so, it claimed it did not have a “regular and established” place of business in New Jersey; it did not have an office or any employees in the state; it had no dealers, manufacturers or distributors in the state; it had no sales agents or sales representatives in the state; for the prior five years it never attended a trade show or other conference in New Jersey; and it never maintained a New Jersey telephone listing. In fact, it appeared that its total sales to New Jersey customers over a five year period amounted to $9,500. Based on the submissions before it, the Court found that it did not have “general jurisdiction” over the alleged infringer because it was not demonstrated that its contacts with the forum were so “continuous and substantial” that it should have expected “to be haled into court on any cause of action.” The complaining party also argued that the alleged infringer’s Internet site, allowing customers to browse through products and order a catalog, constituted sufficient activity to give a New Jersey court general jurisdiction over the defendant. The Court analyzed this argument and pointed to “three areas into which Internet use can be categorized” for the purpose of determining whether the exercise of personal jurisdiction is permitted. “At one end of the spectrum are cases where individuals can directly interact with a company over their Internet site, download, transmit, or exchange information with the company, and enter into contracts with the company via computer. In such cases, the exercise of personal jurisdiction is appropriate.” The Court also described sites that it called “passive” where a defendant “has done nothing more than advertise on the Internet.” Here, personal jurisdiction is generally not found. In the middle are cases where parties can interact with the defendant company but may not be able to contract with it over the Internet site. In most cases, a Court must examine “the level of interactivity and [the] commercial nature of the exchange of information” that occurs on such a Web site. Here, the defendant’s site contained company and product descriptions, distributor information, owner information, and a catalog request form, but customers could not purchase products from the company over the Internet. The Court therefore categorized this site as falling into the middle category. The Court then determined that because customers could not place orders via their computers, the level of interaction, “simply put, is not ‘continuous’ or ‘systematic’ enough to find general personal jurisdiction on the basis of the Internet site.”


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