Report: How ‘Targeting’ Establishes Jurisdiction in Trademark Usage on the Internet

It can be difficult to determine when a court has jurisdiction concerning the use of trademarks on the Internet. A recent report by INTA’s Internet Committee reviews the approaches followed in several recent appellate court decisions in Canada, the United Kingdom, and the United States, and finds that many decisions consider the concept of “targeting” or whether the defendant manifested an intention to establish commercial relations with consumers in that jurisdiction. Targeting can be a useful way to approach what can be a difficult legal issue.

For a UK court to have jurisdiction, the defendant must have manifested an intention to establish commercial relations with consumers in the UK. The court must ascertain from the trader or intermediary’s website, or its overall activity, whether it envisaged doing business with such consumers. Further, the court must evaluate all the relevant circumstances, which may include any clear expressions of an intention to solicit business in the UK.

However, a finding that an advertisement is directed at consumers in the UK does not depend upon the existence of any such clear evidence. The court may decide that an advertisement is directed at the UK in light of the non-exhaustive list of matters established by the Court of Justice of the European Union. The appearance and content of the website will be significant, including whether it is possible to buy goods or services from it, as well as the number of visits made to the website by UK consumers. However, the relevant circumstances may extend beyond the website itself and include, for example, the nature and size of the trader’s business and the characteristics of the goods or services at issue.

In the United States, in 2014, the Supreme Court in Walden v. Fiore limited the ability to assert personal jurisdiction on the grounds that a foreign or out-of-state defendant targeted the plaintiff’s trademarks or copyrights. Subsequently, the foreseeability of harm to the plaintiff in the forum resulting from the defendant’s infringement of a trademark is no longer enough for personal jurisdiction where there is no significant connection between the defendant and the forum.

On the Internet, the question is no longer whether a defendant’s website is “interactive” in the sense of its availability to consumers in the forum state, or where the domain name registration service providers are located, but whether there is a connection between the defendant and the forum beyond the mere foreseeability of harm to the plaintiff in the forum. Merely interacting with a plaintiff known to bear a strong connection to the forum state is no longer enough to establish such jurisdiction. The Committee report examines the impact of Walden on the traditional “effects test” and comments on the evolving landscape of appellate opinions.

In Canada, to determine when jurisdiction should be assumed, the courts apply the “real and substantial connection” test. In applying this test, targeting, in a fashion like the UK/EU examples above, may establish a real and substantial connection.

The report was written by Bruce McDonald (Smith, Gambrell & Russell, LLP, USA), and John McKeown (Goldman Sloan Nash & Haber LLP, Canada), both members of the Internet Committee. See the full Committee report.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest. 

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