"Purposeful Availment" Needed for Online Jurisdiction

The U.S. Court of Appeals (3rd Circuit) recently considered the test for Internet jurisdiction in a trade-mark dispute in Toys "R" Us v. Step Two SA. Toys "R" Us had acquired a number of U.S.-registered IMAGINARIUM marks and was using them in its stores and on the website imaginarium.com. Step Two operates a chain of toy stores in Spain under the name "Imaginarium" and had registered the mark IMAGINARIUM in Spain. Since 1996, Step Two also operated a website using the domain imaginarium.es, advertising merchandise available in its stores. In February 2001, the New Jersey-based Toys "R" Us sued Step Two, a Spanish company, for infringement and unfair competition in its use of IMAGINARIUM. At trial, the case was dismissed for lack of jurisdiction, with the Court finding that although Step Two had an interactive website (thereby meeting the well-established Zippo test for personal jurisdiction), it did not do any business in the United States and did not "purposefully avail" itself of New Jersey customers. The trial judge found that Step Two's website was entirely in Spanish, showed prices in pesetas or euros, and the company shipped orders only to Spanish addresses. On appeal, the Court agreed that "purposeful availment" was the appropriate test, but found that the trial judge had erred in denying the plaintiff's request for further discovery on the jurisdiction issue. The Court of Appeals held that the defendant's non-Internet activities should also be considered "as part of the 'purposeful availment' calculus". For a copy of the decision, visit: http://www.ca3.uscourts.gov/recentop/week/013390.pdf