''CompuServe, Inc. v. Patterson'' was a court case heard before the Sixth Circuit Court of Appeals which held that contacts and contracts negotiated through the

Internet The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a '' network of networks'' that consists of private, pub ...

with a party in a different state were sufficient to grant personal jurisdiction in that state. In particular, the court held that Patterson's use of storage, electronic transmission of files, and advertisement through CompuServe's network in Ohio were sufficient to grant Ohio personal jurisdiction over Patterson.

Background

Richard Patterson, a resident of

Texas Texas (, ; Spanish language, Spanish: ''Texas'', ''Tejas'') is a state in the South Central United States, South Central region of the United States. At 268,596 square miles (695,662 km2), and with more than 29.1 million residents in 2 ...

, subscribed to CompuServe, Inc., an

Internet service provider An Internet service provider (ISP) is an organization that provides services for accessing, using, or participating in the Internet. ISPs can be organized in various forms, such as commercial, community-owned, non-profit, or otherwise private ...

with its headquarters in

Ohio Ohio () is a state in the Midwestern region of the United States. Of the fifty U.S. states, it is the 34th-largest by area, and with a population of nearly 11.8 million, is the seventh-most populous and tenth-most densely populated. The sta ...

. Under the business moniker FlashPoint Development, Patterson developed a software product designed to help people navigate around the Internet. In 1991, from Texas, Patterson entered into an agreement with CompuServe in which Patterson could store, transmit, and advertise

shareware Shareware is a type of proprietary software that is initially shared by the owner for trial use at little or no cost. Often the software has limited functionality or incomplete documentation until the user sends payment to the software developer ...

files through CompuServe. Other CompuServe subscribers could purchase Patterson's software through CompuServe, and CompuServe would collect a 15% fee and pay Patterson the remaining balance. In 1993, CompuServe started marketing a software product similar to that of Patterson's with similar markings and names. In December 1993, Patterson informed CompuServe that he believed CompuServe's marketing of their product infringed his

common law In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omnipresen ...

trademarks. While CompuServe changed its program's name, Patterson continued to complain. When Patterson demanded $100,000 to settle his claim, CompuServe filed a lawsuit seeking declaratory judgment in Ohio District Court.

Legal proceedings

Trial court proceedings

Patterson responded to CompuServe's suit with a

motion to dismiss In United States law, a motion is a procedural device to bring a limited, contested issue before a court for decision. It is a request to the judge (or judges) to make a decision about the case. Motions may be made at any point in administrativ ...

, arguing that the Ohio court lacked personal jurisdiction. He supported this claim with an affidavit, stating that he had never visited Ohio, along with other facts that weighed against granting personal jurisdiction. CompuServe filed a memorandum in opposition along with supporting exhibits. Based on these filings, the District Court granted Patterson's motion to dismiss for lack of personal jurisdiction, in what Judge Bailey would later deem "a thorough and thoughtful opinion." The trial court felt that the connection between Patterson in Texas and CompuServe in Ohio was "too tenuous to support the exercise of personal jurisdiction." CompuServe appealed.

Appellate court proceedings

Patterson filed no brief on appeal and did not appear at oral argument for the appellate hearing. The court noted that individually, Patterson's sale of software in Ohio and entering into a contract with an Ohio company would be questionable grounds for exercising personal jurisdiction. The court then considered whether Ohio had the right to exercise jurisdiction under Ohio's

long-arm statute Long-arm jurisdiction is the ability of local courts to exercise jurisdiction over foreign ("foreign" meaning out of jurisdiction, whether a state, province, or nation) defendants, whether on a statutory basis or through a court's inherent jurisdic ...

, which uses a three-pronged test to determine if it is reasonable to exercise personal jurisdiction: # The defendant must have purposefully availed himself of the privilege of acting in the state # The legal action must have arisen from defendant's activities there # The acts of the defendant or consequences of his actions must have a sufficiently substantial connection to the state The court ruled that all three prongs were satisfied, since Patterson had contracted with CompuServe and repeatedly sent his computer software to CompuServe in Ohio and advertised through CompuServe's network. As such, they reversed the district court's dismissal and remanded for further proceedings.

Impact

The applicability of jurisdiction in cases involving activities over the Internet is interesting because an out-of-state resident can very easily cause an impact in the state in question, leading to questions of how large the impact need be before exercising jurisdiction is constitutional.Tyler, David D. ''Personal Jurisdiction via E-Mail: Has Personal Jurisdiction Changed in the Wake of CompuServe, Inc. v. Patterson?'' 51 Ark. L. Rev. 429 (1998) This was one of the first court cases that dealt with personal jurisdiction as it applied to use of the Internet."Important Court Cases Dealing with Internet and Censorship" retrieved fro

/ref> As a result, it set an influential precedent which later cases would reference in their arguments, including

Zippo Manufacturing Co. v. Zippo Dot Com, Inc. ''Zippo Manufacturing Co. v. Zippo Dot Com, Inc.'', 952 F. Supp. 1119 (W.D. Pa. 1997), was a decision by the United States District Court for the Western District of Pennsylvania finding that a court has personal jurisdiction over a website orig ...

George B. Delta, Jeffrey H. Matsuura. ''Law of the Internet, Volume 2.'' §3.03 /ref>

References