e-Commerce Docket Sheet

The doctrine of exhaustion of patent rights does not render unenforceable a true conditional license containing a single-use restriction imposed by a toner cartridge manufacturer on its patented toner cartridges. Arizona Cartridge Remanufacturers Association, Inc. v. Lexmark International, Inc. (N.D. Cal. Sep. 30, 2003). The plaintiff, a toner remanufacturer trade group, claimed the restrictions were an unenforceable post-sale condition barred by the doctrine of patent exhaustion. The court disagreed, concluding that the license was a valid conditional license because the consumers had notice of the post-sale conditions and had an opportunity to reject them, and the toner cartridges were offered at a special price in exchange for the conditions.

Personal e-mails are not considered public records by virtue of their placement on a government owned computer system. State of Florida v. City of Clearwater, No. SC02-1694 (Fla. Sept. 11, 2003). The Supreme Court of Florida affirmed the lower court's judgment that a city government did not have to turn copies of e-mail correspondence between two city employees conducted over the city's computer network over to a newspaper. The court held that personal e-mails were not “made or received in connection with official business,” and thus fell outside the scope of Florida's public records law. The city's “Computer Resources Use Policy,” which expressly disclaimed a user's expectation of privacy, could not be construed as expanding the scope of the public records statute. Further, the court distinguished automatically created e-mail headers from “purposely compiled and maintained” mail logs and phone records, which arguably qualified as public records.

For purposes of determining an insurer's contractual obligation to defend, a trademark complaint based on the defendant's allegedly improper domain name registration and use alleges an “advertising injury” as defined in the policy. State Auto Property and Cas. Ins. Co v. Traveler Indem. Co. of Amer., No. 02-2069 (4th Cir. Sept. 4, 2003). Under the policy, advertising injury included the “misappropriation of advertising ideas or style of doing business.” The policy provided coverage only for advertising injuries caused by offenses committed in the course of advertising the insured's own goods, products or services. Reversing the District Court, the Fourth Circuit held that the cybersquatting complaint did in fact allege an advertising injury because, inter alia, a trademark was an advertising idea, and much of the advertising on the insured's Web site was for its own goods and services.

The “virtually limitless” number of potential customers on the Internet supports a court's imposition of a large damages award against an Internet vendor of counterfeit goods. Tiffany (NJ) Inc. v. Luban, No. 03 Civ. 2824 (S.D.N.Y. Sept. 11, 2003). The District Court awarded the plaintiff $550,000 in damages under the Lanham Act. The defendant was a Web site that sold 28 identified counterfeit items infringing upon at least four of the plaintiff's trademarks. Although the court could not determine actual sales made by the Web site, it noted that “by selling over the Internet, [defendant] had access to a 'virtually limitless number of customers,'” and that sales under such a circumstance were presumptively high.

Internet consumers are likely more educated and affluent than other consumers, and more likely to be able to differentiate between two companies that use similar marks. Commerce Bancorp, Inc. v. Bankatlantic, Civ. No. 02-4774 (D.N.J. Sept. 25, 2003). The District Court granted summary judgment dismissing the plaintiff's Lanham Act claims relating to its slogan, “America's Most Convenient Bank.” Assessing the likelihood of confusion between this slogan and the defendant's slogan, “Florida's Most Convenient Bank,” the court held that Internet banking consumers ' including many of the plaintiff's customers ' exercised extreme care in choosing their banking services and would likely differentiate between the two companies. The court credited the defendant's expert's conclusions that costly high-speed Internet access was important for conducting banking online, and that Internet banking customers “tended to be comfortable if not enamored with technology.”

Even though a domain name has a descriptive connotation, it may be used to divert Internet users seeking another party's Web site. Mentor ADI Recruitment Ltd v. Teaching Driving Ltd., Case No. D2003-0654 (WIPO Sept. 29, 2003). The WIPO Panelist transferred the domain name “letsdrive.com” to the Complainant, a driving school that owned a trademark based on the words “Let's Drive.” Although the Panelist noted, in its “bad faith” analysis, that the words had a descriptive connotation, it also found that the URL was “unlikely to be keyed in except by a person seeking information about the Complainant.” Thus, it was likely that some users were confused into believing the Web site was connected to the complainant, and respondent was not entitled to divert Internet users by means of such confusion.

An out-of-state retailer that operates a “sophisticated virtual store” in the forum state is subject to general personal jurisdiction within the forum state. Gator.com Corp. v. L.L. Bean, Inc., No. 02-15035 (9th Cir. Sept. 2, 2003). The Ninth Circuit noted that there was a high standard governing whether general jurisdiction may be asserted over a company that does business on the Internet, but that the standard was met in this case. The retailer operated a “highly interactive and very extensive” Web site, driven by a “sophisticated” sales effort involving direct e-mail solicitations to forum residents. Large numbers of forum residents regularly made purchases and interacted with sales representatives through the Web site. The court reversed the District Court's dismissal of the case for lack of personal jurisdiction.

Personal Jurisdiction over Web Operator Supported by Four Sales to Forum Residents