It used to be that if someone in Nebraska used your trademark on the Internet, you had to go to Nebraska courts for relief. It used to be that if you sold a product on the internet, you could only be sued in the state where you sold it from not the state you sold it to. It used to be that if a customer in Alaska posted a false statement about your franchise brand, you had to file a claim in Alaska for injunction. The recent trend in court cases is changing all that.
In the 1st case Hinners v. Robey, Defendant Robey, a Missouri resident, sold a vehicle on ebay to Hinner, a Kentucky resident. When Hinner attempted to return the vehicle to Robey because of an unreported vehicle defect, Hinner was unresponsive. Hinner sued Robey in his home state of Kentucky. Historically, the case would have been dismissed. A court in Kentucky has no authority over a Missouri resident. But the court in this case said ‘Yes’ we have authority over a Missouri resident because the Missouri resident contracted to sell a vehicle to a Kentucky resident and that Kentucky resident was injured here in Kentucky.
In the 2nd case Kauffman Racing Equipment, LLC v. Roberts, the defendant Roberts, a Virginia resident, bought an engine block from Plaintiff Kauffman Racing Equipment (KRE), an Ohio limited liability company. Roberts attempted to return the engine block to KRE saying the engine block was defective. KRE refused to take the engine block back saying that Roberts substantially altered the engine block. Roberts got mad. Roberts posted a rash of negative comments on various racing websites. At least 5 Ohio residents saw Roberts’ comments. KRE sued Roberts in Ohio for defamation. Roberts objected saying, ‘I am a Virginia resident and therefore you can’t sue me in Ohio.` The Ohio court disagreed. Roberts intended to and did hurt KRE in Ohio; thereby Roberts must go to court in Ohio.
In the 3rd and final case Penguin Group (USA) Inc. v. American Buddha, Penguin Group (USA), Inc. (Penguin) is a New York based publisher. American Buddha (Buddha) published, without Penguin’s consent, some of Penguin’s books on its website in Arizona. Penguin sued Buddha in New York. Buddha said, ‘ You have to sue us in Arizona.` The New York court disagreed. Penguin is located in New York; Penguin is the copyright holder of the books that were published. Penguin was injured in New York; thereby the case can be heard in New York.
Lesson from the Court: The long of the arm of the courts is getting even longer on the internet.