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Plixer International, Inc. v. Scrutinizer GmbH

United States Court of Appeals for the First Circuit · Civil Procedure

Civil ProcedurePersonal JurisdictionRule 4(k)(2)Specific JurisdictionInternet ContactsRule 4(k)(2)Fifth Amendment due processminimum contacts

Facts

Scrutinizer is a German corporation that provides cloud-based software analysis services through a globally accessible, interactive English-language website. Over three-and-a-half years, it knowingly sold its services to 156 U.S. customers in thirty states, generating €165,212.07 in revenue, while maintaining no U.S. office, phone number, agent, advertising, or business travel. Plixer, a Maine corporation owning the U.S. registered mark "Scrutinizer," sued for trademark infringement, alleging that Scrutinizer's use of the same term created confusion. Scrutinizer did not block U.S. users from its site or disclaim any intent to serve them, and after suit began it filed a U.S. trademark application for "Scrutinizer."

Issue

Whether, under Federal Rule of Civil Procedure 4(k)(2), a federal court may constitutionally exercise specific personal jurisdiction over a German corporation based on its nationwide U.S. contacts when the corporation knowingly and repeatedly sold services to U.S. customers through its website. More specifically, the question was whether purposeful availment and reasonableness were satisfied under the Fifth Amendment Due Process Clause.

Rule

Under Rule 4(k)(2), when a federal claim is at issue and the defendant is not subject to any state's general jurisdiction, due process is assessed using the defendant's contacts with the United States as a whole. For specific jurisdiction, the plaintiff must show relatedness, purposeful availment, and reasonableness; purposeful availment may be established where a foreign defendant knowingly and voluntarily uses a globally accessible interactive website to engage in a regular flow or regular course of U.S. sales yielding not insubstantial revenue, even without forum-specific targeting.

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North Peak Analytics Ltd., an Irish company, sells cloud-based code-testing subscriptions through an interactive English-language website. Over four years, it knowingly entered 190 paid subscriptions with customers in 28 U.S. states and earned about $240,000, while maintaining no office, employees, or advertising campaign in the United States.

In a federal trademark suit invoking Rule 4(k)(2), which is the strongest argument that a federal court may constitutionally find purposeful availment?

Explanation. Under the majority opinion, purposeful availment can be shown where a foreign defendant knowingly and voluntarily uses a globally accessible interactive website to engage in a regular flow or regular course of U.S. sales producing not insubstantial revenue. The absence of a U.S. office or targeted advertising is not dispositive, and specific targeting is not the only way to show foreseeability. (Derived from Plixer International, Inc. v. Scrutinizer GmbH (n.d.).)