Domain Names Are “Located” Where the Registrar is Located
Office Depo, Inc. v. Zuccarini, 2010 WL 669263, No. 07-16788 (9th Cir. Feb. 26, 2010).

Appellant Zuccarini registered the domain name “officdepo.com” and Office Depot subsequently brought, and won, an action against Zuccarini under the Anticybersquating Consumer Protection Act of 1999 (“ACPA”). Office Depot obtained a judgment against appellant, which it assigned to DSH. DSH sought to levy upon some of the other 248 domains owned by appellant and registered the judgment in the district court for the Northern District of California. The district court denied DSH’s request to compel the domain registrars to transfer Zuccarini’s property, holding that under California Code of Civil Procedure § 699.040, it could not order a third party to turn over property. DSH then moved for the appointment of a receiver who would obtain and sell the domains to satisfy the judgment. The district court granted the motion and Zuccarini appealed.

A district court can obtain quasi in rem jurisdiction over property held within its geographical borders, including intangible property. Under §§ 695.010(a) and 699.710 of the California Code of Civil Procedure, all property of a judgment debtor can be used to satisfy a writ of execution. The applicable state and federal provisions declare that if the domain names are property subject to execution, and if they are located in the Northern District of California, then the district court is an appropriate location to execute judgment on them through the appointment of a receiver.

“[A]ttaching a situs to intangible property is necessarily a legal fiction; therefore, the selection of a situs for intangibles must be context-specific, embodying a ‘common sense appraisal of the requirements of justice and convenience in particular conditions.’” Af-Cap Inc. v. Republic of Congo, 383 F.3d 361 (5th Cir. 2004). While California law does not specifically address the location of domain names, the ACPA states that a trademark owner in a cybersquatting action can proceed in rem against a squatter “in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain is located . . . “ 15 U.S.C. § 1125(d)(2)(A).

The court found the language of the ACPA persuasive and concluded that under California law, domain names are located where the registry is located for the purpose of asserting quasi in rem jurisdiction.

Individuals and businesses can be brought to court in states where they live or operate in commerce (personal jurisdiction). Additionally, both can agree to submit to jurisdiction in a forum state as part of a valid contract. What effect then does a website have? Is a page that can be accessed over the internet a “presence” in every state? Or is launching such a site some implicit agreement to litigate a dispute wherever a plaintiff may reside?

A foreign state can exercise personal jurisdiction over a non-resident for non-forum related activities when the individual or business has engaged in “systematic and continuous” activities in the forum state. This type of jurisdiction is known as general jurisdiction and can be exercised when a company does targeted business in a state, such as by opening a store or sending employees to make sales or perform services. A foreign state can exercise specific jurisdiction, however, when an entity’s activity within the state create sufficient “minimum contacts” with the state. Specific jurisdiction is what is invoked when a state exercises jurisdcition based on a website.

To satisfy the “minimum contacts” requirement, websites are divided into 3 categories:

Commercial Websites – which do a substantial volume of business over the internet, and through which customers in any location can immediately engage in business with the business owner;

Interactive Websites – which merely provide information, will almost never provide sufficient minimum contacts for jurisdiction. Such a website will only provide a basis for jurisdiction if there is an intentional tort such as defamation on the website, and if it is directed at the jurisdiction in question

Passive Websites – which permit the exchange of information between the website owner and visitors, may be subject to jurisdiction, depending on the website’s level of interactivity and commerciality, and the amount of contacts which the website owner has developed with the forum due to the availability of the website within the jurisdiction.

If you’re not sure which category your website falls into it may be time to consult with a local internet and e-commerce attorney.. For a quick and easy answer, the Minnesota District Court poses this question, is your website more of “less sophisticated than a typical teenager’s Facebook page”? If it is less sophisticated then chances are you are not subjecting yourself, or your company, to foreign jurisdiction.

In order to decide if a contract is procedurally unconscionable, courts consider factors such as how the contract was entered into, whether the parties had adequate time to read and understand the contract, and whether important terms in the contract are conspicuous. Under the Uniform Commercial Code of many states, a term in a contract is conspicuous if it is presented in a manner “that a reasonable person against which it is to operate ought to have noticed it.” Courts interpreting this definition have looked to see whether the presentation of contract terms include any means to set it, or its heading, apart from the rest of the content displayed, such as difference in color, size, or font.

Here are some simple steps you can follow to ensure that your contract will be seen by your customers and enforced by the court if a problem does arise:

1. Don’t Hide Your Terms

This step should be fairly obvious but too many website operators choose to bury their terms of service either on unrelated pages that customers are unlikely to visit, or at the very bottom of a page in a small font. No matter what size font you use, if your users have to scroll way down a page to view the terms (and they don\’t have to do the same amount of scrolling to make a purchase) chances are you’re running an unnecessary risk

2. Have Plenty of Links

This step is really a continuation of your efforts NOT to hide the terms of a website. If you have multiple pages required to finalize an order, have a link to the terms on each page, and have each link be visible. This doesn’t mean that your website needs to be plastered with links but one visible link per page should suffice without disrupting the look and feel of your site.

3. Use Blue, Underlined Links

This may sound silly, but courts like consistency and precedent and while you may like the look of a yellow hyperlink for your terms in italic, courts are familiar with standard blue, underlined links. Chances are your customers are familiar with blue links as well so make it as easy as possible for them to recognize the links to your terms by showing them the convention they’re used to.

4. Consider a Clickwrap Agreement

Clickwrap agreements require a user to check a box or push a button signifying that they have seen and read the terms before making a sale. Browsewrap on the other hand, assumes that users have read and agreed to terms because they have been conspicuously posted. While both types of agreements will be enforced under the right conditions, if the organization and structure of your site permits a clickwrap agreement it is always best to have an affirmative action that shows a manifestation of intent to enter into an agreement.

For more information about e-commerce and online contracts visit the WLF Lawyers website: http://www.wlflawyers.com.