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Court to Rehear Key Website Jurisdiction Case

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Apr 29, 2004 11:46 AM PDT    Text size: 
SAN FRANCISCO – An appeals court, deciding to toss a previous ruling, will rehear a case that spelled out where website operators can be sued.

The 9th U.S. Circuit Court of Appeals decided Thursday to rehear the case of Gator.com Corp. vs. L.L. Bean, No. 02-15035, a decision that held that L.L. Bean’s Internet, catalog, and mail-order retail operations are sufficient to support jurisdiction in California, even though the company has no physical presence in the state.

The September 2003 ruling by three judges was thrown out without comment and will be reheard by the full panel.

The court held that L.L. Bean’s marketing and retail activities, combined with the “virtual store” found on its website, created a “consistent and substantial pattern of business relations” in California, sufficient to confer personal jurisdiction over the Maine-based company.

Gator.com, an advertising company whose program monitors Internet users’ web surfing and displays pop-up windows when users visit certain websites, sued L.L. Bean, saying its pop-up windows did not infringe or dilute L.L. Bean’s trademark rights.

When users visited L.L. Bean’s website, Gator’s program displayed a pop-up. L.L. Bean sent Gator a cease-and-desist letter in March 2001 demanding that Gator stop its program from displaying pop-up windows on L.L. Bean’s website offering coupons for Eddie Bauer, an L.L. Bean competitor.

Gator, which is now Claria Corp. of Redwood City, Calif., sued for declaratory judgment that its pop-up windows did not infringe L.L. Bean’s trademark rights.

The U.S. District Court granted L.L. Bean’s motion to dismiss for lack of jurisdiction.

The 9th Circuit reversed the decision in its September ruling that found that L.L. Bean had “substantial… [or] continuous and systematic” contacts with California by virtue of its “mak[ing] sales, solicit[ing] business in the state, and serv[ing] the state’s markets” through its Internet and catalog businesses.

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