A US court has ruled that, while a party may consent to the court’s
jurisdiction in a challenge to an arbitration decision on a domain
name dispute, this does not necessarily mean it has consented to
jurisdiction for other claims.
The ruling comes as a second victory, at least in part, for Bata
Limited, a large Canadian manufacturer, which previously won domain
names from an alleged cybersquatter. That victory was before
eResolution, a Canadian dispute resolution provider that operates
under the same rules as the better-known World Intellectual
Property Organisation (WIPO). The losing party, Virtuality, went to
a US court in Maryland in the hope of reversing the decision and
winning damages from Bata, alleging reverse hijacking of its domain
names and defamation for labelling it a cybersquatter.
Bata asked the District Court to dismiss the claim by
Virtuality, which had owned the domain name PowerShoes.com and
similar others until the eResolution decision. Bata, which won the
names because it showed it had trade marks for “power” footwear,
argued that, being Canadian and with no Maryland activities, it was
not subject to jurisdiction in a Maryland court for either the
federal trade mark law claim to recover the domain name or the
compensatory claim under Maryland law.
The court found that it did in fact have jurisdiction to hear
the case over the federal trade mark claim because, when the case
was taken by Bata to eResolution under the rules of ICANN, Bata
consented to the jurisdiction of a court selected by it for
consideration of any challenge to a decision of eResolution. During
that proceeding, Bata consented to a hearing before a Maryland
court.
However, the court found that jurisdiction of the claims under
Maryland law did not necessarily follow. Because Bata lacked
“extensive, continuous and systematic” contacts with Maryland, the
court had no jurisdiction to hear these claims. Virtuality argued
that, because Bata ran a web site at Bata.com, the site constituted
a “persistent course of conduct in the state.” The court observed
that the web site is passive, merely positing information and not
selling products on-line. The court added,
"Clearly, Bata's consent to the jurisdiction
of this Court for the limited purpose of reviewing the Canadian
administrative decision cannot serve as the basis for the Court's
exercise of general jurisdiction in Maryland as to other claims
asserted by Virtuality."
