Inset Systems, Inc. v. Instruction Set, Inc.

• Decision Date: 17 April 1996
• Docket Number: Civil No. 3:95CV-01314 (AVC).
• Citation: 937 F. Supp. 161
• Court: U.S. District Court — District of Connecticut
• Parties: INSET SYSTEMS, INC., Plaintiff, v. INSTRUCTION SET, INC., Defendant.

937 F. Supp. 161

INSET SYSTEMS, INC., Plaintiff, v. INSTRUCTION SET, INC., Defendant.

Civil No. 3:95CV-01314 (AVC).

United States District Court, D. Connecticut.

April 17, 1996.

Anthony B. Corleto, Danbury, CT, for plaintiff.

Michael T. McCormack, Howd & Ludorf, Hartford, CT, Matthew L. Donohue, Holyoke, MA, for defendant.

MEMORANDUM OF DECISION ON MOTION TO DISMISS

COVELLO, District Judge.

This is an action for damages and injunctive relief based upon an alleged infringement of a trademark. It is brought pursuant to the Federal Trademark Act, 15 U.S.C. §§ 1051-1127. In addition, the complaint alleges violations of various state common law tenets concerning unfair competition and trademark infringement, as well as violations of C.G.S. § 35-11i(c) concerning dilution and injury to business reputation, and C.G.S., ch. 735a, §§ 42-110a et seq. of the Connecticut Unfair Trade Practices Act.

The defendant, Instruction Set, Inc., now moves pursuant to Rules 12(b)(2) and 12(b)(3) of the Federal Rules of Civil Procedure to dismiss the complaint in its entirety based upon a lack of personal jurisdiction over the defendant and for the further reason that venue is set in the wrong forum¹. The issues presented are: 1) whether the Connecticut long-arm statute, C.G.S. § 33-411(c) confers jurisdiction over the defendant, Instruction Set, Inc.; 2) whether the statute's jurisdictional reach as applied to Instruction Set, Inc. meets the "minimum contacts" required to satisfy constitutional due process; 3) whether venue is proper. The court concludes: 1) that the plaintiff has established solicitation by the defendant, Instruction Set, Inc., within the meaning of Connecticut long-arm statute, C.G.S. § 33-411(c)(2), so that long-arm jurisdiction is proper; 2) that the plaintiff has established the minimum contacts necessary to comport with due process; 3) that venue is proper according to 28 U.S.C. 1391(b). Accordingly, the motion to dismiss is denied.

FACTS

An examination of the complaint, memorandums, and accompanying affidavit reveals the following: The plaintiff, Inset Systems, Inc. ("Inset"), is a corporation organized under the laws of the state of Connecticut, with its office and principal place of business in Brookfield, Connecticut. Inset develops and markets computer software and other related services throughout the world. The defendant, Instruction Set, Inc. ("ISI"), is a corporation organized under the laws of the state of Massachusetts, with its office and principal place of business in Natick, Massachusetts. ISI provides computer technology and support to thousands of organizations throughout the world. ISI does not have any employees, nor offices within Connecticut, and it does not conduct business in Connecticut on a regular basis.

On August 23, 1985, Inset filed for registration as the owner of the federal trademark INSET. On October 21, 1986, Inset received registration number 1,414,031.

Thereafter, ISI obtained "INSET.COM" as its Internet domain address. ISI uses this domain address to advertise its goods and services.

The Internet is a global communications network linked principally by modems which transmit electronic data over telephone lines. Worldwide there are approximately 20 to 30 million users of the Internet. Domain addresses are similar to street addresses, in that it is through this domain address that Internet users find one another. A domain address consists of three parts: the first part identifies the part of the Internet desired such as world wide web (www), the second part is usually the name of the company or other identifying words, and the third part identifies the type of institution such as government (.gov) or commercial (.com), etc. If a company uses a domain which is identical to the name or trademark of a company, an Internet user may inadvertently access an unintended company. Thereafter, the Internet user may not realize that the advertisement is actually from an unintended company, or the Internet user may erroneously assume that the source of information is the intended company. As a result, confusion in the marketplace could develop.

Unlike television and radio, in which advertisements are broadcast at certain times only, or newspapers in which advertisements are often disposed of quickly, advertisements over the Internet are available to Internet users continually, at the stroke of a few keys of a computer. At this time there are at least 10,000 Internet connected computer users in the state of Connecticut.

Inset first learned of ISI's Internet domain address in March, 1995 when attempting to obtain the same Internet domain address. ISI also uses the telephone number "1-800-US-INSET" to further advertise its goods and services. Inset did not authorize ISI's use of its trademark, "INSET", in any capacity. ISI continues to use "INSET" in relation to both its Internet domain address and its toll-free number. On June 30, 1995, the plaintiff filed the within action.

STANDARD

"On a Federal Rules of Civil Procedure, Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of showing with `actual proof' that the court has personal jurisdiction over the defendant." Ensign-Bickford Co. v. ICI Explosives USA Inc., 817 F.Supp. 1018, 1026 (D.Conn.1993); See also Whelen Eng'g Co., Inc. v. Tomar Elecs., 672 F.Supp. 659, 661-662 (D.Conn.1987). "To survive the motion, the plaintiff must make a `prima facie showing' through affidavits or other evidence that the defendant's conduct was sufficient for the court to exercise personal jurisdiction." Ensign-Bickford Co., 817 F.Supp. at 1026; See also Whelen Eng'g Co., 672 F.Supp. at 661-662. "A defendant's conduct is sufficient for the exercise of personal jurisdiction if (1) the conduct satisfies the requirements of the Connecticut long-arm statute, C.G.S. § 33-411(c) ... and (2) the conduct satisfies the `minimum contacts' requirement of the Due Process Clause of the Fourteenth Amendment." Ensign-Bickford Co., 817 F.Supp. 1018, 1026 (D.Conn.1993); See also World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980); International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945).

DISCUSSION

1. Connecticut Long-Arm Statute

ISI, the defendant, in the within motion does not specifically address whether the Connecticut long-arm statute, C.G.S. § 33-411(c)² has been satisfied in the present instance.

Inset, the plaintiff, on the other hand, argues that the requirement of the Connecticut long-arm statute, C.G.S. § 33-411(c)(2) has been satisfied because ISI has repeatedly solicited business within Connecticut via its Internet advertisement and the availability of its toll-free number.

The Connecticut long-arm statute, C.G.S. § 33-411(c)(2) states that "Every foreign corporation shall be subject to suit in this state, by a resident of this state ... on any cause of action arising ... (2) out of any business solicited in this state ... if the corporation has repeatedly so solicited business, whether the orders or offers relating thereto were accepted within or without the state ..."

In McFaddin v. National Executive Search, Inc., 354 F.Supp. 1166, 1169 (D.Conn. 1973), the court held that "the placing of at least six franchise ads over a six-month period in a newspaper whose circulation clearly includes Connecticut (citation omitted) demonstrates a sufficiently repetitious pattern to satisfy subsection (c)(2)" of the Connecticut long-arm statute, C.G.S. § 33-411. See also Whelen Eng'g Co., 672 F.Supp. 659 (advertising in 30 publications known to have been circulated in Connecticut over the course of a year and a half, plus delivery of 30 allegedly infringing catalogs to Connecticut residents, plus two sales of the allegedly infringing products to Connecticut residents, which may or may not have been due to the solicitation activities, satisfies C.G.S. § 33-411(c)(2)).

Similarly, since March, 1995, ISI has been continuously advertising over the Internet, which includes at least 10,000 access sites in Connecticut. Further, unlike hard-copy advertisements noted in the above two cases, which are often quickly disposed of and reach a limited number of potential consumers, Internet advertisements are in electronic printed form so that they can be accessed again and again by many more potential consumers.

The court concludes that advertising via the Internet is solicitation of a sufficient repetitive nature to satisfy subsection (c)(2) of the Connecticut long-arm statute, C.G.S. § 33-411, thereby conferring Connecticut's long-arm jurisdiction upon ISI.

2. Minimum Contacts

The defendant claims that personal jurisdiction is lacking here because it does not have sufficient minimum contacts within Connecticut to satisfy constitutional precepts concerning due process. Minimum contacts are lacking, according to the defendant, because it is a Massachusetts corporation with its office and principal place of business in Natick, Massachusetts, "it does not conduct business in Connecticut on a regular basis," and it "does not maintain an office in Connecticut, nor does it have a sales force or employees in the State."

The plaintiff responds that minimum contacts comporting with due process have been satisfied because the defendant has used the Internet, as well as its toll-free number to try to conduct business within the state of Connecticut.

"Due Process limitations require that a nonresident corporate defendant have `minimum contacts' with the forum state such that it would reasonably anticipate being haled into court there. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980). Further, maintenance of the suit in the forum state cannot offend traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310, 316 66 S.Ct. 154, 158, 90 L.Ed....