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Perhaps representing a new backlash against the trend of cases finding in favor of jurisdiction based on Internet transactions, the U.S. District Court for the District of Maryland has just ruled, in the case Robbins v. Yutopian Enterprises, that it does not have jurisdiction over the case, even though there were numerous Internet transactions by Maryland residents. THE DISPUTE RELATING TO THE GO DATABASE At the core of the case is the “Go Database,” aka “GoBase,” created by Peter Danzeglocke. The database is a computer software package that allows users to locate information relating to the game of Go. Go is described as an “ancient board game played on a 19 x 19 grid.” Yutopian is based in Santa Monica, Calif., and operates an Internet Web site at www.yutopian.com. This Web site provides information about and sells information relating to Asian culture. Yutopian and Danzeglocke entered into a license agreement whereby Yutopian was granted “the right to duplicate the GoBase software for sale. …” Danzeglocke was to receive 25 percent of sales as his royalty. Charles Robinson is a resident of Pennsylvania, and he is an assignee of Danzeglocke. In his complaint, Robbins alleged that Yutopian had failed to make required royalty payments and had threatened to continue selling the software past the date of the license agreement. Yutopian was enjoined under a temporary restraining order and a preliminary injunction from engaging in certain conduct. FACTS BEARING ON JURISDICTION Yutopian filed a motion to dismiss the case, arguing that there were insufficient contacts with Maryland for the court to keep the case. However, there were quite a few contacts that at first blush would seem to auger in favor of jurisdiction. Yutopian admitted that it entered into 46 transactions with Maryland residents through its Web site and a toll-free number it had maintained over the course of a 10 1/2-month period. Plus, a Maryland resident submitted an affidavit in which he stated that he purchased between $500 and $1,000 of “Go products” each year for the past five years. The same person also declared that he regularly received flyers from Yutopian, has been subject to Yutopian advertising in the “American Go Journal,” and has received about five phone solicitations from Yutopian. THE COURT PUNTS Notwithstanding these facts and the contacts between Yutopian and Maryland, the court deemed these insufficient to confer jurisdiction. The court found that Robbins did not establish “specific” or “general” jurisdiction. Specific jurisdiction is founded upon the relationship of “the defendant, the forum, and the litigation.” General jurisdiction may be asserted over a defendant “whose activities in the forum state have been ‘continuous and systematic.’” In terms of specific jurisdiction, the court found that Robbins had “not alleged or proferred evidence regarding any specific transactions with a Maryland resident upon which this court could found jurisdiction.” The court came to this conclusion because there was insufficient evidence that the “software at issue” was involved in any of the 46 transactions in Maryland. Still, one would think that 46 transactions in the state might be sufficient to allow the court to maintain jurisdiction over Yutopian. As to general jurisdiction, the court held that Yutopian’s “contacts with Maryland are insufficient to conclude that Yutopian is ‘essentially domiciled’ in Maryland.” While that is true, it appeared that there were a number of contacts with the state over a five-year period. Finally, Robbins argued that the court shoud retain jurisdiction because of the presence of Yutopian on the Internet. Robbins argued that because Yutopian’s Web site is “active,” allowing for transactions with customers in Maryland, jurisdiction in Maryland is appropriate. While the court agreed with Robbins that Yutopian’s Web site is active and that other cases have found in favor of jurisdiction with respect to such Web sites, the court still decided to punt because “forty-six transactions with Maryland residents over a 10 1/2 [month] period are not enough to establish general jurisdiction over [Yutopian].” Having found that jurisdiction was lacking, rather than simply dismiss the case, the court transferred the case to a federal court in California, “the only district in which the court is confident that jurisdiction may be had over Yutopian.” WRAP UP It is true that there should be little difficulty in the federal court in California maintaining jurisdiction over Yutopian, a California company. But still, a plaintiff is entitled to certain appropriate discretion as to where to bring legal action. Here, Robbins chose Maryland, and it would seem that Yutopian reached out and touched Maryland sufficiently for the case to proceed there. Indeed, one of the dangers of transacting business on the Internet is that businesses and people open themselves up to the laws and courts of many locales. With all good comes some bad. While the Internet provides a potential avenue for greater revenue and profit, it also brings with it the prospect of increased legal action. Eric J. Sinrod is a partner in the San Francisco office of Duane Morris, where he focuses on technology and litigation matters. His Web site is sinrodlaw.com and his firm’s site is Duane Morris.Mr. Sinrod may be reached by e-mail at [email protected]

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