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The Ninth Circuit Court of Appeals held this week that an Arkansas retailer is subject to personal jurisdiction in Washington state when its only relevant contact with the state is a claim that it willfully violated a copyright held by a Washington corporation.
Move over, International Shoe, because Washington Shoe is about to get up in your personal jurisdiction.
Washington Shoe, as its name suggests, is a Washington corporation that manufactures shoes. A-Z Sporting Goods is an Arkansas corporation that operates a single retail store in Alma, Arkansas, where it sells goods related to hunting, fishing, and outdoor activities. A-Z doesn't offer e-commerce, although a different A-Z entity, with some common management, does sell some products over eBay.
Between 2007 and 2009, A-Z purchased a number of items from Washington Shoe. Washington Shoe salesman Jesse James regularly visited the A-Z store in Arkansas as part of the companies' business dealings. During one of his visits to A-Z, James noticed that "Ditsy Dots" and "Spider" boots -- two of Washington Shoe's popular children's rain boots -- were on display, but James knew that A-Z had never purchased these particular styles from him. James bought a pair of the boots and sent them to Washington Shoe, which confirmed that they were infringing copies.
A-Z admits that the boots in dispute were purchased from China and not from Washington Shoe, but claims that the boots had no name on them or other indication that they were subject to copyright.
When Washington Shoe became huffy about the boots, A-Z removed the offending footwear from its store, but sold its remaining inventory to a thrift store.
Washington Shoe filed a complaint in a federal court in Washington, alleging copyright infringement, trade dress infringement, and unfair competition. A-Z moved to dismiss for lack of personal jurisdiction or, in the alternative, on forum non conveniens grounds. After initial briefing, the district court allowed jurisdictional discovery to test A-Z's claim that it "has never sold any goods, of any kind, to any person, business or entity in the State of Washington."
The district court granted A-Z's motion to dismiss. This week, the Ninth Circuit Court of Appeals reversed that decision.
Applying Washington's long-arm statute, which extends jurisdiction over a defendant to the fullest extent permitted by the Due Process Clause, the three-judge panel held that A-Z was subject to personal jurisdiction in Washington even though its only relevant contact with the state was a copyright violation.
Washington Shoe made a prima facie showing that A-Z purposefully directed its activities at the State of Washington because it engaged in intentional acts expressly aimed at the state. Thus the appellate court concluded that A-Z's alleged infringement of the shoe copyright -- and its knowledge of both the existence of the copyright and the forum of the copyright holder -- was sufficient "individual targeting" to satisfy the "express aiming" requirement of personal jurisdiction.