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Virtuality v. Bata Limited

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Citation Edit

Virtuality L.L.C. v. Bata Limited, 138 F.Supp.2d 677 (D. Md. 2001) (full-text).

Factual Background Edit

Defendant, a Canadian company, sold footwear throughout the world under various POWER-formative trademarks and operated a website at the domain name "powerfootwear.com." Plaintiff, a Michigan company working on an Internet search-engine business, registered the domain names "powershoes.com," "powershoes.net," and powershoes.org" with a registrar based in Baltimore, Maryland.

Defendant filed a UDRP complaint against plaintiff regarding these three domain names in which it submitted to the jurisdiction of the courts in Maryland regarding any challenge to a decision in the UDRP proceeding cancelling or transferring the domain names. On September 20, 2000, the UDRP panel rendered its decision in favor of defendant and ordered transfer of the domain names to defendant.

Trial Court Proceedings Edit

Plaintiff filed this suit to prevent the transfer of the names, seeking a declaration that its use of the "powershoes"-formative domain names was not likely to cause confusion with defendant's federally registered POWER-formative marks. In addition to this federal claim, plaintiff asserted various state-law claims, namely, defamation, slander, conversion by fraud, reverse passing off, fraud, unfair competition, and interference with prospective economic advantage.

Defendant filed a motion to dismiss the complaint on the ground that it was not subject to personal jurisdiction in Maryland regarding any of plaintiff's claims. The court denied defendant's motion regarding plaintiff's federal claim but granted it regarding plaintiff's state-law claims. The court concluded that it had jurisdiction over the federal trademark claim because defendant "elected during the administrative proceeding to submit to a Maryland court to hear and adjudicate [plaintiff's] challenge to the decision made in that proceeding." Jurisdiction was not proper, however, regarding plaintiff's state-law claims because of defendant's lack of contacts with Maryland.

Although defendant owned United States trademark registrations relating to its POWER-branded footwear, it did not sell such products in Maryland. And although defendant's website reached Maryland Internet users, it was clearly passive as the site did not sell any products or feature any other commercial activity. Finally, the court rejected plaintiff's argument that defendant's filing of its UDRP complaint constituted a consent to jurisdiction in Maryland for purposes of all of plaintiff's claims. According to the court, defendant's consent to the court's jurisdiction for the limited purpose of reviewing the UDRP decision could not serve as a basis for the court's exercising general jurisdiction over plaintiff's state-law claims. In short, "[defendant's] consent to jurisdiction related solely to the dispute between it and [plaintiff] as to the ownership of the domain names at issue."

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