Pay Per Clicks Sufficient For Jurisdiction
A Florida-based website that targeted the Chicago market and received payment based on the number of clicks on each hyperlink can be sued in Illinois.
U.S. District Court Judge Charles R. Norgle found Domain Magic, LLC’s website www.chicagoarchitecturefoundation.org misappropriated the website of an Illinois corporation for its own gain. “By purposefully reaching out to the state of Illinois, targeting a company located in Chicago, and profiting from Illinois citizens, Domain Magic is on notice that it may be subject to suit in this state,” the judge wrote.
Domain Magic filed a motion to dismiss claiming that its website was “passive” and therefore the company could not be sued in Illinois.
The suit for trademark infringement was brought by the Chicago Architecture Foundation, which maintains the domain name of www.architecture.org. The court found that when Domain Magic refused to respond to discovery concerning how many visitors to the site were from Illinois, the court could make a “negative inference” that the company did derive income from Illinois by using the website.
The website included hyperlinks to various Chicago businesses that offered bike, bus and boat tours in Chicago. Some of the companies compete directly against the Chicago Architecture Foundation, the court found. Domain Magic received a payment based on the number of clicks on each hyperlink.
“Domain Magic earns revenue each time a user clicks on the links attached to the offending webpage,” the opinion stated. “While users can look up services and tours on the offending website, it is Domain Magic who profits from the numerous ‘hits’ it receives each day by unsuspecting users looking for information about CAF.” The action by Domain Magic “misappropriated an Illinois based company’s trademark, and generated revenue created by Illinois citizens clicking on the offending website’s hyperlinks. The court determines that these activities represent ‘continuous and systematic’ contacts with Illinois.”
Chicago Architecture Foundation v. Domain Magic, LLC, N.D. Illinois No. 07 C 764, issued October 12, 2007.