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Maryland Court Refuses to Take Jurisdiction over Website Offering Software Downloads
In Beyond Systems Inc. v. Realtime Gaming Holding Company LLC, the Court of Appeals of Maryland reviewed and applied the law on whether a court will take jurisdiction over a party based on the availability of its website. The court held that the lower court had correctly refused to assert jurisdiction based on the mere availability of the Defendants' software for download in Maryland. The availability of the software did not meet the test of "continuous and systematic" activities in the State.
The Plaintiff, Beyond Systems Inc. ("BSI") brought the claim pursuant to the Maryland anti-spam law (the Commercial Electronic Mail Act) which provides for a private cause of action for injury arising from receipt of misleading or fraudulent commercial e-mail. The Defendants, Realtime Gaming Holding Company LLC ("Realtime") and its subsidiary, KDMS International LLC ("KDMS") were not incorporated in, and did not have a place of business in, Maryland. Their only link to the jurisdiction was that the online gambling software developed by KDMS could be downloaded via a website. An unrelated party that operated a gaming site, goldenrhino.com, directed players to the site of a KDMS licensee, windowscasino.com, where players could download the KDMS software. The owner of goldenrhino.com also arranged for a bulk e-mail solicitation sent to 2.5 million email addresses. Of those, BSI employees, located in Maryland, received 240 unsolicited e-mails.
The Court reviewed the case law to date in the U.S. dealing with the issue of Internet jurisdiction and particularly the cases that follow the Zippo decision (Zippo Manufacturing Co. v. Zippo.com, Inc., 952F. supp. 1119 (1997)). Zippo applied a sliding scale to Internet jurisdiction and stands for the doctrine that a court should not assert jurisdiction over a matter solely based on the existence of "passive website". On the other hand, a court would consider asserting jurisdiction if the website was an "interactive website", such as one containing solicitations and promotional activities directed at the residents of the jurisdiction in question. The Court concluded in this case that there was not enough evidence of interactivity. The Court also considered whether there was specific jurisdiction based upon the unsolicited e-mails. However, it concluded that there was insufficient evidence to establish that the sender of the e-mails has any legal connection to, or acted as agent for, the Defendants.
For a copy of the decision, visit: