American Eyewear, based in Texas, claimed in a Texan court that
Minnesota-based Peepers Inc. infringed its “Peepers” trade mark by
doing web sales of sunglasses from peepers.com. The Minnesota
company tried to argue that the Texas court had no jurisdiction to
hear the case. This argument was rejected by Judge Sidney
Fitzwater, although his reasoning was somewhat controversial.
The web site at peepers.com was selling to residents of Texas on
a daily basis. The US rules on web jurisdiction would normally
provide that, in these circumstances, the Texas court has
jurisdiction over the Minnesota company. However, the Judge
Fitzwater went much further by suggesting how the peepers.com site
might have avoided the jurisdiction of the Texas courts.
Among his suggestions on how to evade the jurisdiction of an
out-of-state court he said the site could invite site visitors to
click an agreement on the site saying that they were bound by
Minnesota courts. He also suggested including a disclaimer that it
would not sell products in Texas. Suggesting that a disclaimer or a
click wrap agreement might be sufficient for such a web site to
avoid jurisdiction in another US state is unusual.
Although ruling that the Minnesota company could not evade the
Texan courts, Judge Fitzwater did not rule on the question of trade
mark infringement because the parties settled out of court. The
agreement subjected the domain name dispute to the discretion of
the World Intellectual Property Organisation (WIPO), one of the
four bodies with ICANN authority to decide dot.com disputes.
In a ruling by WIPO panellist Mark Partridge, the original owner
of peepers.com was allowed to keep the name. Partridge wrote that,
in his opinion, the peepers.com domain name was not registered,
"as a deliberate infringement of [American
Eyewear's] rights. Rather, the selection was based on a long period
of prior use of the name. At the time of [American Eyewear's]
adoption of [the trade mark PEEPERS], any rights [of American
Eyewear] were limited to its local area of Texas. As a good faith
junior user in a remote location, [the owner of the domain name]
did not violate any potential rights of [American Eyewear]."
