Insightful Solutions Company is a Wisconsin-based company that sells designer eye glassesover the internet to customers in the United States,Canada and Europe.During the current year, Insightful Solutions records $10,000,000 in revenue.Minnesota customers account for $10,000 of the total revenue recorded during the current year. A significant portion of the company's sales are to customers residing in Canada.On average, each customer purchases $1,000 of goods from the web site. However, the average Minnesota customer spends $100.

To attract customers, Insightful Solutions advertises over the internet and in local newspapers. The majority of the company's newspaper ads are in Wisconsinnewspapers.Due to its unique web site, Insightful Solutionshas an excellent reputation for customer satisfaction. The company's web site allows customers to photograph their faces wearing the eye glassessold on the online site. The web site also offers to ship eye glassesanywhere in the U.S. at no additional cost and allowscustomers to return defective eye glasseswithin a 30-day period.

Unhappy with her contact lenses, Sandy Sorenson decides to order glasses using Insightful's web site after reading an online ad about Insightful Solutions. Sandy, a Minnesota resident, uses the interactive feature of the web site to view the glasses on her face. After spending 30 minutes"trying" on glasses with the web site, Sandy places an online order with Insightful Solutions for a $100 pair of eye glasses.

The eye glasses arrive at Sandy's home in Minnesota the following week. Later that week, Sandy returns the purchased eye glasses to Insightful Solutions and requests a refund, claiming that the eye glasses are defective since the glasses irritate her face. Insightful Solutionsrefuses to refund Sandy's money.Sandy sues Insightful Solutions in a Minnesota state court. Insightful Solutions files a motion to dismiss for lack of personal jurisdiction.

Gucci America. Inc v. Wang Huoqing case

Background and facts

Wang Huoqing, a resident of the People's Republic of China, operates numerous Web Sites. When Gucci discovered that Wang Huoging's Web sites offered for dale counterfeit goods- products bearing Gucci's trademarks but not genuine Gucci articles- it hired a private investigator in San Jose, California, to buy goods from the Web site. The investigator purchased a wallet that was labeled Gucci but was counterfeit.

Gucci filed a trademark infringement lawsuit against Wang Huoqing in a federal district court in California seeking damages and an injunction to prevent further infringement. Wang Huoqing was notified by the lawsuit via e-mail but did not appear in court. Gucci asked the court to enter a default judgement. First, however, the court had to determine whether it had person jurisdiction over Wang Huoqing based on the internet sales.

In the Language of the Court

*** Under California's long-arm statute, federal courts in California may exercise jurisdiction to the extent permitted by the Due Process Clause of the Constitution. The Due Process Clause allows federal courts to exercise jurisdiction where***the defendant has had sufficient minimal contact with the forum to subject him or her to the specific jurisdiction of the court. The courts apply a three-part test to determine whether specific jurisdiction exists:

(1)The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposely avails himself of the privilege of conducting activities in the forum,thereby invoking the benefits and protections of its laws;(2) the claim must be one which arises out of or results from the defendants forum-related activities and (3)exercise of jurisdiction must be reasonable.

****

In order to satisfy the first prong of the test for specific jurisdiction, a defendant must have either purposefully availed itself of the privileged of conducting business activities within the forum or purposefully directed activities toward the forum. Purposefully availment typically consists of action taking place in the forum the invokes the benefits and protections of the laws of the forum, such as executing or performing a contract within the forum. To show purposeful availment, a plaintif must show that the defendant "engag[ed] in some form of affirmative conduct allowing or promoting the transaction of business within the forum state."

"In the Internet context, the Ninth Circuit utilizes a sliding scale analysis under which 'passive' websites do not create sufficient contacts to establish purposeful availment,whereas interactive websites may create sufficient contacts, depending on how interactive the website it."***Personal jurisdiction is appropriate where an entity is conductig business over the Internest and has to offer for sale and sold its products to forum[California] residents.

Here the allegations and evidence presented b y the Plaintiffs in support if the Motion are sufficient to the purposeful availment on the part of the Defendant Wang Huoqing. Plaintiffs have alleged the Defendant operates "fully interactive Internet websites operating under the Subject Domain Names" and have presented evidence in the form of copies of web pages showing that the websites are, in fact, interactive

Please answer the following:

1. Can the Minnesota court exercise personal jurisdiction over Insightful Solutions Company? Why or why not? Fully explain your answer using the IRAC approach (state the issue, rule of law, apply the rule(s) to the facts in the case and state your conclusion). Use the Gucci America, Inc. v. Wang Huoqing case on pages 32-33 of the text as precedent. Compare and contrast the case in this assignment with the Gucci America case in deciding whether the instant case can be heard in a Minnesota court.
2. Suggest one fact that is not stated in the case (or alter one stated fact) and explain why your suggested fact/altered fact would be relevant in deciding whether the state of Minnesota should be able to exercise personal jurisdiction over Insightful Solutions Company.Be creative!
3. Should Insightful Solutions haveincluded amandatory arbitration clause on its web site that required Sandy to agree to arbitrate all disputes? Why or why not?