NATURE OF CORPORATIONS ZIPPO MANUFACTURING CO. v. ZIPPO DOT COM, INC. 952 F. Supp. 1119 (WD. Pa. 199?) Zippo Manufacturing Company is a Pennsylvania corporation that manufactures the well-known \"Zippo \" tobacco lighters. Zippo Dot Com, Inc. is a California corporation with its principal place of business in Sunnyvale, California. Dot Com operates a website and an Internet news service, and has obtained the right to use the domain names \"Zippocom,\" \"zipponet, \" and "zipponewscom" on the Internet. Dot Com 's website contains information about the company, advertisements, and an application for its Internet news service. A customer who wants to the service lls out an online application that asks for a variety of information including the person 's name and address. Payment is made by credit card over the Internet or the telephone. The application is then processed and the subscriber is assigned a password which permits the subscriber to view or download Internet newsgroup messages that are stored on a server in California. Dot Com 's oices, employees and Internet servers are located in California. Dot Com maintains no o'ices, employees or agents in Pennsylvania. Dot Com 's advertising for its service to Pennsylvania residents involves posting information about its service on its website, which is accessible to Pennsylvania residents via the Internet. Defendant has approximately I 40, 000 paying subscribers worldwide. Approximately two percent(3,000) of those subscribers are Pennsylvania residents. Ihese subscribers have contracted to receive Dot Com 's service by visiting its website and lling out the application. Additionally, Dot Com has entered into agreements with seven Internet access providers in Pennsylvania to permit their subscribers to access Dot Com 's news service. Zippoled suit in a Pennsylvania federal district court against Dot Com. Zippo asserted that Dot Com 's use of the word "Zippo" in its domain names violated Zippo's trademark rights. In response, Dot Com led a motion to dismiss the case for lack of personal jurisdiction. McLaughlin, District Judge. Our ['I]_he defendant must [also]. have authority to exercise personal jurisdiction sufcient 'nummum contacts with the in this case is conferred by state law. The forum state, the clam asserted agamst the extent to which we may exercise that defendant must arise out_ of those authority is governed by the Due Process contacts, and the exerc1se of Junsdictlon Clause of the Fourteenth Amendment to must be reasonable. Defendants who the Federal Constitution. Pennsylvania's \"reach out beyond one state and create long arm jurisdiction statute permits continuing relationships and obligations the exercise of jurisdiction over non \"nth the c1tlzens Of another. state are resident defendants upon: Contracting to \"1316'\" to regulation and sanctions "1 the supply services or things in this other State for consequences of then Commonwealth. It is undisputed that Dot actlons.\" \"Junsdiction 15 proper, Com contracted to supply Internet news however, where contacts proximately services to approximately 3,000 result from actions by the defendant Pennsylvania residents and also entered Ill-\"1561f, 11?\[T]he likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of conmiercial activity that an entity conducts over the Internet. . At one end of the spectrum are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer les over the Internet, personal jurisdiction is proper. At the opposite end are situations where a defendant has simply posted information on an Internet Web site which is accessible to users in foreign jurisdictions. A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise personal jurisdiction. The middle ground is occupied by interactive Web sites where a user can exchange information with the host computer. In these cases, the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of infomiation that occurs on the Web site. First, we note that this is not an Internet advertising case . Dot Com has not just posted information on a Web site that is accessible to Pennsylvania residents who are connected to the Internet. This is not even an interactivity case . Dot Com has done more than create an interactive Web site through which it exchanges information with Pennsylvania residents in hopes of using that information for commercial gain later. We are not being asked to determine whether Dot Com's Web site alone constitutes the purposeful availment of doing business in Pennsylvania. This is a \"doing business over the Internet\" case We are being asked to determine whether Dot Com's conducting of electronic commerce with Pennsylvania residents constitutes the purposeful availment of doing business in Pennsylvania. We conclude that it does. Dot Com has contracted with approximately 3,000 individuals and seven Internet access providers in Pennsylvania. The intended object of these transactions has been the downloading of the electronic messages that form the basis of this suit in Pennsylvania. Dot Com has done more than advertise on the Internet in Pennsylvania. Defendant has sold passwords to approximately 3,000 subscribers in Pennsylvania and entered into seven contracts with Internet access providers to furnish its services to their customers in Pennsylvania. . Dot Com repeatedly and consciously chose to process Pennsylvania residents' applications and to assign them passwords. Dot Com knew that the result of these contracts would be the transmission of electronic messages into Pennsylvania. The transmission of these les was entirely within its control. Dot Com was under no obligation to sell its services to Pennsylvania residents. It freely chose to do so, presumablyin order to prot from those transactions. If a corporation determines that the risk of being subject to personal jurisdiction in a particular forum is too great, it can choose to sever its connection to the state. If Dot Com had not wanted to be amenable to jurisdiction in Pennsylvania, the solution would have been simple it could have chosen not to sell its services to Pennsylvania residents. Finally, Dot Com argues that the exercise of jurisdiction would be unreasonable in this case. We disagree. There can be no question that Pennsylvania has a strong interest in adjudicating disputes involving the alleged infringement of trademarks owned by resident corporations. These concerns outweigh the burden created by forcing the Defendant to defend the suit in Pennsylvania, especially when Dot Com consciously chose to conduct business in Pennsylvania, pursuing prots from the actions that are now in question. Motion to dismiss denied