Mullally v. Jones

Citation: Mullally v. Jones, 2007 U.S. Dist. LEXIS 16034.

Factual Background
Mullally alleges that he owns the exclusive internet rights to two casino games, "Caribbean Stud Poker" and "21 Superbucks" obtained through an agreement between he and Defendant Jones. He further alleges that Jones sold additional licenses to use these games through the defendant company Games Marketing Limited ("GML") and with the assistance of defendant companies Mikohn Gaming Corp. ("Mikohn"), Progressive Games, Inc. ("PGI"), and Gametek, LLC ("Gametek"). The plaintiff subsequently brought this action for patent infringement and seeking declaratory relief in the District Court of Nevada and three of the licensees moved to dismiss for lack of personal jurisdiction.

District Court Holding
KDMS, a licensee for the Caribbean Stud Poker game, is a corporation organized under the laws of Ireland with places of business in Ireland and Kentucky. According the KDMS they do not make their games available anywhere in the United States do to the general prohibition against online gaming in the U.S. Mullally presented no facts to establish jurisdiction over KDMS so the District Court held their was a lack of jurisdiction.

A court determines whether personal jurisdiction exists based on whether a forum state's long-arm statute permits service of process, and whether the exercise of jurisdiction is violative of due process. Since Nevada's long-arm statute is coextensive with the due process principles the court may exercise jurisdiction if a defendant has minimum contacts with the forum and their is no offense to traditional notions of fair play and substantial justice.

The plaintiff alleges that sufficient minimum contacts exist with Nevada for personal jurisdiction based on their operation of "highly interactive websites that are accessible by Nevada residents". The two main interactive elements highlighted by the plaintiff are the ability to e-mail the companies and fill out forms regarding licensing, and the ability to access client websites.

The District Court granted defendants motions to dismiss for lack of jurisdiction because the defendants had not "'purposefully direct[ed]' [their] activities at or take[n] 'deliberate action' in or create[d] 'substantial connection' with the forum state so as to provide 'fair warning' that such activities may subject defendant to jurisdiction in a distant forum." Following Cybersell, "there must be 'something more' than the mere existence of a website that is visible in a forum to confer jurisdiction over the site's owner."