Monday, June 4, 2018

Case of the Day: Alibaba Grp. Holding Ltd. v. Alibabacoin Found., 2018 U.S. Dist. LEXIS 72282 (S.D.N.Y. Apr. 30, 2018)


Plaintiff Alibaba is the massive e-commerce company incorporated in the Cayman Islands with the principal place of business in China. Defendant Alibabacoin is a creator of a cryptocurrency of the same name. Plaintiff filed for a preliminary injunction claiming violation of trademark. Defendant moved to dismiss.

The court first ruled there was subject matter jurisdiction under the Lanham Act, even though Alibabacoin was not yet sold on any trading platform. However, the court dismissed based on the lack of personal jurisdiction. The court found insufficient that the defendant's website, which is accessible from New York, could be used to buy and sell Alibabacoin, because the plaintiff failed to establish "reasonable probability" that New York customers would use the website to transact business. Nor did it matter to the court that a New York company hosted Alibabacoin's website. That the defendant contemplated listing its coins in New York-based exchange was also insufficient. Using U.S. dollars to project the value of the cryptocurrency was likewise irrelevant. Further, the court held the situs of the injury was China, the plaintiff held the trademark.


My two worlds intersect! Digital currency and personal jurisdiction!

There is a lot more to consider when it comes to a government agency like the SEC or the CFTC asserting a long arm jurisdiction in a civil suit, but when it comes to litigation between two private parties, this case is greatly clarifying. Oddly, the opinion does not state where the defendant is incorporated or does business.

No comments:

Post a Comment