Canadian Court Uses Jurisdiction Simpliciter Test in Domain Name Case

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CANADIANCOURTUSESJURISDICTION
SIMPLICITERTESTINDOMAINNAMECASE

AdamMizera*
LEGERROBICRICHARD
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Inaunanimousdecision,theBritishColumbiaCourtofAppealhasruledthat
BritishColumbiahasjurisdictioninadisputerelatedtoarighttouseadomain
name“Poker.com”eventhoughthedefendantinthiscasewasincorporated
inSamoa(UniNetTechnologiesInc.v.CommunicationsServicesInc.2005
BCCA114(March2,2005,NewburyJ.A.)).Thecomplexityinthe
circumstancesofthecaseisagoodillustrationofthechallengesofapplying
traditionallegalconceptsofjurisdictiontocasesthatinvolvedifferentplayers
intheglobalinternet-basedeconomy.
FactualBackground
ALA,acorporationincorporatedinSt.VincentandtheGrenadines,granted
thefirstplaintiff/respondent,UniNetTechnologiesInc.,a99-yearlicenceto
usethedomainname“Poker.com”.Thedomainnameisassociatedwithon-
linegambling,anactivitythatisillegalinsomejurisdictions,including
Canada.UniNetthensublicensedthedomainnametothesecond
plaintiff/respondentPoker.comInc.aFloridacompany.Thefactsofthecase
alsoindicatethat,althoughanothercompany,incorporatedinAntigua,was
originallydesignatedtooperatetheinternetpokerroom,thesitewasactually
operatedfromCostaRica.
Thelicenceagreementcontainedachoiceoflawandjurisdictionclause
whichspecifiedthattheagreementwastobegovernedbythelawsofthe
ProvinceofBritishColumbiaandthatthepartiestotheagreement
recognizedthejurisdictionofthecourtsofBritishColumbia.

©CIPS,2005.*LawyerandEngineerofthelawfirmLEGERROBICRICHARD,L.L.Pamultidisciplinaryfirmof
lawyers,andpatentandtrademarkagents.PublishedintheAugust2005Worlde-commerce
&IPReport.Publication274.024.

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Futhermore,anydisputebetweentheplaintiffandthedefendantin
connectionwiththeagreementwhichcouldnotbesettledbymediation,
wouldberesolvedbyarbitrationundertheBritishColumbiaCommercial
ArbitrationAct,R.S.B.C.1996,c.55totakeplaceinVancouver.
UniNetallegesthatALAwrongfullyterminatedtheoriginallicenceagreement
andtransferredrightstousethedomainnametothedefendant
CommunicationsServicesInc.,acompanyincorporatedinSamoaandlinked
toALA.ThestatementofclaimagainstCommunicationsServicesInc.also
raisedclaimsrelatedtoatrade-markapplicationandallegedpassingoff.
Inthecourtoffirstinstance,theplaintiffsclaimedarighttoserveawritof
summonsandastatementofclaimonthedefendantoutsideBritish
Columbiabasedonthefactthattherewasabreachofcontractoratort
committedinBritishColumbia.ThedefendantclaimsthattheSupremeCourt
ofBritishColumbiawaswithoutjurisdictionovertheclaimsorthatitshould
havedeclinedjurisdiction.
Thetrialjudgefoundthattheclaimsraisedbythepleadingsofinducementof
abreachofcontractmadeinBritishColumbiaanddamagessufferedin
BritishColumbiainthearbitrationcasebetweenthetwopartieswere
sufficientforafindingofjurisdictionsimpliciter.Consequently,thecourtfound
thattheplaintiffshadanarguablecaseforrelief.Thedefendantsappealed
thedecision.
AnalysisbytheCourtofAppeal
AlthoughtheCourtofAppealmentionedthatitwouldbechallengingto
applya“realandsubstantialconnection”testtothepresentfacts,it
proceededtodoso.Infact,theCourtfoundthatacumulativeweightof
connectingfactorsbetweenBritishColumbiaandthecircumstancesofthe
caseweresufficienttosupporttheconclusionthatBritishColumbiacourts
hadjurisdictionsimpliciter.Theconnectingfactorsincluded:
·Thelicenceagreementunderwhichtheplaintiffsclaimedrightto
useandeventuallyownthedomainnameisgovernedbythe
lawofBritishColumbia;
·Therighttouseandeventuallyownthedomainnamewasalso
beingconcurrentlyadjudicatedinarbitrationproceedingsin
BritishColumbia;
·ThelicenceagreementwasenteredtoinBritishColumbia;
·Accordingtotheplaintiffs,thecontractwastobeperformed,at
leastinpart,intheprovince;

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·BritishColumbialawwaschosenbybothpartiestothelicence
agreement.
Consequently,theCourtofAppealheldthatthetrialjudge’streatmentofthe
arbitrationbetweenthepartiesasgroundsforestablishingjurisdictionwas
valid,anddismissedtheappeal.
Thiscaseisanillustrationoftheimportanceofjurisdictionclausesinlicensing
agreements.Asshownabove,partieswhothinkthattheirinterestsarewell
protectedbyincorporatingincountrieshavingstrong“assetprotection”laws,
canseetheirfortunesturnedbysigninglicensingagreementsthatmakethem
subjecttothesameforeignjurisdictionstheywereoriginallyseekingto
escape.

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