UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

CLOSED CORPORATION, a California Corporation Plaintiff, v. OPEN SESAME USERS’ GROUP, DOES 1-1000, and SCAPE GOAT, Defendants.

CASE NO. CT-0001-DFO CLOSED CORPORATION’S amended RESPONSE IN OPPOSITION TO OPEN SESAME’S MOTION TO DISMISS

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES iii

QUESTIONS PRESENTED 1

INTRODUCTION 1

STATEMENT OF FACTS .... ..............3

BURDEN OF PROOF 7

ARGUMENTS 8

1. The Open Sesame Users’ Group And Its Members Created An

2. Jurisdiction Is Proper In California Under the "Effects Doctrine"

1. Service By Electronically Mailing (e-mailing) to the E-mail
   Addresses of Posters to comp.os.opensesame, Posting on the
   comp.os.opensesame Newsgroup, and Publishing in the Open
   Source Newsletter Constituted Adequate Service of Process
   To Doe Defendants 1-1000. 26

CONCLUSION 28

TABLE OF AUTHORITIES

CASES

Page

ACLU v. Reno,
929 F. Supp. 824 (E.D. Pa. 1996), affd, 521 U.S. 844 (1997) 3, 8

Associated Students of the University of California at Riverside v. Kleindienst,
60 F.R.D. 65 (C.D. Cal. 1973) 17

Bally Export Corp. v. Balicar, Ltd.,
804 F.2d 398 (9th Cir. 1986) 8

Barrett v. Catacomb Press,
44 F.Supp.2d 717 (E.D. Pa. 1999) 3, 11

Bradford Novelty Co. v. Manheim,
156 F. Supp. 489 (SD NY 1957) 3, 23

Burger King v. Rudzewicz,
471 U.S. 462 (1985) 1, 3, 11, 14

Butchers Union Local No. 498, United Food & Commercial Workers v. SDC Investment, Inc., 788 F.2d 535 (9th Cir. 1986) 7

Calder v. Jones,
465 U.S. 783 (1984) 3, 12

California Clippers, Inc. v. United States Soccer Football Association,
314 F. Supp. 1057 (N.D. Cal. 1970) 3, 19

Columbia Insurance Co. v. Seescandy.com,
185 F.R.D. 573 (N.D. Cal. 1999) 3, 26, 27, 28

CompuServe v. Patterson,
89 F.3d 1257 (6th Cir. 1996) 3, 10

Core-Vent Corp. v. Nobel Industries AB,
11 F.3d 1482 (9th Cir. 1993) 3, 12, 14

Coscarart v. Major League Baseball, No. C96-1426
(N.D. Cal. Jul. 11, 1996) 3, 18, 19

Cybersell, Inc. v. Cybersell, Inc.,
130 F.3d 414 (9th Cir. 1997) 3, 9

Denver Area Education Telecommunications Consortium, Inc. v. F.C.C,
518 U.S. 727 (1996) 22

Donatelli v. National Hockey League,
893 F.2d 459 (1st Cir. 1990) 3, 18

Grammenos v. Lemos,
457 F.2d 1067 (2d Cir. 1972) 8

Hasbro, Inc. v. Clue Computing, Inc.,
994 F. Supp. 34 (D. Mass. 1997) 3, 12

Hayashi v. Red Wing Peat Corp.,
396 F.2d 13 (9th Cir. 1968) 8

Hecht v. Malley,
265 U.S. 144 (1923) 3, 20

IPCO Hospital Supply Corp. v. Les Fils DAuguste Maillefer S.A.,
446 F. Supp. 206 (SD NY 1978) 22

Indianapolis Colts, Inc. v. Metropolitan Baltimore Football Club Ltd. Partnership,
34 F.3d 410 (7th Cir. 1994) 4, 12

Inset Systems, Inc. v. Instruction Set,
937 F. Supp. 161 (D. Conn. 1996) 4, 13

Maritz, Inc. v. Cybergold, Inc.,
947 F. Supp. 1328 (E.D. Mo. 1996) 4, 10, 11

Metropolitan Life Insurance Co. v. Robertson-Ceco Corp.,
84 F.3d 560 (2d Cir. 1996) 7

Motta v. Samuel Weiser, Inc.,
598 F. Supp. 941 (D. Maine 1984) 4, 18

Mullane v. Central Hanover Bank & Trust Co.,
339 U.S. 306 (1952) 4, 24

Panavision International L.P. v. Toeppen,
141 F.3d 1316 (9th Cir. 1998) 4, 9, 12, 14, 16

Piedmont Label Co. v. Sun Garden Packing Co.,
598 F.2d 491 (9th Cir.1979 7

Project Basic Tenants Union v. Rhode Island Housing and Mortgage Finance Corp.,
636 F. Supp. 1453 (D. R.I. 1986) 20

Ripon Society v. National Republican Party,
525 F.2d 567 (D.C. Cir. 1975) 4, 20

Sperry Products, Inc, Denver & Rio Grande Western Railroad Co. v. Brotherhood of Railroad Trainmen, 387 U.S. 556 (1967) 21

Sperry Products v. Association of American Railroads,
132 F.2d 408 (2nd Cir. 1942) 17

Steur v. Phelps,
41 Cal. App. 3d 468 (1974) 4, 20

Stewart Warner Corporation v. Hunter Engineering Co.,
163 U.S.P.Q. 326 (N.D. Ill 1969) 22

SuperGuide Corp. v. Kegan,
987 F. Supp. 481 (W.D.N.C. 1997) 4, 10, 15

VE Holdings Corporation v. Johnson Gas Appliance Company,
917 F.2d 1574 (Fed. Cir 1990) 17

Whiteman v. Resort, No. C98-04442 MMC
(N.D. Cal. Mar. 17 ) 7

Ziegler v. Indian River County,
64 F.3d 470 (9th Cir. 1995) 4, 12

Zippo Manufacturing Co. v. Zippo Dot Com,
952 F. Supp. 1119 (W.D. Pa. 1997) 4, 10

FEDERAL STATUTES

STATE STATUTES

QUESTIONS PRESENTED

May a California Court exercise personal jurisdiction in a patent infringement lawsuit over an Internet Usenet group, all of whose members are anonymous but some of which are known to be software developers located in California, where each member of the Usenet group contributes to developing the infringing software?

Under the circumstances of this case, is the Open Sesame Users’ Group an unincorporated association, given that it is created for, and dedicated to, the goal of jointly and voluntarily creating an alternative to Closed Corporation’s Views& software?

Does the Open Sesame Users’ Group and its members maintain a regular and established placed of business within the Northern District of California, by virtue of the presence of distribution servers for its Usenet newsgroup and the availability of access to the group’s web and FTP servers?

Does service of process meet the requirements of Cal Code Civ. Proc. § 415.30 and the U.S. Constitution, in any or all of the following scenarios: (a) where service is effected by posting a copy of the summons and complaint to the Open Sesame Usenet newsgroup’s website; (b) where service is effected by-mailing copies to the Open Sesame email addresses of individual newsgroup subscribers; and/or (c) where service is effected by publishing a copy of the summons and complaint to an on-line newsletter known to be regularly read by the members of the Open Sesame User’s Group?

INTRODUCTION

In 1984, largely basing its observations on the pronounced effect that had occurred in business and commerce as a result of late-twentieth century innovations in the area of telecommunications, the Supreme Court indicated that a defendant could not avoid the jurisdiction of the federal Courts "merely because the defendant did not physically enter the forum state." Burger King v. Rudzewicz, 417 U.S. 462, 476 (1984). Instead, the Supreme Court acknowledged that "it is an inescapable fact of modern commercial life that a substantial amount of commercial business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted." Id.

Less than a decade after the Supreme Court observed that changes in telecommunications already had challenged the traditional concepts of personal jurisdiction the explosion in the popularity of the Internet, whose members are largely anonymous, even more dramatically altered the framework for determining who had foreseeably directed their commercial activities at a given forum. In that regard, in a 1993 New Yorker cartoon, now famous in Internet circles, two dogs are pictured sitting in front of a computer with the caption: "On the Internet, nobody knows you’re a dog." New Yorker, July 5, 1993, at 61. This case presents the vexing response to the New Yorker’s cartoon, by asking the Court to resolve the question of "given the fact that on the Internet nobody knows you’re a dog, what do you do when the dog bites you and then hides behind its anonymity." Here, the dog is an Internet Usenet group known as Open Sesame, the unfortunate bitten "mailman" is Closed Corporation, the dog’s bite is patent infringement, the dog bite occurred in California, and as the New Yorker saliently observed, the dog remains hidden on the Internet.

In that regard, although the Internet may provide greater anonymity than generally provided in the visceral world, this does not mean that patent infringers should be allowed to operate with total freedom on the Internet, use the Internet to interact directly and foreseeably with a forum, and then claim that because their actions were on the Internet that they are immune from justice in that forum. That would be akin to saying, "On the Internet, anybody can infringe a patent." Indeed, when a patent is infringed, the wronged owner of that patent faces serious and difficult burdens in proving the allegation of infringement. These burdens generally revolve around the technical questions concerning the patented device and the infringing device. Usually there is little question, however, of who the infringer is or where the infringement is occurring. All of this changes when the infringement occurs on the Internet. This anonymity is further compounded by the lack of any concept of physical location with the Internet. This lack of location led, in part, to the creation of the concept of cyberspace.

However, there are no courts in cyberspace to enforce Closed Corporation’s patent protections. It is therefore necessary for some court, located in the real, tangible world to hear these claims, or they will go unheard. This Court is, in fact, the appropriate forum for the adjudication of these claims. Jurisdiction and venue are proper here given the actions of the defendants in directly and foreseeably interacting with the forum. Traditional notions of fair play and justice will not be offended by the extension of jurisdiction to a California forum. Moreover, the methods of service, although novel because of the involvement of the Internet, are appropriate extensions of service methods recognized and accepted for the more tangible world, and are the most effective way to reach those who operate primarily on the Internet.

STATEMENT OF FACTS

At the evidentiary hearing schedule for October 23, 1999, Closed Corp. believes the testimony will elicit the following facts. Closed Corp. is a California corporation that is headquartered in San Jose, California, which manufactures a popular operating system for personal computers known as Views&. Views& is protected by a United States patent. Closed Corp. licenses Views& to a number of computer manufacturers for sale with their computers and it is sold directly to consumers. The Views& software is a valuable piece of intellectual property and Closed Corp. has protected it by the use of licensing agreements. These agreements allow third parties to develop applications for the Views& operating system, while preventing damaging and unauthorized disclosure of the Views& code.

There are software developers who are unhappy with the methods that Closed Corp. has used to protect its investment in Views&. Some of these developers have banded together for the common purpose of producing a product to compete with Views&. This group, which calls itself the Open Sesame Users’ Group, has developed an operating system product known as Open. Open is an open source development. This means that anyone may copy this freely available source code, modify it, and redistribute it; subject only to the requirement that they not charge for it and that they attribute the source of the code. In this manner, the software grows as individuals contribute and substantially develop it.

Such a distributed development is made practical by the use of the Internet, a network of inter-connected globally located computer networks, and the Usenet, a method for a large number of users to share messages and have ongoing discussions on the Internet. The Usenet is essentially a large bulletin board system. Users read and post messages in a particular discussion area, called a newsgroup, to a local Usenet server. This is done using Usenet compatible software, e.g. any popular web browser. These Usenet servers (computers running Usenet distribution software), located worldwide, spread the messages across the Internet from Usenet server to Usenet server so that each server has a copy of every message posted anywhere, for any group carried by that server. There are several hundred thousand servers located worldwide, and many are operated by Internet service providers and by universities. There are servers located in California operated by Stanford University, California Institute of Technology, in addition to many others. Not every server carries every group, however. Individual computer servers may only carry and forward a subset of newsgroups, typically based on which hierarchy the newsgroup belongs to.

There are more than a thousand Usenet newsgroups, arranged in eight primary hierarchies: comp (computer and software issues), rec (recreation and sports), soc (social issues), sci (science and engineering), misc (miscellaneous), news (Usenet/newsgroup issues), talk (debate of various issues), and humanities (arts and the humanities); a number of additional hierarchies which focus on localities, states, and nations; and the alt hierarchy, which is the alternative hierarchy. Most servers carry all of the eight primary hierarchies, but may not carry all of the others. Examples of a Usenet newsgroups are rec.sport.baseball.college, which focuses on college baseball; comp.os.ms-windows.apps.word-proc, which focuses on word processors for Microsoft Windows; and misc.legal, which focuses on legal and legal ethics issues.

Usenet newsgroups in primary hierarchies do not spring from the ether, but require considerable effort and planning to create. The method by which a new newsgroup is created for the eight primary hierarchies is: (1) a proposal for discussion of the creation of a new newsgroup is posted to the newsgroups news.groups and news.announce.groups, as well as any other appropriate groups, (2) if after thirty days of discussion, a consensus is reached about the charter and administration of the newsgroup, there will be call for a vote on the newsgroup; (3) votes are submitted by e-mail to a designated volunteer from the Usenet Volunteer Votetaker (uvv-contact@uvv.org); (3) if after the voting period ends (21-31 days determined at the time of the call for votes), at least 100 votes have been received and two thirds of them favor the newsgroup, it will be created and an announcement will be posted to news.announce.newgroups. David C. Lawrence, The Guidelines for Newsgroup Creations FAQ (last modified Jan. 31, 1997) _Newsgroup>. Administrators of servers will configure their servers to carry this new newsgroup and it will be propagated across the Internet. One issue that must be resolved prior to the call for votes, is whether the newsgroup will be a moderated newsgroup or not. Id. In a moderated newsgroup, a posted message is not automatically posted for all to see, but the local Usenet server, to which it is posted, forwards the message via e-mail to the person who was designated as the newsgroup moderator, when the newsgroup was set up. The moderator then decides whether the message should be posted to the newsgroup or not. Dennis McKeon, Moderated Newsgroups FAQ, (last modified March 11, 1997) . These rules of newsgroup creation don’t apply, however, to newsgroups that are not in one of the eight primary hierarchies. In these hierarchies, especially the alt hierarchy, anyone with access to a server can create a new newsgroup. Because of this, many of the most extreme and fringe newsgroups are within the alt hierarchy. However, a significant number of servers do not carry or forward the alt hierarchy, so there is substantial benefit in terms of breadth of distribution to being part of one of the eight primary hierarchies.

The Open Sesame Users’ Group created a newsgroup for the development of the Open software within a primary hierarchy. This newsgroup is called comp.os.opensesame. Members of the Open Sesame group can subscribe to this newsgroup and post their changes to the software and receive changes posted by others. This newsgroup is part of the comp hierarchy, but is not moderated. Members may also use electronic mail (email) to send changes directly to other members. There is no requirement that anyone who subscribes provide their true identity or physical mailing address, although customarily posters to Usenet newsgroups may provide their email address, as well as their true name, to allow other subscribers to contact them directly without having to post publicly to the newsgroup. Nonetheless, members typically only submit suggested changes to Open’s software which emulate particularly desirable features of the Views& well-known graphical user interface. Then, after a change is submitted to the newsgroup, a subset of Open Sesame members decides if the change is useful and then the change is posted to an FTP (File Transfer Protocol) and web server located in Finland. From this file server anyone can download the latest version of the software that has been developed by the Open Sesame group.

Utilizing this method, the Open Sesame group has collaboratively and iteratively created a new graphical user interface (GUI) for the Open operating system, which makes Open far easier to use. This GUI makes Open a viable competitor to the Views& operating system for the vast majority of users who demand a graphical user interface. The creation and distribution of this Open GUI across the entire length and breadth of the Internet has resulted in this suit, as Closed Corp. contends that this Open GUI infringes the patent protection granted to the Views& software.

The identity of individual members of the Open Sesame group is currently unknown. By their use of the Internet, this group has created a large and complex piece of software without the requirement of being known or having their locations known. Although the developers of most open developments include their names with their development, the members of the Open Sesame group have deliberately chosen not to make their identities known. Through the use of discovery and other technical means it is possible to eventually determine the true identities of the individuals who make up this group. This anonymity has not prevented the software from gaining in popularity, however. Anyone having access to the Internet may freely get a copy of the software, and some hardware manufacturers are now allowing purchasers the option of having the Open software pre-installed on their computers. It has been reported that some manufacturers are contemplating widespread commercial distribution of the Open software including the Open GUI. Users of the Open software have recently protested at Closed Corp.’s San Jose, California, headquarters demanding refunds for the price of the Views& software which had come pre-installed on their computer. This protest was widely publicized and Closed Corp. has had to offer refunds of the purchase price of Views& to Open users to avoid any further public relations damage.

Because of the anonymous nature of the members of the Open Sesame Group, Closed Corp. has filed suit against Open Sesame as a group; its individual members, as Does defendants 1-1000; and Ms. Scape Goat, a self described user of the infringing software and member of the Open Sesame Users’ Group, who participated at the protest at Closed Corp.’s headquarters. Ms. Goat, a resident of the Northern District of California was served, personally. The Open Sesame group was served via a posting to the newsgroup that was set up for the development of the software, comp.os.opensesame. The unnamed defendants were served by a e-mail to the addresses given on their Usenet postings. Some of these were returned as undeliverable e-mail. Additionally, a notice was placed in the on-line newsletter Open-Source (http://www.open-source.org). This newsletter is popular with the open source software development community. Defendants now argue that there is a lack of jurisdiction in California for this suit, that the Northern District of California, is an improper venue, and that service upon Open Sesame group and the unnamed defendants was inadequate.

BURDEN OF PROOF

With respect to motions to dismiss is brought pursuant to Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction, "the plaintiff bears the burden of showing that the court has jurisdiction." Butcher’s Union Local No. 498, United Food & Commercial Workers v. SDC Investment, Inc., 788 F.2d 535, 538 (9thCir. 1986). Likewise, once a defendant challenges venue under Fed. R. Civ. P. 12(b)(3), "the burden is on the plaintiff to show that venue is proper." Whiteman v. Resort, No. C98-04442 MMC (N.D. Cal. Mar. 17, 1999), 1999 WL 163044, at *1. Accord Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9thCir.1979 ("Plaintiff had the burden of showing that venue was properly laid in the Northern District of California"). Moreover, where an evidentiary hearing is held to ascertain whether personal jurisdiction or venue is proper, "the plaintiff must demonstrate the court’s jurisdiction [or venue] by a preponderance of the evidence." Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir. 1996). See also Whiteman v. Resort, No. C98-04442 MMC (N.D. Cal. Mar. 17, 1999), 1999 WL 163044, at *1-2 (noting that "[f]acts supporting venue may be shown by declaration, affidavit, oral testimony, or `other evidence,’" but concluding that plaintiff had failed to meet this burden).

However, in order to ameliorate the harsh consequences of granting motions to dismiss under Rules 12(b)(2) or 12(b)(3), the trial court also retains the discretion to allow the plaintiff to proceed with discovery to ascertain whether the plaintiff can demonstrate the existence of personal jurisdiction or venue. Butcher’s Union Local No. 498, United Food & Commercial Workers v. SDC Investment, Inc., 788 F.2d at 540. To that end, the Ninth Circuit has noted that "[d]iscovery should ordinarily be granted where `pertinent facts bearing on the question of jurisdiction are controverted or where a more satisfactory showing of the facts is necessary.’" Id. (quoting Data Disc, Inc. v. Systems Technology Associates, Inc., 557 F.2d 1280, 1285 n.1 (9thCir. 1977)). Similarly, "the trial court may permit discovery on . . . a motion [to dismiss for lack of venue], and indeed should do so where discovery may be useful in resolving issues of fact presented by the motion, particularly since the necessity of resolving such issues is created by the movant himself and the relevant evidence is properly within the movant’s possession." Hayashi v. Red Wing Peat Corp., 396 F.2d 13, 14 (9thCir. 1968).

In contrast to the burdens imposed upon plaintiff with respect to motions for lack of personal jurisdiction or venue, the burden remains with defendant to prove that service was insufficient to support a motion to quash and/or dismiss under Fed. R. Civ. P. 12(b)(5). Bally Export Corp. v. Balicar, Ltd., 804 F.2d 398, 404 (9thCir. 1986). See also 2 Moore’s Federal Practice § 12.33[1], at 12-52 (3d ed. 1999) ("In all challenges to the sufficiency of either the process or service of process, the burden of proof lies with the party raising the challenge"). Moreover, "[t]he standards set in Rule 4(d) for service on individuals and corporations are to be liberally construed, to further the purposed of finding personal jurisdiction in cases in which the party has received actual notice." Grammenos v. Lemos, 457 F.2d 1067, 1070 (2d Cir. 1972). Accordingly, "the fact of invalidity of one attempt at service does not automatically require dismissal of the complaint," and the trial court therefore ordinarily should allow a plaintiff the opportunity to remedy any defective service before dismissing the complaint. Id., at 1071.

ARGUMENTS

The Internet is "a decentralized, global medium of communications – or ‘cyberspace’ – that links people, institutions, corporations, and governments around the world[.]" ACLU v. Reno, 892 F. Supp. 824, 831 (E.D. Pa. 1996), aff’d, 521 U.S. 844 (1997). Some networks are "closed" to other networks, but most are connected to other computer networks so that each computer in such open networks may communicate with others located in the same system. Id., 892 F. Supp. at 831. Accordingly, the Internet enters into every state within the United States. The non-physical nature of the Internet makes applying the traditional location-based rules of jurisdiction problematic.

A federal court in California will exercise personal jurisdiction to the maximum extent that is allowed under the federal constitution. The test for valid personal jurisdiction is a three-part test. "(1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activity 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 defendant’s forum-related activities; and (3) exercise of jurisdiction must be reasonable." Panavision International L.P. v. Toeppen, 141 F.3d 1316, 1320 (9thCir. 1998) (quoting Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 270 (9th Cir. 1995)).

Open software development efforts rely upon the availability and skill of highly motivated groups of developers. Since the software to be developed will be distributed without cost, direct renumeration is not a primary motivating factor. Developers have to be motivated by a strong desire to develop an alternative to the commercial software that the open source development is intended to supplant. Consequently, a key element in the success of such developments is access to skilled and motivated software developers. Distributed development without geographic limitations is vital in allowing a critical mass of developers to be assembled (virtually) to work on a single project. This is a major reason why those wishing to develop open source software frequently do so by creating an Internet presence which extends across the entire world and into many jurisdictions.

Simply creating an Internet presence, such as a web site, is not sufficient for a finding of jurisdiction, because as the Ninth Circuit has recognized, without more, the mere creation of a Web site "is not an act purposefully directed toward the forum state." Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 418 (9thCir. 1997). However, in circumstances where a defendant conducts business over the Internet by engaging in repeated and ongoing transactions with forum residents, the federal courts routinely conclude that they may exercise personal jurisdiction over the defendant. E.g., CompuServe v. Patterson, 89 F.3d 1257 (6thCir. 1996) (personal jurisdiction existed in Ohio where Texas subscriber of computer network service developed "shareware" software and entered into ongoing contract with service to have such shareware distributed on international computer network); Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119. 1123 (W.D. Pa. 1997) (personal jurisdiction sustained where defendant contracted with approximately 3000 individuals and several Internet access providers in the forum state); SuperGuide Corp. v. Kegan, 987 F. Supp. 481, 486-487 (W.D.N.C. 1997) (court finds jurisdiction appropriate where there was a "reasonable inference" that a large number of North Carolina customers had visited non-resident defendant’s website). For instance, as the Court in Maritz, Inc. v. Cybergold, Inc., 947 F. Supp. 1328, 1333 (E.D. Mo. 1996) noted, where a defendant maintains a Web site that invites users to join a mailing list in order to receive information about the defendant’s service, personal jurisdiction over the defendant is appropriate. That is so, because the defendant has "consciously decided to transmit advertising information to all Internet users, knowing that such information will be transmitted globally," and under such circumstances the mailing list will "presumably includ[e] many residents" of the forum state. Id.

Here, like the situation in Maritz, in creating a newsgroup for the development of Open, the Open Sesame Users’ Group went far beyond merely creating a web presence similar to a passive web site. The Open Sesame group created a forum encouraging developers to interact with one another and to develop a complex and highly connected software system. This sort of development requires iteration and complex communication between developers. The act of newsgroup creation, which eventually led to the development of software infringing Closed Corp.’s patent, was an implicit call for those developers who were interested, including those that might be located in California, to join in the development of the Open software. It is also quite foreseeable that this development would attract programmers from California. California plays a major role in the world of software development. This is illustrated by the archetypal role of Silicon Valley in the computer industry, and the location of the plaintiff, Closed Corp., within California. See SuperGuide v. Kegan, 987 F.Supp at 487 ("while the number of hits to defendant’s website originating in North Carolina is not now before the Court, a reasonable inference which arises is that such are numerous inasmuch as North Carolina is one of the populated states").

California also has a unique position relative to the Internet, being the birthplace of that system and still maintaining a disproportionate share of Internet users, estimated to be 14.4% of all World-Wide-Web users. Graphics, Visualization, and Usability Center, College of Computing, Georgia Institute of Technology, The Tenth WWW User Survey, . Given this fact, it could be readily expected that a distributed software development will make use of, and benefit from, developers within California. Likewise it was reasonably foreseeable that that this software, if successfully developed and distributed on the Internet, would be used in California. Cf. Maritz, Inc. v. Cybergold, Inc., 947 F.Supp. at 1330 (131 website "hits" by Missouri residents enough for court to conclude there would be "many" such hits by state residents). This reasonably foreseeable use and benefit from developers and use of the software by users in California, targets the act of creating this distributed software development effort toward California. This satisfies a basic tenet of jurisdictional analysis which holds that the required contacts must be such that non-residents may anticipate being subjected to litigation in the forum as a result of their activities. See Burger King at 472. Given the unique role of California in the Internet and the computer industry, the defendants should have anticipated that, if there was a problem with the software, such as a patent infringement, then they would be subject to litigation in California.

By contrast, in Barrett v. Catacomb Press, 44 F.Supp.2d 717 (E.D. Pa. 1999), postings of allegedly defamatory material to a Usenet newsgroup were analogized to a passive web site, which did not directly solicit interaction with forum residents, and was held not to provide a sufficient basis for jurisdiction. Id. at 728. The facts here can be distinguished in that newsgroups in Barrett were not created specifically for the primary purpose of fostering active and ongoing interaction with other newsgroup subscribers concerning the specific matter of the postings. Also distinguishing this case is the fact that a submission of code or comments on code submitted to the Open Sesame newsgroup clearly is an implicit solicitation to other subscribers to integrate this code into what they are producing, and to make further improvements. Unlike this case, in Barrett, there was no evidence that the defendant intended to solicit anyone to do anything based on his postings to the newsgroups in question.

Similarly, the present case is readily distinguishable from Hasbro, Inc. v. Clue Computing, Inc., 994 F. Supp. 34, 42 (D. Mass. 1997), in which the court found that it was not technically feasible for the operator of a web site to limit access from a given jurisdiction, and therefore even though access was available from a given state, that would not be sufficient for jurisdiction. Unlike in Hasbro, Inc., the technical medium being used here is not a web site, but a Usenet newsgroup. This distinction is critical, as Usenet provides a mechanism for controlling who can post to the group. This is mechanism is known as moderation. Had the Open Sesame group wished to prevent the participation of residents of California, or any forum or forums, from participating in the collaborative development, the use of a moderator could have prevented any posting or participation by developers who residence was either undesirable or unknown. While this would not prevent interlopers from reading the posts, it would have prevented meaningful participation in the development of the Open software by residents of any forum that the Open Sesame group would have wished to exclude.

Jurisdiction may be based on the "effects" of the plaintiff’s actions. See Calder v. Jones, 465 U.S. 783 (1984). The standard for this "effects test" is "(1) intentional actions (2) expressly aimed at the forum state (3) causing harm, the brunt of which is suffered – and which the defendant knows is likely to be suffered – in the forum state." Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482, 1486 (9thCir. 1993). This test applies in tort and cases akin to tort, but not in contract cases. Ziegler v. Indian River County, 64 F.3d 470 (9th Cir. 1995). This standard has recently been applied in Panavision International, L.P. v. Toeppen, 141 F.3d 1316 (9thCir. 1998), to find jurisdiction. In Panavision, the defendant had registered a domain name which was the same as a prominent trademark of the plaintiff. The defendant had attempted to extort money from Panavision, a Delaware corporation having its primary place of business in California. Although the act of registering the domain name had occurred outside of California, the court ruled that the primary effects were in California. Similarly, in Indianapolis Colts, Inc. v. Metropolitan Baltimore Football Club Ltd. Partnership, 34 F. 3d 410 (7thCir. 1994), the act of nationally broadcasting a football game by a Canadian Football League Team, the "Baltimore CFL Colts" was held to be sufficient action to establish personal jurisdiction for trademark infringement in Indiana, because that was where the primary effect would be felt by the Indianapolis Colts, holders of the trademark.

Here, the Open Sesame Users’ Group, intentionally set out to develop software to serve as a replacement for Closed Corp.’s Views& software. Closed Corp., as noted, is a California corporation, has its headquarters in California, and will suffer the effect of any lost sales of the Views& software in California. Additionally, because of the large population of California and the prominent position of California as a location in the computing and software industry, a substantial share of Closed Corp.’s business is in California. Finally, since customers in California, especially the "Silicon Valley," in large part shape the definition of the market and set trends for others due to perception and reputation, the effects of the actions of the Open Sesame group in developing infringing software is felt in California, even more acutely than the even the disproportionate size of the California computer and software industry would suggest. The relative sophistication of the Open Sesame Users’ Group and its members in specifically setting out to develop an alternative to Closed Corp.’s Views& evidences a level of knowledge about the computer software business, and Closed Corp. in particular, that would indicate that the defendants knew of the likelihood of effects of their actions being felt in California. Finally, the protest by users of Open at Closed Corp.’s headquarters in San Jose, is further evidence of this knowledge. Jurisdiction against the Open Sesame Users’ Group and its members for patent infringement therefore is supported in California, based upon the effects of their actions. Cf. Inset Systems, Inc. v. Instruction Set, 937 F.Supp. 161, 162-165 (D. Conn. 1996) (personal jurisdiction over non-resident defendant appropriate where defendant’s contacts with Connecticut were limited to posting of a website that was accessible to approximately 10,000 state residents and maintaining a toll-free number, since "unlike television and radio advertising, the advertisement [here] is available continuously to any Internet user").

"Once it has been decide that a defendant purposefully established minimum contacts within the forum State, these contacts my be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with ‘fair play and substantial justice.’" Burger King, 471 U.S. at 476-477. In addressing this question seven factors are considered: (1) the extent of a defendant’s purposeful interjection; (2) the burden on the defendant in defending in the forum; (3) the extent of the conflict with the sovereignty of the defendant’s state; (4) the forum state’s interest in adjudicating the dispute; (5) the most efficient judicial resolution of the controversy; (6) the importance of the forum to the plaintiff’s interest in convenient and effective relief; and (7) the existence of an alternative forum. Id. The factors are to be balanced and no one is dispositive. Core-Vent, 11 F. 3d at 1488.

1. Purposeful Interjection

"Even if there is sufficient ‘interjection’ into the state to satisfy the purposeful availment prong, the degree of interjection is a factor to be weighed in assessing the overall reasonableness of jurisdiction under the reasonableness prong." Id. (citing Insurance Company of North America v. Marina Salina Cruz, 649 F.2d 1266, 1271 (9thCir. 1981)). Here, the Open Sesame group and its members have substantially interjected their activities into California. The Usenet newsgroup that was established to develop the Open software is available from servers located in the state. Moreover, the entire Open Sesame software effort is focused on developing a free alternative to a product produced and sold by a California corporation. This effort implicitly solicits software developers from the Internet, including those in California. The degree of interjection is very substantial.

2. Defendant’s Burden in Litigating

Although the defendant’s burden in litigating is a factor in assessing reasonableness, unless the "inconvenience is so great as to constitute a deprivation of due process, it will not overcome clear justifications for the exercise of jurisdiction." Panavision Int’l v. Toeppen, 141 F.3d at 1323 (citing Caruth v. International Psychoanalytical Ass’n, 59 F.3d 126 128-29 (9thCir. 1995)). The burden on the individual defendants who make up the Open Sesame Users’ Group to litigate may be significant. However, since the individuals are currently unknown, it is not possible to determine how great the burden would be. This uncertainty is caused by defendants themselves, because they have consciously elected to remain anonymous. More importantly, the very nature of the software development at issue here indicates that the defendants are sophisticated users of the Internet and technology capable of maintaining complex interactions from a distance. This is strong evidence that they would be able to participate in their own defense from their own residence, if not California, with little difficulty. Furthermore, this Court itself can minimize defendants’ burden, for as recognized by the Court in SuperGuide Corp.v. Kegan, 987 F.Supp. at 487, "should discovery reveal that the hits from [California] are insubstantial, the jurisdictional issue may be revisited."

3. Sovereignty

Given that this is a patent infringement action, the choice of jurisdiction in California would not conflict with the sovereignty of any other U.S. state. The analysis of a federal patent infringement claim would be the same regardless of the U.S. jurisdiction chosen because the Federal Circuit has jurisdiction over all such cases, wherever they arise. See 28 U.S.C. § 1338.

However, admittedly in this case, a number of the yet to be identified defendants may not be U.S. citizens. "The foreign-acts-with-forum-effects jurisdiction principle must be applied with caution, particularly in an international context." Core-Vent, 11 F.3d at 1489 (citing Pacific Atlantic Trading Co. v. M/V Main Exp., 758 F.2d 1325, 1330 (9thCir. 1985)). In Core-Vent Corp., the court focused on the presence or absence of connections between the foreign defendants and the United States in general, not merely California. Nonetheless, here the defendants set out to produce a software package specifically as an alternative to the product of a U.S. corporation and created a Internet based software development which was open to U.S. citizens acting within the U.S. Much more important, however, is the fact that this is a patent infringement action. The territorial nature of patent protection argues very strongly for the exercise of jurisdiction within the United States. This protection does not extend to other sovereignties and is a violation of a right granted by the United States government. For these reasons, the exercise of jurisdiction in California should not interfere with the sovereignty of any other U.S. jurisdiction or foreign state.

4. Forum State’s Interest

The fourth factor for personal jurisdiction overwhelmingly supports Closed Corp.’s arguments. "California maintains a strong interest in providing an effective means of redress for its residents tortiously injured." Panavision Int’l, 141 F.3d at 1323 (citing Gordy v. Daily News, L.P., 95 F.3d 829, 836 (9thCir. 1996)). Closed Corp. is a California corporation with its headquarters in California. This factor weighs in favor of finding jurisdiction.

5. Efficient Resolution

The fifth Core-Vent factor focuses on the location of evidence, and is no longer weighed heavily by Courts due to advances in modern technology. See Panavision Int’l, 141 F.3d at 1323. Given the Internet savvy and ability of the defendants this factor should not weigh heavily against the reasonableness of jurisdiction.

6. Convenient and Effective Relief for the Plaintiff

Given the Usenet’s anonymity, if California is not an appropriate forum for the adjudication of this matter, there may be no forum in which it is proper for this matter to be heard against the Open Sesame Users’ Group in its entirety. The distributed nature of the Internet and the methods by which the Open Sesame Users’ Group set out to develop their software make it virtually a certainty that the members as individuals would reside in multiple forums. This would result in substantial difficulty for the plaintiff in pursuing the defendants as individuals and brings the effectiveness of such an option into question.

7. Alternative Forum

It does not appear from the facts of this case that there is any other forum which has better claim to jurisdiction for this case. In fact, it would appear that if jurisdiction is not proper in California, then there is no other jurisdiction in which a claim may be made against the defendants in aggregate. The contacts between the Open Sesame Users’ Group and any other forum where this claim might be brought are no better than the contacts in California. Further, given the plaintiff’s residence in California, the effects are more acutely felt here than anywhere else. The Internet has no location it calls home, therefore this argument weighs in favor of the reasonableness of finding jurisdiction in California.

For the purposes of venue, the rule for the residence of an unincorporated association has long been treated to be the same as that for a corporation in patent infringement suits. Sperry Products v. Association of American Railroads, 132 F.2d 408 (2ndCir. 1942). Venue in patent infringement suits is governed by 28 USC §1400(b), which provides:

In 1988, Congress adopted a new definition of ‘reside’ for application to corporate defendants. That definition is codified in 28 USC §1391(c), which states:

This definition of residency is applicable to questions of residence in patent infringement actions. VE Holdings Corporation v. Johnson Gas Appliance Company, 917 F.2d 1574 (Fed. Cir 1990). Consequently, if the Open Sesame Users’ Group falls under the definition of an unincorporated association and jurisdiction is appropriate in the Northern District of California then venue is proper in the Northern District of California.

An unincorporated association is "a voluntary group of persons, without a charter, formed by mutual consent for the purpose of promoting a common enterprise or prosecuting a common objective." Associated Students of the University of California at Riverside v. Kleindienst, 60 F.R.D. 65, 67 (C.D. Cal. 1973) (quoting Local 4076, United Steelworkers v. United Steel-Workers, 327 F. Supp. 1400, 1403 (W.D. Pa. 1971)). As the First Circuit has recognized:

Donatelli v. National Hockey League, 895 F.2d 450, 468 (1stCir. 1990). Thus, it has been held that "[u]nder California law, a group is an unincorporated association when its members share a common purpose and when it functions ‘under a common name under circumstances where fairness requires the group to be recognized as a legal entity.’" Coscarart v. Major League Baseball, No. C96-1426 FM (N.D. Cal. Jul. 11, 1996), 1996 WL 400988, at *2 (quoting Barr v. United Methodist Church, 90 Cal. App. 3d 259, 266 (4thDist. 1979)). The Open Sesame Usenet group readily fits this definition.

The Open Sesame Users’ Group was created with the specific and common objective of developing an alternative operating system to Closed Corp.’s Views& software and it is in prosecution of this objective that the alleged infringement of Closed Corp.’s patent protections has occurred. When the Usenet newsgroup in question, comp.os.opensesame was created, it was created for the clear and distinct purpose of facilitating the development of an alternative to the Views& software. The newsgroup was proposed, chartered, and voted into existence by supporters of this notion and these people have been voluntarily participating in the development of the Open GUI since this time. Despite common misconception, considerable coordination and order are needed to create a new newsgroup within one of the eight primary newsgroups and few enterprises on the Internet, or in the more concrete world, are clearer examples of voluntary groups working together on a common enterprise toward a common objective than the distributed development of open source software.

Notwithstanding its broad definition, an unincorporated association can not simply be any "amorphous or attenuated" organization lacking in "any authoritative criteria to determine membership[.]" Motta v. Samuel Weiser, Inc. 598 F. Supp. 941, 950 (D. Maine 1984). However, Open Sesame is not an amorphous organization. Here, by contrast there is membership-driven authoritative criteria, including participation in and contribution by software developers to comp.os.opensesame. While it is true that currently the actual names and addresses of these participants in the Open Sesame newsgroup are masked by their use of the Internet, if this action is allowed to proceed the true identities of these developers will be determinable through investigation and discovery. More importantly, "[f]airness requires [the identification of group as an unincorporated association] when an individual alleges the group has violated his rights." Coscarart, 1996 WC 400988, at *2. That rule is paramount here. Closed Corp. has identified a substantial violation of its intellectual property rights, and "fairness" therefore dictates Open Sesame be identified as an unincorporated association.

In that regard, this case stands in stark contrast to California Clippers, Inc. v. United States Soccer Football Association, 314 F. Supp. 1057 (N.D. Cal. 1970). There, the court ruled that the International Games Committee of the USSFA was not an unincorporated association because it had "no charter, by-laws, no office or place of business, mailing address, no bank account, no assets or obligations, and has never transacted any business." Id. at 1068. By contrast, the Open Sesame Group has a charter. A charter is a necessary and required element prior to forming a Usenet newsgroup in a primary hierarchy. The Open Sesame group has some form of structure, although the full details of it are unclear. It is known that although anyone can participate in the development of the Open software (via the Open Sesame newsgroup), the decision as to which contributions make it to the web and FTP servers in Finland for distribution is made by a small group of developers. Although the Open Sesame Users’ Group may not have an office in the physical world, in fact they do have a virtual office. Their virtual office is the comp.os.opensesame newsgroup. This allows the members to meet, communicate, collaborate, and develop new software in concert. Merely because this ‘office’ does not have four walls and a ceiling does not mean that it is not an office, any more than the fact that Amazon.com does not have a single physical retail book outlet does not mean that it is not a ‘bookstore.’

Finally, the Open Sesame group has clearly transacted business. The existence of the Open GUI, which is the subject of this action, is the manifestation of these transactions. Each time someone downloads a copy of the Open software, the Open Sesame Users’ Group transacts business and each time a computer manufacturer installs the Open software on to a computer the Open Sesame Users’ Group transacts business. The members of the Open Sesame Users’ Group have worked together in close concert to achieve their objective of developing an alternative product to Closed Corp.’s Views& software. Although the form of concerted action may be defined in terms of Internet technology, the basic principle of a voluntary group working toward a common objective has not.

Admittedly, some opinions focus on the use of the "methods and forms used by incorporated bodies," Hecht v. Malley, 265 U.S. 144, 157 (1923). Form and structure is not dispositive however. In Hecht, the court noted "the word ‘association’ as used in the Act clearly includes "Massachusetts Trusts" such as those herein involved, having quasi-corporate organizations under which they are engaged in carrying on business enterprises. What other form of "associations", if any, it includes, we need not, and do not, determine." Id. (footnote omitted). More recent cases have focused less on the form and structure. Project Basic Tenants Union v. Rhode Island Housing and Mortgage Finance Corp., 636 F. Supp. 1453 (D. R.I. 1986) (Union lacked structure, had no officers, budget, by-laws or set group of members, but was unincorporated association due to distinct purpose and specific functions toward that end.) Steuer v. Phelps, 41 Cal. App. 3d 468 (1974) (Nine member church group was an unincorporated association, even though it had no officers and had engaged in only one business transaction, the purchase of an automobile.) Finally, courts concede that where a group is "commonly understood, referred to, and contributed to" under a given name like Open Sesame, fairness dictates that such a group be deemed a legal entity. Ripon Society v. National Republican Party, 565 F.2d 567, 571-72 n.5 (D.C. Cir. 1975).

The Open Sesame Users’ Group had enough structure to give itself a commonly recognized name, create its own charter, set up a primary hierarchy newsgroup, develop a complex software system, coordinate updates to the software through an editorial board structure, and publish the developments on the web. This voluntary group set out to achieve a specific goal and met that goal. The Open Sesame Users’ Group is the quintessential embodiment of an unincorporated association.

Under 28 U.S.C. §1391(c), a corporation resides, for purposes of venue, in a judicial district when its contacts with the district would be sufficient for the establishment of personal jurisdiction. The same rule applies for unincorporated associations. Sperry Products, Inc, Denver & Rio Grande Western Railroad Co. v. Brotherhood of Railroad Trainmen, 387 U.S. 556 (1967). As discussed above, the defendant has substantial contacts with the California, and specifically the Northern District of California, which would make a finding of personal jurisdiction proper. Consequently, venue is proper.

The Open Sesame User’s Group and its members, as discussed above, set out to develop a software system, in a distributed manner utilizing the Internet. This act had the foreseeable consequence of having direct contacts into California, due to the disproportionate presence of Californians on the Internet and the significant role of California in the area of software development. The heart of California’s computer presence is the "Silicon Valley," located in the Northern District of California. Stanford University, the University of California, Berkeley, and other educational institutions with substantial computer and software development efforts are located in the Northern District. Finally, the effects of the Open Sesame Group’s actions is felt most acutely in the Northern District. This is the site of Closed Corp.’s headquarters. As a primary seat of the computer industry it is where Closed Corp. will stand to lose substantial sales opportunities to Open. The effects are magnified more, by the preeminent and perceived leadership role that the individuals and firms of ‘Silicon Valley’ have throughout the computer industry.

Under 35 U.S.C §271, anyone who "makes, uses, offers to sell, or sells" a patented good within the United States is a patent infringer. As discussed above, the use of the Internet and Usenet allowed the Open Sesame Users’ Group to make the Open software everywhere that the Usenet and the Internet penetrate. Likewise the placement of the software on a server in Finland, given the foreseeability that it would be accessed from the United States and from California, constitutes an offer to sell the software within the District. The fact that the only price that the Open Sesame developers exact is a promise for attribution, per the standard open source licensing agreement, does not negate the fact that this is an offer to sell the software, literally for a promise, in California.

The Internet allows companies like Amazon.com, eBay, and others to have a permanent place of business, wherever the Internet can be found. This basic fact has led to the creation of an entire segment of our economy known as e-commerce. Similarly the Internet allows the Open Sesame Users’ Group and its members to have a permanent place of business for the distribution and development of their software everywhere, including in the Northern District of California. It is true that previous cases have generally focused on the existence of a physical situs, as a regular and established place of business. Re Cordis Corp., 769 F.2d 722 (Fed. Cir. 1985), Stewart Warner Corporation v. Hunter Engineering Co., 163 U.S.P.Q. 326 (N.D. Ill 1969), IPCO Hospital Supply Corp. v. Les Fils D’Auguste Maillefer S.A., 446 F. Supp. 206 (SD NY 1978). However, there is no adequate definition of physical location for an Internet business which would not put the business out of the reach of almost any forum in which it was actively operating. The Supreme Court has recognized the difficulty in applying old standards in light of "changes taking place in the law, the technology, and the industrial structure related to telecommunications" and has advocated a more general approach to analyzing such situations. Denver Area Education Telecommunications Consortium, Inc. v. F.C.C, 518 U.S. 727, 742 (1996). This more general approach leads to the conclusion that the Open Sesame Group has a permanent and established place of business within the Northern District of California.

The Open Sesame Group has developed and sold its software in the Northern District of California. Through the Internet, the Open Sesame Group maintains a permanent and established, albeit virtual, place of business in the Northern District of California. Venue therefore is appropriate in the Northern District of California.

The rationale for the restrictive nature of venue in patent infringement suits arises from the peculiar nature of such suits:

Bradford Novelty Co. v. Manheim, 156 F. Supp. 489, 491 (SD NY 1957) (citing Ruth v. Eagle-Picher Co., 225 F.2d 572 (10th Cir. 1955)). When the alleged infringement occurs on the Internet and the technical data and relevant facts are available everywhere with Internet access, as easily as they are available anywhere else, the rationale of convenience and fairness to the defendants are substantially mitigated. While this principle does not obviate the need to adhere to the language of the statute, when the question of what a "regular and established place of business" or infringement within the District means in an Internet context arises, it provides a measure for applying these rules to that context.

If venue is strictly tied to physical location, then the enforcement of U. S. patent protection is seriously undermined. Defendants, such as the Open Sesame User’s Group and its members can readily insure that their only physical presence is outside the U.S. The international aspect of the Internet then allows them to fully and freely maintain development and distribution within the U.S. of software which infringes U.S. patents, but not necessarily those of the sovereignty in which their server is located. This would then leave the patent holder with two options: attempt to identify each individual user in the U.S. and pursue patent infringement actions against them, or simply allow their intellectual property rights to go undefended to any who would choose to abuse them. The former option is not palatable from either a practical point of view or a judicial efficiency view, and the latter option is simply an abandonment of Constitutionally created rights to technological highwaymen.

Service of process must conform to both Constitutional as well as statutory requirements. Constitutionally, the requirement is that service must be "notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1952). Statutorily, service of process must conform with federal and state requirements.

Service on an unincorporated association, such as the Open Sesame Users’ Group is governed under Federal Rules of Civil Procedure 4(h) which holds that service on an unincorporated association may be effected:

California Code of Civil Procedure §416.40, likewise defines the standards for service of process on an unincorporated association,

The Open Sesame Users’ Group does not fall within subsection (a), so the question is whether the posting of the notice to comp.os.opensesame would constitute delivery of the notice to one of the people designated in subsection (b), or could be authorized under (c). It is clear that the California code anticipates a more traditional organizational structure for an unincorporated association than the Open Sesame Users’ Group appears to possess. However, it is clear that there is some organizational structure to the Users’ Group. Only the modifications to the Open software deemed useful were merged by a small group of developers and posted to the FTP and web server maintained by the group in Finland. Since the Open Sesame Users’ group was chartered for the purpose of producing and enhancing the Open software, the control of what software is posted manifests leadership of the organization. This small group of developers constitute the head of the association as envisioned in Cal. Civ. Proc. Code §416.40 and the managing agent under F.R.C.P. 4(h). Likewise, the self imposed requirement that software posted to the newsgroup would be evaluated for usefulness implies diligence in monitoring the comp.os.opensesame newsgroup. For these reasons, the posting to the newsgroup should and does constitute delivery to the head of the Open Sesame Users’ Group. Closed Corp. has made use of the same method that the group itself relies upon to conduct its own day-to-day business with its leadership in order to inform that leadership of this suit. No other form of delivery would be as effective, given the circumstances, to inform the parties of the pendency of this action.

Under Cal. Civ. Proc. Code §416.40(c), service may be as permitted under California Corporations Code §24007, which provides that:

If the court finds that service by posting to the Usenet newsgroup was inadequate service, then the court may allow service on the association by delivery to the one identified member of the association, Ms. Goat, who has already been served. Since the association has never had any known address, the second part of this requirement may also be best effected by service on Ms. Goat.

The problems presented by this case have recently been recognized by this court, "With the rise of the Internet has come the ability to commit certain tortious acts, such as defamation, copyright infringement, and trademark infringement, entirely on-line. The tortfeasor can act pseudonymously or anonymously and may give fictitious or incomplete identifying information." Columbia Insurance Co. v. Seescandy.com, 185 F.R.D. 573, 578 (N.D. Cal. 1999). It has been noted that "in such cases the traditional reluctance for permitting filings against John Doe defendants or fictitious names and the traditional enforcement of strict compliance with service requirements should be tempered by the need to provide injured parties with a forum in which they may seek redress for grievances." Id.

Unlike most distributed open source software development, the developers of Open have chosen to remain anonymous. Their meeting location exists only in cyberspace, and their use of the Internet allows them to maintain the organization necessary to achieve the development of a complex operating system software without requiring the traditional trappings of conventional organizations. However, this should not mean that the members of the Open Sesame Users’ Group can infringe at will within California and avoid service. Cal. Civ. Proc. Code § 413.30 authorizes the court to order alternative methods of service. The relevant provision holds,

The developers of the Open operating system use the Internet, including web sites, Usenet newsgroups, and e-mail to instigate, develop, and distribute the software. They eschewed a more traditional organization or collaborative techniques. As a consequence of their choices, no traditional method of service proscribed in statute, including first class mail, or publication in a traditional print newspaper, is as likely to provide these defendants with actual notice, as the efforts undertaken by Closed Corp. Closed Corp. is using the very methods that the defendants relied on to develop the infringing software to notify them of this suit. Closed Corp. is not e-mailing arbitrary individuals, but rather those individuals who gave e-mail addresses in their postings to the comp.os.opensesame newsgroup. Closed Corp. is not posting the notice to arbitrary web sites or on-line newsletters, but to the OpenSource newsletter, a newsletter specifically targeted to, and popular with, the open source development community. Closed Corp. did not post the notice to arbitrary Usenet newsgroups, but to comp.os.opensesame, the very newsgroup created and utilized by the defendants to develop the infringing software at issue. These are actions more calculated to give actual notice to the defendants in this action, than any traditional form of service, and should be supported as constituting valid service.

Even if service against the Open Sesame Users’ Group and the unidentified individual members is not adequate, this action should be allowed to go forward until discovery allows for the identification of the Doe defendants and they can be served in a more traditional manner. Generally courts are reluctant to allow discovery to go forward in order to identify defendants. Columbia Ins. at 578. "[L]imiting principles should apply to the determination of whether discovery to uncover the identity of a defendant is warranted." Id. These principles manifest themselves as a three part test: 1) the defendant must be identified "with sufficient specificity such that the Court can determine that defendant is a real person or entity who could be sued in federal court … to ensure that federal requirements of jurisdiction and justiciability can be satisfied[,]" 2) "all previous steps taken to locate the elusive defendant" must be identified to ensure "that plaintiffs make a good faith effort to comply with the requirements of service of process[,]", and 3) the "plaintiff should establish to the Court’s satisfaction that plaintiff’s suit against defendant could withstand a motion to dismiss." Id. at 578-79.

The requirement that the unidentified entity be sufficiently identified as one who can be sued in federal court is met by the facts and arguments given in the on the appropriateness of jurisdiction above. These defendants are real entities who have actively engaged in distributed software development using the Internet and have thereby had significant foreseeable contacts with California. Secondly, the plaintiff’s good faith effort to identify and notify the defendants is evidenced by the gathering of e-mail addresses from the Usenet newsgroup, the e-mailing to those addresses, and posting of notice to Internet locations most likely to alert the individual defendants to the suit. The act of using e-mail to notify defendants has been seen as evidence of a plaintiff’s good faith effort to serve a defendant. Id. at 579. Most significantly, plaintiff has identified at least one actual person – Ms. Scape Goat. Finally, the defendant has presented a case for infringement of its U.S. patents in the original cause of action against the defendants. Defendants have not alleged any facts to counter those arguments and evidence that the Open software infringes patents held by Closed Corp. on Views&. For these reasons it is proper to allow discovery to go forward against Ms. Goat and those entities that have had dealings with the Open Sesame group and its members, including the hardware manufacturers who are now bundling the Open software on machines they sell, in order to ascertain the true identities of the defendants so that they may be served.

CONCLUSION

The Internet is not the wild west, it is not without law or order. Just as actions on the Internet have repercussion which effect and harm persons who inhabit the tangible world in which we all live, so must individuals who act on the Internet be subject to the laws and jurisdiction of courts in the tangible world for the administration of justice. In this case, the Open Sesame Users’ Group, the members of that group, and Ms. Goat have all taken actions on the Internet which fairly warrant the continued administration of that justice in the Northern District of California.

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Dated: October 12, 1999 LOYOLA LAW SCHOOL

TERRENCE P. McMAHON

VINCENT M. POLLMEIER

ROMAN GINIS

______________________________________

Vincent M. Pollmeier

Attorneys for Plaintiff

CLOSED CORPORATION