The ruling is a useful boost for companies launching legal action against online counterfeiting and other brand infringement, as it allows the court to take action even if the defendant is based outside of the state, using a single sale as the basis.
Personal jurisdiction establishes whether a court can hear a civil case and issue a binding decision. It relies on the defendant either being based in the jurisdiction area, or the case having a strong link to the area.
The Southern District of New York (SDNY) had previously ruled that online sales alone were not sufficient to establish personal jurisdiction, but a precedent has now been set allowing it when combined with other business activity in the state.
The decision came following a lawsuit by accessories company Chloé in New York accusing Queen Bee of Beverly Hills and others of selling counterfeit Chloé handbags.
Simone Ubaldelli, one of the defendants, moved to dismiss the claim, citing a lack personal jurisdiction, arguing that a single sale was not enough to confer personal jurisdiction on him.
The Second Circuit includes the four district courts of New York, as well as the states of Vermont and Connecticut, although the new precedent is likely to have an effect across the country.
More details on the case and its effects can be found here.