Ninth Circuit Recognizes “Catch-All” Jurisdiction Over Foreign-Based Intellectual Property Infringers – Copyright
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In a decision that continues the courts’ trend to recognize broad jurisdiction over persons and entities involved in intellectual property infringement via the Internet, the United States Court of Appeals for the Ninth Circuit reversed and remanded for a new trial a judgment of the United States District Court for the Central District of California dismissing plaintiff’s claims for lack of personal jurisdiction.
Lang Van, Inc. v. VNG Corporation involved the issue of whether invoking jurisdiction over a foreign entity without a physical presence in the United States was consistent with due process. VNG, a Vietnam-based company, operates a website that allows copyrighted music to be downloaded worldwide, including the United States. Lang Van, a California-based Vietnamese music producer and distributor, filed a copyright infringement lawsuit against VNG in the Central District of California.
In 2014, the district court granted VNG’s motion to dismiss for lack of personal jurisdiction. However, in a 2016 ruling, the Ninth Circuit reversed and returned the dismissal with instructions to allow Lang Van to undertake jurisdictional discovery. Following the finding of jurisdiction, the district court again dismissed the case, finding no specific personal jurisdiction over VNG in California. The district court did not respond to Lang Van’s argument that personal jurisdiction was appropriate under the “catch-all” provision of Rule 4(k)(2) of the Federal Rules of Civil Procedure, and Lang Van appealed the rejection.
Rule 4(k)(2) applies to situations where no individual court has general jurisdiction over a foreign defendant, but the defendant’s contacts with the United States as a whole are sufficient to justify jurisdiction. To establish personal jurisdiction under Rule 4(k)(2), three prongs must be satisfied: (1) the claim must arise under federal law, (2) the foreign entity must not be subject to general jurisdiction throughout the United States, and (3) Defendant must willfully exercise the privileges of doing business in the United States. The third prong encompasses several notions related to due process, including that the claim arises from U.S.-related activities, that the assertion of jurisdiction is consistent with notions of fair play and substantial justice, and that the defendant has created the necessary contacts with the State forum. In cases alleging copyright infringement, intentional direction is indicated when the defendant commits an intentional act that targets the forum and causes harm that the defendant knew would occur.
In considering the second rejection, the Ninth Circuit found that the first and second prongs of Rule 4(k)(2) were met because copyright infringement is subject to federal law and VNG n is subject to general jurisdiction anywhere in the United States. Therefore, the decision rested on the due process analysis.
In conducting this analysis, the Ninth Circuit determined that it must consider the sum total of VNG’s business contacts even though those contacts, taken individually, would be insufficient to subject VNG to jurisdiction.
Applying this approach, the court found that VNG deliberately targeted US companies and their intellectual property. Additionally, VNG took a number of actions that the court found were consistent with targeting the United States as a whole, including releasing a music app that allowed consumers to download copyrighted material. author, in English, in the US market, where it has been downloaded over 320,000 times. The Ninth Circuit noted that VNG chose not to “geo-block” (restrict access) to consumers outside of Vietnam, except for music from certain companies. The court also found it relevant that VNG distributed the app on platforms such as Google Play Store and Apple App Store. Finally, the court detailed VNG’s extensive business relationships with companies in the United States, including Sony Music and Universal Music, and even a previous course of negotiations with Lang Van.
The Lang Van decision follows a recent trend in favor of jurisdiction over persons or entities using the Internet to provide services to persons in the United States. In UMG et al. v. Kurbanov, the Fourth Circuit found that the federal courts in Virginia had specific jurisdiction over the operator of two Russian “feed rumination” websites that attracted more than 500,000 users from Virginia over a one-year period. Although the holistic analysis performed by the Fourth Circuit was similar, the Kurbanov court did not need to reach Rule 4(k)(2) because it concluded that the defendant’s contacts with Virginia were sufficient. .
These rulings suggest that victims of online copyright infringement and other Internet crimes such as trademark infringement and cybersquatting may have the opportunity to seek remedies in federal courts even when the primary business interests of the tortfeasor are not directed to the United States.
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