CALIFORNIA JURISDICTION IN INTERNET SOFTWARE PIRACY CASES
(2000) 

 It is increasingly important in the Internet age for intellectual property owners to be able to protect their rights by bringing copyright infringement actions against software pirates, copyright infringers, and other ne’er-do-wells in federal court.  Recent legal developments have made it possible to obtain local jurisdiction over an out of state, or “nonresident,” software pirate based on infringing activities occurring on the Internet.

 As a threshold matter, an action for copyright infringement must be based upon personal jurisdiction: that is, the court in which the action is filed must have jurisdiction over the person or entity accused of the infringing activities.  The Federal Circuit Court in Washington, D.C. has recently held that offering to sell an infringing product to a buyer in a state is to commit a tort in that state sufficient to allow personal jurisdiction over the infringer.  An older federal case in California holds that personal jurisdiction may be asserted in State X if the defendant in State Y could reasonably foresee that his activities there would result in copyright infringement in State X; thus copying in State Y that results in sales in State X will justify personal jurisdiction in X, even though the defendant has never been present in State X.

 Based on these authorities, it would appear that if a nonresident defendant offered pirated software for sale in California through the Internet, the copyright holder would have a strong argument for jurisdiction in California.  In other words, it would certainly be foreseeable to a nonresident pirate that its infringing activities over the Internet -- even if physically occurring in another state – were likely to result in copyright infringement in California. 

 Another possible avenue for obtaining local jurisdiction over pirates is under the “effects doctrine.” This test is generally reserved for tort cases in which the plaintiff demonstrates (1) intentional actions by the defendant; (2) expressly aimed at the forum state; and (3) causing harm which the defendant knows is likely to be suffered in the forum state.  The Ninth Circuit Court of Appeals in San Francisco has applied the effects doctrine outside the tort arena, but only in situations where the defendant has acted intentionally and the facts are “akin to a tort.”  In a recent case, that court found the facts of a trademark infringement case to be sufficiently analogous to an intentional tort and applied the effects doctrine. 

 Where the nonresident pirates are using web sites as a means to offer infringing products for sale, courts generally group such  web sites into three categories for jurisdictional analysis: (1) those which are passive and merely make information accessible to users; (2) those by which the owner clearly does business and enters into contracts over the web; and (3) a middle ground of sites where a user can exchange information with the host computer. In the third category, “the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the web site.”  According to one court, if a nonresident pirate operates a web site in the second or third category, the copyright holder would have a strong argument to litigate in California based upon Internet jurisdiction.

 Whether a copyright holder can successfully persuade a court to assert jurisdiction in an Internet copyright case will depend heavily on the facts surrounding the infringement.  In evaluating whether to bring an infringement claim in California, the copyright holder will have to look carefully at the nature of the infringing conduct, considering such factors as where it occurred and with what results, whether it was intentional, whether the infringer operates a web site, and whether the conduct had foreseeable effects in California.  Fortunately, the copyright holder will often be able to obtain jurisdiction over the infringer in the copyright holder’s home court and not have to bring its claim in an out-of-state court.

© 1999-2008 Donahue Gallagher Woods LLP.  All rights reserved.