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IP/Entertainment Case Law Updates

Penguin Group (USA) Inc. v. American Buddha

Second Circuit vacates district court’s dismissal of copyright infringement case for lack of personal jurisdiction, based on New York Court of Appeals’ holding, in response to a certified question, that in cases involving a copyrighted printed literary work that is uploaded to the Internet, the location of the copyright holder, not the location of the infringing activity, determines the situs of injury for purposes of New York’s long-arm statute.

Plaintiff Penguin Group (USA) Inc., a large publisher located in New York, brought an action for copyright infringement in federal court in New York against defendant American Buddha, a not-for-profit organization incorporated in Oregon and located in Arizona. American Buddha operates two web sites – the American Buddha Online Library and the Ralph Nader Library. Plaintiff alleged that American Buddha infringed its copyrights to four books by uploading them to American Buddha’s websites and allowing users to download them. The district court granted defendant’s motion to dismiss for lack of personal jurisdiction. The court concluded that, for the purposes of the state’s “ long-arm” statute, which provides jurisdiction over nondomiciliaries that commit tortious acts outside New York that result in injuries within New York, plaintiff’s injury occurred in Arizona and Oregon, where the copying and uploading of the books took place, and not in New York, were plaintiff is located.

On appeal, the Second Circuit identified a split in state court decisions interpreting the limits of New York’s long-arm statute, and certified the question to the New York Court of Appeals. In response, the Court of Appeals concluded that in copyright infringement cases involving the uploading of a copyrighted printed literary work to the Internet, the situs of injury for purposes of determining long-arm jurisdiction is the location of the copyright holder, not the location of the alleged infringing conduct.

Based on the Court of Appeals’ holding, the Second Circuit vacated the district court’s dismissal and remanded the case for consideration of the remaining factors relevant to the long-arm statute analysis.

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