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WILL CO., LTD. V. KA LEE

The panel reversed the district court’s dismissal of a copyright suit for lack of specific personal jurisdiction and remanded for further proceedings.

Will Co. Ltd., a Japanese adult entertainment producer, brought this copyright infringement action against the owners and operators of ThisAV.com, a video-hosting site based in Hong Kong, alleging that the site was displaying without authorization several of its copyrighted works. The district court found that it lacked specific personal jurisdiction over ThisAV.com’s owners and operators because Will Co. could not establish that they “expressly aimed” ThisAV.com’s content at the United States market, or that it was foreseeable that operating the site would cause jurisdictionally significant harm in the United States. Defendants were Youhaha Marketing and Promotion Limited (“YMP”) and Ka Yeung Lee.

The panel held that under Federal Rule of Civil Procedure 4(k), the federal long-arm statute, a federal court may exercise jurisdiction over a foreign defendant if: (1) the claim arises under federal law, (2) the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction, and (3) exercising jurisdiction comports with due process. Defendants conceded the first two elements. As to the third element, the exercise of personal jurisdiction over a defendant comports with due process if a defendant has “minimum contacts” with the relevant forum such that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice. In the context of tort claims, like the Copyright Act claims at issue here, a defendant has the requisite minimum contacts with the forum if: (1) the defendant purposefully directs its activities at the forum, (2) the lawsuit arises out of or relates to the defendant’s forum-related activities, and (3) the exercise of jurisdiction is reasonable.

To determine whether defendants purposefully directed their activities at the forum, the panel applied the “Calder Effects Test” and asked whether defendants: (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state. As to the first element, the panel concluded that both YMP and Lee committed at least one intentional act by operating ThisAV.com and purchasing its domain name and domain privacy services. As to the second element, both defendants did “something more” than mere passive operation of the website. Their advertising structure demonstrated that they profited from viewers in the United States market, and their intent to cultivate an audience in the United States was demonstrated by their choice to host the website in Utah and to purchase content delivery network services for North America, which made the site load faster for viewers there, and by the fact that the webpages they posted on the site that addressed legal compliance were relevant almost exclusively to viewers in the United States. As to the third element, defendants’ conduct caused harm in the United States because there were almost 1.3 million visits to their website in the United States during the relevant period, and that harm was foreseeable.

The panel held that defendants “purposefully directed” their operation of ThisAV.com at viewers in the United States. The panel reversed and remanded to the district court to conduct the remainder of the personal jurisdiction analysis under Rule 4(k).

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