Penguin v. American Buddha: Should Internet Copyright Infringement Alter the Jurisdictional Analysis Under the Long-Arm Statute?

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Long-arm statutes were designed to extend personal jurisdiction outside of state lines. But no doubt the legislators who enacted these statutes never dreamed that the long arm they were creating might stretch around the  world thanks to the internet.

P enguin v. American Buddha is the latest case to shape the boundaries of the long-arm statute in an internet age. I earlier posted about 2d Circuit opinion here.

The 2d Circuit referred the jurisdiction issue in Penguin to the New York Court of Appeals. The issue, for purpose of determining long-arm jurisdiction under CPLR § 302(a)(3) (ii), is: what is the situs or location of injury of an copyright infringing action where the infringement is committed outside New York. There are two possible answers. The situs may be the location where the infringing action took place. That is the result the district court reached; and Amercian Buddha urges the Court to follow. Or the situs may be the residence or location of the principal place of business of the copyright holder, the result Penguin urges.

Underlying the question is the extent to which the ease of infringement via the internet should alter long-arm jurisdictional analysis. Here are some of the many interesting questions the parties raise in their main and Penguin’s reply briefs herehere and here.

1. Should the situs of injury resulting from copyright infringement be where the uploading infringer clicks the “send” button or where the infringer’s servers happen to be located? And what if that server is located in a jurisdiction with little respect for intellectual property?

2. Should copyright infringers profit from their ability to use the internet to copy and distribute copyrighted works worldwide and then based on their physical location retreat to a pre-internet world to avoid the reach of the long-arm statute?

3. Does copyright infringement outside the state result only in “derivative economic injury” to copyright holders in the state (and therefore not subject the infringer to jurisdiction, as the district court found) or does that infringement also cause irreparable harm in the state depriving the copyright owner of intangible rights?

4. Is the Court being asked to add to the long-arm statute a requirement that “any lawsuit arising from a song written in the State of New York, or which has been licensed to a New Yorker, shall be litigated in the State of New York?”

Oral argument has been scheduled for early February 2011. Stay tuned.

The Court of Appeals rules for Penguin; see my latest post on this case here

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