On March 16, 2016, the Southern District of New York decided that, standing alone, the mere fact that allegedly infringing online content could be accessed via computers in New York did not make New York the “situs of injury” for purposes of establishing personal jurisdiction. As a result, the court determined that it lacked jurisdiction over a copyright infringement suit brought by and against non-New Yorkers.
In Pablo Star Ltd., et al. v. The Welsh Government, et al., No. 15-CV-1167 (JPO), 2016 WL 1056590 (S.D.N.Y. Mar. 16, 2016), two companies organized under the laws of Ireland and the U.K. brought suit against the Welsh Government and a number of publisher defendants. The plaintiffs – Pablo Star Ltd. And Pablo Star Media Ltd. – owned the copyrights to two photos of the poet Dylan Thomas. They accused the Welsh Government of (i) using those photos in its online advertisements and (ii) providing unauthorized copies of those photos to the various publisher defendants who, in turn, published and displayed the photos on their websites or in print.
The defendants moved to dismiss on multiple grounds. A number of the publisher defendants, which were not incorporated in New York and did not have their principal place of business there, argued that the court lacked personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2).
A copy of the court’s order is available here. Noteworthy is the court’s specific personal jurisdiction analysis. Because the Copyright Act does not have its own jurisdictional provision, the court applied New York law. And, under New York law, the plaintiffs were required to show that there was a non-speculative and direct injury to their intellectual property rights that occurred in New York. Because they themselves were not New York residents and therefore were not “New York copyright owners,” they had to rely on other arguments to establish New York as the site of their alleged injury. To do so, they put forward a theory of “market harm,” essentially arguing that they had lost potential sales – specifically, the chance to license and publish the photos – in New York. The court rejected this argument:
First, as a general matter, when a defendant is accused of posting copyrighted material on a website accessible to anyone with an internet connection, Plaintiffs’ theory of “market harm” would define the “market” as anywhere that the internet is accessible. Online copyright infringement would thus always cause injury in New York, no matter how thin a plaintiff’s connection to the forum.
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Second, on the facts of this case, even if the Court were to try to identify a single location where this alleged injury is felt, that location would not be New York. The most concrete “lost potential sales” identified by Plaintiffs are the fees that the Publisher Defendants would have paid Plaintiffs for the right to use the Photos—not foregone sales to New York consumers who merely viewed the Photos online. To the extent that this harm causes injury in any single place—a dubious proposition—the location of that injury is not New York.
Ultimately, the court concluded that a copyright owner could not claim New York as the “situs of injury” in an online copyright infringement suit, where the sole connection to New York was that the online content could be “accessed by New Yorkers” and where the plaintiff did not reside in New York or have its principal place of business there.