“Situs of the Injury” for Exercising Personal Jurisdiction over Defendant for Online Copyright Infringement Is Location of Copyright Owner

In a decision favorable to copyright owners based in the state of New York, the New York State Court of Appeals held that in copyright infringement cases involving the uploading of copyrighted literary works onto the internet, the situs of the injury for purposes of determining personal jurisdiction under New York’s long-arm jurisdiction statute is the location of the copyright holder and not the location of the infringing conduct.   Penguin Group (USA), Inc. v. American Buddha, 2011 N.Y. Slip Op. 02079, 2011 WL 1044581 (N.Y., March 24, 2011). (Graffeo, J.) 

Plaintiff Penguin Group (USA) is a book publisher based in New York City.   Defendant American Buddha is an Oregon not-for-profit corporation with a principal place of business in Arizona.  American Buddha operates two websites, hosted on servers in Oregon and Arizona, that make available free of charge to its members a variety of publications.  Penguin Group brought a copyright infringement action in New York federal court, alleging that the defendant published complete copies of four of Penguin’s books on the defendant’s websites.  The electronic copying and uploading of the books occurred in Oregon or Arizona. 

American Buddha moved to dismiss the complaint for lack of personal jurisdiction, arguing that as an Oregon company, it possessed insufficient ties to New York.   Further, the plaintiff had not alleged any infringing activity within New York.   Penguin Group claimed that jurisdiction was proper under New York’s long-arm jurisdiction statute, which provides jurisdiction over non-New York residents who commit tortuous acts outside of the state that result in injuries within New York.  The district court granted the defendant’s motion to dismiss, holding that the plaintiff was injured in Oregon or Arizona where the copying and uploading of the copyrighted works took place. 

On appeal, the U.S Court of Appeals for the Second Circuit recognized a split of authority in New York district courts concerning the application of New York’s long-arm statute to copyright infringement cases involving out-of state defendants and certified the issue for consideration to the New York Court of Appeals.   After reviewing the applicable New York cases, the New York Court of Appeals determined that the jurisdictional analysis required in internet cases is different than that used in traditional commercial tort cases.   Because the infringed works were made available to internet users everywhere there was internet access, it was “difficult, if not impossible, to correlate lost sales to a particular geographic area,” as would be the focus in a more traditional commercial tort case. Therefore, in internet copyright infringement cases the court determined that it was more reasonable to determine that the injury caused by the infringement was suffered where the copyright owner is located.  The decision clarifies that New York copyright owners may bring infringement actions in New York for online infringement of their literary works, even if the infringing download or use occurs outside of the state.