In spring 2015, plaintiffs Pablo Star Ltd. and Pablo Star Media Ltd., each a company organized under the laws of Ireland and the United Kingdom, sued the Welsh government and various content-providing companies for copyright infringement. At issue were two photographs of Welsh poet Dylan Thomas, allegedly improperly used by the Welsh government as part of its “Visit Wales” program to promote tourism. Specifically, the complaint alleged that Visit Wales published the photographs without authorization on a website accessible in New York, thereby causing injury through lost business.
The defendants moved to dismiss the case for various reasons, including improper service, sovereign immunity, improper venue, and lack of personal jurisdiction. After dismissing the case against the Welsh government for improper service under the Foreign Sovereign Immunities Act, the court turned to the question of personal jurisdiction, for which it looked to New York’s long-arm statute, section 302 of the New York Civil Practice Law and Rules (“CPLR”). CPLR 302(a)(3) permits a New York court to exercise personal jurisdiction over a nondomiciliary defendant that:
[C]ommits a tortious act [outside] the state causing injury to a person or property within the state but only where the party: (i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce.[1]
To determine whether it could exercise long-arm jurisdiction under CPLR 302(a)(3), the court narrowed the threshold issue to the following: “whether, in a copyright infringement case, a copyright owner who neither resides in New York nor has its principal place of business in New York, may assert that New York is the situs of injury.”[2] To successfully do so, the plaintiffs would have to “allege facts demonstrating a non-speculative and direct New York-based injury to [their] intellectual property rights.”[3]
The Plaintiffs argued that because the defendants published the Dylan Thomas photographs on the Internet, there was cognizable harm in New York State because the infringing use “deprived [the plaintiffs of] the potential opportunity to license and publish their copyrighted photos here.”[4] But as the court pointed out, the plaintiffs’ theory of injury would give rise to liability “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.”[5] The court went on to find that no alleged injury had been identified in New York, and that the locus of any cognizable harm based on a theory of “lost potential sales” arising from licensing fees that should have been paid to the plaintiff would not, in any event, be New York.[6] In so finding, the court cited to authority standing for the proposition that “[t]he torts of copyright and trademark infringement cause injury in the state where the allegedly infringed intellectual property is held.”[7] Because a copyright “is an intangible incorporeal right, it has no situs apart from the domicile of the proprietor.”[8] Although the court did not get to this point, this reasoning suggests that the more appropriate venue, if no direct injury could be identified in New York, would have been Ireland or the United Kingdom.
The court was careful to restrict its holding to the “facts of this case.”[9] And in rejecting the plaintiff’s theory of jurisdiction against all but one of the remaining defendants (who failed to move to dismiss), the court was careful not to shut the door to the possibility of a nondomiciliary being subject to suit for copyright infringement in New York. But to do so, a general allegation of Internet access to the infringing content in New York will not suffice to establish jurisdiction in that state. Rather, a plaintiff will have to “allege facts demonstrating a non-speculative and direct New York-based injury to its intellectual property.”
[1] Pablo Star Ltd. v. Welsh Government, No. 15-CV-1167 (JPO), 2016 WL 1056590 at *6 (S.D.N.Y. Mar. 16, 2016) (citations and internal quotations omitted).
[2] Id. The court went on to observe that it is well-established that a New York copyright owner alleging infringement sustains an in-state injury pursuant to CPLR 302(a)(3)(ii) when its copyrighted work is uploaded without permission onto the Internet for public access. Id. But of course, defendants here were not New York copyright owners – they were Ireland/UK copyright holders.
[3] Id.
[4] Id.
[5] Id. at 7.
[6] Id.
[7] Id. at 6 (citations omitted).
[8] Id. (citations omitted).
[9] Id. at 7.