Must All Foreigners Online Comply With US Copyright Law? (Part 2 of 2)

A case now before the DC Circuit Court of Appeals, Spanski Enterprises v. Telewizja Polska, creates a legal dilemma. The court needs to find Telewizja liable for copyright infringement, or else the court will create a roadmap for pirates, enabling them to stream copyrighted works into the US with impunity. But if the court finds Telewizja committed infringement simply because the Polish company put online works that could be accessed in the US, the court will apply US copyright law in an extraterritorial manner that will create problems around the globe.

Map of Poland

Several different legal rationales have been proposed to solve this dilemma. They all seek to hold Telewizja liable, yet limit the reach of US copyright law.

The rationale asserted by Spanski – and the US Department of Justice in an amicus brief [pdf] supporting Spanski – focuses on the “volitional acts” committed by Telewizja. Telewizja put some TV episodes online, knew the episodes would be of interest to people in the US (having licensed the US distribution rights), and intentionally disabled its own geo-blocking technology so the episodes could be streamed to the US. Telewizja thus “targeted the US public” and the company’s actions were the proximate cause of the US infringements, according to the DOJ’s brief.

“This case accordingly does not require the Court to decide whether the Copyright Act would reach foreign conduct on the Internet less directly and foreseeably related to infringement in the United States, such as a video posted by a foreign user on a personal blog or private website,” the DOJ stated in its brief.

This legal reasoning has been adopted by various US tribunals. “The way that many courts have distinguished between committing copyright infringement and unintentionally making it possible, especially when dealing with the internet, has been to read into the statute a ‘volitional act’ element,” said Prof. Jessica Litman of University of Michigan Law School.

There are, however, two significant problems with this “volitional act” standard. First, it is unclear if volitional conduct is actually required for copyright infringement. “The Supreme Court majority in American Broadcasting Cos. v. Aereo, Inc. [pdf] may have implicitly rejected any ‘volitional conduct’ predicate for copyright infringement liability,” said Litman. Still, she adds, “lower courts have continued to require it because there is really no other more feasible alternative.”

Second, if volitional conduct is required for copyright infringement, what precisely was the volitional conduct committed by Telewizja? Was it the company’s deliberately targeting of the US? If so, that seems to conflict with the longstanding rule that direct copyright infringement is a strict liability offense. The infringer’s intent is irrelevant (except that willful infringement can result in treble damages).

Was Telewizja’s volitional conduct the company’s posting of copyrighted works online? If so, then any foreigner who posts copyrighted works online could potentially face infringement liability in the US.

Was Telewizja’s volitional conduct the company’s transmission of copyrighted material from its servers to the US? That would prevent many foreigners who post material online from being liable for US copyright infringement, since they don’t own the servers on which their material is posted. But any foreign entity that posts material and that owns or rents space on a server would face potential liability for US copyright infringement.

Contributing to Infringement

A second type of legal analysis would sidestep the dilemma posed by holding Telewizja liable for direct copyright infringement. Telewizja could instead be found liable for contributory copyright infringement.

The analysis runs as follows: If watching the episode in the US constituted a public performance that infringed a US copyright, that infringement occurred only because someone in the US decided to watch the video. This volitional act – to watch the video – was the proximate cause of the infringement, and the US viewer committed direct copyright infringement. But Telewizja contributed to that infringement.

Contributory copyright infringement is not a strict liability offense. It occurs when an entity knowingly induces, causes, or materially contributes to the infringing conduct of another. Telewizja’s “deliberately removing the geo-blocking satisfies the intent element,” said Prof. Tyler T. Ochoa of Santa Clara Law School (California). “So, the court can hold Telewizja liable for contributory infringement (contributing to a public performance in the US) without having to decide whether anyone uploading any video anywhere is ‘performing’ in the US.”

That analysis may seem to limit the extraterritorial reach of US copyright law, because foreigners would not infringe US copyrights simply by putting works online. Foreigners could face contributory liability only if they knowingly contributed to US infringement.

But that limitation might do little to restrict the extraterritorial reach of US copyright law. Suppose a foreigner put a work online, knowing it could be accessed from anywhere in the world, including the US. Would posting that work online constitute “knowingly” contributing to US infringement? What if the foreigner received information that the work was being accessed in the US and the foreigner left the work online – would that be “knowingly” contributing to US infringement? The answers are unclear.

Furthermore, the contributory infringement analysis faces another problem in this case. Contributory infringement exists only if someone else committed direct infringement, and there is good reason to doubt that direct infringement occurred here. The only people who watched the supposedly infringing videos were two of the plaintiff’s lawyers. Is an audience of two a public performance? That is questionable. Even if that were a public performance, it could be a de minimus infringement which would not result in any direct liability. And there’s a third reason to doubt that the US viewers committed direct infringement. “The only parties who appear to have viewed the programs in the US seem to have been the plaintiff’s lawyers and employees. Since plaintiff owns the US copyright and authorized its lawyers and employees to seek to view the streams, those wouldn’t be infringing transmissions,” said Litman.

Not my Jurisdiction

Another way to hold Telewizja liable, while limiting the reach of US copyright law, might be to apply the jurisdictional limits of US courts. The US Supreme Court held, in World-Wide Volkswagen Corp. v. Woodson, that the US Constitution’s Due Process Clause allows a US court to obtain personal jurisdiction over a nonresident only if the defendant has “‘minimum contacts’ with the forum state such that [the defendant] would reasonably anticipate being haled into court there.”

The Court stated in Hanson v. Denckla that the essence of the minimum contacts test is “that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.”

Lynda Zadra-Symes, a partner in the Knobbe Martens law firm (Irvine, California), explained how this would apply to online activities: “A foreigner must have purposely availed itself of business in the US in order for there to be jurisdiction. If there is only accidental streaming into the US, maybe there is a technical argument there is infringement, but the US court wouldn’t have jurisdiction over the defendant.”

Some US court decisions support this analysis. For instance, in Cybersell, Inc. v. Cybersell, Inc., the 9th Cir. Court of Appeals held in 1997 that an Arizona court did not have personal jurisdiction over a Florida defendant that posted a supposedly infringing web page. Although the page could be accessed in Arizona, the defendant did not “purposefully avail” itself of the privilege of conducting activities in that state, the court declared.

Similarly, in Bensusan Restaurant Corp. v. King, the Second Circuit held in 1997 that a Missouri defendant’s supposedly infringing website (advertising a local jazz club) did not create personal jurisdiction in New York. Although the website was accessible in New York, the defendant did not “purposefully avail” itself of the privilege of conducting activities in New York.

Telewizja, by contrast, has purposely availed itself of the privilege of conducting activities in the US. The company sold Spanski an exclusive license to show the works in the US, then Telewizja removed geo-blocking from its website, deliberately allowing its works to be streamed to the US. Telewizja’s intentional acts would enable a US court to assert personal jurisdiction over Telewizja, while finding no jurisdiction over foreigners who merely put works online with the goal of reaching a non-US audience.

The Long Arm of the Law

This view of personal jurisdiction, however, is not shared by all US judges. Some courts have adopted a more expansive view of personal jurisdiction.

In Inset Systems, Inc. v. Instruction Set, Inc., a federal district court in Connecticut ruled in 1996 that, under the Due Process Clause, a Massachusetts company’s supposedly infringing website (displaying a nationwide toll-free phone number) provided a sufficient basis for Connecticut to assert personal jurisdiction over the company in a trademark infringement suit – even though the Massachusetts company had no offices or employees in Connecticut and did not regularly conduct business there. The defendant’s website, the court found, was soliciting business around the nation, including Connecticut, so the company “purposefully availed itself of the privilege of doing business within Connecticut.”

If a foreign company’s website has been repeatedly accessed in a jurisdiction, that will suffice to create personal jurisdiction over the foreign company, according to various courts. For instance, in Maritz, Inc. v. Cybergold, Inc., a California defendant posted a website that allegedly infringed a trademark owned by the Missouri plaintiff. A federal district court in Missouri found in 1996 that the website “appears to be maintained for the purpose of, and in anticipation of, being accessed and used by any and all internet users, including those residing in Missouri,” and also found the website had been accessed in Missouri 131 times. That was enough contact, under the Due Process Clause, for Missouri to assert personal jurisdiction over the California defendant in the trademark infringement suit.

In Penguin Group (USA), Inc. v. American Buddha, a federal district court in New York held in 2013 that, under the Due Process Clause, an Oregon company’s supposedly infringing website, repeatedly accessed in New York, provided a sufficient basis for New York to assert personal jurisdiction over the company in a copyright infringement suit. (The court went on to find that New York’s own statute on jurisdiction is less expansive than allowed under the US Constitution, and under the state statute, New York did not have jurisdiction over this Oregon defendant.)

These cases suggest that US courts can and will assert jurisdiction over a foreign entity, if that entity puts infringing material online that is either repeatedly accessed in the US or is intended to reach an international audience that includes the US.

“US courts have commonly found that infringing a copyright in the US is sufficient for the court to have jurisdiction,” noted Litman.

Personal jurisdiction, therefore, may do little to stop US copyright law from applying to online actors located beyond US borders.

Overall, it is unclear how the DC Circuit could hold Telewizja liable for copyright infringement while still limiting the reach of US copyright law. The court may well fudge the issue, asserting that its ruling applies only to the facts in this case. But the larger issue – about the reach of US copyright law in the internet age – will not go away. The US will need to address it sooner rather than later.

Image Credits: Halibutt