Ninth Circuit Expands Reach of “Effects Test” Personal Jurisdiction Over Foreign Infringers

The power of Ninth Circuit district courts to decide lawsuits against foreign intentional tortfeasors, such as IP infringers, has waxed and waned — and, lately, waxed again.

The question of personal jurisdiction often has turned on whether the defendant “expressly aimed” its misconduct at the forum.  That term originated with the Supreme Court’s 1984 decision in Calder v. Jones, in which the Court held that the California courts had personal jurisdiction over two Floridian National Enquirer employees who defamed actress Shirley Jones, a Californian, as a drunkard.  In a less influential companion case, Keeton v. Hustler Magazine, the Court held that the New Hampshire courts had jurisdiction over Hustler in a defamation suit by Kathy Keeton, a New York resident, based on the magazine’s distribution in New Hampshire.

Some Ninth Circuit decisions, such as Schwarzenegger v. Fred Martin Motor Co., have limited the reach of the Calder “effects test” for personal jurisdiction by viewing restrictively whether the defendant “expressly aimed” its conduct at the forum, as opposed to somewhere else.  Others, such as Brayton Purcell v. Recordon & Recordon, have viewed “express aiming” expansively.  (Read here for more background.)

Recently, the Ninth Circuit took an expansive view in Mavrix Photo v. Brand Technologies.  Mavrix, a Florida company, sued Brand, an Ohio company, for posting copyrighted photos of Fergie and Josh Duhamel on Brand’s popular website, celebrity-gossip.net.  The Ninth Circuit held Brand subject to personal jurisdiction in California, finding “most salient the fact that Brand used Mavrix’s copyrighted photos as part of its exploitation of the California market for its own commercial gain.”  Likening the case to Keeton, the court continued:

Based on the website’s subject matter, as well as the size and commercial value of the California market, we conclude that Brand anticipated, desired, and achieved a substantial California viewer base.  This audience is an integral component of Brand’s business model and its profitability.  As in Keeton, it does not violate due process to hold Brand answerable in a California court for the contents of a website whose economic value turns, in significant measure, on its appeal to Californians.

“[A]cknowledg[ing] the burden that [its] conclusion may impose on some popular commercial websites,” the court noted that

the alternative proposed by Brand[] . . . — that Mavrix can sue Brand only in Ohio or Florida — would substantially undermine the interests . . . of the plaintiff in proceeding with the cause in the plaintiff’s forum of choice . . . and allow corporations whose websites exploit a national market to defeat jurisdiction in states where those websites generate substantial profits from local consumers.

(Citation omitted.)

Mavrix is in some ways more challenging to reconcile with other Ninth Circuit effects test decisions than its companion decision, Collegesource v. Academyone, which also treated extensively the effects test and its express aiming element.  And both decisions are interesting, and potentially influential, for other reasons too detailed to treat here.

The best course, in applying these and other Ninth Circuit decisions to particular facts, is to maintain a firm grounding in Calder, Keeton, and other Supreme Court personal jurisdiction decisions.  Going back to that binding precedent may help in predicting and optimizing future outcomes.

This entry was posted in Copyright Litigation, Internet and Domain Name Litigation, IP and Technology Litigation and tagged , , .

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