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Personal Jurisdiction Caught in a Web
Every day, courts must address questions that from a technical perspective simply make no sense. One of the most basic is: “Where is the Internet?”
If a copyrighted file is copied on a computer in California, broken into pieces and distributed over hundreds of computers across the globe on a peer-to-peer network and finally downloaded (from all of those computers at once) to a machine in New York, where did the infringement take place? What was the physical location of the file at the time of infringement? What was the site of the injury?
From its earliest origins, the Internet was designed with a distributed structure; it was designed to make certain the answer to that question would be: “Who cares?” Unfortunately, as is so often the case, the law lacks that kind of flexibility. It requires an answer.
Some of the thorniest questions in technology litigation arise when traditional notions of limited personal jurisdiction clash with the global reach of the Internet. In the context of intellectual property infringement ' where the concept of “injury” can be complex ' these issues become even more difficult.
New York's long-arm jurisdiction statute, for example, includes a multi-part test for personal jurisdiction over non-residents that can be a challenge to apply even in relatively straightforward cases. It is thus no surprise that courts have struggled to come up with a consistent set of standards applicable to claims of infringement over the Internet.
Differing Interpretations
What is surprising is how stark the differences in interpretation can be, and how difficult the cases become at the margins. Two recent decisions from the Southern District of New York make this clear. Both are well reasoned, carefully considered opinions from judges sitting on the same bench, but they reflect radically different views of the scope of New York's jurisdiction over foreign infringers and reach diametrically opposite results.
In federal cases based on diversity jurisdiction or federal statutes that have no specific jurisdictional provisions, jurisdiction is based on the state's jurisdictional statute. In New York, for non-domiciliaries (entities or persons not “present” in the state), that statute is CPLR '302. Section 302 contemplates several different bases for “long-arm” jurisdiction, including the commission of torts within the state by non-residents (CPLR '302(a)(2)) and the commission of torts by non-residents with substantial contact with the state, if the tort arises out of those contacts (CPLR '302(a)(1)). The most complicated of '302's provisions, and the one often used to assert jurisdiction in Internet cases, is '302(a)(3), which provides for jurisdiction over a non-domiciliary who:
- Commits a tortious act without the state causing injury to person or property within the state ' if he:
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- 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.
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In addition to analyzing all of the statutory requirements, a court seeking to assert jurisdiction over a non-resident must also ensure that the non-resident has sufficient minimum contacts with the state to satisfy Constitutional due process requirements.
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