On May 28, 2010, the United States Court of Appeals for the Ninth
Circuit affirmed the district court?s denial of the defendant?s motion to
dismiss for improper venue in a copyright infringement action. Brayton Purcell LLP v. Recordon &
Recordon, 2010 WL 2135302 (9th Cir. Mar. 28, 2010).
The original action stemmed from a
copyright suit brought in the Northern District of California, alleging that
Appellant copied verbatim material on Appellee?s website without proper
attribution.
Appellant, Recordon & Recordon (?Recordon?), is a
two-attorney, San Diego
based law firm that exclusively serves the Southern District market. Appellee, Brayton Purcell LLP (?Brayton
Purcell?), is a Northern District based law firm that specializes in elder
abuse law, with a practice extending throughout the entire state. In 2004, Recordon added an elder law section
to their website, which was copied verbatim from Brayton Purcell?s own
website. Brayton Purcell discovered the unauthorized
use of copyrighted material by using Copyscape, an internet plagiarism
checking software.
Brayton Purcell filed suit in the Northern District of
California. Recordon alleged that venue
was improper, because, as a Southern District law firm, they did not have
sufficient minimum contacts to be subject to jurisdiction in the Northern
District. The Ninth Circuit has held
that venue is proper ?in any judicial district in which the defendant would be
amendable to personal jurisdiction if the district were a separate state.? Columbia Pictures Television v. Krypton Broad. of Birmingham, Inc., 106 F.3d 284 (9th
Cir. 1997).
The Ninth Circuit uses a three-pronged test to evaluate
whether a party has sufficient minimum contacts, but the court found that the
first prong was the only one at issue on appeal. ?The non-resident defendant must purposefully
directs his activities or consummate
some transaction with the forum or resident thereof; or perform some act by
which he purposefully avails himself of the privilege of conducting activities
in the forum, thereby invoking the benefits and protections of its law.? Schwarzenegger v. Fred Martin Motor Co.,
374 F.3d 797, 802 (9th Cir. 2004).
The purposeful availment analysis applies to actions in contract,
whereas the purposeful direction analysis applies to actions in tort. In this case, the court applied the
purposeful direction analysis, because the underlying action is a copyright
infringement suit, which is classified as a tort. See Columbia
Pictures, 106 F.3d at 289.
The court applies the Supreme Court?s three-part ?Calder-effects?
test to determine whether the defendant purposefully directed its activities to
the forum. The test requires that the
?defendant allegedly must have (1) committed an intentional act, (2) expressly
aimed at the forum state, (3) causing harm that the defendant knows is likely
to be suffered in the forum state.? Calder
v. Jones, 465 U.S.
783 (1984).
The court, in this case, held that Recordon committed an intentional
act when it posted infringing material on its website taken directly from the
Brayton Purcell website, despite Recordon?s contention that the website was
merely passive and informational in nature.
However, operating a passive website is not enough to
satisfy the ?express aiming? prong of the ?Calder-effects? test. Pebble Beach Co. v. Caddy, 453 F.3d
1151, 1158 (9th Cir. 2006). In
this case, Recordon?s use of the same information on its website (despite its
passive nature) placed it in direct competition with Brayton Purcell in the Northern
District, satisfying the ?express aiming? prong. The court found that Recordon?s website did
not indicate the geographical limits of their practice, even if they had never worked
for clients in the Northern District.
Furthermore, the court reasoned that Recordon?s two attorneys were
actually licensed to practice in the entire state, which could lead to the
possibility of direct competition in the Northern District. Moreover, the court found that Recordon?s
actions created consumer confusion when choosing between Recordon and Brayton
Purcell?s websites, given the dearth of law firms specializing in elder abuse
law. Thus, the court held, Recordon?s
actions satisfied the second prong.
The third element of the ?Calder-effects? test
requires that the conduct caused harm that the defendant knew was likely to be
suffered in the forum. This element is
satisfied even if very little harm was actually caused in the forum, as long as
the defendant?s acts had ?foreseeable effects? in the forum. See Bancroft & Masters, Inc. v. Augusta Nat'l Inc.,
223 F.3d 1082, 1087 (9th Cir. 2000).
In this case, the court held that this element was satisfied, because it
was foreseeable that Brayton Purcell?s business reputation and goodwill would
be harmed where it resided in the forum, as well as a possibility of a decrease
in business and profits.
Thus, the court held that Recordon satisfied the ?purposeful
direction? prong to establish specific jurisdiction. As a result, venue was proper in the Northern
District of California and the district court?s decision was affirmed.