Focusing on the first prong of the minimal contacts test (whether the foreign defendant deliberately directed his activities to the United States), the United States Court of Appeals for the Ninth Circuit reversed a district court holding that He had no specific personal jurisdiction over the operators of a Japanese-language video hosting website and referred the matter for further analysis under the Fed. A. Civil. P. 4(k)(2), Federal Long Arm Act. Will Co. v. LeeCase No. 21-35617 (9th Cir. August 31, 2022) (wardlawGould, Bennett, JJ.)
Will is a Japanese adult entertainment producer with over 50,000 videos registered with the US Copyright Office. Will sells access to his content on his website, where he earns over $1 million a year from American consumers. Defendants Youhaha Marketing and Promotion (YMP) and Lee own and operate ThisAV.com, a Japanese language video hosting website similar to YouTube. ThisAV.com allows users to download and watch videos for free alongside advertisements posted by third-party vendors.
After discovering 13 of his videos on ThisAV.com, Will sent the defendants takedown notices under the Digital Millennium Copyright Act (DMCA). When the defendants failed to honor the takedown notices, Will sued for copyright infringement. The defendants requested that the suit be dismissed for lack of personal jurisdiction, as Lee is a permanent resident of Hong Kong currently residing in Canada and YMP is registered in Hong Kong (where he operates ThisAV.com). Will countered that the lower court had specific personal jurisdiction over the defendants because their viewing of the copyrighted videos was sufficiently tied to the United States. The district court granted defendants’ motion to dismiss, finding that ThisAV.com’s content was not “expressly intended” for the United States and that defendants did not cause “jurisdictionally significant prejudice.” “, since only 4.6% of the site’s viewers came from the United States. Will appealed.
The main issue on appeal was whether the defendants had “deliberately directed” ThisAV.com content to the United States under the minimal contacts Calder test, which asks whether the defendant (1) committed an intentional act (2) expressly directed against the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state. for.
The Ninth Circuit summarily found that YMP and Lee committed intentional acts in operating ThisAV.com and purchasing the domain name and domain privacy services. However, whether Lee and YMP had “expressly targeted” ThisAV.com in the US was a closer question. The Court noted that the “mere passive operation of a website” is not sufficient to demonstrate an express purpose. Instead, the operator must have “enlisted and enjoyed an audience in this forum”. The Court first determined that the defendants “took advantage” of the U.S. market because U.S. consumers had seen the advertisements posted on the website more than 1.3 million times and the defendants were paid by third-party advertisers in view function. The Court further found that the defendants intentionally “appealed” to the US market by allowing the website to be quickly accessible to US consumers with reduced latency (i.e. load times). Reduced latency is crucial in attracting and maintaining users’ attention and can be achieved by hosting the website on servers close to the desired audience or by purchasing access to a content delivery network (CDN) spanning the desired geographic area. The court found that the defendants intended to “please” US consumers because they chose to host the site in Utah and purchased CDN services in North America.
Finally, the Ninth Circuit found that ThisAV.com caused foreseeable harm to the United States. While only 4.6% of site views came from US customers, that small percentage still amounted to over 1.3 million views. Further, since the defendants “deliberately directed” ThisAV.com to US users, the Court held that these opinions were foreseeable. Thus, the Court overturned the district court’s dismissal for lack of personal jurisdiction and remanded for further analysis under Rule 4(k).