Fourth Circuit’s Kurbanov Reversal Spells Trouble for Foreign-Based Piracy
On June 26, the United States Court of Appeals for the Fourth Circuit reversed and remanded an Eastern District of Virginia decision in UMG Recordings, Inc. v. Tofig Kurbanov, which had granted a Russia-based alleged copyright infringer’s motion to dismiss for lack of personal jurisdiction. The decision echoed arguments made by the Copyright Alliance in its amicus brief in support of the plaintiffs-appellants, and it represents a significant win for copyright owners who often find themselves without recourse when confronted with foreign-based piracy. The analysis of the Fourth Circuit is also a welcome development as the Ninth Circuit reconsiders a similar dismissal for lack of personal jurisdiction in Lang Van v. VNG, in which the Copyright Alliance has also filed an amicus brief in support of reversal and remand.
UMG v. Kurbanov
In its appeal to the Fourth Circuit, UMG Recordings, along with eleven other record companies responsible for the distribution and licensing of sound recordings in the United States, argued that there is ample evidence to assert specific personal jurisdiction over Kurbanov in the state of Virginia and bring copyright infringement claims against him. Although Kurbanov is a Russian citizen, the Fourth Circuit found that the interactive nature and popularity of his website in the U.S., along with the fact that the website had U.S.-targeted advertisements and a registered DMCA agent, constituted sufficient contacts with Virginia and that Kurbanov purposefully availed himself of the privilege of conducting business in the state.
The Copyright Alliance’s brief in support of UMG Recordings’ appeal outlined the arguments against Kurbanov’s claim and the district court’s earlier ruling that this case lacked specific personal jurisdiction. In addition to explaining that Kurbanov had sufficient contacts with Virginia to establish personal jurisdiction under Federal Rule of Civil Procedure 4(k)(1), the brief also argued that the district court should have exercised personal jurisdiction over Kurbanov under Federal Rule of Civil Procedure 4(k)(2), which applies jurisdictional analysis not to one particular state, but the entire United States.
Additionally, the Copyright Alliance explained that the district court’s decision to grant Kurbanov’s motion to dismiss based on insufficient contacts with Virginia contradicts Rule 4(k)(2) public policy concerns, which aim to “assure that foreign entities that violate federal law are subject to suit in federal court if they have sufficient contacts with the United States as a whole, even if those contacts do not give rise to jurisdiction in any one State.” Rule 4(k)(2) is critical to upholding copyright owners’ ability to enforce their rights against foreign infringers and stream-ripping websites like those owned and operated by Kaurbanov, and without its proper application, copyright owners would be burdened by the impractical expenses of litigating their claims in international territories.
The Fourth Circuit agreed with the Copyright Alliance that the district court erred in its application of Rule 4(k)(1) and Rule 4(k)(2), finding that Kurbanov’s contacts with Virginia showed he purposeful availed himself of the privilege of doing business in the forum and that UMG Recordings’ copyright infringement claims arose from Kurbanov’s activities directed toward Virginia. Due to these factors, UMG Recordings could establish specific personal jurisdiction over Kurbanov in Virginia under Rule 4(k)(1).
Lang Van v. VNG
The Fourth Circuit decision comes at a timely moment for another related personal jurisdictional analyses, as the Ninth Circuit considers a similar inquiry in the pending Lang Van, Inc. v. VNG. In late June, the Copyright Alliance filed an amicus brief in support of Lang Van, petitioning the court to reverse the district court’s decision, which granted a motion for dismissal for lack of personal jurisdiction despite facts comparable to those in Kurbanov.
In 2014, Lang Van, a leading producer and distributor of Vietnamese music and entertainment, filed a copyright infringement suit against VNG, a Vietnam-based website and app operator, claiming that VNG’s Zing music website and app illegally makes more than 3,000 Lang Van-owned recordings and 600 albums available for streaming or downloadÊaround the world.
Despite providing its app and website to millions of users in the U.S., the District Court for the CentralÊDistrict of California found that VNG “didn’t purposefully direct its activities toward California” and granted defendant’s motion to dismiss for lack of personal jurisdiction.
Lang Van appealed to the Ninth Circuit, arguing that the district court erred inÊdetermining that Lang Van had not established a prima facie case under the first, second, and third prongs of the specific jurisdiction test and that the court did not properly apply the Ninth Circuit’s test for purposeful direction because it did not consider all of the relevant evidence submitted by Lang Van.
As the Copyright Alliance brief details, the district court erred by not considering substantial evidence of VNG’s forum contacts, including making its app available in the U.S. via the Apple and Android app stores and entering into contracts with U.S. businesses to provide content for its website and app. The district court also did not take into account data that showed that VNG’s app had been downloaded hundreds of thousands of times in the U.S. and that millions of users in the U.S. visited its website. The brief goes on to explain that the forum contact facts in Lang Van are strikingly similar to those in Kurbanov, and that the Ninth Circuit must take into account this critical evidence as it reconsiders the district court’s dismissal.
Conclusion
As the Copyright Alliance makes clear in both the Kurbanov and Lang Van briefs, the district court errors threaten to undermine copyright enforcement in the United States. If the dismissals for lack of personal jurisdiction are allowed to stand, they would provide a step-by-step roadmap for foreign-based piracy operations to avail themselves of U.S. markets while eluding the jurisdiction of U.S. courts. The district court decisions would also leave copyright owners with no choice but to try to enforce their rights in foreign courts, an option that requires significant time and resources not available to most victims of piracy. To ensure that copyright owners and the vibrant creative industries that rely on copyright protection are not further damaged, the Ninth Circuit would be wise to follow the lead in Kurbanov.