2nd Circuit Seeks Answers in Penguin Copyright Case

     (CN) – The 2nd Circuit asked the New York Court of Appeals to clarify how New York’s long-arm statute applies to a copyright infringement case in which Penguin Group USA accuses an Oregon nonprofit of illegally uploading four publications to online libraries.

     The New York-based publisher claims American Buddha uploaded four of its copyrighted works to two online libraries, the American Buddha Online Library and the Ralph Nader Library (unaffiliated with Ralph Nader).
     American Buddha’s 50,000 members can then download those books for free, along with other works of classical literature.
     American Buddha assured users that its online library service violated no copyright laws, because the Copyright Act protects fair use and reproduction by libraries and archives.
     But Penguin saw it differently and sued American Buddha for copyright infringement in New York. American Buddha moved to dismiss the federal complaint, arguing that New York courts lack jurisdiction over an Oregon company operating out of Arizona.
     Penguin insisted that New York’s long-arm statute applied to the Oregon nonprofit with servers in Oregon and Arizona.
U.S. District Judge Gerard Lynch agreed with American Buddha that the alleged injury was where the alleged electronic copying occurred, presumably Arizona and Oregon, and not in New York, where Penguin is based.
     Lynch acknowledged that the Penguin books’ availability online complicated his jurisdiction, but said the Internet ultimately “plays no role” in determining where the alleged copyright violation took place. He dismissed the claim for lack of jurisdiction.
     On appeal, the 2nd Circuit had to decide whether, under New York’s long-arm statute, the location, or “situs,” of injury is where the copyright holder is located, or where the allegedly infringing action took place.
     “Neither the New York Court of Appeals nor this Court has decided what the situs of injury is in an intellectual property case,” Circuit Judge Robert Sack wrote.
     “We therefore certify the following question to the New York Court of Appeals: In copyright infringement cases, is the situs of injury for purposes of determining long-arm jurisdiction … the location of the infringing action or the residence or location of the principal place of business of the copyright holder?”
     If the state appeals court says the injury occurs where the infringement happened, “we will doubtless affirm the district court’s judgment,” Sack wrote. But if it’s where the copyright holder lives or does business, “then the district court’s opinion must, with virtual certainty, be vacated.”

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