(CN) – Publishers filing Internet copyright infringement lawsuits should bring their claims in courts where their businesses are located, as opposed to where the alleged violations occurred, an appeals court in Albany ruled.
Penguin Group, one of the largest trade book publishers in the world, brought suit against Oregon nonprofit American Buddha for purportedly publishing complete copies online of four Penguin books.
American Buddha is accused of making the works freely available to its 50,000 members and anybody with an Internet connection.
Despite the decision, the appeals court maintained this decision will not open up “Pandora’s box.”
“It is widely recognized that ‘the digital environment poses a unique threat to the rights of copyright owners’ and that ‘digital technology enables pirates to reproduce and distribute perfect copies of works – at virtually no cost at all to the pirate,” Judge Victoria Graffeo wrote for the court.
The decision hinged on whether an injury is linked to the location where sales and customers are lost.
A federal judge in Manhattan previously dismissed the publishing powerhouse’s case, asserting that Penguin’s purported injury occurred where the uploading took place, which was Oregon and Arizona, in this case.
The 2nd Circuit then called on New York’s top court to intervene on the case’s issue of long-arm jurisdiction and injury given the largely undefined digital age.
“The injury in this case is more difficult to identify and quantify because the alleged infringement involves the Internet, which by its nature is intangible and ubiquitous,” according to the ruling.
The judge said the rate of e-book piracy has risen along with the increasing popularity of electronic book devices, such as the iPad and Kindle. As of 2010, customers shelled out close to $1 billion on e-books, according to a report by Forrester Research. The independent technology and market research company predicted that number will rise to $3 billion by 2015.
“The role of the Internet in cases alleging the uploading of copyrighted books distinguishes them from traditional commercial torts cases where courts have generally linked the injury to the place where sales or customers are lost,” the ruling states. “The location of the infringement in online cases is of little import inasmuch as the primary aim of the infringer is to make the works available to anyone with access to an Internet connection, including computer users in New York.”
The court noted that permission fees are an important factor for the continued publication of marginally profitable academic books, and pointed out that less educational works could stifle artistic creativity.
“The crux of Penguin’s copyright infringement claim is not merely the unlawful electronic copying or uploading of the four copyrighted books,” Graffeo wrote. “Rather, it is the intended consequence of those activities… the instantaneous availability of those copyrighted works on American Buddha’s Web site’s for anyone, in New York and elsewhere, with an Internet connection to read and download the books free of charge.”
The appeals court unanimously rejected Penguin’s jurisdictional argument that American Buddha failed show that the books were actually downloaded in the Empire State.
“The absence of any evidence of the actual downloading of Penguin’s four works by users in New York is not fatal to a finding that the alleged injury occurred in New York,” Graffeo wrote. “Contrary to American Buddha’s assertion, our decision today does not open up a Pandora’s box allowing any nondomiciliary accused of digital copyright infringement to be haled into a New York court when the plaintiff is a New York copyright owner of a printed literary work.”
The books at the heart of the case are “Oil!” by Upton Sinclair, “It Can’t Happen Here” by Sinclair Lewis, “The Golden Ass” by Apuleius, and “On the Nature and the Universe” by Lucretius.