Sunday, September 1, 2013

Agreeing To An Injunction Waives Personal Jurisdiction Challenge; But Alleging "Deliberate" Copyright Infringement Justifies Personal Jurisdiction?

Gainesville Coins operates a website for selling precious medals.  So does Vanguard Capital Group.  But Vanguard copied product descriptions and pictures off of Gainesville's website.  So Gainesville sued for copyright infringement.  First, Gainesville sought and obtained a temporary restraining order.  Next, the Court referred Gainesville's request for a preliminary injunction the Magistrate Judge, who extended the restraining order and set a hearing.   Three days before the hearing, Vanguard's attorney appeared, and the parties agreed to a stipulated preliminary injunction - presumably to obviate the need for the hearing.

Vanguard next moved the Court to dismiss the case for lack of personal jurisdiction, arguing that merely operating a website was insufficient contacts with Florida to justify a lawsuit here.  The Court was not persuaded:
As Gainesville Coins points out, Vanguard moved to dismiss the complaint for lack of personal jurisdiction after Vanguard stipulated to a preliminary injunction and participated in the case management conference.  Importantly, Vanguard did not reserve its right to contest the Court’s jurisdiction over it at any of these junctures. Under these facts, Vanguard waived the defense and its motion to dismiss is denied on this ground. See Aeration Solutions, Inc. v. Dickman, 85 Fed.Appx. 772, 774 (Fed. Cir. 2004) (finding defendants voluntarily acknowledged and acquiesced to the district court’s jurisdiction over them by stipulating to an injunction); Nat. Union Fire Ins. Co. of Pittsburgh, PA v. Beta Constr. LLC, 8:10-CV-1541-T-26TBM, 2010 WL 4316573, at *1 (M.D. Fla. Oct. 26, 2010) (finding defendant “waived his right to attack the personal jurisdiction of [the] Court by entering an appearance and participating in the case management conference without objecting to the Court’s personal jurisdiction”).
Turning next to the substance of Vanguard's argument, the Court also found personal jurisdiction proper under Florida's long-arm statute and the "effect's test."  As to Florida's long-arm statute:
Copyright infringement is a tortious act that satisfies Florida’s long-arm statute. See Smith v. Trans-Siberian Orchestra, 8:09-CV-1013-T-33EAJ, 2011 WL 824675, at *4 (M.D. Fla. Mar. 3, 2011); see also Cable/Home Commc’ns [v. Network Productions, Inc], 902 F.2d at 854 [(11th Cir. 1990)]. Also, the infringement occurred in Florida to the extent that Vanguard’s website is accessible in Florida and has been accessed by Florida residents.
The Court next turned to the "effects test" and relied on the Calder decision, which found personal jurisdiction appropriate for an intentional tort committed against a Florida resident.  Calder concerned a California plaintiff that sued a Florida newspapers for an alleged libelous article.  The Court held that such an intentional tort committed against a California resident justified jurisdiction over the Florida company in California.

But here, copyright infringement is a strict liability tort.  Intent is irrelevant for purposes of a direct infringement claim, although intent can increase a statutory damage award.  No matter.  The Court concluded because Gainseville alleged deliberate and willful infringement, the cause was akin to an intentional tort such as Calder justifying jurisdiction:
The Court concludes that Vanguard’s alleged actions of: deliberately and willfully infringing upon Gainesville Coins’ copyright by copying nearly the entire website for Gainesville Coins; and displaying the Work at its competing website, the Vanguard Website, for commercial gain because Vanguard is a competitor of Gainesville Coins, are sufficient to meet the “effects test”. In other words, Vanguard’s alleged acts purposefully availed itself of this forum. See Waterproof Gear, Inc. v. Leisure Pro, Ltd., 8:08-cv-2191-T-33MAP, 2009 WL 1066249, at *1 (M.D. Fla. Apr. 20, 2009) (finding that defendant purposefully availed itself of the forum when defendant copied and placed plaintiff’s copyrighted marketing materials on defendant’s website).
Motion to Dismiss for Lack of Personal Jurisdiction, Denied.
Gainesville Coins, LLC. v. VCG Ventures, Inc., Case No. 8:13-CV-1402 (M.D. Fla. Aug. 28, 2013) (J. Moody)

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