Legal Niches

On May 28, 2010, the United States Court of Appeals for the Ninth Circuit affirmed the district court?s denial of the defendant?s motion to dismiss for improper venue in a copyright infringement action.  Brayton Purcell LLP v. Recordon & Recordon, 2010 WL 2135302 (9th Cir. Mar. 28, 2010).  The original action stemmed from a copyright suit brought in the Northern District of California, alleging that Appellant copied verbatim material on Appellee?s website without proper attribution.

Appellant, Recordon & Recordon (?Recordon?), is a two-attorney, San Diego based law firm that exclusively serves the Southern District market.  Appellee, Brayton Purcell LLP (?Brayton Purcell?), is a Northern District based law firm that specializes in elder abuse law, with a practice extending throughout the entire state.  In 2004, Recordon added an elder law section to their website, which was copied verbatim from Brayton Purcell?s own website.  Brayton Purcell discovered the unauthorized use of copyrighted material by using Copyscape, an internet plagiarism checking software. 

Brayton Purcell filed suit in the Northern District of California.  Recordon alleged that venue was improper, because, as a Southern District law firm, they did not have sufficient minimum contacts to be subject to jurisdiction in the Northern District.  The Ninth Circuit has held that venue is proper ?in any judicial district in which the defendant would be amendable to personal jurisdiction if the district were a separate state.?  Columbia Pictures Television v. Krypton Broad. of Birmingham, Inc., 106 F.3d 284 (9th Cir. 1997).

The Ninth Circuit uses a three-pronged test to evaluate whether a party has sufficient minimum contacts, but the court found that the first prong was the only one at issue on appeal.  ?The non-resident defendant must purposefully directs his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its law.?  Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004).  The purposeful availment analysis applies to actions in contract, whereas the purposeful direction analysis applies to actions in tort.  In this case, the court applied the purposeful direction analysis, because the underlying action is a copyright infringement suit, which is classified as a tort.  See Columbia Pictures, 106 F.3d at 289. 

The court applies the Supreme Court?s three-part ?Calder-effects? test to determine whether the defendant purposefully directed its activities to the forum.  The test requires that the ?defendant allegedly must have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state.?  Calder v. Jones, 465 U.S. 783 (1984). 

The court, in this case, held that Recordon committed an intentional act when it posted infringing material on its website taken directly from the Brayton Purcell website, despite Recordon?s contention that the website was merely passive and informational in nature. 

 However, operating a passive website is not enough to satisfy the ?express aiming? prong of the ?Calder-effects? test.  Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1158 (9th Cir. 2006).  In this case, Recordon?s use of the same information on its website (despite its passive nature) placed it in direct competition with Brayton Purcell in the Northern District, satisfying the ?express aiming? prong.  The court found that Recordon?s website did not indicate the geographical limits of their practice, even if they had never worked for clients in the Northern District.  Furthermore, the court reasoned that Recordon?s two attorneys were actually licensed to practice in the entire state, which could lead to the possibility of direct competition in the Northern District.  Moreover, the court found that Recordon?s actions created consumer confusion when choosing between Recordon and Brayton Purcell?s websites, given the dearth of law firms specializing in elder abuse law.  Thus, the court held, Recordon?s actions satisfied the second prong.

The third element of the ?Calder-effects? test requires that the conduct caused harm that the defendant knew was likely to be suffered in the forum.  This element is satisfied even if very little harm was actually caused in the forum, as long as the defendant?s acts had ?foreseeable effects? in the forum.  See Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1087 (9th Cir. 2000).  In this case, the court held that this element was satisfied, because it was foreseeable that Brayton Purcell?s business reputation and goodwill would be harmed where it resided in the forum, as well as a possibility of a decrease in business and profits.  

Thus, the court held that Recordon satisfied the ?purposeful direction? prong to establish specific jurisdiction.  As a result, venue was proper in the Northern District of California and the district court?s decision was affirmed.