D.C. Circuit affirms dismissal of content owner’s copyright infringement suit against Chinese video-sharing giant Youku for lack of personal jurisdiction, finding that Youku does not direct its business toward U.S. viewers and did not purposefully avail itself of U.S. jurisdiction by passively working with agencies that placed geographically targeted advertisements on its videos.
Seychelles-based Triple Up Ltd., which at one point owned the exclusive U.S. broadcast rights to three Taiwanese movies, brought suit for copyright infringement and other claims against Chinese video-sharing giant Youku Tudou Inc. after Triple Up’s attorney, over the course of five months in 2015, was able to stream the three movies through Youku’s website on his computer in the District of Columbia. The district court dismissed the complaint for lack of personal jurisdiction.
During the course of the litigation, Triple Up abandoned its claim for statutory damages under the Copyright Act, limiting its requested relief to an injunction and actual damages. The U.S. Court of Appeals for the D.C. Circuit first addressed Triple Up’s request for an injunction and found that request to be moot for two reasons: First, the D.C. Circuit noted — and Triple Up conceded — that upon being notified by Triple Up’s attorney that it was violating copyright law by streaming Triple Up’s movies, Youku removed the films from its website within 24 hours. Triple Up admitted that it had no basis to believe that Youku would repost the videos in the future. Second, Triple Up’s exclusive licenses in the films expired in November 2017. Because Triple Up was unable to show that it faced a real and immediate threat of future injury, the D.C. Circuit found that it lacked standing on its claim for injunction and that its request for injunctive relief was moot.
The court then analyzed Triple Up’s claim for actual damages and found that Triple Up had failed to allege a plausible basis for personal jurisdiction over Youku. Noting that the test for establishing personal jurisdiction over Youku required Triple Up to show that Youku had sufficient contacts with the United States as a whole, and that Youku had purposefully directed its activities at residents of the forum or had otherwise created a substantial connection with the United States, the circuit court held that Triple Up failed to establish such connections. Youku lacks a significant physical presence in the United States, having no offices or employees in this country, and has not registered an agent with the Copyright Office because, as Youku claims, it does not target its activities at U.S. residents. Additionally, the court found that Triple Up failed to allege that Youku engages in any persistent course of conduct in the United States resulting in business transactions with U.S. residents. There was no allegation, the court said, that any U.S. viewer of the movies, including Triple Up’s attorney, paid any money to watch the films. Triple Up failed to plausibly allege that Youku even makes its website generally available to American viewers — who make up less than one quarter of one percent of Youku’s monthly users — and, as the court pointed out, Youku’s website is entirely in Mandarin Chinese.
Triple Up argued that Youku purposefully availed itself of the United States as a forum by permitting the films to be streamed alongside geographically targeted advertisements. However, the D.C. Circuit found that Triple Up failed to show that Youku controlled these advertisements — which were placed by third-party ad agencies — or that Youku played a material role in pairing advertisements with videos directed to a specific market, such as the United States. The court also noted that Triple Up did not allege any facts showing Youku had acted intentionally or in bad faith in making the films available to U.S. viewers.
Triple Up also challenged the district court’s denial of its request to take discovery concerning the jurisdictional issues present here. Specifically, Triple Up sought to depose Youku’s legal director for information which might evidence Youku’s connections to the United States. The D.C. Circuit held that the district court did not abuse its discretion in denying Triple Up’s request, finding that Triple Up had nothing more than a theory and a hunch as to why Youku should be subject to jurisdiction in the United States. Jurisdictional discovery, the court stated, is not a fishing expedition.
Holding that Triple Up had failed to allege plausible facts showing that Youku had contacts with the United States sufficient to subject it to the personal jurisdiction of the court, the D.C. Circuit affirmed the district court’s dismissal of Triple Up’s claims.