Russian Copyright Pirate May Be Forced To Answer Infringement Claims in Virginia
Does a Virginia federal court have specific personal jurisdiction over a Russian copyright pirate who operates numerous websites from Russia and has never been to the United States?
The U.S. Court of Appeals for the Fourth Circuit says maybe so. While you can hide in Russia, if your commercial activities and websites reach Virginia residents, then the federal courts may hold you accountable.
The alleged pirate websites are operated almost entirely from Russia and have no employees in the United States. The owner has never been the United States, never held a bank account in the United States, never paid taxes in the United States, and also argues that it would be difficult to even get a visa to visit the United States. The district court ruled that personal jurisdiction did not exist under these facts, but the Fourth Circuit reversed this decision and ruled that the exercise of specific personal jurisdiction was appropriate if it was deemed constitutionally reasonable. UMG Recordings, Inc. v. Kurbanov, 963 F.3d 344, 355 (4th Cir. 2020).
Twelve record companies that produce, distribute, and license 85% of the sound recordings in the United States filed suit against Tofig Kurbanov for mass copyright infringement. See id. at 348. Through numerous websites, Kurbanov offers “stream-ripping” services that extract audio recordings from videos available through online platforms. See id. The majority of the ripped streams are derived from YouTube videos. See id. The websites are free to use and require limited interaction from the visitors. Kurbanov derives virtually all of his revenues from selling space on the websites to advertising brokers in the Ukraine, and at least two in the United States, which then resell those spaces to advertisers. See id. Geolocation and geo-targeting capabilities are offered to the advertisers for displaying geographic-specific advertisements to website visitors. See id. While it’s fairly easy to see why the record companies are upset, Kurbanov argued that a Virginia federal court does not have personal jurisdiction over him or his companies.
The Fourth Circuit has developed a three-prong test for the specific personal jurisdiction requirements: “(1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the State; (2) whether plaintiffs’ claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable.” See id. at 351-52.
Under the first prong, the court found that there were more than half a million unique Virginia visitors to Kurbanov’s websites in a single year and that these visitor’s acts of accessing the websites are commercial relationships, even though the website visitors are not charged a fee. See id. at 353. Kurbanov also registered a DMCA agent with the U.S. Copyright Office to qualify for certain copyright safe harbor defenses, contracted with U.S-based advertising agencies, used U.S. domain registrars, and relied upon U.S.-based servers. See id. at 354. Therefore, Kurbanov’s activities with Virginia residents were sufficient to meet the requirements of the first factor.
The Fourth Circuit then analyzed the second factor and ruled that the record companies’ claims did arise out of Kurbanov’s activities in Virginia. See id. at 355. The websites were accessible around the world and Virginia residents pirated music through them. Further, the geo-location features of the website enabled Kurbanov to sell Virginia visitors’ data to advertising brokers. Through his network, “Kurbanov directly profited from a substantial audience of Virginia visitors and cannot now disentangle himself from a web woven by him and forms the basis of [these copyright infringement] claims.” Id.
This case was ultimately remanded to the district court to determine whether the exercise of personal jurisdiction is constitutionally reasonable under the third prong. The Fourth Circuit is clearly bending over backwards to force Kurvanov to defend these copyright infringement claims in federal court. In this digital age where you can reach customers from the other side of the world, a website that interacts with customers in the United States may be sufficient to establish personal jurisdiction, even if you never step on U.S. soil.
The Opinion from the U.S. Court of Appeals for the Fourth Circuit can be found here: Opinion
Dustin Mauck focuses his practice on intellectual property and technology disputes, counseling, and licensing.
RegitzMauck PLLC is an intellectual property boutique based in Dallas, Texas. The firm focuses on providing value-based legal services to cost-conscious clients seeking high quality legal representation in intellectual property, cybersecurity, and data privacy matters and disputes.