UMG Recordings, Incorporated v. Tofig Kurbanov
Published opinion (2020)
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Rule of Law:
A foreign operator of a globally accessible website purposefully avails itself of a forum state's jurisdiction when it cultivates a substantial user base in that state and profits from that user base through geo-targeted advertising, even if facilitated by third-party ad brokers.
Facts:
- Tofig Kurbanov, a Russian citizen residing in Russia, owned and operated the websites FLVTO.biz and 2conv.com.
- The websites offered a free 'stream-ripping' service that allowed users to extract audio from online videos and download the audio files.
- Users were required to agree to Terms of Use, forming a contractual agreement, and the websites' privacy policies stated that user data like IP addresses and country of origin would be collected to provide targeted advertising.
- Kurbanov generated revenue by selling advertising space on the websites to third-party advertising brokers, some of whom were U.S.-based, which enabled geo-targeted ads to be displayed to users.
- Between October 2017 and September 2018, the websites attracted over 30 million visitors from the United States, including nearly 600,000 unique visitors from Virginia.
- The websites' domain names were registered with GoDaddy.com, a U.S. company, and their top-level domains (.biz and .com) were administered by Neustar, Inc. and VeriSign, Inc., both headquartered in Virginia.
- Kurbanov registered a Digital Millennium Copyright Act (DMCA) agent with the U.S. Copyright Office.
- Until July 2018, the websites were hosted on Amazon Web Services servers, which were physically located in Virginia.
Procedural Posture:
- Twelve record companies (Plaintiffs-Appellants) filed a lawsuit against Tofig Kurbanov in the U.S. District Court for the Eastern District of Virginia, alleging copyright infringement.
- Kurbanov (Defendant-Appellee) filed a motion to dismiss the case for lack of personal jurisdiction.
- The district court granted Kurbanov’s motion, concluding that it lacked personal jurisdiction because Kurbanov had not purposefully availed himself of the benefits and protections of Virginia or the United States.
- The record companies appealed the district court's dismissal to the United States Court of Appeals for the Fourth Circuit.
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Issue:
Does a federal district court in Virginia have specific personal jurisdiction over a foreign defendant who operates globally accessible stream-ripping websites that attract a substantial number of Virginia users, from whom the defendant profits by collecting data and enabling geo-targeted advertising, for a copyright infringement lawsuit arising from that activity?
Opinions:
Majority - Chief Judge Gregory
Yes, the federal district court in Virginia has specific personal jurisdiction over the defendant. The court found that Kurbanov purposefully availed himself of the privilege of conducting business in Virginia. The court's reasoning followed the three-prong test for specific jurisdiction. First, Kurbanov's contacts with Virginia were both quantitatively and qualitatively sufficient for purposeful availment. He attracted a massive user base in Virginia (hundreds of thousands of visitors) and established a commercial relationship, even though the service was free to users. The court characterized this as a 'calculated business choice' to lure visitors in order to profit from them by collecting their data and selling targeted advertising space. The use of third-party ad brokers did not sever his connection to the forum, as he knowingly exploited his Virginia user base for commercial gain. Additional contacts, like using Virginia-based domain administrators and formerly using Virginia-based servers, reinforced the conclusion that he could anticipate being haled into court there. Second, the record companies' copyright infringement claims arose directly out of Kurbanov's activities directed at Virginia, as the alleged piracy was the very activity conducted by Virginia users that he facilitated and profited from. The court found this created a direct 'affiliation between the forum and the underlying controversy.' The court remanded for the district court to consider the third prong: whether exercising jurisdiction would be constitutionally reasonable.
Analysis:
This decision clarifies the application of specific personal jurisdiction to foreign operators of interactive websites, particularly in the context of copyright infringement. It establishes that monetizing a user base within a specific state through geo-targeted advertising, even indirectly through brokers, constitutes purposeful availment. The ruling makes it more difficult for foreign website operators to evade U.S. jurisdiction by claiming a lack of direct commercial transactions with users or by outsourcing advertising. This precedent strengthens the ability of copyright holders to sue foreign infringers in the forums where the harm is occurring, shifting the focus from the website's technical interactivity to the operator's intent to exploit a specific market for commercial gain.
