Will Co., Ltd. v. Ka Lee
Not officially reported (2022)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
For specific personal jurisdiction under Federal Rule of Civil Procedure 4(k)(2), a federal court may assert jurisdiction over a foreign defendant if the defendant purposefully directed its activities at the United States, the claim arises from those activities, and jurisdiction is reasonable, applying the Calder Effects Test to determine purposeful direction.
Facts:
- Will Co. Ltd. (Will Co.), a Japanese entertainment company, produces adult videos and has registered them for copyright protection in the United States.
- Will Co. sells access to its videos exclusively on R18.com, generating over one million dollars annually from U.S. consumers.
- In June 2020, Will Co. discovered that ThisAV.com, a video-hosting site, was displaying thirteen of its copyrighted videos without permission.
- Youhaha Marketing and Promotion Limited (YMP) owns ThisAV.com, and Ka Yeung Lee (Lee) serves as a Director of YMP; both are based in Hong Kong.
- Lee and YMP created ThisAV.com, purchased its domain name, acquired hosting services from an American company (Gorilla Servers) with servers in Utah, and purchased content delivery network (CDN) services for North America from Cloudflare, another American company.
- While most of ThisAV.com's content is in Japanese, its legal compliance pages (Privacy Policy, Terms and Conditions, DMCA, and 2257) are in English and specifically address United States law, stating the site is 'available from its location in the United States of America' and guaranteeing lawful access for U.S. persons.
- ThisAV.com generates revenue by selling advertising space to third-party vendors, some of whom use geo-targeting to serve location-relevant advertisements.
- During the period of April 1 to June 30, 2020, ThisAV.com received over 1.3 million visits from the United States, constituting 4.6% of its total views.
Procedural Posture:
- Will Co. Ltd. discovered ThisAV.com was displaying its copyrighted videos without permission in June 2020.
- Will Co. sent Digital Millennium Copyright Act (DMCA) takedown notices to ThisAV.com, but the allegedly infringing works were not removed.
- Will Co. initiated a copyright infringement suit against 'Does 1-20' under the Copyright Act in the United States District Court for the Western District of Washington.
- After limited discovery, Will Co. amended its complaint to name Youhaha Marketing and Promotion Limited (YMP) and Ka Yeung Lee (Lee) as defendants.
- Defendants YMP and Lee moved to dismiss the lawsuit under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction, conceding that the court lacked general personal jurisdiction over them.
- On June 30, 2021, the district court granted Defendants' motion to dismiss, finding that Will Co. failed to establish that the content on ThisAV.com was 'expressly aimed' at the United States or that defendants caused 'jurisdictionally significant harm.'
- Will Co. Ltd. appealed the district court's dismissal to the United States Court of Appeals for the Ninth Circuit.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a federal court have specific personal jurisdiction over foreign operators of a video-hosting website who utilize U.S.-based hosting and content delivery network services, tailor legal compliance pages to U.S. law, and profit from a significant number of U.S. viewers, thereby purposefully directing their activities at the United States under the Calder Effects Test?
Opinions:
Majority - Wardlaw, Circuit Judge
Yes, a federal court has specific personal jurisdiction over Youhaha Marketing and Promotion Limited (YMP) and Ka Yeung Lee (Lee) because they purposefully directed the operation of ThisAV.com at viewers in the United States, thereby satisfying the "expressly aimed" element of the Calder Effects Test. The court applies Federal Rule of Civil Procedure 4(k)(2), noting that the defendants conceded the claim arose under federal law and they are not subject to jurisdiction in any state court. The determinative question is whether exercising jurisdiction comports with due process, which requires "minimum contacts" through a three-part test for tort claims: purposeful direction, a claim arising from forum activities, and reasonableness. This appeal specifically addresses the "purposeful direction" element through the Calder Effects Test, which requires an intentional act, expressly aimed at the forum state, causing harm known to be suffered there. Regarding the "intentional act," YMP operated ThisAV.com, and Lee purchased its domain name and domain privacy services, which are established as intentional acts. As for "express aiming," the court found YMP and Lee did "something more" than merely operating a passive website. Their advertising structure demonstrated they profited from U.S. viewers, as over 1.3 million visits from the U.S. during the relevant period generated considerable revenue. Furthermore, their intent to cultivate a U.S. audience was evidenced by two key choices: first, hosting the website in Utah and purchasing content delivery network (CDN) services for North America, which significantly reduces loading times for U.S. viewers, thereby improving search engine optimization (SEO) and user engagement in the U.S.; and second, posting legal compliance webpages (Privacy Policy, Terms and Conditions, DMCA, and 2257) that are exclusively in English and tailored to U.S. law, explicitly guaranteeing lawful access only for persons in the United States. These affirmative actions distinguished ThisAV.com from purely user-generated content sites where the operator showed no subjective intent to target the forum, as seen in AMA Multimedia v. Wanat. Finally, the court concluded that the defendants' conduct caused foreseeable harm in the United States. The 1.3 million visits from U.S. users constituted a "substantial" amount of harm in the forum, comparable to the Keeton v. Hustler Magazine precedent, and the harm was foreseeable given their active appeal to, knowledge of, and profit from a U.S. audience, coupled with receiving takedown notices. The court therefore reversed the district court's dismissal and remanded for the completion of the personal jurisdiction analysis.
Analysis:
This case significantly clarifies the application of the "express aiming" element of the Calder Effects Test in determining specific personal jurisdiction over foreign operators of internet-based businesses. It demonstrates that a combination of infrastructural choices (U.S.-based hosting, North American CDN), U.S.-specific website content (legal compliance pages), and significant profit generation from a U.S. audience can collectively establish purposeful direction, even when no single factor might be sufficient alone. The ruling provides a more robust framework for plaintiffs seeking to establish jurisdiction over foreign online infringers and signals that mere passive availability of a website is insufficient to avoid U.S. jurisdiction if active steps are taken to cultivate a U.S. audience. This precedent could impact future cases involving copyright infringement, trademark infringement, or other internet-based torts where foreign defendants engage in similar targeting strategies.
