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By Peter Leung
Alibaba-owned Youku Tudou, Inc., which runs one of the most popular video streaming sites in China, can’t be sued for copyright infringement in the U.S., a federal court ruled Jan. 24 ( Triple Up Ltd. v. Youku Tudou Inc. , 2017 BL 19299, D.D.C., No. Civil Action No. 16-159 (RDM), 1/24/17 ).
Youku Tudou lacked sufficient contacts with the U.S. to fall under its jurisdiction, even though it was listed on the New York Stock Exchange and its website hosted ads directed at American consumers, the U.S. District Court for the District of Columbia said.
Plaintiff Triple Up Ltd. claimed it had the exclusive U.S. internet broadcasting rights to several Chinese-language movies, including “The Squirrel Suicide Incident,” which can be found on the Youku Tudou video streaming site.
The decision is not binding on other courts, but highlights some of the challenges to stopping copyright infringement on foreign websites. Sites like Youku Tudou, which hosts user-uploaded videos, can be a particular problematic as users may try to share copyright-protected content.
Youku Tudou has no offices or employees in the U.S. and its streaming website is only in Chinese, but by making these movies available to U.S. viewers, Youku Tudou was infringing its copyrights in the U.S., Triple Up said in its complaint.
Triple Up also argued that the court had jurisdiction over Youku Tudou because of the company’s various U.S. ties. U.S. law gives a federal court jurisdiction over a foreign company that has a certain level of contacts with the U.S., if that company is not subject to the personal jurisdiction of any one state.
The court said it didn’t have jurisdiction under Rule 4(k)(2) of the Federal Rules of Civil Procedure, which requires ties to be “purposefully directed” at U.S. residents and, at minimum, related to the copyright infringement claims.
In particular, the court said that most of the ties did not relate to the copyright claims. This included Youku Tudou’s U.S. public listing before it was purchased by Alibaba Group Holding Inc., and the fact that the company had contracts with various U.S.-based companies.
The fact that the streaming website served up third-party hosted ads directed at U.S. customers did not confer jurisdiction, the court said. It said that there was no direct relationship between those ads and the allegedly infringing content, since the videos would still be on the website even if it had only ads for Chinese consumers.
The court also rejected Triple Up’s “novel” argument that since Youku Tudou has the power to restrict some videos to viewers in specific countries, the fact that it failed to block U.S. access to the allegedly infringing videos showed that it purposefully directed the materials to the U.S.
The court said the argument has negative policy implications, because it means that every foreign website owner must block its content from reaching the U.S. to avoid being sued here.
The court said that Triple Up did not make the argue that there was jurisdiction because Youku Tudou’s intentional actions were expressly aimed at the U.S., where the brunt of the harm was felt. But this argument would likely have failed as well, since none of the actions were “expressly aimed” at the U.S.
Judge Randolph D. Moss decided the motion. Mei & Mark LLP represented Triple Up. Skadden, Arps, Slate, Meagher & Flom LLP represented Youku Tudou.
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