It’s 2022, but IP litigants can still learn from the spirit of that groundbreaking Supreme Court case that gave us the Miranda rights. Surprisingly, anything you say to the USPTO can and will be used against you in a copyright infringement case — even if it is apparently unrelated to your trademark application.
Brought before the Ninth Circuit, Lang Van, Inc. v. VNG Corporation involves a streaming pirate service based in Vietnam suddenly finding itself subject to U.S. jurisdiction. Unlike other piracy cases in which the defendants were no-shows, in this case, the defendant showed up, thus avoiding a default judgment for millions of dollars.
The plaintiff, in this case, is a U.S. company that owns thousands of copyrights in Vietnamese language music. The defendant is a company based in Vietnam that streams music without the authorization of the copyright owner, monetizing it through an app called “Zing MP3” that grants its customers access to DRM-free downloads of all kinds of music.
The district court originally ruled against the plaintiff on the question of jurisdiction, but the Ninth Circuit reversed. Instead of looking to case law precedent, the appellate court looked to the statute and said Rule 4(k) of the Federal Rules of Civil Procedure governed this case. Rule 4(k) is designed to determine that a federal court has jurisdiction based on the aggregate amount of contacts with the US that a defendant has. Where a company has sparse business in multiple states, it might not be subject to the general jurisdiction of any particular state; but by considering the aggregate of contacts, a federal court can assert its jurisdiction to determine the defendant’s liability.
Rule 4(k) has three prongs, which are very simple:
1. Whether the dispute is a federal question; and
2. Whether the defendant is subject to the jurisdiction of any particular state.
3. The burden then shifts to the defendant to demonstrate that it would be unreasonable to be brought into the federal court where the plaintiff commenced the case.
In this case, copyright infringement is the subject of a federal statute, so it was clearly a federal question, and the first prong was satisfied. As for the second prong, the defendant itself had said it was not subject to California or any other state’s personal jurisdiction because it didn’t have any substantial sales in any particular state. The burden then shifted to the defendant to show that traveling to California was an unreasonable inconvenience.
The court said that it’s clearly more inconvenient for the California company to go to Vietnam than the other way around. Also, an international report had recently indicated a lack of copyright infringement jurisprudence in Vietnam. That, the court said, means that it was not a practical forum for this case.
One of my favorite parts of this case was that the defendant had previously demonstrated to the USPTO in a trademark application that its Zing MP3 app was being used in U.S. commerce (in order to register its trademark). Defendant filed English-language screenshots as specimens of such use. This unintentional evidence — originally unrelated to the copyright claims — helped to demonstrate that “by its own admission,” the defendant was selling its goods and services in the U.S. As such, it benefitted from the laws of the U.S. and thus cleared the way for the Ninth Circuit to apply Rule 4(k) to this case.
Additionally, some witness statements bolstered the plaintiff’s claim. For example, an employee testified that he was told to peruse the catalogs of Vietnamese music of plaintiff and others in order to add to the content of Zing MP3. Of course, they added songs to the app without even requesting any authorization. Other problematic evidence included the defendant’s non-use of a geo-blocking feature that would have blocked the app from the U.S. market. The fact that it declined to use that geo-blocking feature confirmed the purposeful availing of itself of US jurisdiction.
The moral of the story is, don’t file for U.S. trademark protection if the cornerstone of your business is U.S. copyright infringement. And try not to make that business model so obvious.
