IP Law Daily, COPYRIGHT—10th Cir.: Congressional intent trumps Black’s Law Dictionary when it comes to the DMCA, (Oct 16, 2024)

By Matthew Hersh, J.D.

A retailer is “found” in a jurisdiction, for the purpose of lawsuits following notice-and-takedown activities, even if it could not be served with process there.

Online retail giant Amazon could be “found” in Utah for the purpose of a jurisdictional dispute arising under Digital Millennium Copyright Act even if it could not have been served with process there, the U.S. Court of Appeals for the Tenth Circuit has held. The court of appeals, reversing the district court in a nonprecedential decision, emphasized that the dictionary definition of the term was “problematic” in light of the statutory scheme set out by Congress in the landmark 1998 legislation (DP Creations, LLC v. Adolly.com, No. 23-4126 (10th Cir. Oct. 15, 2024)).

The dispute arises out of a lawsuit filed by Bountiful Baby, a Utah company that manufactures kits and supplies for creating lifelike infant dolls known as “reborn dolls.” The target of the lawsuit is two Chinese companies—Adolly US and Reborn Doll Gallery—that were allegedly selling counterfeit copies of reborn dolls through Amazon. Before suing, Bountiful Baby sent a takedown notice to Amazon under the Digital Millennium Copyright Act, which led to the listings being taken down. But the Chinese companies then filed DMCA counter-notices which led Amazon, as required under the statute, to put the sites back up.

This copyright infringement complaint followed—but it did not remain in the courts for very long. The district court dismissed the claim for lack of personal jurisdiction over the Chinese companies. Bountiful Baby appealed, leading to this ruling.

Personal jurisdiction. The court of appeals reversed the district court. The dispute involves an interpretation of the notice-and-takedown provision of the Digital Millennium Copyright Act, codified at 17 U.S.C. §512(g). Under that provision, a copyright owner can serve a takedown notice on a service provider like Amazon that requires the service provider to take down allegedly infringing materials. But the owner of those materials can then serve a counter-notice that requires the service provider to put the materials back up. Importantly, for the purpose of this dispute, any overseas subscriber must include in its counter-notice a statement that it consents to the jurisdiction of the federal court “for any judicial district in which the service provider may be found.”

The question here was what the word “found” in that statute meant—and whether Amazon, the service provider in question, was “found” in Utah under that definition. Under the venerable Black’s Law Dictionary, the district court observed, in order for a person to be “found” in a particular jurisdiction it was “necessary that [the corporation] be doing business in such state through an officer or agent or by statutory authority in such manner as to render it liable then to suit and to constructive or substituted service of process.” Because Amazon did not have officers or agents in Utah carrying on Amazon’s business there, the district court reasoned, Amazon was not “found” there for purposes of the DMCA. That reading of the statute was incorrect, the court of appeals concluded.

The district court read the statute wrong, the court of appeals found, because traditional principles of personal jurisdiction were simply unworkable under the statutory scheme of the DMCA. Under traditional jurisdictional principles, the court noted, a company like Amazon could be subject to jurisdiction in a particular state either if it had continuous and systematic ties with the state (or in other words, if the court had “general” jurisdiction over it), or if the allegations in the lawsuit arose out of the company’s activities in the state (that is, if the court has “specific” personal jurisdiction over it). It was the second prong that was problematic under the DMCA, the court reasoned. “[T]he service provider is not a defendant,” the court noted, “so the plaintiff’s injuries do not—and could not—arise out of the service provider’s forum-related activities.” Rather, the court noted, “the plaintiff’s injuries arise out of the activities of the service provider’s subscriber.” In practice, then, the court concluded, Black’s jurisdiction-based definition of the word “found” was “inadequate considering the context in which Congress used the word in § 512(g)(3)(D).”

What’s more, the court of appeals noted, Amazon could be “found” in Utah even under the Black’s Law definition. Amazon invested over $1 billion in Utah from 2010 to 2019 and had 5,000 employees there—many working at customer fulfillment centers and delivery stations in the state. “Clearly, it is possible to come across or locate Amazon in Utah because its agents and officers carry on Amazon’s business in Utah,” the court of appeals found. For that reason, too, the decision would be reversed.

The Case is No. 23-4126.

Judge: Carson, J.

Attorneys: Ryan C. Morris (Workman Nydegger) for DP Creations, LLC d/b/a Bountiful Baby.

Companies: DP Creations, LLC d/b/a Bountiful Baby; Adolly.com; Shenzhen City Aiduola Hualianwang, Ltd. d/b/a Adolly US; Huizhou City Otard Gifts d/b/a/ OtardDolls; Rugao Luoen Trading Co., Ltd. d/b/a Reborn Doll Galler; Nanjing Tianzeng Gifts, Ltd. d/b/a NPK

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