In 2018, a group of prominent record labels sued two very popular YouTube rippers, FLVTO.biz and 2conv.com.
The labels, including Universal, Warner Bros, and Sony, accused the sites of copyright infringement and hoped to shut them down quickly. But that didn’t go as planned.
The Russian operator of the sites, Tofig Kurbanov, fought back with a motion to dismiss. He argued that the Virginia federal court lacked personal jurisdiction as he operated the sites from abroad and didn’t target or interact with US users.
The District Court agreed with this assessment. In a verdict released early last year, Judge Claude M. Hilton dismissed the case. The court carefully reviewed how the sites operated and found no evidence that they purposefully targeted either Virginia or the United States.
The record labels and the RIAA were disappointed with the outcome and swiftly announced an appeal.
Appeals Court Reverses the Dismissal
Today, the Fourth Circuit Court of Appeals decided on the matter. In a unanimous decision, it reversed the District Court’s ruling. This means that the motion to dismiss is off the table and that the case will be revived.
The Fourth Circuit Court found that there are more than sufficient facts to conclude that Kurbanov purposefully conducted business in the US, specifically, the state of Virginia. That the site doesn’t charge users is not seen as being crucial.
“To start, his contacts with Virginia are plentiful. In the relevant period, between October 2017 and September 2018, more than half a million unique visitors went to the Websites, totaling nearly 1.5 million visits. These visits made Virginia one of the most popular states in terms of unique visitors as well as number of visits,” the Appeals Court notes.
“In addition to the volume of visitors, we also find the nature of the repeated interaction between the Websites and visitors to be a commercial relationship,” the order adds, stressing that the “mere absence of a monetary exchange does not automatically imply a non-commercial relationship.”
On top of that, the decision also weighs in the fact that the sites have a registered DMCA agent, worked with US-based advertisers, and used US-based servers and domain registrars at some point.
Contrary to the District Court, the Appeals Court also finds that FLVTO.biz and 2conv.com targeted Virginia users, as the websites were globally accessible. No attempts were made to block Virginia visitors while the site did profit from the data that was harvested from these people.
“In sum, we conclude Appellants’ copyright infringement claims arise out of Kurbanov’s activities directed at Virginia,” the Court concludes.
The result of the ruling is that the District Court dismissal is off the table, so the lawsuit at the lower court can continue. This doesn’t mean that Kurbanov has lost that case though, but he will possibly have to defend himself and his sites against the record labels’ copyright infringement claims.
Before that happens, the District Court will first have to reconsider the jurisdiction challenges in full. In its first decision on the motion to dismiss, it chose not to conduct a “reasonability test” because the other arguments were sufficient to warrant a dismissal. This has now changed.
‘A Dangerous Precedent’
The record labels will be pleased with this decision but according to Kurbanov and his legal team, it sets a dangerous precedent. Counsel Evan Fray-Witzer informs us that if this ruling stands, it will have a broad impact on foreign site operators.
“The idea that a website operator could be subject to personal jurisdiction because the site has a DMCA agent would be a horrible precedent if allowed to stand: all it will mean is that foreign website operators will forgo having a DMCA agent, something that is beneficial to content producers,” Fray-Witzer says.
“If Mr. Kurbanov – who has never once visited the United States – can be hauled into a U.S. Court simply because he created a website that turned out to be popular in the U.S., then any American who creates a website can expect to be subject to personal jurisdiction in China, Russia, and every other country in the world.”
Kurbanov and his legal team are still considering their options at this time but they don’t expect this to be the end of the jurisdictional battle, where further appeals are still possible.
A copy of the Fourth Circuit Court of Appeals’ decision is available here (pdf).