Geophysical Service, Inc. v. TGS-NOPEC Geophysical Co.
2017 U.S. App. LEXIS 4286
5th Cir.2017Background
- Geophysical Service, Inc. (Canadian company) created copyrighted seismic "seismic lines" and submitted copies to the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) as required by Canadian law; submissions were subject to a confidentiality period.
- TGS-NOPEC Geophysical Co. (Houston) requested older seismic lines from CNLOPB in 1999; CNLOPB directed a Canadian copy service to prepare and courier copies to TGS in Houston.
- Years later Geophysical learned of the transfer and sued TGS in the Southern District of Texas for copyright infringement (direct importation, contributory infringement based on inducing CNLOPB, and removal of copyright management information).
- The district court dismissed (with prejudice) for failure to state a claim, invoking extraterritorial limits of the Copyright Act and the act of state doctrine, and awarded attorneys’ fees to TGS.
- On appeal the Fifth Circuit: (a) treated the territorial reach of the Copyright Act as a merits element (not jurisdictional); (b) reversed dismissal of the importation claim and remanded for further analysis of whether the imported copies were “lawfully made” under §109; (c) affirmed dismissal of the contributory-infringement claim because the alleged underlying direct infringement occurred entirely abroad; and (d) vacated the fee award for reconsideration on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether territorial scope of Copyright Act is jurisdictional | Geophysical impliedly treated domestic requirement as part of merits but opposed dismissal | TGS argued claims were beyond Copyright Act’s territorial reach (jurisdictional) | Court: Territorial limit is a merits element, not jurisdictional (nonjurisdictional precondition) |
| Whether complaint pleaded unlawful importation | Geophysical pleaded that CNLOPB copied and couriered works to TGS in Houston | TGS argued pleading was insufficient and alternatively that importation was protected by first sale because foreign copies were "lawfully made" | Court: Complaint sufficiently pleaded importation; remanded to decide whether copies were "lawfully made" under §109 |
| Whether act of state doctrine bars inquiry into lawfulness of foreign-government-made copies under §109 | Geophysical said U.S. court may decide effect of CNLOPB’s acts on importation rights | TGS said act of state prevents U.S. courts from judging legality of CNLOPB’s acts and thus requires finding copies lawful | Court: Act of state does not bar §109 inquiry; determining lawfulness for first-sale effect does not invalidate foreign sovereign act |
| Whether contributory-infringement claim can be based on U.S. authorization of infringements that occur entirely abroad | Geophysical argued TGS induced CNLOPB from Houston and is liable as contributory infringer | TGS argued authorization in U.S. of foreign acts is insufficient where direct infringement occurred abroad | Court: Affirmed dismissal — authorization in U.S. of wholly extraterritorial direct infringement states no claim (follows Subafilms) |
Key Cases Cited
- Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351 (2013) (first-sale doctrine applies to copies lawfully made abroad)
- Quality King Distribs., Inc. v. L’anza Research Int’l, Inc., 523 U.S. 135 (1998) (unauthorized importation is an infringement of the §106 distribution right)
- Subafilms, Ltd. v. MGM-Pathe Commc’ns Co., 24 F.3d 1088 (9th Cir. 1994) (authorization in the U.S. of acts that occur entirely abroad does not state a copyright claim)
- W.S. Kirkpatrick & Co. v. Envtl. Tectonics Corp., Int’l, 493 U.S. 400 (1990) (scope and application of the act of state doctrine)
- Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) (statutory limits are jurisdictional only if Congress clearly states them)