Royalty Network Inc. v. Dishant. Com, LLCRoyalty Network Inc. v. Dishant. Com, LLC
OPINION & ORDER
Defendant Dishant.com, LLC, through its proprietors- — defendants Dishant G. Shah and Meeta Shah — operates a website, www.dishant.com, which is the self-proclaimed “home to Indian music.” The website invites visitors to play Indian music, to create “playlists” of Indian songs, and to “listen to and download Bollywood Movie ringtones.” 1
Plaintiff Royalty Network, Inc. is the designated American administrator of music owned by non-party Saregama India, Ltd., a music recording company based in India. As the administrator, Royalty collects all royalties and other fees derived from copyrights Saregama holds on its music. Royalty contends defendants’ website provides visitors with unauthorized access to music produced and owned by Saregama, thereby- violating Saregama’s copyrights and denying Royalty royalties to which it is entitled. After notifying defendants of their allegedly infringing behavior, Royalty filed this complaint bringing Copyright Act, Lanham Act, and New York State law claims against Dish-ant.com, LLC and Dishant and Meeta Shah. 2
Dishant.com, LLC and Dishant and Meeta Shah now move to dismiss the complaint on the grounds that this Court lacks personal jurisdiction over them.
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In particular, those defendants argue that despite the ability of New York residents to access the website, Dishant.com, LLC is a Virginia-based company that does no business in New York, owns no property in New York, and has no contacts in or with the state, and, therefore, this Court does not have jurisdiction over the corporate defendant. Absent jurisdiction over the corporation, defendants continue, the Court also lacks jurisdiction over individual defendants Dishant and Meeta Shah. Accordingly, it contends dismissal pursuant to
Royalty opposes dismissal, contending that this Court has jurisdiction over defendants pursuant to New York’s “long-arm” statute,
Because this Court finds that neither provision of New York’s long-arm statute confers jurisdiction over these defendants in this matter, defendant’s motion to dismiss the complaint for lack of personal jurisdiction pursuant to
I. BACKGROUND
Unless otherwise noted, the following facts are taken from the complaint' and presumed to be true:
A. The Parties
Plaintiff Royalty Network, Inc. is a New York corporation with its principal place of business located within the Southern District of New York. (Compl. ¶ 1.) Pursuant to a written agreement dated November 29, 2005, Royalty serves as the American administrator of songs owned by Saregama India, Ltd., an Indian corporation and one of that country’s largest music recording companies. (Id. ¶¶ 2, 3.) As the administrator, Royalty has the right to collect all royalties, fees, and other income derived from the copyrights held by Saregama on all of its musical compositions and master records, and has been authorized by Saregama to proceed as the plaintiff in this suit. (Id. ¶ 3; Ex. N to Decl. of Frank Liwall dated Dec. 11, 2008.)
Defendant Dishant.com, LLC is a limited liability company formed under the laws of Virginia and with a principal place of business in Richmond, Virginia. (Id. ¶ 4.) Dishant.com, LLC, through its officers, directors, and employees — specifically defendants Dishant and Meeta Shah— operates the website www.dishant.com. (Id. ¶¶ 4, 7-8,11-12.) - '
According to the complaint, ’ Dishant Shah personally conceived of and created the website and, along with Meeta Shah, authorizes and directs all of the website’s activities, including the allegedly infringing activity at issue in this action. (Id. ¶¶ 6-9, 10-13.)
B. The Website
According to the complaint, www. dishant.com allows users to register and obtain a username; to play an extensive collection of Indian music; to create and save personal “playlists” for future use; and to download ringtones. (Id. ¶ 5.) The website, which professes to be the “Home of Indian Music,” is available in several languages, and provides access to not only music, but to movies and photographs as well. (Motta Decl. ¶ 6; www.dishant.com (last visited July 27, 2009).)
Royalty contends Saregama owns — and has assigned to Royalty — copyrights in at least 25 percent of the music available on www.dishant.com either as streaming media or as downloadable ringtones. (Id. ¶¶ 5, 13.) By way of example, Royalty identifies approximately 90 songs all validly copyrighted by Saregama but available to be listened to without plaintiff’s permission on www.dishant.com. (Ex. A to Compl.)
While all of the services offered by the website are free of charge to users, Royalty contends Dishant derives substantial revenues from operating the site.
(Id.
¶¶7, 12.) It does so, plaintiff argues, by selling advertisements to such well-known
In particular, www.dishant.com offers advertisers the opportunity to engage in “targeted advertising.” (Motta Decl. ¶ 10.) As the website tells potential advertisers, www.dishant.com attracts “hundreds of thousands of South Asian visitors” and “this number is increasing by the day!,” thus offering advertisers a unique opportunity to reach that particular audience with advertisements on'the website. (Id.; Ex. E to Motta Deck) Royalty contends a significant percentage of those visitors are based in the United States. And while it does not identify any specific visitor to the site, it provides data indicating that as many as 47,000 individuals in the United States visit www.dishant.com each month. (Ex. H to Motta Deeb)
C. The Complaint
The complaint contains seven counts brought pursuant to federal and New York state law. Count One alleges that defendants’ operation of www.dishant.com infringes copyrights validly held by'Saregama and assigned to Royalty, thereby violating section 501 of the Copyright Act. (Compl. ¶¶ 25-28.) In so doing, Royalty contends defendants are damaging Royalty’s “goodwill and reputation” and “destroying the commercial market for the Songs administered by plaintiff and owned by Saregama.” (Id. ¶ 34.) Count One thus seeks lost profits or, if lost profits are unascertainable,. statutory damages in addition to the fees and costs incurred in bringing this action. (Id. ¶¶ 31-33.) Count Two raises identical claims against Dishant and Meeta Shah in their individual capacities as operators of www.dishant. com. (Id. ¶¶ 36-42.) 4
Count Four of the complaint alleges defendants’ website not only makes plaintiffs music available to the public without permission but does so while also depicting Saregama’s artwork and logo in an attempt to “deceive ... the public” into believing that www.dishant.com is authorized by Saregama.
(Id.
¶¶ 61-62). Royalty contends defendants are thus falsely designating www.dishant.com as a owner or originator of the copyrights arid causing copyright dilution in violation of section 43(a) of the Lanham Act.,
Counts Five through Seven, which are based on the same conduct, allege deceptive acts or practices in violation of New York law, (id. ¶¶ 66-69), and common law unfair competition and unjust enrichment. (Id. ¶¶ 71, 73-75.)
II. DISCUSSION
A. The Motion to Dismiss Standard
A plaintiff bears the burden of establishing the Court’s jurisdiction over the defendant on a motion to dismiss the complaint pursuant to
While the Court may look beyond the complaint to satisfy itself that it has jurisdiction to hear the case,
DiStefano v. Carozzi N. Am., Inc.,
B. New York’s Long-Arm Statute
In a federal question case, a federal court applies the personal jurisdiction rules of the forum state unless the federal statute specifically provides for national service of process.
PDK Labs, Inc. v. Friedlander,
New York law provides for both general and specific jurisdiction over non-domiciliary defendants. Royalty does not contend that defendants’ contacts with New York are so “continuous and systematic” as to make them “subject to the jurisdiction of New York on a general jurisdiction theory.”
Sole Resort, S.A. v. Allure Resorts Mgmt., LLC,
Instead, Royalty argues two different provisions of C.P.L.R.
1. “Transacts Business” in New York
To make a prima facie showing of jurisdiction pursuant to
For purposes of the long-arm statute, a party “transacts business” within the state when it “purposefully avails itself of the privilege of conducting activities
As New York courts have explained,
a. Jurisdiction over a Website — The “Spectrum of Interactivity”
Where a plaintiff seeks to invoke
Instead, where jurisdiction is premised on the use of a website by residents of a forum state, courts frame the jurisdictional inquiry
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by placing a website on a “spectrum” of interactivity. At one end are “passive” websites — i.e., those that merely make information available to viewers. Such websites have “been analogized to an advertisement in a nationally-available magazine or newspaper, and does not without more justify the exercise of jurisdiction over the defendant.”
Citigroup Inc. v. City Holding Co.,
As a preliminary matter, the parties dispute where on the spectrum the website www.dishant.com falls. Defendants contend the site is “passive” in that it is merely available to visitors anywhere but does not sell anything to anyone or otherwise purposefully direct its activities into any state, including New York. By contrast, as Royalty sees it, the website is “interactive” because it allows users to register, to create and save play lists, and to download content — notably ring tones- — • from the site to their own personal computers.
Royalty is clearly correct insofar as it contends that www.dishant.com is not a “passive” website. The site allows, indeed invites, a level of interactivity that extends well beyond merely making information available to visitors.
See Citigroup,
Here, Royalty identifies three different sets of contacts with New York that it contends are sufficient to amount to a transaction of business sufficient to trigger jurisdiction pursuant to
■ b. Availability of the Site to New York Residents
Indisputably, defendants’ website is available to visitors worldwide, including those in New York. Equally indisputably, as noted, mere availability to New York residents is insufficient to confer jurisdiction over defendants pursuant to
The Court need not decide whether that activity, either singularly or cumulatively, is sufficient to amount to a “transaction of business” for purposes of
Royalty does not dispute that, at this pre-discovery stage, it cannot identify specific New York users or ascertain the “full extent” to which “New York residents have accessed and used the many services of the Dishant website.” (Pl.’s Mem. of Law in Opp. to Mot. to Dismiss 11.) Instead, Royalty contends that the website purposefully targets the Indian population, that a significant percentage of the Indian population within the United States resides in New York, and, therefore, that New York residents must have used the website and that defendants must have intended such use, thereby purposefully availing itself of the New York market.
That argument is simply insufficient. Even assuming those facts could support an inference that transactions with New York residents occurred, they would nonetheless be insufficient to support the further, necessary finding that defendants purposefully and knowingly entered into those transactions with New York residents or otherwise targeted New York for business. In particular, Royalty’s argument that New York is home to a legally significant percentage of individuals of Indian descent residing in the United States — itself a questionable conclusion given that at least 85 percent of such individuals live outside of New York state — is insufficient to establish an intent to target the state given that defendants contend, and plaintiffs do not dispute, that the website’s primary audience is not visitors to the site from America at all but instead residents of India. (Shah Aff. ¶ 4; Pl.’s Mem. of Law in Opp. 5.) Indeed, Royalty’s own data shows that users from the United States (and thus any New York-based subset of those users) comprise a tiny fragment — -just five percent— of the website’s total monthly visitors, (Ex. L to Motta Decl.), thus confirming defendants’ averment that “New York visitor traffic is negligible with respect to visitors in India.” (Shah Aff. ¶ 4.)
Absent any additional evidence or even specific allegations to be proven through discovery, there is nothing in this record to support a finding that defendants purposefully transacted business via their website with New York visitors. In the context of the
c. Sale of Advertisements to New York-based Companies
Alternatively, Royalty argues that defendants “transact business” within the state by selling advertisements on its website to national advertisers, including companies based in New York such as American Express, Citibank, and Verizon. Royalty further contends those transactions of business are sufficient to create jurisdiction over this case.
While the sale of advertisements to a New York corporation could constitute “transactions of business” for purposes of
Moreover, the website features similar advertisements for companies based all over the country, and among those Royalty identifies, in addition to American Express, Verizon, and Citibank, are Texas-based Dell, Washington-based Microsoft, Colorado-based Dish Network, New Jersey-based Vonage, and California-based Paypal.
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Where a defendant’s interactions with New York residents is not “distinguishable from [defendants’] interaction with [those] located in any other jurisdiction,” the allegations are insufficient because they “lack[] the traditional indicia of ‘purposeful availment.’ ”
Capitol Records,
Even where a defendant website sells to advertisers nationwide, however, at least some courts have found that a defendant purposefully avails itself of the privileges and protections of doing business in New York when it sells to advertisers seeking to reach a New York audience by touting its ability to reach New York users.
See, e.g., Id.
at 360-61. Here, Royalty contends defendants did just that by telling potential advertisers that www.dishant. com could “increase your presence in the South Asian NRI audience”
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and thus of
The argument fails, however, because Royalty’s allegations and supporting evidence are inadequate to support the inference of a purposeful attempt to take advantage of the New York market. First, there is no direct evidence that defendants touted their ability to reach the New York market to anyone. Moreover, as- discussed above, Royalty’s data confirms that defendants’ website actually attracts visitors primarily from India, not from America, and that “New York visitor traffic is negligible” compared to visitors to the site residing in India. (Shah Aff. ¶ 4.) In light of that data, and absent any evidence to the contrary, the Court cannot conclude that defendants touted their ability to reach New Yorkers to potential advertisers, or in any other way purposefully availed themselves of the New York market in their advertising-related transactions of business.
Plaintiffs second asserted transaction of business, therefore, is also insufficient to confer jurisdiction pursuant to
d. Registration of a Domain Name with a New York Company
Finally, Royalty proffers that the fact that defendants registered the website domain name' — www.dishant.com—through a New York corporation, Register.com, Inc., amounts to a transaction of business within New York sufficient to confer jurisdiction in this Court. The argument is without merit.
Assuming defendants’ registration of the domain name through a New York corporation validly alleges a purposeful transaction of business in New York, that alone would not end the jurisdictional inquiry. For the Court to have jurisdiction pursuant to
No such nexus exists here. Indeed, aside from the general and undisputed fact that the instant suit stems from operation of the website whose domain name was registered in New York, Royalty does not identify any specific relationship at all between this suit and defendants’ transaction of business within the state. Moreover, that general and undisputed fact — i.e., that defendants registered the domain name www.dishant.com in New York — is insufficient here because the transaction has no specific connection to this litigation. That it took place in New York is “merely coincidental” and of no relevance to the facts or legal issues underlying this suit. To find otherwise would be to suggest that registration of a domain name — an act courts have described as “quite simple,”
Acad. of Motion Picture Arts & Sciences v. Network Solutions,
Accordingly, absent any additional nexus between defendants’ registration of a domain name in New York and this litigation, Royalty fails to make a prima facie showing that the transaction provides a basis for asserting specific jurisdiction over defendants pursuant to
2. Tortious Conduct Out of State Causing Injury In State
Alternatively, Royalty seeks to invoke
Royalty contends defendants’ conduct satisfies each of those jurisdictional elements because operation óf www. dishant.com amounts to copyright infringement — i.e., tortious conduct — committed out of state that causes injury to Royalty within the state, and that such injury in New York was reasonably foreseeable to defendants given the large Indian population in the state. Royalty further ' contends that defendants derive substantial revenue from operation of their website, and thus, the alleged tortious conduct. Defendants generally deny that they are causing harm, let alone harm in New York, and in particular contest that they derive substantial revenue from any of their activities.
Claims for copyright infringement validly allege tortious activity,
McGraw-Hill Cos. v. Ingenium Techs. Corp.,
Royalty also validly pleads the second element — -i.e., injury within the state of New York — because “the tort of copyright infringement causes injury in the state where the allegedly infringed intellectual property is held.”
Id.; see also Design Tex Group, Inc. v. U.S. Vinyl Mfg. Corp.,
No. 04 Civ. 5002,
The jurisdictional-inquiry breaks down, however, with respect to the third element because plaintiff proffers insufficient evidence to support a finding that it was reasonably foreseeable to defendants that their conduct would cause such injury in New York. The “reasonable foreseeability” requirement, which New York courts construe “in a manner consistent with United States Supreme Court precedent” so as to “avoid conflict with federal constitutional due process requirements,”
Fernan v. Furz-Hastings, Inc.,
Here, Royalty points to neither tangible manifestations of defendants’ intent to target New York nor concrete facts known to defendants thatwould lead them to foresee being sued in the Southern District of New York. Indeed, there is nothing in the record to indicate defendants had knowledge that a New York company held copyright interests in any of the music at issue in this action.
Cf. McGraw-Hill Cos.,
Nevertheless, Royalty contends the harm in question was reasonably foreseeable to defendants irrespective of whether they knew who the copyright holder was or where the copyright holder was located. As Royalty sees it, the harm in question consists, of the copyright holder’s loss of sales to its primary customers — i.e., the Indian and Indian American audience— and harm to its reputation among those customers. Moreover, Royalty argues defendants must have foreseen causing such a harm in New York given, as plaintiff contends, that defendants purposefully targeted New York’s Indian-American population.
The argument falls short, however, because Royalty does not actually establish that defendants purposefully targeted New York’s Indian American population or otherwise targeted their activities toward the state. And while lost sales resulting from infringing activities can constitute harm for purposes of
Accordingly, the Court finds Royalty has failed to plead a reasonably foreseeable harm in the state of New York and thus has failed to make a prima fa.ciq showing of jurisdiction pursuant to
C. Discovery
Finally, Royalty claims that, if the Court finds insufficient evidence to warrant the exercise of jurisdiction over defendants, it should be entitled to limited discovery in order to uncover additional facts and evidence relevant to the jurisdictional inquiry. The request is denied.
Although the decision to grant jurisdictional discovery is left to the discretion of the district court,
Jazini v. Nissan Motor Co.,
Royalty here has made no such threshold showing. Simply put, Royalty has failed to allege any plausible basis for finding jurisdiction pursuant to any provision of the New York long-arm statute. Royalty has not alleged any meaningful ties between defendants and the state of New York, and those few contacts between defendants and the state Royalty has identified bear little or no relationship to the facts and issues underlying this action. To the contrary, as highlighted above, Royalty’s own submissions underscore the lack of connection between the website and New York by confirming that the vast majority of www.dishant.com visitors do not live in the United States at all, let alone in New York.
Moreover, Royalty does not put forward any compelling reasons why discovery should be allowed, nor does it identify any particular facts it would seek to adduce through such discovery or suggest how discovery could aid in this Court’s jurisdictional inquiry. And it is well settled that a “plaintiff cannot put defendant through the costly process of discovery, even discovery limited to jurisdictional matters, simply because it thinks that it can probably show significant contact with the state of New York if discovery were to proceed.”
Bellepointe, Inc. v. Kohl’s Dep’t Stores,
Royalty has therefore made an insufficient showing to warrant jurisdictional discovery at-this stage.
III. CONCLUSION
Because Royalty fails tb make a prima facie showing that any provision of New York’s long-arm statute gives the Court
SO ORDERED.
Notes
. A "ringtone” is a "tune that plays when an individual who has purchased a ringtone receives a telephone call.” United States v. ASCAP, 599 F.Supp.2d. 415, 420 (S.D.N.Y.2009).
. The complaint also contains claims of contributory infringement against C I Hosting, Inc. and Propagation Networks, Inc. which allegedly serve as web "hosts” for the website. However, neither of those defendants has appeared in this action, and therefore the Court will not address the claims brought against them further. Accordingly, any reference to "defendants” in this opinion does not include either C I Hosting or Propagation Networks.
.Although the notice of motion was made solely by the individual defendants proceeding pro se, the parties all treat the motion as also made by Dishant.com, LLC and the Court will accordingly do so as well.
. Count Three alleges contributory copyright infringement against C I Hosting and Propagation Networks. However, there is no indication in the record to suggest those two defendants have yet been served with the summons and complaint, and neither has made an appearance in this action.
. The Court takes note of the Second Circuit's guidance that, while the "spectrum of interactivity” may be "useful for analyzing personal jurisdiction under
. The only specific users Royalty points to are two of its attorneys, both of whom made use of defendants' site for purposes of this suit. (Decl. of Anthony Motta dated Dec. 12, 2008, ¶1¶ 5-8; Decl. of Andrew Krents dated Dec. 11, 2008, ¶¶ 1-2.) However, even assuming those attorneys are New York residents, "courts, both in this circuit and elsewhere, have found that personal jurisdiction may not be based on contacts ‘manufactured’ by a plaintiff in this way.”
Chloe v. Queen Bee of Beverly Hills, LLC,
. The Court takes judicial notice of the location of each listed company’s principal place of business — as documented in each company’s Securities and Exchange Commission filings — for purposes of resolving this motion.
See
http://www.sec.gov/edgar.shtml (last visited July 9, 2009);
cf.
. Moreover, even if defendants’ sale of advertisements to New York corporations could constitute transactions of business for purposes of
.The term "NRI” is apparently an acronym for “non-resident Indian” and as such refers to an “Indian citizen who has migrated to
. Defendants concede their knowledge that Saregama held copyrights on some of the music available on www.dishant.com and detail their efforts to obtain a license for that music through negotiations with Saregama directly. (Exs. B, D to Ans.) However, there is nothing in the record to indicate defendants’ knowledge of Royalty’s licensing agreement with Saregama or Royalty’s New York location.