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PENGUIN GROUP v. AMERICAN
16 N.Y.3d 295 (2011)
PENGUIN GROUP (USA) INC., Appellant,
v.
AMERICAN BUDDHA, Respondent.
No. 7.
Court of Appeals of New York.
Argued February 9, 2011.
Decided March 24, 2011.
Online Media Law, PLLC (Charles H. Carreon, of the Arizona bar, admitted pro hac vice, of counsel), for respondent.
Public Citizen Litigation Group (Michael H. Page, of the District of Columbia bar, admitted pro hac vice, of counsel), for Public Citizen, amicus curiae.
Kilpatrick Stockton LLP, New York City (Marc Lieberstein, of counsel), for International Trademark Association, amicus curiae.
Davis Wright Tremaine LLP, New York City (Elizabeth A. Mc-Namara, of counsel), for American Association of Publishers and others, amici curiae.
Chief Judge LIPPMAN and Judges CIPARICK, READ, SMITH, PIGOTT and JONES concur.
OPINION OF THE COURTGRAFFEO, J. The United States Court of Appeals for the Second Circuit has asked us a question regarding the scope of long-arm
jurisdiction under CPLR 302 (a) (3) (ii) in the context of a federal copyright infringement action. Plaintiff Penguin Group (USA) is a large trade book publisher with its principal place of business in New York City. Defendant American Buddha is an Oregon not-for-profit corporation whose principal place of business is in Arizona. It operates two Web sites—the American Buddha Online Library and the Ralph Nader Library1—that are hosted on servers located in Oregon and Arizona. Penguin commenced this copyright infringement action against American Buddha in the United States District Court for the Southern District of New York, alleging that American Buddha infringed on Penguin's copyrights to four books: "Oil!" by Upton Sinclair; "It Can't Happen Here" by Sinclair Lewis; "The Golden Ass" by Apuleius, as translated by E.J. Kenney; and "On the Nature of the Universe" by Lucretius, as translated by R.E. Latham. The complaint alleges that American Buddha published complete copies of these works on its two Web sites, making them available free of charge to its 50,000 members and anyone with an Internet connection. The electronic copying and uploading of the works was apparently undertaken in Oregon or Arizona. American Buddha's Web sites assure its users that its uploading of these works and the users' downloading of them do not constitute copyright infringement because they are protected under sections 107 and 108 of the Copyright Act (17 USC § 101 et seq.), which govern fair use and reproduction by libraries and archives. Penguin disputes that any exception to the Copyright Act applies to American Buddha's activities. American Buddha moved to dismiss the complaint for lack of personal jurisdiction, arguing that its ties to New York were too insubstantial. In response, Penguin asserted that it had secured long-arm jurisdiction over American Buddha by virtue of CPLR 302 (a) (3) (ii), which provides jurisdiction over nondomiciliaries who commit tortious acts outside the state that result in injuries within New York. American Buddha countered that CPLR 302 (a) (3) (ii) was inapplicable because Penguin did not suffer an in-state injury.
1. The Ralph Nader Library is not affiliated with Ralph Nader.
2. The Second Circuit also stated that "[t]here is a possible question at the threshold that neither the district court nor the parties have addressed and which we do not here decide: whether a copyright—in and of itself an intangible thing—has a physical location for jurisdictional purposes and, if so, what that location is" (609 F3d at 36 n 4). The Second Circuit resolved to "accept for the purposes of this appeal the district court's implicit conclusion that copyrights have a location and that their location in this case is in New York State" (id.). We, too, accept this characterization in answering the certified question.
3. Of course, we take no position on the merits of Penguin's claims.
4. In its brief, Penguin asserts that its claim is solely against American Buddha and that it is "loath to sue its readers," particularly where they are assured by American Buddha's Web sites that downloading the works contained therein would not constitute copyright infringement.
5. We do not find it necessary to address whether a New York copyright holder sustains an in-state injury pursuant to CPLR 302 (a) (3) (ii) in a copyright infringement case that does not allege digital piracy and, therefore, express no opinion on that question (compare McGraw-Hill Cos. Inc. v Ingenium Tech. Corp., 375 F.Supp.2d 252, 256 [SD NY 2005] ["The torts of copyright and trademark infringement cause injury in the state where the allegedly infringed intellectual property is held"] with Freeplay Music, Inc. v Cox Radio, Inc., 2005 WL 1500896, 2005 US Dist. LEXIS 12397 [SD NY 2005] [holding that personal jurisdiction over a nondomiciliary in a copyright infringement case did not exist because the injury occurred where the alleged out-of-state infringement took place]).
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