District Court Allows Discovery of Non-U.S. Sales of Video Games Based on Potential Involvement of Apple Corp. Servers in the U.S.

The World in U.S. Courts: Spring 2016 - Intellectual Property: Copyright

Goes International, AB v. Dodur Ltd., U.S. District Court for the Northern District of California, February 4, 2016

The plaintiff, Goes, is a Swedish video game developer that alleged the defendant, Dodur, pirated copies of Goes's game in China and distributed them worldwide, in violation of U.S. copyright law. Goes sought information about Dodur's sales outside the U.S. and Dodur objected on grounds that any such sales were irrelevant because the Copyright Act does not have extraterritorial application.

Because the case involved only discovery and not a final decision, the Court analyzed whether it was "plausible" that the non-U.S. sales could be relevant to damages, and found that it was. In doing so, it applied a two part test requiring a plaintiff show that 1) "an act of infringement occurred[ed] within the United States, subjecting [the defendant] to liability . . . under the Copyright Act," and 2) the "damages flowed from extraterritorial exploitation of [the] infringing act that occurred in the United States." In the case at bar, Dendur downloaded Goes's protected game from, and uploaded its own (allegedly infringing) games to, the Internet by way of Apple Corp.'s App Store. U.S. consumers downloaded the infringing games from the App Store at least 51,000 times. Dendur argued that these actions were irrelevant because it uploaded its game to Apple servers in China, from which Apple (and not Dendur) may have made copies onto Apple servers in the U.S. Dendur also argued that that uploading alone is not a complete act of infringement that will trigger damages under U.S. copyright law. The Court disagreed, and noted that Dendur, in uploading its games to the App Store, "maybe purposely, maybe inadvertently" prompted Apple to distribute the allegedly infringing games worldwide. On these facts, the Court permitted discovery of non-U.S. sales to proceed.

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