District Court Finds that US Authorization of Non-US Infringement does Not State a Claim under the Copyright Act

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

Datacarrier S.A. v. WOCCU Services Group, Inc., US District Court for the Western District of Wisconsin, November 22, 2016

Datacarrier, an Ecuadorian software company, brought copyright infringement claims against WOCCU Services Group, a Wisconsin corporation that holds ownership interest in several Latin American and South American companies.  Datacarrier claimed that WOCCU infringed its copyright in software that processes financial transactions and manages ATM systems.  The software is used primarily in South America, and the infringement allegedly consisted of WOCCU’s authorization, from the US, of infringement in that region, and some limited direct US infringement.

The District Court observed that copyright infringement occurring entirely outside the US could not form the basis for a US infringement action.  It addressed an open question in the case law by concluding that the US authorization of non-US infringement was similarly outside the scope of the Copyright Act.  The Court considered another open question, concluding that it would treat an argument that only extraterritorial infringement had been alleged as going to the merits of the case, rather than the Court’s jurisdiction under the Copyright Act.  The Court noted, without deciding, that one of the parties believed that the procedural question mattered because allegations of US infringement could be made based on “information and belief” as opposed to direct knowledge only if the territorial question went to merits of the claim rather than jurisdiction.

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