US Court Tells Brazilian Court To Stop Ruling On Copyright Issue That It Wants To Rule On First

Legal Issues

from the international-disputes dept

One of the issues that we’ve been discussing on Techdirt since the very beginning is the big question of how do you determine proper jurisdiction on internet related lawsuits, since the internet is accessible anywhere. Over the years there have been different rulings and different thoughts on this, but it’s not clear there are good answers. The worst idea, of course, is suggesting that because something is available anywhere, it’s subject to all rules. That creates a least common denominator setup, in which the absolute most restrictive rules win out around the world. That would hinder innovation tremendously. Almost as bad is the view that the US government appears to take, which is that the US’s rules matter on most of the internet, because the major URLs of the internet (such as .com) are managed by a US company. That’s pretty crazy, and is going to lead to serious international problems in the long run. I think a more reasonable (though far from perfect) test is simply an analysis of (1) where the actual business is located and (2) where the servers are located. It seems reasonable to focus mainly on where the company is located, and as a secondary measure, look at where the servers are located, and then use that for jurisdiction.

But, of course, when you’re dealing with multiple parties, there can be questions of multiple jurisdictions. In the US, when there’s a dispute over jurisdictions, such as when a declaratory judgment is filed for in one district, and the other party wants to file the lawsuit in another district, efforts are made to explain to the court that first got the case which district is best, and the court then decides to keep the case or boot it to a different district. But what happens when there are international jurisdiction disputes?

TechCrunch alerts us to a fun case in which Zynga (who has a well known history of copying other company’s games) sued a Brazilian startup named Vostu, which it accused of copying its games. Personally, I think Zynga should shut up and not open up such a can of worms that might come back to bite it as well, but Zynga seems to be focusing a lot on being a legal bully lately. Either way, it filed lawsuits in both the US and in Brazil. While the US court, as typically happens, was taking its sweet time, the Brazilian court actually ruled in favor of Zynga (against the hometown favorite) and issued a preliminary injunction, telling Vostu to shut down within 48 hours.

And here’s where things get interesting. This woke up the US court (at the request of Vostu), who has ordered Zynga not to enforce the Brazilian decision. As the court notes, it wants to “maintain the status quo” until it has a chance to decide the preliminary injunction question. Furthermore, even as Zynga argues that the two lawsuits are separate, as one covers Brazilian copyright law and the other covers American copyright law, the US court points out that the impact of the Brazilian ruling will hit the US as well:

But one clear policy that all federal courts recognize?even those which have been loath to interfere with foreign proceedings?is the need to protect the court?s own jurisdiction…. The Brazilian injunction evidently purports to restrict all use of the works in suit everywhere. It appears that enforcement of the exceptionally broad Brazilian injunction would prevent this Court from meaningfully adjudicating the claims of U.S. copyright infringement in this case.

As the court notes, allowing the Brazilian injunction to go forward could harm the US court’s ability to decide the case… and, by the way, it notes that Zynga filed in the US first, and should wait for the US court to weigh in:

The injunction issued in the Brazilian action is a grim backdrop against which to consider issues of comity. To be sure, Brazil has an important interest in enforcing its copyright laws. But Zynga?which chose the U.S. forum first?now seeks to enforce an injunction it obtained abroad that would paralyze this Court?s ability to decide this case. Comity norms do not abide such a result.

It will be interesting to see if this cross-border dispute goes much further, because I would expect that we’re going to see a lot more international jurisdiction battles in the near future, and how courts deal with these could become a very big deal.

Filed Under: brazil, copyright, jurisdiction, us
Companies: vostu, zynga