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Hello TL with the recent drama between KESPA and Blizzard, I thought I would write a law school style essay answer about the controversy in an attempt to answer several of the basic legal question presented.
Anyways some background, my name is Brian Eller and I am currently a 2nd year law student at U.C. Davis (I also am moderator of the UCD starcraft team for CSL) and am also going into finals this week. The fact pattern presented by KESPA and Blizzard seemed like a good way to review for my final in E-Commerce. If any other law students (especially 1Ls) would like to jump in with criticisms of my answer/analysis feel free. FYI my analysis might be entirely wrong!
Essentially I am going to write a legal memo that will attempt to analyze a potential cause of action initiated by Blizzard against KESPA for copyright infringement, trademark infringement and trademark dilution of SC1. NOTE(1): To write this “memo” I will have to make several assumptions and additional facts of course would change the analysis. NOTE(2): Most of you will find this very boring and is probably too long for you to read, but maybe one or two of you won’t. Future law students (future 1Ls) might find this as a good general way to form an answer to a civ pro question regarding jurisdiction on the internet.
Part I will analyze whether a suit by Blizzard in the Eastern District of California passes a jurisdictional challenge
Part II will analyze the validity of the claims (my next post)
Part I
For a court to find jurisdiction over the defendants (KESPA), a court must find that there is subject matter jurisdiction, personal jurisdiction, and that the principal of forum non coveniens is not violated.
Is there subject matter jurisdiction?
Under 28 U.S.C. 1331 federal district courts have subject matter jurisdiction arising in all civil actions arising under the Constitution, laws, or treaties of the United States. The plaintiffs (Blizzard) claim that the defendants infringed Blizzard’s copyright under the Copyright Act of 1976 (17 U.S.C. §§ 106(1), (2) and (3)) and infringed and diluted plaintiff’s trademark under the Lanham Act (15 U.S.C. §§ 1114-1127). Therefore, this Court has valid subject matter jurisdiction.
Is there in personam jurisdiction (personal jx) either through general or specific jurisdiction?
a) General Jurisdiction
General jurisdiction exists when an out-of-state party has extensive, “systematic and continuous” or “substantial” dealings with the state in which the court sits. See Helicopteros v. Hall 466 U.S. 408 (1984). This requires “certain minimum contacts” and must “not offend traditional notions of fair play and substantial justice.” See Int’l Shoe Co. v. Washington 326 U.S. 310 (1945). However, the threshold of minimum contacts sufficient to confer general jurisdiction is higher than that for specific jurisdiction. Generally, a state may not obtain general jurisdiction over and out-of-state actor who regularly and systematically transmits electronic signals; instead there must be “something more.” See Bancroft v. Augusta Nat’l Inc. 223 F.3d 1082 (9th Cir. 2000). Factors to be taken into consideration are whether the defendant makes sales, solicits or engages in business in the state, serves the state’s markets, designates an agent for service of process, holds a license or is incorporated there. Id.
General jurisdiction is lacking in this case because KESPA’s contacts do not qualify as either substantial or systematic and continuous. KESPA is not registered or licensed to business in California, pays no taxes in California, maintains no bank accounts in California, and targets no print, television, or radio advertising towards California. Furthermore, KESPA occasional sales to California residents are not sufficient to create general jurisdiction (I am not even sure KESPA sells stuff to U.S. citizens).
b) Specific Jurisdiction
If no general jurisdiction exists, courts can still exercise personal jurisdiction over the defendants by using specific jurisdiction. A court may exercise specific jurisdiction over a defendant even when the defendant does not have systematic and continuous contacts with the state, if the case arises specifically out of the party's in-state activity. To establish specific jurisdiction over a defendant the court must thus find that the defendant (1) purposefully availed themselves to the forum state, (2) the claim must be one which arises out of or results from the defendant's forum-related activities, and (3) exercise of jurisdiction must be reasonable. If any of the three requirements is not satisfied jurisdiction in the forum, it would deprive the defendant of due process of the law.
The first prong to satisfy specific jurisdiction, personal availment, may be satisfied by the “effects test” or “Calder test”. See Calder v. Jones 465 U.S. 783 (1984). The “Calder test” or “effects test” requires that the out of state actor have "purposeful direction," or (a) an intentional action, that was (b) expressly aimed at the forum state, with (c) knowledge that the brunt of the injury would be felt in the forum state. That the effects were foreseeable for the Defendant at the time of the action is not alone sufficient to find specific jurisdiction, rather there must be more. See Bancroft 223 F.3d at 1087.
The internet presents a fascinating challenge to the effects test laid out in Calder, and courts taken several approaches. To decide whether a person has entered the state via the Internet for jurisdictional purposes requires an interpretation of the due process components of personal jurisdiction laid out in Calder. In Zippo, the court established a sliding scale test to determine whether a website a defendant personally availed itself to the forum state. See Zippo Manufacturing Co v. Zippo Dot Com Inc. 952 F.Supp. 1119 (W.D.Pa.1997). In Zippo the court made a distinction between active sites with lots of interactivity and passive sites which simply display information, finding personal jurisdiction to exist with active sites and lack of jurisdiction with passive sites. However, this analysis is too simplistic, because the distinction between active and passive is incomplete. For instance, it would be hard for a court to deny personal jurisdiction to a completely passive website that defames someone that solely displays text and it would be hard for a court to grant personal jurisdiction over a forum board that has high activity with numerous posts from people across the world. A more accurate test is reflected in ALS Scan, which allows a state to exercise personal jurisdiction over a defendant if that person (1) directs electronic activity into the State, (2) with the manifested intent of engaging in business or other interactions within the State, and (3) that activity creates, in a person within the State, a potential cause of action cognizable in the State's courts. ALS Scan, Inc. v. Digital Service Consultants Inc., 293 F.3d 707 (4th Cir. 2002).
To find personal jurisdiction over KESPA, there must be intentional acts, directed at the state of California, and that harms the plaintiff under California law. All of KESPA’s actions have taken place outside the forum (I assume…) and KESPA has not taken actions within the forum that invokes the benefits and protections of the law in the forum. Therefore, the court must look to see whether actions by KESPA indicated a purposeful direction toward California. (This is where creative legal arguments come in, again I don’t have complete facts). KESPA will argue that its website is in Korean, is registered as .kr, its leagues are in Korea and it specifically targets the Korean market and thus has not availed itself to the protections and benefits of the laws of California or the United States. Blizzard will argue that knowledge of Blizzard’s trademark along with advertisements in English, making Starcraft events freely available online and recruitment of Starcraft players in California and the United States to play in Korea establish sufficient minimum contacts. Likewise, negotiations in the United States, over Starcraft, with Blizzard, constitutes a direct interaction with the forum state. These interactions included an attempt to negotiate a license with Blizzard, but also included the threat of continued infringement of the copyright and trademark of Starcraft. This case presents facts similar to the situation in Panavision, where a letter sent to the forum state demanding money was enough to establish minimum contacts. See Panavision Int’l v. Toeppen, 141 F.3d 1316 (9th Cir. 1998). By attempting to negotiate with Blizzard KESPA directly targeted Blizzard unlike a solely passive website. This was an attempt to force the plaintiff to act and thus is enough to find personal jurisdiction. KESPA’s knowing and willful infringement of Blizzard’s trademark and combined with its awareness that Blizzard is incorporated, or has its principal place of business, in California is also sufficient to establish personal jurisdiction. (This section is seriously lacking…more evidence is needed for a better answer).
After determining whether the defendant availed him or herself to the forum state, the second prong of analysis requires that the contacts constituting purposeful availment must be the ones that give rise to the current suit. Under Bancroft & Masters, a simple “but for” causation may be used, and this requirement is met here. See Bancroft 223 F.3d at 1087. But for KESPA’s advertisements and use of Starcraft’s name there would be no cause of action. (Again this analysis is limited by the facts).
Finally for specific jurisdiction there must be reasonableness, i.e., the jurisdiction must comport with the interests of “fair play and substantial justice.” Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985). The reasonableness determination requires the consideration of seven separate factors: (1) the extent of the defendant's purposeful interjection into the forum state, (2) the burden on the defendant in defending in the forum, (3) the extent of the conflict with the sovereignty of the defendant's state, (4) the forum state's interest in adjudicating the dispute, (5) the most efficient judicial resolution of the controversy, (6) the importance of the forum to the plaintiff's interest in convenient and effective relief, and (7) the existence of an alternative forum, which may provide adequate relief to the plaintiff. Id at 476-477 citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S., 292 (1980). Blizzard will argue that enough of the factors weigh in favor, while KEPA argues the opposite. (Again I need more facts).
Blizzard will also argue that under Federal Rule of Civil Procedure 4(k)(2) that if KESPA’s contacts with California are insufficient to warrant jurisdiction in the state, rule 4(k)(2) may establish jurisdiction where “the United States serves as the relevant forum for a minimum contacts analysis.” Under this analysis the plaintiff must prove (1) that the claim against the defendant must arise under federal law (2) the defendant must not be subject to personal jurisdiction of any state court of general jurisdiction and (3) the federal court’s exercise of personal jurisdiction must comport with due process. The first factor is satisfied because the claim arises under the Lanham Act and under the Copyright Act (as opposed to diversity). Supposing the second factor is met because California denied jurisdiction, that leaves the third factor. The third factor’s analysis is essentially a similar analysis of reasonableness above, except that the actions must be directed at the United States as whole, rather than just California.
Is there a more appropriate forum? (i.e. does forum non conveniens apply?)
Forum non conveniens enables a court to exercise its discretion and dismiss a case when a foreign court is a more “appropriate and convenient forum for adjudicating the controversy.” Invoking forum non conveniens implies that the plaintiff properly invoked the jurisdiction of the court, but that it is inconvenient for the court and the defendant to have the trial in the original jurisdiction. KESPA will argue that Korean civil procedure, copyright and trademark law provide similar substantive and due process rights compared to American procedural rules, and copyright and trademark law. Thus, adjudicating the claims in Korea would be more appropriate.
However, Blizzard will argue that Korean copyright and trademark law is substantively different despite both parties being signatories to TRIPS ( Agreement on Trade Related Aspects of Intellectual Property Rights). TRIPS sets a minimum standard with respects to copyright, trademark, and patent law in the signatory nations. Thus, Korean copyright and trademark law may have dramatic differences as compared to U.S. copyright and trademark law.
For instance, several TRIPS countries have much broader fair use defenses and often mandate contributory licensing. Hypothetically, if a U.S. court rejects the case and a Korean court hears the case and decides for KESPA, Blizzard could argue that the decision in favor of KESPA is in flagrant disregard of the minimum copyright and trademark standards set out under TRIPS. Blizzard could then file a petition under section 301 of the 1974 Trade Act against South Korea for failing to live up to its treaty obligations under TRIPS. The United States could then conduct an investigation and threaten or implement trade sanctions against South Korea. This action however would not personally help Blizzard in recovering damages or an injunction against KESPA
Edited for style and length
 
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Mind summing up the key facts? 
Just kidding, interesting to read but since I am poorly educated in American law issues, some general questions I have in terms of understanding:
General Jurisdiction/Specific J.
--> So, the issue has to be somehow related to the state of the accusing company (Blizzard)? Wouldn't make sense or am I totally misreading things?
Specific J.
"To decide whether a person has entered the state via the Internet for jurisdictional purposes requires an interpretation of the due process components of personal jurisdiction laid out in"
--> Can you explain that? How the hell would one achieve such an interpretation?
Also, I didn't really understand what the exact accusation from Blizzard looked like. Where does the violation start when a solid end user licence agreement was the basis for using the product/game? I apologize since I did not follow the controversy to its full extend, but this might be a good opportunity to sum it up and get a good intro for your law project
Cheers
G
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Hey Thanks Iopper for the reply, here goes my answer:
"So, the issue has to be somehow related to the state of the accusing company (Blizzard)? Wouldn't make sense or am I totally misreading things?"
You are reading it correctly, and the answer is actually no. Strangely enough American civil procedure is mainly based on the convenience of the defendant in the forum. Basically this is because plaintiffs get to file the action wherever they want (they are initiating the law suit), and thus it’s up to the plaintiffs to show why the particular forum is a fair place to drag in a foreign company. A lot of the battles regarding civil proceduresgenerally revolve forum shopping or trying to get the lawsuit to occur in a location that would be more favorable to your party. Thus defendants generally try to shift the forum away from where the plaintiff brought the action, and the plaintiffs try to select a forum that is most likely to guarantee victory. In the patent context, there is a constant battle between the Eastern District of Texas which is considered pro patentee and the District of Deleware which is considered pro big business (this one of the reasons why nearly every U.S. company is incorporated in Deleware). Because patent infringement occurs at a national level suing in the Eastern District of Texas is a place where the harm occured and allows plaintiffs to get in. There is this thing called a declaratory judgment action that allows someone to declare a patent invalid and thus allows the big company to be the plaintiff, and in this case they would file in Deleware. So often there is a race between parties to file law suits. Essentially, Blizzard doesn’t need to file suit from their headquarters or office, but merely in a forum where they can show they were harmed.
"To decide whether a person has entered the state via the Internet for jurisdictional purposes requires an interpretation of the due process components of personal jurisdiction laid out in Calder"
--> Can you explain that? How the hell would one achieve such an interpretation?.
Basically American law surrounding civil procedure (at least from the Supreme Court) was developed before the creation of the Internet and relied on the technologies of that time period (phones, newspaper etc.). Essentially now courts must decide internet cases using that reasoning and draw analogies from non-internet cases, which creates confusion. The American federal court system is divided into a series of Circuits based on region. The appellate level of these circuits is one level below the Supreme Court. Each Circuit is bound by the Supreme Court, but each Circuit can interpret the Supreme Court in a different way. Thus decisions regarding the same set of facts can reach different results based on the Circuit and the particular legal tests they apply (this is called a Circuit split). The idea of minimum contacts with the regards to letters or advertisements is simple to conduct, just see if the company ran advertisements or wrote letters into the forum (i.e. did the company advertising in the state). However, the internet broadcasts essentially to everyone. Does sending electronic signals to everyone create personal jurisdiction in every state in the United States. This doesn’t seem like a fair result. So courts had to develop tests that would still allow you to bring in parties via the internet but that were not unfair. Essentially, Zippo, ALS and bunch of other courts continue to wrestle with this question.
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"Also, I didn't really understand what the exact accusation from Blizzard looked like. Where does the violation start when a solid end user licence agreement was the basis for using the product/game? I apologize since I did not follow the controversy to its full extend, but this might be a good opportunity to sum it up and get a good intro for your law project."
I am actually not as familiar with causes of action under breach of a EULA than compared to say causes of action under Copyright and Trademark law. From what I've read that would be a breach of contract, and thus might adjudicated under California state contract law (the EULA might actually have a forum selection provision, however these are not necessarily enforceable). I will go into more detail in the next section regarding the causes of action that I bring up, but the first section tries to answer whether or not you could even try the case in the United States or in California, or whether Blizzard would be forced to go to Korea and fight there. The second section will analyze the actual merits of the case, and whether Blizzard would likely succeed in a Copyright or Trademark infringement cause of action.
Edited for grammer.
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Wait, omfg, I don't believe this. I work @ Davis Law School, pop by King Hall admissions sometime and make it be known that you are a Brian. Just dont let on the fact that I know you from starcraft, rather awkward...
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I don't know anything about law, so I don't know how much use it is for you. But from my perspective, it seems really odd that Blizzard would or even could sue KeSPA in a US court. KeSPA is a foreign body, authorised by a foreign government, that works solely and exclusively in a foreign country catering to a foreign market and under the funding and control of foreign companies. If Blizzard tried to sue KeSPA in a US court, KeSPA would not show up, and perhaps even more importantly, if Blizzard were to gain a conviction, what kind of jurisdiction can a US court possibly have to sentence a foreign body? To me the most interesting part of your article was the final paragraph, and I'd love to know more about how this sort of thing would work with international copyright law?
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1L here.
I don't think suing in US federal court would be fruitful for Blizzard. First, US patent law doesn't apply extraterritorially - i.e. in Korea. A federal court applying the Copyright Act of 1976 would be limited in its remedies to enjoining KeSPA from infringing upon Blizzard's copyrights in the United States, or to granting money damages for infringements that occurred within the United States (little or no damages, likely, since any infringement by KeSPA occurred in Korea). If Blizzard wants to enjoin KeSPA from violating Blizzard's copyrights in Korea, or get money damages from KeSPA's assets in Korea, Blizzard needs to allege that KeSPA is violating Korean law.
Pages 4 and 5 here: http://elr.lls.edu/issues/v24-issue1/documents/copyright.pdf
Moreover, once Blizzard receives a judgment from a US federal court, since KeSPA has no local assets, Blizzard would likely have to attempt to get a Korean court to enforce the injunction, which presents a whole new set of difficulties based on the Korean view of the question of jurisdiction.
If Blizzard were serious about taking legal action to protect its intellectual property rights from KeSPA, I think its best bet would be to sue in Korean court under Korean law, since that eliminates the whole problem of having to get a judgment of a US court applied overseas.
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Blizzard must get a kick out of reading these threads if they do 
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As an incoming 1L this fall, I really appreciated this. I wish everything I'll write in law school will be as interesting (but I guess that won't probably be the case...). If Blizzard saw this, they would be like "s--t, we could've saved thousands of dollars of legal fees"
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Well first of all the issue is limited to copyright and trademark. As for the issue of patent filings its a little bit more complicated, but essentially you file this thing called a PCT (Patent Cooperation Treaty) application in the member states (South Korea is a PCT country). Essentially what happens when you do this is that you get your U.S. filing date for your patent and you get patent rights in the PCT countries you file in if they accept (which most do following the lead of the U.S. patent office). Patent law at least procedurally is much more harmonized across nations as compared to copyright although, not necessarily with the substantive requirement (although again TRIPS lays out some basic guidelines) with the exception of novelty requirements (basically every other nation utilizes a first to file system). However, if you did not file a PCT application in each member or state or in a limited number, essentially you only get rights in the member states you filed in, but your application and eventual patent become prior art which prevent others from getting a similar patent (essentially your patent becomes prior art that blocks a possible in the other countries).
As to the question of enforcement and damages. Essentially if KESPA or any foreign country does not show up in the U.S. to defend itself a U.S. court could enter a default judgement. As for the issue of enforcement, unless they have U.S. assets you would need a foreign court to enforce the judgment. However, this happens more frequently than you think and foreign courts do the same to American ones, as well. Likewise, now that I am reading that you are correct about the U.S. Copyright Act, but I think Blizzard has a reasonable case that there are damages that occurred in the United States which they could recover for.
The case they describe on page 4-5 is actually very controversial. A French court essentially enjoined Yahoo from advertising Nazi products in their market place. In the United States that violates free speech, but in Europe selling Nazi antiques violates their hate law. Yahoo's market place is available to everyone in the world not just France. They could have violated the injunction or maybe installed software that prevented French users from accessing these parts of the online marketplace or they could have said hey France install software like China and censor the net. Yahoo brought an action in the U.S. contesting the ruling and a U.S. court upheld the judgment. See UEJF and Licra v. Yahoo! Inc. and Yahoo France, The County Court of Paris, Nov 20, 2000 AND See Yahoo Inc! v. La Ligue Contre Le Racisme et L'Antisemitisme, 433 F.3d 1199 (9th Cir. 2006).
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Braavos36370 Posts
yeah, in that yahoo case the court said that they won't enforce the french judgment, saying the US constitution 1st A outweighs any international comity principles
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Well thats what the district court said, but the 9th Circuit decision reversed and remanded with directions to dismiss the action.
Its' interesting the decision (en banc) in the Ninth Circuit , because of the 11 judges 3 judges found no personal jx and of the remaining 8, 3 judges found the case unripe. The remaining 5 thought the case was ripe. Thus 6-5 thought the case should be dismissed for some reason (which is what the court decided). Basically, because Yahoo! had complied with the French order to the satisfaction of the French Court (of course the French Court could change their mind), the 9th Circuit did not really want to issue an advisory opinion getting into the First Amendment. But of the 5 who wanted to adjudicate the case, they stated that it would have a chilling effect on speech, essentially putting the 1st Amendment above the comity principles.
Edited for grammar
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On May 06 2010 04:22 SOB_Maj_Brian wrote:
As to the question of enforcement and damages. Essentially if KESPA or any foreign country does not show up in the U.S. to defend itself a U.S. court could enter a default judgement. As for the issue of enforcement, unless they have U.S. assets you would need a foreign court to enforce the judgment. However, this happens more frequently than you think and foreign courts do the same to American ones, as well. Likewise, now that I am reading that you are correct about the U.S. Copyright Act, but I think Blizzard has a reasonable case that there are damages that occurred in the United States which they could recover for.
I really don't think Blizzard could recover significantly for damages occurring in the United States. They'd probably be recovering under the theory that the TV broadcasts are derivative works, and that KeSPA is infringing in the United States by distributing videos over the Internet, which can be accessed from the United States. I'm not exactly sure how the distribution works, though. If what people are seeing in the United States is pirated broadcasts of shows KeSPA sold to some Korean television station, then it's not clear to me that KeSPA would be liable. Moreover, this outcome isn't particularly great for Blizzard. Once Blizzard recovers these damages, assuming they actually manage to get their judgment enforced in Korea and recover from KeSPA, KeSPA can probably avoid further infringement in the United States by blocking US IP addresses when they distribute their shows. But, realistically, that's not going to stop people from getting the shows and posting them on youtube - it just shields KeSPA from further liability.
Additionally, how is Blizzard going to prove its damages? There appears to be no market currently for US television broadcast rights for professional Starcraft competition, and the extent to which users in the US are watching is also unclear. The statute contemplates the copyright-holder submitting to the court proof of the infringer's gross revenue, but in a case like this where we're dealing with infringements in different countries, KeSPA will almost certainly argue that it has no revenue resulting from conduct in the United States, and therefore there are no actual damages. Blizzard can elect to recover statutory damages under § 504 (c), but even if Blizzard proves the infringement was willful, the maximum statutory damages are $150,000, which probably just isn't worth the hassle.
It might be true as a matter of law that Blizzard can get some recovery under the US Copyright Act in federal court, but as a matter of litigation strategy, it probably makes more sense to sue in Korean court, under Korean copyright law. This strategy would allow Blizzard to sue for everything KeSPA is doing, rather than just infringement in the United States, and would allow Blizzard to ask a court to enjoin them from any further infringements in Korea. Of course, since the whole point of such a lawsuit would be leverage in negotiations for royalty payments, this is probably the optimal outcome since it gives Blizzard maximum leverage. On the other hand, it's possible that Korean copyright law isn't as friendly to Blizzard's cause, or that a Korean court might be more sympathetic to KeSPA. But, I think, on balance, Blizzard would do better suing in Korean court than in the US.
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Hehe, *disclaimer* I practice purely in criminal law here in Aus, and I didn't take any IP classes at law school (they were electives and irrelevant to my interests at the time) but I did take conflict of laws in my 2nd or 3rd year of uni (which was 6/7 years ago mind you..) and this dispute is certainly interesting from that perspective. In fact, given my complete ignorance of Korean IP/copyright/contract law, and my assumption of incompatibilities (there always are), I would dare say that the choice of forum issues would play the largest part in Blizzard's strategy for dealing with KeSPA.
I think, realistically, Blizzard would be wasting their time suing for breaches in the US courts; jurisdictional limits, enforceability restrictions, and forum non conveniens arguments are serious concerns for their ability to seek effective remedy in the US.
An interesting consideration in this dispute, is what, if any, forum selection clause is wound up in the EULA which is accepted when installing SC to the computers, and the enforceability of such agreements under Korean law; presumably Blizzard's lawyers in 97/98 were intelligent enough to select a forum likely to be receptive to international IP/Copyright/Contract disputes. Has anybody given any pause to possible arguments along these lines?
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You both make excellent points, as a matter of litigation strategy I also think it will probably make sense to sue in S. Korea.
Essentially for the damages (if Blizzard were to sue in the U.S.), Blizzard can sue based on the theory that KeSPA's website is available to U.S. citizens and from damages resulting. A similar case, Pebble Beach Co. v. Caddy, 453 F.3d 256 (4th Cir. 2006), occured where a British citizen registered the domain name pebblebeach.com for his hotel; there is a very famous golf course in California called pebble beach and they brought a U.S. trademark infringment cause of action against the British guy. The California court seriously considered granting personal jurisdiction, but ultimately didn't because the facts indicated that the guy hadn't targeted U.S. consumers (most of the visitors came from Britain). It was a close call, generally there has to be some evidence directed to the United States to get jurisdiction. If the court had found jurisdiction over the defendant, it is possible the U.S. court could have granted damages or injunctive relief based on U.S. trademark law.
As for a forum selection clause in the EULA, I just know about U.S. law, so this wouldn't apply to S. Korea, let me just give a brief overview. In Capsi v. The Microsoft Network 732 A.2d 528 (N.J. Super. Ct. App. Div. 1999), a NJ court upheld a EULA agreement's forum selction clause for MSN in a class action law suit. Essentially, the class action included all users of MSN so the trial court reasoned that a forum selection clause that selcted the state of Washingon was fine because it involved people from around the country. Generally, NJ courts will only decline to enforce forum selection clauses if (1) the clause is a result of fraud or "overweening " bargaining power, (2) enforcement woudl violate the strong public policy of NJ, or (3) enforcement would seriously inconvenience trial. In this case the EULA is not burried (people can view it, normal print easy to read) and it wasn't against any public policy. Likewise, Washington law was not substantively different then NJ law, so the court did not feel compelled to negate the forum selection clause.
Compare this case to AOL v. Superior Court of Alameda County, 108 Cal. Rptr. 2d 699 (Ct. App. 2001). This case involved a class action law suit against AOL and included a forum selection clause, which designated Virginia as the jurisidction where the place of litigation and Virginia in a choice of law clause. California has passed the California Consumer Legal Remedies Act (CRLA) and the class was suing in violation of that, among other things. CRLA has a provision that voids any waiver of rights under CRLA as being contrary to California public policy. Basically, California will not allow you to contract away your rights under CRLA. Likewise Virginia law varies dramatically compared to California law with cases brought as class actions and severely restricts damages. Thus, the court found for these two reasons that the forum selection clause and choice of law clause were both enforceable. Essentially, if you bring suit in California, you most likely can waive a forum selection clause. Thus, the real question is whether a S. Korean court would consider a forum selction clause as contrary to public policy of S. Korea. It is possible that they might, but again I don't know Korean law.
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EPT
