Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

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Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

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Socially Aware is devoted to the law and business of social media, proactively addressing emerging issues and keeping our clients informed of new developments. We cover fields such as artificial intelligence, privacy and data security, Section 230, intellectual property, and much more.

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Foreign websites that use geotargeted advertising may be subject to personal jurisdiction in the United States, even if they have no physical presence in the United States and do not specifically target their services to the United States, according to a new ruling from the Fourth Circuit Court of Appeals.In UMG Recordings, Inc. v. Kurbanov, twelve record companies sued Tofig Kurbanov, who owns and operates the websites: flvto.biz and 2conv.com. These websites enable visitors to rip audio tracks from videos on various platforms, like YouTube, and convert the audio tracks into downloadable files.The record companies sued Kurbanov for copyright infringement and argued that a federal district court in Virginia had specific personal jurisdiction over Kurbanov because of his contacts with Virginia and with the United States more generally. Kurbanov moved to dismiss for lack of personal jurisdiction, and the district court granted his motion.The district court found that both flvto.biz and 2conv.com were semi-interactive, that the visitors’ interactions with them were non-commercial, and that Kurbanov did not purposefully target either Virginia or the United States. As a result, the court ruled that no federal court in the United States had personal jurisdiction over Kurbanov and to exert such jurisdiction would violate due process. On appeal, however, the Fourth Circuit reversed the district court’s ruling and remanded the case.Facts of the CaseTofig Kurbanov is a Russian citizen.  He was born in and still resides in Rostov-on-Don, Russia. He has never worked on his websites in the United States, does not employ anyone in the United States, and has never even visited the United States.While flvto.biz and 2conv.com are largely used to rip music from YouTube, Kurbanov asserts that his websites could also have non-infringing uses such as by a professor or a student to download the audio from a video lecture or by parents who may want to keep only the audio track from a video of their child’s school concert.Flvto.biz and 2conv.com are free to use, and users are not required to create an account or register to use the ripping service. Kurbanov does not maintain any relationship with the websites’ users other than requiring them to agree to the websites’ Terms of Use before they can download audio files.Kurbanov’s websites are free. He makes money by selling advertisements. His websites have geolocation or geotargeting capabilities, which can record users’ IP addresses and countries of origin. This allows the websites to carry geotargeted ads, which in turn attract advertising brokers and advertisers who want to display specific advertisements to certain countries, states, or cities. But Kurbanov does not sell advertising space on the websites directly to advertisers.  Instead, he sells advertising space to advertising brokers who then resell that space to advertisers.Kurbanov claims that he has no direct relationship or communication with any of the advertisers on his websites and he has little control over the relationship that the brokers have with the advertisers. Furthermore, he has no control over which advertisers are selected for the geotargeting advertisements.While many of the advertising brokers that Kurbanov uses are based in the Ukraine, at least two of them are based in the United States: one in New York and one in California.Flvto.biz and 2conv.com are very popular. They are two of the most popular stream-ripping websites in the world. Between October 2017 and September 2018, they had over 300 million visitors from more than 200 countries around the world. About 10% of these websites’ users come from the United States Within the United States and about 2% of those users are in Virginia.Kurbanov’s websites do have a few other contacts with the United States. For example, his domain names are registered with a U.S.-based domain name registrar and the websites’ top-level domains, “.com” and “.biz,” are administered by companies headquartered in Virginia. The sites have a registered Digital Millennium Copyright Act (DMCA) agent in the United States. And, until July 2018, his websites’ servers were hosted by a global web services provider, which has servers in Virginia. Other than those contacts which many foreign website owners share, Kurbanov has no connections to the United States.Specific Personal JurisdictionThe parties agree that there is no general personal jurisdiction over Kurbanov in Virginia. But, the record companies assert, among other things, that there is specific personal jurisdiction over Kurbanov in Virginia under Fed. R. Civ. P. 4(k)(1). Rule 4(k)(1) provides that a district court may exercise personal jurisdiction over Kurbanov if he is “subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located” like Virginia. That exercise of jurisdiction is lawful as long as it is authorized by the state’s long-arm statute and the application of the long-arm statute is consistent with the due process clause of the Fourteenth Amendment.To meet constitutional due process requirements for personal jurisdiction, Kurbanov must have “minimum contacts” so that “the maintenance of the suit does not offend traditional notion of fair play and substantial justice.” To satisfy this, the record companies must show that Kurbanov “purposefully directed his activities” at Virginia residents and that their cause of action “arise[s] out of” those activities. The Fourth Circuit created a three-prong test for specific personal jurisdiction: “1. The extent to which the defendant purposefully availed itself of the privilege of conducting activities in the State; 2. Whether the plaintiffs’ claims arise out of those activities directed at the State; and 3. Whether the exercise of personal jurisdiction would be constitutionally reasonable.”In most matters, the purposeful availment analysis requires that the court examine the quality and nature of the party’s connections to the forum state such as whether the person maintained offices or agents in the state or whether the person deliberately tried to initiate business in the state. But, in the context of websites, the analysis is often different. Courts generally use the sliding scale or “Zippo test” to help determine a website’s purposeful availment. The Zippo test requires that a court examine the website’s level of interactivity and commercialism. The more interactive and commercial a website is, the more likely a court will have jurisdiction over it.In this case, the Fourth Circuit decided that Kurbanov’s websites were somewhat interactive because they record users’ IP address and because visitors must agree to the Terms of Use in order to access the websites. The Court also stated that it is not necessary to determine if a website is highly or only semi-interactive for personal jurisdiction. It found that it is more important to examine whether Kurbanov intentionally directed his activities at Virginians. When examining Kurbanov’s actions, the Court decided that Kurbanov had purposefully availed himself of conducting business in Virginia because many Virginians used his websites and because the geotargeted advertising on his websites targets customers like those in Virginia with local ads.  Since Kurbanov makes money from these advertisements, the Court reasoned that this made his websites commercial in nature and that, as a result of these geotargeted ads, Kurbanov is exploiting his Virginia user base for commercial gain.The Fourth Circuit also found that the second prong of the personal jurisdiction test was satisfied: The record companies’ claims did arise out of Kurbanov’s contacts with Virginia. In reaching this conclusion, the Court reasoned that Kurbanov did not just create a website that happened to be accessible by Virginians.  Instead, he “actively facilitated the alleged music piracy through a complex web involving Virginia visitors, advertising brokers, advertisers, and location-based advertising.” It was this “complex web” that gave rise to the record companies’ copyright infringement claims.Finally, the Court did not analyze the third prong of its test since the district court had not done so. Instead, it remanded the case to the district court to perform a reasonability analysis.Key TakeawayPrior court decisions have found geotargeting of advertisements in the forum state generally insufficient to establish personal jurisdiction, in particular where the claim does not arise out of the advertisement itself.Thus, website owners that use geotargeted ads should take note. Just because they do not have a physical presence in the United States and do not intentionally seek to attract users from the United States, does not mean that they are safe from being hauled into a U.S. court.

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Stretching the Bounds of Personal Jurisdiction, 4th Circuit Finds Geotargeted Advertising May Subject Foreign Website Owner to Personal Jurisdiction in the U.S.

Stretching the Bounds of Personal Jurisdiction, 4th Circuit Finds Geotargeted Advertising May Subject Foreign Website Owner to Personal Jurisdiction in the U.S.