Suing For All The Tea In China: Court Exercises Jurisdiction Over Chinese Government And Companies In $2.2 Billion Copyright Infringement Case

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The Central District of California is allowing a software copyright infringement suit to proceed against the People’s Republic of China and several Chinese corporations, in which the pleaded copyright damages exceed $2.2 billion.  The Amended Complaint in CYBERsitter, LLC v. Peoples Republic of China, the plaintiff software developer alleges that large and important chunks of its Internet content filtering software were copies wholesale by two Chinese software developers working in conjunction with the Chinese government, and that China then essentially mandated that every new computer sold or distributed within China have a copy of the infringing “Green Dam” filtering software installed.  CYBERsitter alleges that the Green Dam software, in addition to copying the sex and violence filters from CYBERsitter, also added various of its own filters to eliminate political and human rights content.  CYBERsitter sued on U.S., Chinese, Japanese and Taiwanese copyright infringement claims, as well as California trade secrets, unfair competition and civil conspiracy claims.

The court denied a series of motions to dismiss the case on personal jurisdiction, forum non conveniens and sovereign immunity grounds.  The court found that the government of China was not immune from suit because its alleged infringing conduct fell within an exception in the Foreign Sovereign Immunities Act for foreign commercial acts causing a direct effect in the United States.  The forum non conveniens motion was denied because the various public and private interest factors did not weigh compellingly against hearing the case in the United States.  The allegations included acts committed in various countries, not just China, and therefore any potential jurisdiction would entail a burden on some of the parties.

Here is the decision: