Posting of DVD Decryption Code on Internet Website Insufficient to Confer Personal Jurisdiction in California

In a 4-3 decision, the California Supreme Court has held that an out-of-state defendant who allegedly posted DVD decryption computer code on a website is not amenable to personal jurisdiction under California’s Long-Arm Statute and the "effects test" set forth by the U.S. Supreme Court in Calder v. Jones. Pavlovich v. Superior Court of Santa Clara County, Case No. S100809, 2002 Cal. LEXIS 7959 (Cal. Nov. 25, 2002).

The defendant, Pavlovich, a Texas resident, allegedly posted a computer code to his website that would defeat encryption technology designed to prevent copying of DVDs. Pavlovich had no connections to the state of California other than the fact that his website was accessible there. The plaintiff, DVD Copy Control Association, Inc. (DVD CCA), a California-based trade association created to control and administer licensing of the DVD encryption technology, sued Pavlovich in California for misappropriation of trade secrets. DVD CCA alleged that personal jurisdiction was proper because Pavlovich knew that his actions would adversely impact several California business enterprises, including the motion picture industry and the computer/consumer electronics industry. Pavlovich moved to quash service because of lack of personal jurisdiction, which the trial court denied. The Court of Appeals denied Pavlovich’s petition for a writ of mandate, holding that Pavlovich had "purposefully availed himself of forum benefits under the Calder effects test," and the trial court’s exercise of jurisdiction was "reasonable."

The California Supreme Court reversed, holding that Pavlovich’s conduct did not satisfy the Calder "effects test" for determining "purposeful availment." DVD CCA could not merely assert that Pavlovich "knew or should have known" that his acts would cause harm in the forum. To establish personal jurisdiction, DVD CCA also must show contacts that demonstrate that Pavlovich expressly aimed or targeted his conduct at the forum.

Applying these standards, the court held that the record was void of evidence demonstrating that Pavlovich had expressly aimed his conduct at or intentionally targeted California. Merely posting the decryption computer code on a website was insufficient. Pavlovich did not know that DVD CCA, the licensing agency, was based in California until after the lawsuit was filed. DVD-CCA could not demonstrate "purposeful availment" by merely alleging that Pavlovich knew that posting the computer code would harm other related industries based in California. Pavlovich’s "mere awareness" that the decryption code could be used to illegally pirate copyrighted motion pictures did not satisfy the effects test, because there were no causes of action asserted premised on copyright infringement or illegal pirating. The court declined to exercise jurisdiction over a defendant who merely should have known that his conduct may harm, not the plaintiff, but industries associated with the plaintiff. That putative knowledge alone is insufficient to establish that Pavlovich expressly aimed or targeted California as required by the Calder effects.