Dow Jones & Company, Inc. v. Juwai Ltd.

Background

Dow Jones alleged that Juwai reproduced more than 100 articles from The Wall Street Journal, MarketWatch, and Mansion Global on Juwai’s Chinese-language website. The alleged copies were either reproduced verbatim or translated into Chinese. Dow Jones also alleged that Juwai sometimes removed the original authors’ names and English-language headlines, removed copyright-management information, and added its own information.

Dow Jones asserted four groups of claims: copyright infringement under the Copyright Act for registered works; violations of the Digital Millennium Copyright Act (DMCA) for allegedly removing or altering copyright-management information; copyright infringement under Hong Kong law; and breach of contract or, alternatively, tortious interference with a contractual relationship based on website terms of use. Juwai moved to dismiss all claims for failure to state a legally sufficient claim.

U.S. Copyright and DMCA Claims

Juwai argued that U.S. copyright law could not reach a company publishing a Chinese-language website outside the United States. The court explained that U.S. copyright law generally does not apply to conduct occurring entirely abroad, but a plaintiff may state a claim by alleging an infringing act in the United States that enables further infringement abroad.

The court held that Dow Jones had adequately alleged domestic conduct. The complaint alleged that Juwai used Amazon Web Services’ CloudFront content-delivery network, which stores cached copies of website content on servers around the world, and that Juwai’s content had been traced to servers in Seattle and Chicago. The court concluded that these allegations plausibly supported an inference that copies of the articles were stored and distributed through servers in the United States. It therefore denied dismissal of the Copyright Act claims and the DMCA claims.

The court did not decide whether Juwai ultimately infringed Dow Jones’s copyrights or violated the DMCA. It ruled only that the allegations were sufficient to proceed past the motion-to-dismiss stage. The court also rejected Juwai’s argument concerning unregistered works because Dow Jones sought Copyright Act relief for registered works, while the unregistered works were included in connection with other claims. The court found premature Juwai’s arguments about possible future registrations, statutory damages, and attorney’s fees.

Contract and Tortious-Interference Claims

Dow Jones alleged that its website terms of service prohibited users from republishing or distributing its content without consent. It claimed that Juwai either accessed the websites directly and accepted those terms or intentionally induced a third party to violate them.

The court concluded that the contract claim was preempted by the Copyright Act. Preemption means that federal copyright law displaces a state-law claim when the claim seeks to protect rights equivalent to copyright rights. The court found that the terms of use and the copyright claim both sought to control reproduction and distribution of the articles, and that the alleged violation arose from the same act of copying.

The court reached the same conclusion for the tortious-interference claim. The additional allegations that Juwai knew about the contract and intentionally caused another person to breach it did not change the basic nature of the claim, which still sought to protect rights equivalent to copyright rights. The court granted dismissal with prejudice as to the breach-of-contract and tortious-interference claims.

Hong Kong-Law Claims

Dow Jones also alleged copyright infringement under Hong Kong law. Juwai sought dismissal based on forum non conveniens, a doctrine allowing a court to dismiss a case or claim when another available forum is substantially more appropriate and convenient.

The court concluded that Hong Kong was an adequate alternative forum for the Hong Kong-law claims. It gave weight to the fact that the claims concerned rights and injuries under Hong Kong law, that relevant witnesses and evidence were likely to be located there, and that Hong Kong courts were better positioned to decide questions of Hong Kong law. The court also concluded that applying Hong Kong law to those claims would impose a weaker connection to a New York jury and community.

The court therefore granted dismissal without prejudice as to the Hong Kong-law claims on forum non conveniens grounds. The order did not dismiss the U.S. copyright or DMCA claims.

Disposition

The court’s conclusion was: Juwai’s motion to dismiss was granted with prejudice as to the breach-of-contract and tortious-interference claim, granted without prejudice as to the Hong Kong-law claims, and denied as to the Copyright Act and DMCA claims. Judge P. Kevin Castel signed the opinion on March 17, 2023.