The California Supreme Court on Monday dealt a blow to the movie industry's bid to crack down on piracy, ruling that a Texas man could not be sued in California for posting a program on the Internet that could be used to make bootleg copies of copyrighted DVDs. The high court said the DVD Copy Control Association, which licenses encryption software for DVDs, could still sue Matthew Pavlovich for posting the code-breaking program in 1999 that allowed users to illegally copy movies.
But they added in a 4-3 decision that the industry association had to do so in either Pavlovich's home state of Texas or in Indiana where he was a student when he posted the software.
The association, which sued for trade secret infringement, had argued that Pavlovich should face a lawsuit in California because the California-centered movie industry was most harmed by the illegal copying of DVDs.
"Pavlovich may still face the music -- just not in California," the court said.
The decision will also likely affect the some 500 other individuals living outside of California who were sued along with Pavlovich for posting the code, said Allonn Levy, Pavlovich's lawyer said.
He said the decision to limit such lawsuits on the issue of jurisdiction sets a precedent that would be followed by courts in other states.
"This is such a cutting edge issue," Levy said. "Now that it is the law of the land in California I would expect that other states will do the same."
Neither the association nor its attorney could immediately be reached for comment.
One of the three dissenting judges, however, said that California did in fact have a substantial interest in seeing the case litigated in the state because so much of the film industry is located here.
Justice Marvin Baxter added that the judicial system had a strong interest in resolving the dispute "efficiently" in a single forum rather than on a state-by-state basis.
"When such persons 'purposely derive benefit' from their interstate activities, it may well be unfair to allow them to raise a territorial shield against efforts to hold them to account where injury proximity resulted," Baxter wrote.