## Facts

- Motion picture studios, record companies, and related rightsholders sued multiple entities associated with peer-to-peer file-sharing software and the “FastTrack” network, alleging copyright infringement under the Copyright Act.
- A related action by songwriters and music publishers asserting substantially similar claims was consolidated for discovery and pretrial purposes.
- Separate defendants independently branded, marketed, and distributed file-sharing software, but the products were powered by the same FastTrack networking technology, allowing users of different platforms to exchange files on the same network.
- Sharman Networks Ltd., a foreign corporation, acquired the Kazaa file-sharing system and related assets and was linked to ongoing distribution and exploitation of the FastTrack-enabled software used by U.S. users.
- LEF Interactive Pty Ltd., an Australian company, was alleged to have been involved in earlier Kazaa-related operations connected to the same file-sharing ecosystem.
- Sharman moved to dismiss for lack of personal jurisdiction, lack of subject-matter jurisdiction, improper venue, and forum non conveniens; LEF moved to dismiss for lack of personal jurisdiction.
- The challenged conduct concerned large-scale Internet-based copying and distribution of copyrighted works, with alleged harm occurring substantially in the United States, including California.

## Issues

1. Whether a federal district court in California could exercise personal jurisdiction over foreign companies tied to distribution and operation of peer-to-peer file-sharing software and networks extensively used in the forum.
2. Whether subject-matter jurisdiction was lacking despite pleaded federal copyright claims.
3. Whether venue in the Central District of California was improper.
4. Whether dismissal was warranted on forum non conveniens grounds in favor of a foreign forum.

## Decision

- The court denied Sharman’s motion to dismiss in full.
- The court denied LEF’s motion to dismiss for lack of personal jurisdiction.
- The court held personal jurisdiction was proper based on defendants’ forum-directed conduct and the alleged forum-centered effects of that conduct.
- The court held subject-matter jurisdiction existed because the complaints alleged claims arising under federal copyright law.
- The court held venue in the Central District of California was proper.
- The court rejected forum non conveniens, concluding defendants failed to show an adequate basis to displace plaintiffs’ chosen U.S. forum.

## Legal Principles

- Personal jurisdiction may be exercised over foreign defendants whose deliberate conduct targets the forum and foreseeably causes alleged injury there; Internet-based distribution and exploitation directed at forum users can establish minimum contacts.
- Federal question jurisdiction exists where complaints plead copyright infringement under the Copyright Act; disputes about the statute’s reach or defendants’ ultimate liability generally go to the merits, not jurisdiction.
- Venue is proper where a substantial part of the events giving rise to the claims occurred, including locations where infringing activity and resulting injury are alleged to be significant.
- Forum non conveniens dismissal requires defendants to carry a heavy burden; strong U.S. interests in adjudicating alleged infringement of U.S. copyrights and practical access to evidence and witnesses can justify retaining the case.

## Conclusion

The court allowed the consolidated copyright actions to proceed in the Central District of California by concluding that foreign entities connected to the FastTrack/Kazaa file-sharing system could be sued there, and by rejecting challenges to subject-matter jurisdiction, venue, and forum non conveniens at the pleadings stage.


Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 243 F. Supp. 2d 1073 (C.D. Cal. 2003)