Penguin’s Copyright Claims Dismissed over Rival’s Miniscule Profits

By Joseph Mandour on March 15, 2013

books Los Angeles – A New York federal judge dismissed Penguin Group USA, Inc.’s copyright infringement lawsuit against a small online library based out of Arizona that posted Penguin’s books online without authorization, saying that the online library’s profits were not sufficient for the court to have jurisdiction over the case.

U.S. District Judge Ronnie Abrams ruled that the court did not have personal jurisdiction over the matter, as Penguin was unable to show that the nonprofit American Buddha had obtained considerable profits from sales of the copyrighted works, which is required by the long-arm statute in New York.

Penguin claimed that American Buddha had received profits from a multiyear contract with Amazon.com for the sale of 13 different works owned by Penguin.  However, Judge Abrams said the organization’s $2,078.33 profit was not significant enough to satisfy the law’s requirement for the long-arm statute.

American Buddha is a nonprofit organization that is run by a librarian who is married to a lawyer that represents the website.  In its Motion to Dismiss, the nonprofit argued that Penguin’s claims were meritless because the publishing house could not meet the pleading requirements for the state of New York.

“Nothing that Penguin can say will create what does not exist: substantial revenue for American Buddha,” American Buddha said in the brief it filed with the court in November.

The lawsuit was originally filed in 2009 after Penguin discovered that American Buddha had made four copyrighted books published by Penguin available on its Website without authorization from the copyright holders.

In the complaint, Penguin alleged that American Buddha encouraged its customers to download unauthorized copies of the works.

Penguin, which makes over $1.6 billion a year on over 4,000 different titles, has spent the last four years attempting to keep the lawsuit in the New York courts.  Before Judge Abrams took over the case last July, U.S. District Judge John G. Koeltl refused to dismiss the lawsuit on jurisdictional grounds.

Judge Koeltl’s decision allowed Penguin to engage in discovery, giving it access to American Buddha’s finances, but also allowed for American Buddha to file another Motion to Dismiss if the company could prove it had not made a substantial amount of money from selling the copyrighted works, which Judge Abrams ruled it was able to do.

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