Case 1:17-cv-00335-JAO-KJM Document 78 Filed 01/22/19 Page 1 of 13       PageID #: 652




  CULPEPPER IP, LLLC
  Kerry S. Culpepper, Bar No. 9837
  75-170 Hualalai Road, Suite B204
  Kailua-Kona, Hawai’i 96740
  Telephone: 503-396-8768
  Facsimile: 503-396-8768
  E-Mail:     jacquelinebenitez@example.com

  Attorney for Plaintiffs

                        UNITED STATES DISTRICT COURT

                            FOR THE DISTRICT OF HAWAII

   Venice PI, LLC et al.,                 )   Case No.: 1:17-cv-00335-JAO-KJM
                                          )   (Copyright)
                     Plaintiffs,          )
      vs.                                 )   SUPPLEMENTAL
                                          )   MEMORANDUM OF POINTS AND
   CLINTON BOVEE et al.,                  )   AUTHORITIES IN SUPPORT OF
                                          )   PLAINTIFFS’ APPLICATION FOR
                     Defendants.          )   ENTRY OF TEMPORARY
                                          )   RESTRAINING ORDER AND
                                          )   PRELIMINARY INJUNCTION
                                          )   [DOC. #76]

   SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN
       SUPPORT OF PLAINTIFFS’ APPLICATION FOR ENTRY OF
       TEMPORARY RESTRAINING ORDER AND PRELIMINARY
                     INJUNCTION [DOC.#76]

        Plaintiffs, by and through their attorney, Kerry S. Culpepper, hereby submit

  their Supplemental Memorandum addressing the issue of personal jurisdiction of

  Defendant STANISLAV AMELYCHYTS per the Court’s Order of Jan. 19, 2019

  (hereafter: “Order”) [Doc. #77].   As discussed below, personal jurisdiction is


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  appropriate here because the interactive website and interactive software application

  Popcorn    Time    of   Defendant    STANISLAV        AMELYCHYTS          (hereafter:

  “Defendant”) facilitate direct contacts with the United States and Hawaii.

  Accordingly, personal jurisdiction is appropriate pursuant to one or both of Rules

  4(k)(2) or 4(k)(1)(A) of the Federal Rules of Civil Procedure. To use the analogy of

  Reebok Int’l cited in the Order, Defendant reached across the Pacific Ocean to

  contribute to copyright infringement of Plaintiffs’ motion pictures here in Hawaii.

  I.    ARGUMENT

  A.    This Court Has Specific Jurisdiction Over Defendant under Rule 4(k)(1)

  and the Hawaii long-arm statute.

        Rule 4(k)(1)(A) provides that “[s]erving a summons…establishes personal

  jurisdiction in the state where the district court is located.”    Fed. R. Civ. P.

  4(k)(1)(A). Because Hawaii’s long-arm jurisdictional statute (HRS § 634-35) is

  coextensive with federal due process requirement, the jurisdictional analyses under

  state law and federal due process are the same. See Hawaii Forest & Trial Ltd. v.

  Davey, 556 F.Supp.2d 1162, 1168 (D. Haw. 2008). In determining whether a

  Plaintiff has made a prima facie showing of jurisdictional facts, the Court must

  accept uncontroverted allegations in the complaint as true. See Dole Food Co. v.

  Watts, 303 F.3d 1104, 1108 (9th Cir. 2002). The Court applies a three-part test to

  determine whether a party has sufficient minimum contacts to be susceptible to


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  specific personal jurisdiction: (1) the non-resident defendant must purposefully

  direct his activities into the forum or purposefully avail himself of the privilege of

  conducting activities in the forum; (2) the claim must arise out of or relate to forum

  related activities; and (3) the exercise of jurisdiction must comport with fair play and

  substantial justice. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797,

  802 (9th Cir. 2004).

        While all three requirements must be met, the Ninth Circuit has stated that in

  its consideration of the first two prongs, a strong showing on one axis will permit a

  lesser showing on the other. See Yahoo! Inc. v. La Ligue Contre Le Racisme Et

  L'Antisemitisme, 433 F.3d 1199, 1210 (9th Cir. 2006) (en banc). A single forum

  state contact can support jurisdiction if the cause of action arises out of that particular

  purposeful contact of the defendant with the forum state. Id.

        The verified allegations as well as the allegations supported by evidence in

  the Third Amended Complaint (“TAC”) [Doc. #72] establish personal jurisdiction.

  1a.   Defendant purposefully directed his activities into Hawaii or

  purposefully availed himself of the privilege of conducting activities in Hawaii

  by his software application Popcorn Time.

        Hawaii’s long arm statute provides:

         (a) Any person, whether or not a citizen or resident of this State, who…in
  person or through an agent does any of the acts hereinafter enumerated, thereby
  submits such person…to the jurisdiction of the courts of this State as to any cause
  of action arising from the doing of any of the acts:
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       (1) The transaction of any business within this State;
       (2) The commission of a tortious act within this State… HRS § 634-35
  (emphasis added).

        Although from Ukraine, Defendant committed tortious acts (contributory

  copyright infringements of Plaintiffs’ motion pictures) within Hawaii as defined by

  HRS § 634-35(a)(2). Particularly, Defendant’s Popcorn Time maintains

  substantial continuous contacts with his users (such as, for example, Kody Kim

  and Clinton Bovee) after they have installed it on their devices so that his users can

  infringe content. Briefly, the essence of peer-to-peer software that uses the

  BitTorrent protocol such as Popcorn Time is that one client device such as that of

  Kody Kim and Clinton Bovee must be connected to another client who has a piece

  of the desired file to receive it (a “handshake”). See TAC at ¶142 [Doc. #72].

  Generally, Popcorn Time performs the handshake via Internet Protocol (IP)

  addresses. When Plaintiffs’ investigator Daniel Arheidt analyzed the network

  traffic of Defendant’s Popcorn Time, he observed a handshake between IP

  addresses containing the hash associated with the motion picture The Hitman’s

  Bodyguard. See Decl. of Arheidt at ¶11 [Doc. #72-1]. To put it simply, Popcorn

  Time not only knows the IP addresses of both client devices, it facilitates the

  transfer of the desired file from a client having the desired file to the client devices

  here in Hawaii. Scanning the peer-to-peer network and isolating the IP addresses

  is how Plaintiffs’ investigator Maverickeye UG (“MEU”) was able to observe the


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  Hawaii based IP addresses of Defendant CLINTON BOVEE (See Exhibit “7” of

  the TAC [Doc. #72-12]) and Kody Kim infringing Plaintiffs’ Works (See TAC at

  ¶¶104, 174 [Doc. #72]). In Kailieha v. Hayes, 56 Haw. 306, 536 P.2d 568 (1975),

  the Hawaii Supreme Court held that under Hawaii’s long-arm statute, “[a] tort is

  committed where the injury occurs, and the phrase ‘tortious act’ encompasses the

  injurious consequences of an act.” 56 Haw. at 307, 536 P.2d at 569 (citations

  omitted). Defendant’s Popcorn Time’s act of connecting, for example, Kody Kim,

  to other IP addresses so that Kody Kim could receive copies of the motion picture

  The Hitman’s Bodyguard constitutes a tortious act (contributory copyright

  infringement) within Hawaii as provided by HRS § 634-35(a)(2). As alleged in the

  TAC, this act infringes Plaintiffs’ distribution and public performance rights. See

  TAC at ¶¶203 [Doc. #72].

        Popcorn Time could, but purposely chooses not to, use geoblocking to filter

  out IP addresses from the United States and/or Hawaii such as done by legitimate

  programs for viewing content like Netflix or Hulu in enforcing regional

  restrictions. See https://www.usatoday.com/story/tech/2018/02/07/eu-

  geoblocking-ban/314310002/ [accessed on 11/4/2018]. In the contrary, Defendant

  emphasizes that Popcorn Time has “No restrictions”. TAC at ¶10 [Doc. #72].

        Although from Ukraine, Defendant also holds himself out to transact

  business within Hawaii as defined by HRS § 634-35(a)(1). Once a user has


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  installed Popcorn Time and begun to use it, it displays clickable advertisements

  and strong encouragements to the user to use its Virtual Private Network (“VPN”)

  service. See Decl. of Arheidt at ¶¶8-9 [Doc. #72-1]. It appears that the VPN

  service requires a payment to Defendant. See Exhibit 20 of the TAC [Doc. #72-

  25]. This is an instance of Defendant purposefully directing his activities into

  Hawaii (clickable advertisements) or availing himself of the privilege of

  conducting activities in Hawaii (VPN referrals) by his software application

  Popcorn Time.

  1b.   Defendant purposefully directed his activities into Hawaii or

  purposefully availed himself of the privilege of conducting activities in Hawaii

  by his interactive website popcorn-time.to.

        In Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, the Ninth Circuit

  addressed the application of the purposeful availment principle to websites and

  stated that “operation of an interactive, commercial website is often sufficient” to

  establish personal jurisdiction. Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 419

  (9th Cir. 1997). Cybersell defined an interactive site as one that allows users to

  “exchange information with the host computer.” Id. at 418. In Mavrix Photo, Inc.

  v. Brand Tech., Inc., the Ninth Circuit considered “the interactivity of the

  defendant’s website, the geographic scope of the defendant’s commercial

  ambitions, and whether the defendant ‘individually targeted’ a plaintiff known to


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  be a forum resident” to determine if there is “something more.” Mavrix Photo,

  Inc. v. Brand Tech., Inc., 647 F.3d 1218, 1229 (9th Cir. 2011) (citations omitted).

  Defendant operated the interactive website popcorn-time.to where he distributed

  and promoted Popcorn Time to Hawaii users such as Kody Kim. See TAC at ¶172

  [Doc. #72], Declaration of Kody Kim at ¶3 [Doc. #72-4]. Particularly, Kody Kim

  downloaded Popcorn Time from Defendant’s website while in Hawaii. Further,

  Defendant’s website includes a forum requiring prior user registration where users

  interact with him to work on software bugs and provide suggestions. See TAC at

  ¶¶12-14 [Doc. #72]. Accordingly, Defendant’s website exchanges information

  with host computers of users similarly to an interactive website as defined in

  Cybersell.

  2.     Plaintiffs’ claims arise out of or relate to Defendant’s forum related

  activities.

         Plaintiffs’ claims for contributory infringement arise from Defendant’s

  promotion and distribution of Popcorn Time to Kody Kim (See Decl. of Kim [Doc.

  #72-4]) and Defendant CLINTON BOVEE in Hawaii via his website popcorn-

  time.to. See TAC at ¶¶71, 172 [Doc. #72]. The allegations against Kody Kim are

  verified by the declaration of Kody Kim himself. Plaintiffs have provided

  declarations of Counsel and Waymond Ngai in support of the allegations against




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  Defendant CLINTON BOVEE. See Decl. of Ngai at ¶2 [Doc. #72-5] and Decl. of

  Counsel at ¶¶3, 7 [Doc. #72-2].

        Plaintiffs’ claims for contributory infringement further arise from

  Defendant’s promotion and distribution of Popcorn Time to Marvin Yangrelig in

  Hawaii via the Google Play website. See Decl. of Yangrelig at ¶¶2-4 [Doc. #72-3].

        Plaintiffs’ claims for copyright infringement further arise out of Popcorn

  Time’s tortious acts of connecting devices of Hawaii users such as Clinton Bovee,

  Marvin Yangrelig, Kody Kim, David Cressman, subscriber at IP address

  503-396-8768, subscriber at IP address 503-396-8768, Zanzalie Matautia, Romel

  Malacas, Shirly Acosta, Kody Kim, a minor at IP address 503-396-8768 and

  Fernando Oleynick via their IP addresses in Hawaii with that of others to copy the

  Plaintiffs’ motion pictures. See TAC at ¶¶159-177. These allegations are

  supported by exhibits in some cases which consist of statements written by these

  individuals themselves. See Exhibits 15-19 of the TAC [Docs. ##72-20 – 72-24].

  3.     The exercise of jurisdiction comports with fair play and substantial

  justice.

        The burden shifts to the Defendant to prove that the exercise of personal

  jurisdiction is not reasonable in light of traditional notions of fair play and

  substantial justice. See Schwarzenegger, 374 jacquelinebenitez@example.com.




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  B.    Alternatively, this Court Has Specific Jurisdiction Over Defendant under

  Rule 4(k)(2).

        Even if the Court finds that it lacks personal jurisdiction under Hawaii’s long-

  arm statute, this Court would still have specific jurisdiction under the so-called

  federal long-arm statute provided by Rule 4(k)(2). Plaintiffs have not yet completed

  service of Defendant. However, once served, personal jurisdiction per Rule 4(k)(2)

  will be appropriate because: (1) Plaintiffs’ claims arise under federal (copyright)

  law; (2) the Defendant is not subject to the jurisdiction in any state’s courts of general

  jurisdiction; and (3) exercising jurisdiction is consistent with the US Constitution

  and laws. See Fed. R. Civ. P. 4(2).

        In Holland America Line v. Wärtsilä North Amer., the Ninth Circuit

  concluded that “[t]he the due process analysis under Rule 4(k)(2) is nearly identical

  to traditional personal jurisdiction analysis with one significant difference: rather

  than considering contacts between the [Defendant] … and the forum state, we

  consider contacts with the nation as a whole.” Holland America Line v. Wärtsilä

  North Amer, 485 F.3d 450, 462 (9th Cir., 2007). Accordingly, Plaintiffs will again

  address the due process analysis of the three-part Schwarzenegger due process test

  with respect to the United States as the forum. See Schwarzenegger at 802 (9th Cir.

  2004).




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 1. Defendant purposefully directs his activities into the United States and/or

 purposefully availed himself of the privilege of conducting activities in the

 United States.

       Defendant maintains a nameserver agreement with the California company

 CloudFlare, Inc. for his website. See TAC at ¶12, 47. Up until approximately

 January of this year, Defendant indirectly rented space at a server from the New

 York company Velocity Servers, Inc. d/b/a ColoCrossing, Inc. for hosting his

 website. See Id. at ¶52-53.

       The interactive nature of Defendant’s website extends beyond merely

 distributing and promoting Popcorn Time. Defendant’s website includes a forum

 where users can interact with Defendant to work on software bugs and provide

 suggestions. See Exhibit “7” of the TAC [Doc. #72-12]. Users are required to

 register before they can use the forum and agree to the terms of use. Importantly,

 the terms require the user “not to post…material that may violate any laws be it of

 your country…” and “doing so may lead to you being...banned, with notification of

 your Internet Service Provider…” and state that “The IP addresses of all posts are

 recorded to aid in enforcing these conditions.” Id. Further, users are required to

 agree to comply with the United States Child Online Privacy and Protection Act of

 1998 before they can register to join the forums. See Exhibit “8” of the TAC [Doc.

 #72-13].


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        Defendant, despite being a resident of Ukraine, has provided the website in

 English. The blog portion of the website includes an image showing exclusively

 what appear to be not Ukrainian but Hollywood movies to encourage users to use

 Popcorn Time. See Exhibit “9” of the TAC [Doc. #72-14]. Indeed, publicly

 available data shows that the plurality of the traffic Defendant’s website receive

 comes from the United States of America. See Exhibit “10” of the TAC [Doc. #72-

 13].

 2.     Plaintiff’s claims arise out of or relate to forum related activities.

        The Ninth Circuit has measured this requirement in terms of “but for”

 causation. See Ziegler v. Indian River County, 64 F.3d 470, 474 (9th Cir. 1995).

 Defendant distributed and promoted Popcorn Time from his website popcorn-

 time.to. The website was hosted on ColoCrossing’s server (in Piscataway, NJ). The

 nameserver services for the website were provided by the California company

 CloudFlare. See TAC at ¶¶12, 47, 52-53. As discussed above, Defendants’ Popcorn

 Time facilitates connections between IP addresses in Hawaii with those of others to

 tortuously distribute and/or publicly perform Plaintiffs’ Works. But for these

 contacts, there would be no direct or contributory infringement of Plaintiffs’ Works

 from Defendant’s Popcorn Time as presently alleged. Accordingly, Plaintiffs’

 claims for Copyright Infringement arise from these activities in the United States.




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 3.    The exercise of jurisdiction comports with fair play and substantial

 justice.

       For jurisdiction to be reasonable, it must comport with fair play and

 substantial justice. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985).

 However, Burger King explicitly places upon the Defendant the burden of

 demonstrating unreasonableness and requires the defendant to put on a “compelling

 case.” Id. at 476-77.

 C.    The Law of the Case Doctrine Possibly Applies

       The law of the case doctrine possibly applies to the present case, at least in an

 ex parte context, because Plaintiffs addressed the issue of personal jurisdiction in

 their Response to the Order to Show Cause filed on November 5, 2018 [Doc. #70].

       Under the “law of the case” doctrine, “a court is generally precluded from

 reconsidering an issue that has already been decided by the same court, or a higher

 court in the identical case.” Thomas v. Bible, 983 F.2d 152, 154 (9th Cir.) (cert.

 denied 508 U.S. 951, 113 S. Ct. 2443, 124 L. Ed.2d 661 (1993). The Court issued

 an Order to Show Cause (“Show Cause Order”) on October 9, 2018 ordering

 Plaintiffs to show cause why the district court should not dismiss without prejudice

 Defendant Doe 1 (the previous designation for Defendant) [Doc. #67]. Although the

 main concern of Magistrate Judge Mansfield in the Show Cause Order was joinder,

 the Order also stated that “the facts alleged against Doe 1 are insufficient to establish


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 personal jurisdiction”.   Show Cause jacquelinebenitez@example.com. 12.         Based upon Plaintiffs’

 Response, the Court withdrew the Show Cause Order, but ordered Plaintiffs to allege

 the new facts of their Response in the TAC. See Order Withdrawing The October

 9, 2018 Order to Show Cause and Granting Plaintiffs Leave to File a Third Amended

 jacquelinebenitez@example.com. 2 [Doc. #71]. Plaintiffs alleged these new facts in the TAC as

 ordered. Accordingly, Plaintiffs respectfully submit that the issue of personal

 jurisdiction has already been addressed by this Court at least in an ex parte context.

 III.   Conclusion.

        Accordingly, Plaintiffs respectfully submit that, once Defendant is served, he

 has sufficient minimum contacts with the United States that will satisfy the three-

 part Schwarzenegger due process test of either the Hawaii long-arm statute or the

 Federal long-arm statute. It would be highly unjust if Defendant could violate

 Plaintiffs’ rights here in the United States yet evade accountability for his actions.

        DATED: Kailua-Kona, Hawaii, January 22, 2019.


                                  CULPEPPER IP, LLLC

                                  /s/ Kerry S. Culpepper
                                  Kerry S. Culpepper

                                  Attorney for Plaintiffs




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