VPN.ht is asking a Virginia federal court to dismiss the piracy lawsuit filed by a group of movie companies earlier this year. The VPN service argues that the court has no jurisdiction over the company and its Algerian operator, who had never heard of Virginia before this case started. VPN.ht also asks the court to lift a temporary restraining order that froze the PayPal account of a third-party company.
A group of movie production outfits, including affiliates of the film studios Millennium Media and Voltage Pictures, filed a lawsuit against VPN.ht in March.
The companies accuse the VPN provider of promoting the piracy app Popcorn Time to its users, noting that a VPN.ht IP-address was repeatedly used to share pirated films.
After filing the original complaint, the copyright holders moved full steam ahead. A few weeks ago, they successfully obtained a temporary restraining order that required PayPal to freeze the assets of VPN.ht’s operating company Wicked Technology Limited.
VPN.ht Filed Motion to Dismiss
This order was a major setback for Wicked Technology and its owner, an Algerian citizen named Mohamed Faouani, who hope to turn things around. In a motion to dismiss filed late last week, the defendants argue that they are not subject to the jurisdiction of the Virginia federal court.
Wicked Technology and its owner are represented by attorney Benjamin Maskell, who stresses that VPN.ht didn’t specifically target people in the state. In fact, Faouani had never heard about Virginia before he was sued.
“Faouani has never traveled to the United States, and had never heard of the state of Virginia prior to this lawsuit. He does not have an interest in, use, or possess any real property in Virginia. He has not transacted any business in Virginia or contracted to supply services or things in Virginia.”
Under US law, complaints have to meet certain standards when foreign people are sued. To establish jurisdiction, there have to be ‘sufficient minimum contacts’ with the state and the legal claim must be connected to those contacts. In addition, there should be reasonable grounds to sue the foreign defendant.
No Connection to Virginia
In this case, there is no substantial connection to Virginia, the defense argues. The VPN provider and its owner didn’t purposefully target Virginia, they simply offered their service to people who could be located anywhere in the world.
“The facts giving rise to Plaintiffs’ claims in this case involve online activity and VPN services that were not expressly directed at Virginia, but to an undefined group of Internet users around the world,” the defense notes.
“Nothing indicates that the Wicked Defendants specifically directed advertising or web activity at Virginia or to Virginia or U.S. users. The Wicked Defendants did not direct the sales of VPN services to Virginia or any Virginia consumers, nor did it require or request that Voxility subcontract to the CoreSite data center in Reston, Virginia.”
The Hosting Issue
The movie companies previously highlighted that VPN.ht used the hosting service Voxility, which supplied a Virginia-based IP address. The defendants don’t deny this. However, they never instructed Voxility to operate a connection in Virginia.
Apparently, Voxility used the services from a CoreSite-operated data center in Reston, Virginia, without any instructions or directions from the VPN provider.
“The Wicked Defendants did not specifically structure the relationship with Voxility to facilitate anything or provide any services in Virginia. The IP address at issue was obtained indirectly, as Voxility reallocated or reassigned IP addresses it received from ARIN and RIPE to its customer Wicked.”
Dismiss Case and Unfreeze Funds
Based on these and other arguments, Wicked Technology and owner Faouani ask the Virginia federal court to dismiss the complaint for a lack of personal jurisdiction. In addition, they want the PayPal funds to be unfrozen as well.
According to the defense, the PayPal account should have never been frozen in the first place. It belongs to the third-party company Wicked Technology UAE which wasn’t sued and, as the name suggests, is incorporated in the United Arab Emirates.
Finally, the defendants also contest that they were properly served. They were notified though “registered email” only which isn’t sufficient, they argue, adding that this alone means that the court doesn’t have proper jurisdiction.
This isn’t the first time that these movie companies have been challenged over a jurisdictional issue. Last year, a federal court in Hawaii ruled that it did’t have jurisdiction over the foreign operator of the torrent site MKVCage, denying a request for $150,000 in piracy damages.
A copy of Wicked Technology Limited’s motion to dismiss the complaint for a lack of personal jurisdiction can be found here (pdf)
Many thanks to TorrentFreak for the breaking news.