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Pavalovich v. Superior Court (2002, California)

Facts
The DVD Copy Control Association created an algorithm to encrypt DVDs. They forced manufacturers of DVD players to pay a licensing fee for the necessary codes. This allowed the CCA to discriminate prices among different markets.

Mr. Pavalovich and other bright individuals were able to crack the encryption. Pavalovich put the code on the Internet, which empowered individuals to watch DVDs illegally.

The CCA filed suit in California. Pavalovich appealed under personal jurisdiction. He lived in Texas, his web server was in Texas, and he had never been to California.

Question
Is there enough evidence (minimum contacts) to assert personal jurisdiction over Pavalovich?

Holding
No

Reasoning
Pavalovich’s website was deemed “passive”. Passive websites simply provide information, and engage in little exchange with visitors. These sites typically do not establish minimum contact. “Active” websites promote a heavy exchange of commerce and information.

The court also accepted that Pavalovich should have known he was potentially harming California-based businesses. However, this knowledge alone was insufficient to establish minimum contacts.

And the winner is…
Pavalovich

Notes
-The court mentioned that DVD CCA might have better luck suing Pavalovich in Texas.
-Although the issue in this case was personal jurisdiction, we got a peek into Pavalovich’s defense against the licensing violation. I found his argument very compelling. Pavalovich testified that he purchased his own DVDs. He broke the encryption only because he wanted to watch the DVDs on his computer using LINUX.

summarized from Life of a Law Student