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Hotz Files Motion to Dismiss for Lack of Personal Jurisdiction, Improper Venue
Wednesday, February 02 2011 @ 11:36 PM EST

George Hotz's lawyers said they'd file a motion to dismiss for lack of personal jurisdiction and improper venue, and they have just done it. They ask not only that the temporary restraining order and impoundment order be dismissed, but that the complaint be dismissed as well. Hotz did nothing in California, they state:
Mr. Hotz is a resident of New Jersey, and he lacks sufficient contacts with California to confer personal jurisdiction over Mr. Hotz and venue is improper....Due Process requires that, in order for a forum to exercise personal jurisdiction over a nonresident defendant, that “he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice'."...

In the present case, SCEA cannot demonstrate that Mr. Hotz's activity could even arguably be construed as expressly aimed at California. To the contrary, the sole alleged activity in this action involves Mr. Hotz-- who is located in New Jersey-- purportedly improperly accessing portions of his own Playstation computer-- which is also located in New Jersey. The Playstation computer is not made by SCEA. It is made by Sony Inc. which is a Japanese corporation.

The Japanese company is not a party to this litigation.

Here it is, first, so you can follow along:

02/02/2011 - 57 - MOTION to Dismiss FOR LACK OF PERSONAL JURISDICTION AND IMPROPER VENUE filed by George Hotz. Motion Hearing set for 3/11/2011 09:00 AM in Courtroom 10, 19th Floor, San Francisco before Hon. Susan Illston. (Kellar, Stewart) (Filed on 2/2/2011) (Entered: 02/02/2011)

02/02/2011 - 58 - Declaration of Stewart Kellar in Support of 57 MOTION to Dismiss FOR LACK OF PERSONAL JURISDICTION AND IMPROPER VENUE , Second Declaration of Stewart Kellar filed byGeorge Hotz. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G)(Related document(s) 57 ) (Kellar, Stewart) (Filed on 2/2/2011) (Entered: 02/02/2011)

02/02/2011 - 59 - CERTIFICATE OF SERVICE by George Hotz re 57 MOTION to Dismiss FOR LACK OF PERSONAL JURISDICTION AND IMPROPER VENUE, 58 Declaration in Support, (Kellar, Stewart) (Filed on 2/2/2011) (Entered: 02/02/2011)

Here's the Introduction, which will give you the overview:
Sony Computer Entertainment America, LLC (“SCEA”) does not make the Playstation 3 console (“Playstation computer”). Complaint [Dkt. No. 1] ¶¶18-19. The Playstation computer is made by Sony Computer Entertainment Inc. (“Sony Inc.”) which is not a party to this action. Id. Sony Inc. is a Japanese corporation with its headquarters in Tokyo, Japan. Second Declaration of Kellar Exh. A. SCEA “develops and publishes video game software” for the Playstation computer and couches that limited role under the broad term “SUBJECT WORKS.” Complaint at ¶¶22-23. Further, SCEA does not state in its complaint that it makes firmware or anti-circumvention technological protection measures (“TPMs”) for the Playstation computer. In fact, SCEA hides the ball with respect to “who does what” within the Playstation computer. Complaint ¶31 states that “SCEA's affiliates have invested hundreds of millions of dollars developing the PS3 System, including the PS3 System's TPMs.” SCEA uses the slippery term “affiliates” to characterize the developers of the TPMs. Because the complaint alleges violation of the DMCA via circumvention of TPMs, the fact that SCEA has not claimed to have developed or own the TPMs at issue is troubling. Complaint ¶48 further bounces between SCEA and Japan's Sony Inc., discussing “SCEA firmware that operates the PS3 System. That firmware contains SCEI's copyrighted PS3 Programmer Tools.” SCEA is not Sony Inc. and has not been a subsidiary of Sony Inc. since April 1, 2010. Complaint ¶19

Mr. Hotz is not subject to personal jurisdiction in California. In its complaint, SCEA asserts Mr. Hotz is subject to jurisdiction based on acts “directed to SCEA in California.” Id. at 28 ¶15(a) ln.28. As is shown below, Mr. Hotz has not purposefully directed his activities towards SCEA in California. SCEA further asserts jurisdiction over Mr. Hotz is proper based on the mere existence of Twitter and Paypal accounts in Hotz's name, an assertion that has not held water with this Court. Next, SCEA claims Mr. Hotz must be subject to the Playstation Network (“PSN”) Terms of Service and User Agreement (hereinafter the “PSN TOS”), which includes a forum selection clause. The PSN is an online service facilitated by SCEA that allows, among other limited activities, certain Playstation computer owners in conjunction with the PSN to participate in multiplayer gaming with one another. In support of its position that Mr. Hotz is subject to the PSN TOS, SCEA puts forth unauthenticated and contradictory hearsay evidence that Mr. Hotz has an Online ID for the PSN, and further makes deceptive and blatantly false statements that Mr. Hotz's is subject to the PSN TOS by mere virtue of Mr. Hotz updating his Playstation computer via a firmware update. In fact, Mr. Hotz demonstrates that he is not subject to the PSN TOS. Second Affidavit of Hotz [Dkt. No. 44] ¶13. Moreover, contrary to SCEA's assertion, and as demonstrated herein, updating a Playstation Computer does not subject a user to the PSN TOS or any other agreement with Plaintiff. Affidvait of Heidari [Dkt. 15 No. 45] ¶12. Finally, SCEA asserts that Mr. Hotz conspired with other defendants in California. As is shown below, no named defendant is alleged to live in California and no conspiracy exists between Mr. Hotz and California Does.

Therefore, Mr. Hotz is not subject to personal jurisdiction in California and this action against Mr. Hotz should be dismissed pursuant to Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction.

That's an interesting detail, that none of the defendants lives in California.

The Declaration by Stewart Kellar has exhibits attached:

Exhibit A shows that Sony is located in Japan.

Exhibit B shows that playstation.net is owned by PSI-Japan.

Exhibit C is a CNET article, showing that Sony, the Japanese company, makes and sells the PlayStation 3.

Exhibit D is a PCWorld article by Ian Paul, saying the Sony PlayStation 3 was released in Japan first, and only afterward in the US.

Exhibit E is a Digital Trends article predicting Sony, maker of the PlayStation 3, will lower prices this year.

Exhibits F and G are the trademark registrations for the mark PLAYSTATION in the US, showing the Japanese SCEA is the owner both in the US and in Japan of this trademark and service mark, respectively.

What seemed to persuade the judge in this case, though, were Sony's arguments related to specific jurisdiction, not personal. Here's Hotz's response:
A. Because SCEA Does Not Make the Playstation Computer, Mr. Hotz has not
Purposefully Directed His Activities at the Forum and is not Subject to
Specific Jurisdiction in California.

Plaintiff SCEA does not make the Playstation computer. The Playstation computer is made by Sony Inc. which is a Japanese corporation and not a party to this action.

The Ninth Circuit has established a three-part test for determining when specific jurisdiction may be exercised. See Data Disc, Inc. v. Systems Tech Assocs, Inc., 557 F.2d 1280, 1287 (9th Cir. 1977). To properly exercise specific jurisdiction, (1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) The claim must be one which arises out of or results from the defendant's forum-related activities; and (3) Exercise of jurisdiction must be reasonable. Id. All three prongs must be met, and the inability to satisfy any of the aforementioned prongs will result in the failure to establish jurisdiction over the defendant. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004).

Moreover, the plaintiff bears the burden of satisfying the first two prongs of the test. Id.; Slepian v. Guerin, 172 F.3d 58 (9th Cir. 1999). If the plaintiff succeeds in satisfying both of the first two prongs, the burden then shifts to the defendant to "present a compelling case" that the exercise of jurisdiction would not be reasonable. Schwarzenegger, 374 F.3d at 802.

The Ninth Circuit analyzes the first prong for personal jurisdiction, purposeful availment and purposeful direction, as two separate analyses. In tort cases involving purposeful direction, the Court evaluates such prong under the “effects” test from Calder v. Jones, 465 U.S. 783 (1984). See Dole Food Co, Inc. v. Watts, 303 F.3d 1104 (9th Cir. 2002). Under Calder, the “effects” test requires that the defendant allegedly (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state. Id.

In analyzing the second prong required for personal jurisdiction, that a claim must arise out of the defendant's forum-related activities, the courts apply a “but for” test. John Doe v. Unocal Corp., 248 F.3d 915, 924 (9th Cir. 2001). The “but for” test is a simple test where the Plaintiff must demonstrate that the claims against the Defendant would not have arisen “but for” the Defendant's contact with the forum state. See Ballard v. Savage, 65 F.3d 1495, 1500 (9th 9 Cir. 1995).

If the Plaintiff meets its burden in satisfying the first two prongs, then the Court must analyze the third and final prong for jurisdiction, reasonableness, by consider the following seven factors: (1) the extent of the defendants' purposeful interjection into the forum state's affairs; (2) the burden on the defendant of defending in the forum; (3) the extent of conflict with the sovereignty of the defendants' state; (4) the forum state's interest in adjudicating the dispute; (5) the most efficient judicial resolution of the controversy; (6) the importance of the forum to the plaintiff's interest in convenient and effective relief; and (7) the existence of an alternative forum. Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482, 1487-88 (9th Cir. 1993). None of the factors are dispositive, and they must be balance together. Id.

B. Prong 1 Of The Personal Jurisdictional Analysis Must Fail Because Mr. Hotz's
Alleged Acts Were Not Directed Toward California, And SCEA Has Failed To
Satisfy Its Burden.

Under the first prong of a specific jurisdiction test, SCEA must demonstrate that Mr. Hotz "purposefully availed" himself of the privilege of conducting activities in California, or purposefully directed its activities toward California. Schwarzenegger, 374 F.3d at 802. While the Courts typically use "purposeful availment," in shorthand fashion to include both purposeful availment and purposeful direction, “availment” and “direction” are two distinct concepts that undergo two distinct analyses. Id. In the matter at hand, SCEA alleges that Mr. Hotz directed his acts at SCEA, as opposed to the Japanese makers of the Playstation computer Sony Inc., by posting information on his passive website and making alleged unrelated statements regarding console makers. SCEA further alleges that Mr. Hotz purposely availed of the benefits of this district by having a Paypal account and then goes on to improperly allege that Mr. Hotz is subject to the PSN TOS. Complaint ¶3. Mr. Hotz will demonstrate that the alleged acts are passive and are not directed towards SCEA and that he is not subject to the PSN TOS.

Purposeful availment involves a showing that a defendant purposefully availed himself of the privilege of doing business in a forum state typically consists of evidence of the defendant's actions in the forum, such as executing or performing a contract in the forum. Id. at 803. Purposeful direction, by contrast, involves a showing that a Defendant purposefully directed his tortious conduct toward the forum state, and applies the three-part Calder effects test promulgated by the U.S. Supreme Court. Id.

SCEA fails to satisfy the first prong of a jurisdictional analysis irrespective of whether a purposeful direction or purposeful availment test is utilized.

1. Purposeful Direction Analysis: Mr. Hotz’s Activities Relate to a Passive Website and Statements Not Directed Toward SCEA or California.

Mr. Hotz maintains a passive website at . The site merely makes information available and does not allow users to interact with the host computer or exchange information. The Complaint also alleges Mr. Hotz made the statement “If you want your next console to be secure, get in touch with me” and directed it at SCEA. Complaint ¶45. The double-hearsay quote, derived from a screenshot within a forum post within a website at , omits the full statement, which undermines SCEA's claim that Mr. Hotz directed any statement toward SCEA:
“if you want your next console to be secure, get in touch with me. any of you 3.” Declaration of Bricker [Dkt. No. 42] Exh. T (emphasis added).
SCEA does not make the Playstation computer. The Playstation computer is made by Sony Inc. which is a Japanese corporation and not a party to this action. The registered trademarks for PLAYSTATION for computer game equipment [game consoles] and for network-related gaming activities are and held by Sony Inc. Second Declaration of Kellar ¶¶ F-G. SCEA likewise does not claim to have developed or own the TPMs alleged to have been circumvented. See Complaint ¶ 31. Finally, the statement “any of you 3” clearly refers to console makers, being Nintendo, Sony Inc. and Microsoft. Second Declaration of Kellar ¶¶C-D. 6 With this background, SCEA has the burden of proving Mr. Hotz purposefully directed his actions towards California as opposed to, say, Japan where Sony Inc. is located. Under the well established “Calder effects” test, which pertains to purposeful direction, Mr. Hotz must have expressly aimed his activity at California, causing harm that the defendant knows is likely to be suffered in California.

The 9th Circuit has held “cases have struggled somewhat with Calder's import, recognizing that the case cannot stand for the broad proposition that a foreign act with foreseeable effects in the forum state will always give rise to specific jurisdiction. We have said that there must be 'something more.' We now conclude that 'something more' is what the Supreme Court described as 'express aiming' at the forum state.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1156 (9th Cir. 2006). Accordingly, acts which are not expressly aimed at California, regardless of foreseeable effect, are insufficient to establish jurisdiction. Id....

SCEA claims Mr. Hotz did “something more” towards the forum via the unauthenticated hearsay statement “if you want your next console to be secure, get in touch with me. any of you 3.” Declaration of Bricker Exh. T. SCEA does not make the Playstation computer. Sony Inc., which is a Japanese corporation and not a party to this action, makes the Playstation computer. Console is defined by the Merriam-Webster Dictionary as "an electronic system that connects to a display (as a television set) and is used primarily to play video games.” SCEA does not make a console. Sony Inc. makes that console: the Playstation computer. Second and most important, the phrase “any of you 3” negates any aiming at SCEA in California. There are three major console makers, Nintendo, Sony Inc., and Microsoft. Second Declaration of Kellar Exhs. C-E.

In the present case, SCEA cannot demonstrate that Mr. Hotz's activity could even arguably be construed as expressly aimed at California. To the contrary, the sole alleged activity in this action involves Mr. Hotz-- who is located in New Jersey-- purportedly improperly accessing portions of his own Playstation computer-- which is also located in New Jersey. The Playstation computer is not made by SCEA. It is made by Sony Inc. which is a Japanese corporation. The Playstation trademark is held by Sony Inc. Second Declaration of Kellar Exhibits F-G.

Finally, SCEA includes various other inexplicable claims for good measure, including Mr. Hotz violating the Computer Fraud and Abuse Act and the California Computer Crime Law for allegedly "exceeding access" to Mr. Hotz's very own Playstation computer (made by Sony Inc.), as well as for Mr. Hotz purportedly "trespassing" on the very Playstation computer he lawfully purchased and owns (made by Sony Inc.). SCEA also alleges that, by engaging in such conduct, Mr. Hotz has breached the PSN TOS (which is not applicable to Mr. Hotz as demonstrated below). Nonetheless, this suit centers on the allegation that Mr. Hotz improperly accessed portions of his own Playstation computer, made by Sony Inc. which is not a party to this action and that Mr. Hotz circumvented TPMs that were developed by affiliates of SCEA, not SCEA itself.

As for whether Hotz is subject to the terms of use for Playstation Network, the motion says this:
SCEA alleges that all users who have updated their Playstation Computer via Playstation Computer firmware update are bound by the PSN TOS. Plaintiff's Complaint, p.13, ¶ 53. SCEA then alleges that Mr. Hotz must have updated his Playstation Computer, and uses this as justification for why Mr. Hotz must be subject to the PSN TOS, which includes a forum selection clause. SCEA's assertion is blatantly false and misleading, and Mr. Hotz has explicitly averred that he is not subject to the PSN TOS. Affidavit of Hotz ¶ 6. Equally significant, updating a Playstation Computer does not subject an individual to the PSN TOS. Affidavit of 23 Heidari ¶ 5. With regard to the PSN TOS, the agreement is not a required step to access the 3.55 firmware and is not required to be entered into by end users to install the 3.55 Firmware onto a Playstation computer. Affidavit of Heidari ¶¶ 5, 8-13. The 3.55 Firmware file may be accessed, without encountering any agreements, directly from a website registered by Sony Inc. ( http://dus01.ps3.update.playstation.net/ update/ps3/image/us/2010_1207_ca595ad9f3 af8f1491d9c9b6921a8c61/PS3UPDAT.PUP ) or many other third party websites. Affidavit of Heidari ¶ 4....

Mr. Hotz has stated he does not have a PSN account, has not agreed to the PSN TOS, and has not obtained a Playstation computer firmware upgrade from the PSN. Second Affidavit of Hotz ¶ 11. Mr. Hotz has also demonstrated that a Playstation computer firmware upgrade does not subject a user to the PSN TOS. Affidavit of Heidari ¶¶ 10-13. SCEA cannot satisfy its burden that Mr. Hotz is subject to the PSN TOS because no such facts exist. Nonetheless, the sole speculative and unauthenticated evidence SCEA has provided falls far short of its burden to satisfy this prong of the personal jurisdiction analysis.

All of this will be considered, of course, but what is most likely to persuade the judge, in my view, are the arguments regarding reasonableness. Here it is in a nutshell:
The burden on Mr. Hotz defending in this forum is high. Mr. Hotz is a 21 year old New Jersey resident with limited means to defend a suit on the other side of the country. Therefore, forcing Mr. Hotz to defend a lawsuit literally across the country will deprive Mr. Hotz of due process.

"The burden on the defendant must be examined in light of the corresponding burden on the plaintiff." Sinatra v. National Enquirer, Inc., 854 F.2d 1191, 1199 (9th Cir. 1988). SCEA is unquestionably a large international company. In Core-Vent, the burden on the respective parties was found to be “asymmetrical” because the plaintiff was a “large international corporation with worldwide distribution of products” while the defendants were individuals “with little or no physical contacts with California.” Core-Vent, 11 F.3d at 1489. In Pavlovich, the California Supreme Court discussed plaintiff's ability to re-file the suit in the defendant's state of residence. “[Plaintiff] has the ability and resources to pursue Pavlovich in another forum such as Indiana or Texas. Our decision today does not foreclose it from doing so. Pavlovich may still face the music--just not in California.” Pavlovich at 29 Cal. 4th at 279. As in Pavlovich, SCEA is unquestionably a large international company with worldwide product distribution. Again, Mr. Hotz is an individual with “little or no physical contacts with California.” Id. In light of the corresponding absence of burden on SCEA, personal jurisdiction over Mr. Hotz in California would be highly burdensome.

The fact that Mr. Hotz has secured last-minute counsel to defend himself against jurisdiction does not diminish the cost or burden of Mr. Hotz having to defend himself on the other side of the country....

SCEA clearly does not know where the other defendants reside and thinks they may in fact be located in foreign countries such as Spain, Hungary and the Netherlands. SCEA Complaint ¶¶5-9. SCEA thinks that an unnamed defendant called “Bushing” resides in California but this person remains a Doe defendant, is not named as a defendant, and has not been served with process. Id. at ¶5. Further, all evidence put forth by SCEA regarding “Bushing” is improperly authenticated hearsay. This court should not rely on SCEA‟s speculation of a Doe defendant‟s place of residence to assert jurisdiction over a nonresident who is actually named with an address that has been identified, in New Jersey.

Further evidence in this matter is found primarily on the internet. Contrary to SCEA‟s assertions, most of the physical evidence and Mr. Hotz himself, are located in the state of New Jersey. The bulk of SCEA's claims regard evidence found on Mr. Hotz's media devices and in Mr. Hotz's testimony as a witness. Other than those items, the bulk of the evidence SCEA puts forth may be found on the internet which is accessible just as easily in New Jersey as in California.

I don't know what the judge will do, but this persuades me that New Jersey is more appropriate. The playing field is already stacked against an individual being attacked by an international corporation. For that reason, given the financial disparity, it is disturbing to see Sony trying so hard to keep the playing field so gravely tilted in its own direction. Fair is fair. That is what the courts are supposed to be about, after all. Who admires a bully? If Hotz has done something illegal, Sony can crush him in New Jersey just as well as in California. But it would be a shame if they win simply by being able to sustain the expense of litigation until this kid gives out.

The motion references a second affidavit by Hotz and one by his lawyer, Yasha Heidari, which we made available earlier, but to understand this new filing, it seems worthwhile to provide a text version of each. I'll leave off the headers and certificates of service, just for space. First, the Affidavit of George Hotz:

AFFIDAVIT OF GEORGE HOTZ

Personally appeared before me, an officer duly authorized by law to administer oaths, George Hotz, who after first being duly sworn, states:

1. My name is George Hotz, and I am of required age and competent in all respects to testify regarding the matter set forth herein. I have personal knowledge of the facts stated herein and know them to be true.

2. I am a resident of the State of New Jersey. I have been a resident of the State of New Jersey since approximately 1995.

3. I was born in the year 1989.

4. I am not a resident of Rhode Island. I have never been a resident of Rhode Island.

5. I do not live at 111 NYB St., Providence, Rhode Island 02909. I have never lived at, visited, or appeared at 111 NYB St., Providence, Rhode Island 02909.

6. I have never created, used, or accessed the Playstation Network ("PSN") Online ID "Geo1Hotz".

7. I have never created, used, or accessed the PSN Online ID "koma1tose", "freedomapocalyse", "snapple18", "elijapi", "uKinfuriator", "gamecaveman", or "nyricansoldier".

8. I have never created, used, or accessed an e-mail address for "pbrdiablo@yahoo.com", "lacobra99e@aol.com", "mjt1704@yahoo.com", "babooski28@yahoo.com", "pookie87@yahoo.com", "Jonesjack33@rocketmail.com", or "nyricansoldier@yahoo.com"

9. A Playstation 3 Computer Entertainment System ("Playstation Computer") may be updated through a firmware update, which may be performed by placing a Playstation Computer firmware update on the Playstation Computer.

2

10. Updating a Playstation Computer via a firmware update does not require access to the PSN, nor does it require accepting the PSN's Terms of Service User Agreement or any other PSN agreement to install such firmware update.

11. I have never obtained a Playstation Computer firmware update through the PSN. I have only obtained Playstation Computer firmware updates via direct download links available on the internet.

12. I have never been prompted with an option or opportunity to accept or agree to the PSN's Terms of Service and User Agreement or any other PSN agreement when installing a Playstation Computer firmware update.

13. Accordingly, I have never accepted or agreed to, nor even been afforded the opportunity to accept or agree to, the PSN's Terms of Service and User Agreement or any other PSN agreement when updating my Playstation Computer via a Playstation Computer firmware update.

14. I have not worked with anyone using the internet handle "Bushing" and have no association or connection with any conduct allegedly performed by any individual using the internet handle "Bushing".

15. I have never attempted to obtain employment from Plaintiff, nor am I interested in obtaining employment from Plaintiff, nor would I accept employment from Plaintiff if offered such.

So he denies seeking a job from Sony. He says he isn't associated with or working with "Bushing", and most significantly he says he never agreed to any terms of use, in that he never "obtained a Playstation Computer firmware update through the PSN".

His lawyer, one of them, Yasha Heidari, confirms that you can upgrade without going through the Playstation Network in his affidavit [PDF]:

Affidavit of Yasha Heidari

Personally appeared before me, an officer duly authorized by law to administer oaths, Yasha Heidari, who after first being duly sworn, states:

1. My name is Yasha Heidari, and I am of required age and competent in all respects to testify regarding the matter set forth herein. I have personal knowledge of the facts stated herein and know them to be true. I am an attorney duly licensed to practice law in the State of Georgia, and I am a member of the law firm Heidari Power Law Group LLC.

2. On the date of this affidavit, I successfully updated a Playstation 3 Computer Entertainment System ("Playstation Computer") I own via a Playstation Computer firmware update.

3. A firmware update file for the Playstation Computer may be obtained through numerous avenues, including by downloading such firmware update file from websites on the Internet.

4. Indeed, a firmware update file for the Playstation Computer may even be obtained from Plaintiff's website. As of the date of this affidavit, Playstation Computer firmware update file for version 3.55 of the firmware, which is the latest firmware update available, may be obtained via the following direct link:

http://dus01.ps3.update.playstation.net/update/ps3/image/us/2010_1207_ca595ad9f3af8f1491d9c9b6921a8c61/PS3UPDAT.PUP.
5. When downloading such Playstation Computer firmware update from Plaintiff's website

via the aforementioned link, no Playstation Network Agreement ("PSN Agreement") is presented, made available, or required to be accepted in order to download such firmware update. As used herein, the phrase "PSN Agreement" explicitly includes the "Playstation Network Terms of Service and User Agreement", which is extensively referenced by Plaintiff in this proceeding.

6. I was able to successfully download the aforementioned Playstation Computer firmware update from Plaintiff's website via the aforementioned link. After downloading the Playstation Computer firmware update, I was able to transfer such file to a USB device,

2

and thereafter, connected my USB device to my Playstation Computer. I was then able to perform a Playstation Computer system update.

7. Instructions for installing a Playstation Computer firmware update via a USB device are widely available on the internet, including on Plaintiff's website.

8. When installing the Playstation Computer firmware update, I was prompted to accept a "SYSTEM SOFTWARE LICENSE AGREEMENT (Version 1.4) FOR THE PlayStation®3 SYSTEM" (hereinafter the "Software License Agreement"). Such Software License Agreement is promulgated by Sony Computer Entertainment Inc., and does not reference Plaintiff, Sony Computer Entertainment America LLC. Such Software License Agreement is also dated December 10, 2009. A true and correct copy of such Software License Agreement is hereto attached as Exhibit "A".

9. The Software License Agreement does not include a choice of law provision, a choice of forum provision, or a choice of venue provision.

10. Accordingly, I was able to successfully update my Playstation Computer via a firmware update without connecting to the Playstation Network ("PSN"). Indeed, I have never accessed the PSN to date.

11. I was able to successfully update my Playstation Computer via a firmware update without accepting any PSN Agreement. Indeed, I was never presented with an opportunity to accept a PSN Agreement. To date, I have never accepted nor been presented with an option to accept a PSN Agreement.

12. Updating a Playstation Computer via a firmware update does not require access to the PSN, nor does it require accepting a PSN Agreement to install such firmware update.

13. I have never agreed to a PSN Agreement, yet I am able to fully utilize and use my Playstation Computer.


  


Hotz Files Motion to Dismiss for Lack of Personal Jurisdiction, Improper Venue | 202 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Thread
Authored by: bugstomper on Thursday, February 03 2011 @ 12:26 AM EST
Please summarize the error->correction or s/error/correction/ in the Title
box. That makes it easy for PJ to see what needs to be corrected and easy for
readers to know if an error they have found has already been reported.

[ Reply to This | # ]

What's wrong with the Heidari Affidavit?
Authored by: Anonymous on Thursday, February 03 2011 @ 12:28 AM EST
It looks to this observer like a cluebat slapped in Sony's face.
We saw it submitted as Hotz' Exhibit A 01/23/2011
[http://www.groklaw.net/pdf2/SonyvHotz-45.pdf]
"in Opposition to 2 Plaintiffs Ex Parte Motion For Temporary
Restraining Order"

Trouble is, the Judge seemed not to buy it then, and you can be sure
Sony will work on that. It must be what webster described as a fuzzy fact.

[ Reply to This | # ]

Off Topic threads
Authored by: bugstomper on Thursday, February 03 2011 @ 12:31 AM EST
Please stay off topic when posting comments in this thread. It's more fun that
way. And use HTML Formatted mode to provide clickable links. Clicking is fun
too.

[ Reply to This | # ]

News Picks Thread
Authored by: bugstomper on Thursday, February 03 2011 @ 12:34 AM EST
Please put the title of the News Pick article in the Title box to make it easier
on the readers to scan the comments.

Please copy the link to the article into your comment, preferably using HTML
Formatted mode to make it clickable, for everyone's convenience once the article
has scrolled off the News Picks sidebar.

[ Reply to This | # ]

COMES goes here
Authored by: bugstomper on Thursday, February 03 2011 @ 02:27 AM EST
Post transcripts or summaries of Comes exhibits here.

Visit the Comes Tracking Page to find an exhibit that has not yet been transcribed and has not yet been claimed. If you are a member you can click to claim an exhibit that you are volunteering to transcribe. Non-members, pick an unclaimed one anyway and post the transcript here, there are plenty to go round with little chance of overlap.

Please put in simple HTML markup, for example <p> to separate paragraphs, and use <br> only where there really has to be a line break such as in email headers. Post the transcript as Plain Old Text, so PJ can copy and paste what you have done.

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Hotz lawyers got jurisdiction right
Authored by: Anonymous on Thursday, February 03 2011 @ 03:02 AM EST
As does case law, except for patent cases in Southern Texas (read hicksville)
cases should be settled where they happen. Actions here, the physical ones, were
in New Jersey. If there is a case, it should happen there.

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Rhode Island?
Authored by: esni on Thursday, February 03 2011 @ 03:56 AM EST
>4. I am not a resident of Rhode Island. I have never been a resident of
>Rhode Island.
>
>5. I do not live at 111 NYB St., Providence, Rhode Island 02909. I have
never
> lived at, visited, or appeared at 111 NYB St., Providence, Rhode Island
02909.

I must confess to have been double-skip-reading to original posts on this case,
but why this denial of a connection to Rhode Island?



---
Eskild
Denmark


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Given that the Judge has...
Authored by: jacks4u on Thursday, February 03 2011 @ 05:23 AM EST
Given that the Judge has already ruled on Venue and forum, I read this latest
motion as a prelude to an appeal of that ruling. New to this motion are
arguments that seem to challenge Plaintiff's standing to even file this suit.

Interesting.

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Hotz Files Motion to Dismiss for Lack of Personal Jurisdiction, Improper Venue
Authored by: DaveJakeman on Thursday, February 03 2011 @ 05:53 AM EST
Makes one wonder how the judge is going weather this storm without looking very silly indeed.

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Betamax
Authored by: Steve Martin on Thursday, February 03 2011 @ 07:23 AM EST

As I understand the parties' positions here, SCEA is claiming that Hotz (by releasing the information he released) is contributing to copyright infringement, while Hotz is defending. IANAL, but I do wonder why Hotz's lawyers have not brought up Sony Inc. v Universal Studios (the "Betamax" case). It would seem to me to be on point. In that case, the Supreme Court ruled that Sony was not liable for contributory infringement of Universal's copyrights, since the product they marketed (the Betamax home VTR) had "significant" non-infringing uses as well as (potentially) infringing ones:

Petitioners manufacture and sell home video tape recorders. Respondents own the copyrights on some of the television [p*420] programs that are broadcast on the public airwaves. Some members of the general public use video tape recorders sold by petitioners to record some of these broadcasts, as well as a large number of other broadcasts. The question presented is whether the sale of petitioners' copying equipment to the general public violates any of the rights conferred upon respondents by the Copyright Act.

[2] Respondents commenced this copyright infringement action against petitioners in the United States District Court for the Central District of California in 1976. Respondents alleged that some individuals had used Betamax video tape recorders (VTR's) to record some of respondents' copyrighted works which had been exhibited on commercially sponsored televisionand contended that these individuals had thereby infringed respondents' copyrights. Respondents further maintained that petitioners were liable for the copyright infringement allegedly committed by Betamax consumers because of petitioners' marketing of the Betamax VTR's. [n1] Respondents sought no relief against any Betamax consumer. Instead, they sought money damages and an equitable accounting of profits from petitioners, as well as an injunction against the manufacture and marketing of Betamax VTR's.

[3] After a lengthy trial, the District Court denied respondents all the relief they sought and entered judgment for petitioners. 480 F.Supp. 429 (1979). The United States Court of Appeals for the Ninth Circuit reversed the District Court's judgment on respondents' copyright claim, holding petitionersliable for contributory infringement and ordering the District Court to fashion appropriate relief. 659 F.2d 963 (1981). [p*421] We granted certiorari, 457 U.S. 1116 (1982); since we had not completed our study of the case last Term, we ordered reargument, 463 U.S. 1226 (1983). We now reverse.

[4] An explanation of our rejection of respondents' unprecedented attempt to impose copyright liability upon the distributors of copying equipment requires a quite detailed recitation of the findings of the District Court. In summary, those findings reveal that the average member of the public uses a VTR principally to record a program he cannot view as it is being televised and then to watch it once at a later time. This practice, known as "time-shifting," enlarges the television viewing audience. For that reason, a significant amount of television programming may be used in this manner without objection from the owners of the copyrights on the programs. For the same reason, even the two respondents in this case, who do assert objections to time-shifting in this litigation, were unable to prove that the practice has impaired the commercialvalue of their copyrights or has created any likelihood of future harm. Given these findings, there is no basis in the Copyright Act upon which respondents can hold petitioners liable for distributing VTR's to the general public. The Court of Appeals' holding that respondents are entitled to enjoin the distribution of VTR's, to collect royalties on the sale of such equipment, or to obtain other relief, if affirmed, would enlarge the scope of respondents' statutory monopolies to encompass control over an article of commerce that is not the subject of copyright protection. Such an expansion of the copyright privilege is beyond the limits of the grants authorized by Congress.

Even Justice Blackmun, in his dissenting opinion, states:

As the District Court noted, if liability for contributory infringement were imposed on the manufacturer or seller of every product used to infringe -- a typewriter, a camera, a photocopying machine -- the "wheels of commerce" would be blocked. 480 F.Supp., at 461; see also Kalem Co. v. Harper Brothers, 222 U.S., at 62.

I therefore conclude that if a significant portion of the product's use is noninfringing, the manufacturers and sellers cannot be held contributorily liable for the product's infringing uses. See ante, at 440-441. If virtually all of the product's use, however, is to infringe, contributory liability may be imposed; if no one would buy the product for noninfringing purposes alone, it is clear that the manufacturer is purposely profiting from the infringement, and that liability is appropriately imposed. In such a case, the copyright owner's monopoly would not be extended beyond its proper bounds; the manufacturer of such a product contributes to the infringing activities of others and profits directly thereby, while [p*492] providing no benefit to the public sufficient to justify the infringement.

The material released by Hotz allows owners of PS3s to return them to their advertised state of usability, namely to run OtherOS products. That is (at least to me) a "significant" non-infringing use.

---
"When I say something, I put my name next to it." -- Isaac Jaffe, "Sports Night"

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First Sale and Copyright Misuse in the Ninth Circuit
Authored by: Anonymous on Thursday, February 03 2011 @ 08:19 AM EST
PJ, another interesting case:

"IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
ADOBE SYSTEMS INCORPORATED,
Plaintiff,
v.
ANTHONY KORNRUMPF, a/k/a TONY
KORNRUMPF; and HOOPS ENTERPRISE, LLC,
Defendants.
/
HOOPS ENTERPRISE, LLC,
Counter-Claimant,
v.
ADOBE SYSTEMS INCORPORATED,
Counter-Defendant,
and
SOFTWARE AND INFORMATION INDUSTRY
ASSOCIATION,
Third-Party Defendant.
/
No. C 10-02769 CW
ORDER GRANTING
ADOBE SYSTEMS
INCORPORATED AND
SOFTWARE &
INFORMATION
INDUSTRY
ASSOCIATION’S
MOTION TO DISMISS
HOOPS ENTERPRISE,
LLC’S CLAIMS
(Docket No. 34)
Plaintiff

....

First Sale Doctrine

A copyright holder has the exclusive right to “distribute
copies . . . of the copyrighted work to the public by sale or other
transfer of ownership, or by rental, lease, or lending.” 17 U.S.C.
§ 106(3). The first sale doctrine enables an “‘owner of a
particular copy’ of a copyrighted work to sell or dispose of his
copy without the copyright owner’s authorization.” Vernor v.
Autodesk, Inc., 621 F.3d 1102, 1107 (9th Cir. 2010) (quoting 17
U.S.C. § 109(a)). The doctrine “does not apply to a person who
possesses a copy of the copyrighted work without owning it, such as
a licensee.” Vernor, 621 F.3d at 1107 (citing 17 U.S.C. § 109(d)).

“Notwithstanding its distinctive name, the doctrine applies
not only when a copy is first sold, but when a copy is given away
or title is otherwise transferred without the accouterments of a
sale.” UMG Recordings v. Augusto, ___ F.3d ___, 2011 WL 9399, at
*3 (9th Cir.) (citations omitted). However, “not every transfer of
possession of a copy transfers title.” Id. at *4. For instance,
in the context of computer software, “copyright owners may create
licensing arrangements so that users acquire only a license to use
the particular copy of software and do not acquire title that
permits further transfer or sale of that copy without the
permission of the copyright owner.” Id.

In Vernor, a declaratory judgment action, the Ninth Circuit
addressed the resale of copyrighted software on eBay. 621 F.3d at
1103. There, Vernor sought a declaration that he did not infringe
the copyright of Autodesk, a software company. Id. Vernor had
purchased copies of Autodesk’s software from Cardwell/Thomas &
Associates (CTA), one of Autodesk’s direct customers, and then
attempted to resell them on eBay. Id. CTA had obtained the copies
under a software license agreement, which imposed significant
restrictions on their transfer and use. Id. at 1104. Based on
this agreement, the Ninth Circuit rejected Vernor’s assertion of
the first sale doctrine, concluding that neither he nor CTA were
owners of the particular copies. Id. at 1111. The court reasoned
that CTA was only a licensee and that Autodesk retained title to
the software. Id.

Here, Hoops does not plead any facts to suggest that it owned
any of the particular copies of Adobe software that it resold or
that it obtained the copies from entities that had owned them. Nor
does Hoops allege that Adobe ever sold, gave away or transferred
title to the particular copies of the software at issue. Hoops
avers that it resold Adobe products it “purchased from third party
intermediary distributors,” Hoops Countercl. ¶ 8, but offers no
facts regarding under what terms these distributors obtained the
copies. Although it maintains that these copies did not infringe
“Adobe’s right of reproduction,” id., Hoops says nothing about
Adobe’s right of distribution, to which the first sale doctrine
applies.

In lieu of addressing these defects, Hoops offers an
unpersuasive argument that it has not sold Adobe’s copyrighted work
but rather sold discs containing copies of that work. This
attempted distinction illuminates the flaw in Hoops’s theory.
Adobe does not allege that Hoops unlawfully transferred ownership
of Adobe’s copyrighted software. It alleges that Hoops and
Kornrumpf sold copies of Adobe’s software in violation of Adobe’s
exclusive distribution right. To avail itself of the first sale
doctrine, Hoops must demonstrate that it owned the copies of the
Adobe software it resold; it is irrelevant whether Hoops owned the
discs on which the copies were stored. A copyright attaches to an
original work of authorship, not the particular medium in which it
was initially fixed.

Hoops appears to argue that Vernor is distinguishable because
that case involved a license agreement. However, Hoops’s
allegations are not sufficient to determine whether Vernor is
analogous; as noted above, Hoops offers no insight into the
circumstances under which it obtained the copies of Adobe software.

Finally, Hoops alleges that Adobe and SIIA misuse Adobe’s
copyrights because their conduct attempts to hamper competition by
eliminating the secondary market of copies of Adobe software.
However, because Hoops has not established that it, or any other
re-seller, sold copies subject to the first sale doctrine, this
allegation is unavailing. It is not a misuse of copyright to
dismantle a market of allegedly infringing copies of software.

Thus, Hoops fails to allege any facts to suggest Adobe or SIIA
engaged in copyright misuse. For this reason and those stated
above, Hoops’s copyright misuse claims for declaratory relief are
dismissed with leave to amend."

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Many Sony Offices in New Jersey
Authored by: Anonymous on Thursday, February 03 2011 @ 11:55 AM EST

Sony "affiliates" have lots of offices in New Jersey. A quick Google search turns up Sony offices, stores, or factories in Teaneck, Paramus, Woodcliff Lake, Park Ridge, Lyndhurst, Edison, and Tinton Falls. Sony also has a CD factory in Pitman which is closing soon.

Also, according to the State of New Jersey, Sony Computer Entertainment America -- both Inc. and LLC -- are registered business entities in the state.

Any Sony affiliates have not been hesitant to pursue litigation in New Jersey courts against New Jersey-based defendants.

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What is Sony doing?
Authored by: Alan(UK) on Thursday, February 03 2011 @ 02:02 PM EST
It seems to me that the only reason that Sony is acting in this totally
unreasonable manner is to impoverish Hotz without the matter even getting to
trial.

---
Microsoft is nailing up its own coffin from the inside.

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What about "Bushing"
Authored by: rsteinmetz70112 on Thursday, February 03 2011 @ 02:46 PM EST
If Sony were to locate him or ask to locate him in California before the motion
of jurisdiction was decided, would that change things?

---
Rsteinmetz - IANAL therefore my opinions are illegal.

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

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Sony Computer Entertainment America doesn't exist according to the SEC
Authored by: The Mad Hatter r on Thursday, February 03 2011 @ 07:45 PM EST

And then there's the question of whether SCEA legally exists. The Securities and Exchange Commission has a set of rules that apply to companies that operate in the United States. I did a search on 'Sony' on the SEC website, and no where does Sony Computer Entertainment America show up.

Several other entries show up under Sony, including

0000313838 SONY CORP SIC: 3651 - HOUSEHOLD AUDIO & VIDEO EQUIPMENT M0
0001091411 SONY CORP OF AMERICA NY
0001418001 SONY FINANCIAL HOLDINGS INC M0
0001468441 Sony Financial Holdings Inc. / ADR NY
0001085808 SONY MUSIC ENTERTAINMENT INC NY

None of these Sony entities has anything to do with California. Now it is quite possible that SCEA is a division of one of the entities shown above, and that they are using their parent's listing. Still it's interesting that such a huge company isn't listed.

BTW, I'm not an expert in American corporations, and I'd like to hear comments from someone who is.

---
Wayne

http://madhatter.ca/

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One thing I've been wondering...
Authored by: Anonymous on Friday, February 04 2011 @ 02:47 AM EST
from a purely hypothetical standpoint, mind, as it's a dead certainty that Sony
has fully indemnified itself in the licensing agreements, is whether the the
third party licensees have a hypothetical standing to sue Sony on the basis of
nonperformance, for failing to execute even basic competence in their security
implementation?

Of course, as I've noted, this probably pretty much purely hypothetical.

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Rootkit? What Rootkit?
Authored by: Anonymous on Friday, February 04 2011 @ 05:07 AM EST
the register

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Motion missed a spot.
Authored by: BitOBear on Friday, February 04 2011 @ 10:03 PM EST
While not critical to the motion, I think council missed a spot for their
motion:

RE: (2) The claim must be one which arises out of or results from the
defendant's forum-related activities;

Even if Hotz had registered and agreed to PSN TOS, plantiff would have to
demonstrate that some feature of the PlayStation Network and membership thereof
was on the critical path to Mr. Hotz successful reverse engineering action.

There is no evidence for, and substantial evidence against, Mr. Hotz using PSN
to download the firmware update. But that is immaterial to the question of
"results" in this matter.

For one thing, it is technologically fact that when a person downloads a
PlayStation 3 firmware update through PSN, the person never directly takes
possession of that firmware. The whole process is automatic. It goes straight
from the service into the device, gets applied to the device, the device
reboots, and there is no trace left of the original download file. The device is
simply updated.

Mr. Hotz's action, if I understand it correctly, was to examine the update
directly and reverse engineer the updater programs function and data. The PSN
update methodology doesn't _ever_ give the person performing the update an
opportunity to do that.

It is therefore a provable fact that the materials Mr. Hotz must have used in
his reverse engineering efforts could not possibly have come to him via PSN.

So Mr. Hotz, even if he should be proved to have dozens or hundreds of PSN
accounts, and to have agreed to the TOS thereof, did nothing "related
to" that entry into the California forum in pursuing his activities. Just
as having PayPal and Twitter accounts are unrelated to the specific actions at
issue here, membership in PSN cannot be related to the specific actions at issue
here.

It's not like PSN has a "give me the keys and the raw software on a
CD" service that would make it relevant to Mr. Hotz pursuit of control of
his own property.

Indeed PSN's own procedures and protections prove that PSN was immaterial to the
actions performed.

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