Case 3:19-cv-01852-VC Document 35 Filed 07/03/19 Page 1 of 2
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`MICHAEL GRECCO PRODUCTIONS,
`INC.,
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`Plaintiff,
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`v.
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`NETEASE, INC.,
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`Defendant.
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`Case No. 19-cv-01852-VC
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`ORDER DENYING MOTION TO
`DISMISS AND MOTION FOR RULE
`11 SANCTIONS
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`Re: Dkt. Nos. 18, 20
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`1. The motion to dismiss is denied. Grecco alleges numerous contacts between Netease
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`and the United States:
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`▪ Millions of users in the United States access Netease’s websites;
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`▪ Netease contracted with a California-based company that operates servers
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`throughout the United States to enable U.S. users to access the sites;
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`▪ Netease employs a California-based wholly owned subsidiary, Netease IT, to
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`conduct U.S. market research and curate content for its websites;
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`▪ Netease is registered to conduct business in the State of Delaware;
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`▪ Netease is listed on the NASDAQ Global Select Market in New York; and
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`▪ Netease maintains an investor relations contact in New York.
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`In the aggregate, these contacts are sufficient to establish personal jurisdiction in the
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`United States, and Grecco has plausibly alleged that the infringing conduct arises from them.
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`Because Grecco’s claims arise under federal copyright law, because the defendant fails to
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`indicate a state in which personal jurisdiction would be appropriate, and because the exercise of
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`personal jurisdiction would comport with due process, there is jurisdiction under Federal Rule of
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`Case 3:19-cv-01852-VC Document 35 Filed 07/03/19 Page 2 of 2
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`Civil Procedure 4(k)(2). See Axiom Foods, Inc. v. Acerchem International, Inc., 874 F.3d 1064,
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`1072 (9th Cir. 2017).
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`Netease makes several arguments that the various individual contacts, on their own, are
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`insufficient to establish personal jurisdiction. For example, neither a passive website that is
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`accessible in the United States, nor the fact that Netease is listed on a New York stock exchange
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`is sufficient, on its own, to establish personal jurisdiction. Even where true, however, Netease
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`fails to explain why these contacts, together, plus the others mentioned above, are insufficient in
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`the aggregate. See Mavrix Photo, Inc. v. Brand Technologies, Inc., 647 F.3d 1218, 1229 (9th Cir.
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`2011); Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 97 (2d Cir. 2000). Netease also makes
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`much of the fact that the activity of a wholly-owned subsidiary in the United States is not, on its
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`own, attributable to the corporate parent. Again, it’s not clear Grecco needs this single contact to
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`establish personal jurisdiction, but even if it did, Grecco does more than simply rely on the
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`corporate structure of parent and subsidiary to establish a contact – the Complaint alleges that
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`Netease and Netease IT worked together to curate American content that, allegedly, included
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`Grecco’s works. See Axiom Foods, 874 F.3d at 1071 n.5.
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`2. The motion to dismiss for failure to state a claim for copyright infringement is denied.
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`Grecco’s photographs were allegedly copied on United States-based servers and disseminated to
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`users here, thereby giving rise to a claim of direct infringement. Cf. Shropshire v. Canning, 809
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`F. Supp. 2d 1139, 1145-46 (N.D. Cal. 2011). And even if Netease were not directly responsible
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`for that infringement, the allegations of coordination between Netease and its America-based
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`subsidiary state a claim for secondary infringement liability.
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`3. Netease’s motion for sanctions is denied.
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`IT IS SO ORDERED.
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`Dated: July 3, 2019
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`VINCE CHHABRIA
`United States District Judge
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`2
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