This case began when US digital civil liberties organization Electronic Frontier Foundation (EFF) featured defendant Global Equity in its "Stupid Patent of the Month" blog series. EFF said Global Equity “seems to be a classic patent troll,” and called for patent law reform. Global Equity demanded that EFF retract the post, then sued for defamation in its home forum, South Australia. EFF did not appear, and the Australian court issued an injunction ordering EFF to remove the post and cease publishing on the topic of Global Equity's intellectual property. EFF did not remove the article, saying that it consisted of “substantially true facts, protected opinion, and rhetorical hyperbole,” but said that it felt chilled from publishing further on the topic.
EFF sought declaratory relief, in the form of an order declaring the Australian ruling unenforceable and repugnant to US law, before a US court under the Securing the Protection of our Enduring and Established Constitutional Heritage Act (SPEECH Act), 28 U.S.C. §§ 4101-4105. That law bars US enforcement of foreign defamation orders that conflict with US laws including the First Amendment and Communications Decency Act 230. Global Equity did not appear in the US action.
A magistrate judge initially concluded that the US court lacked personal jurisdiction over Global Equity, drawing in part on the 9th Circuit's Yahoo France case. The District Court disagreed. It found personal jurisdiction under the US Supreme Court's Calder effects test. Under the Ninth Circuit standard, the court noted that "specific personal jurisdiction exists where: (1) the defendant purposefully availed itself, (2) the claim arises out of the defendant’s forum-related activities, and (3) the exercise of jurisdiction is reasonable." Here, defendant directed its actions to the forum state through its demand letters to EFF, its pursuit of an Australian injunction requiring compliance in California, and its service of process on EFF, with an emphasis on the Australian court action. The court noted likely harm in California, including "limiting the information available to EFF’s California readers who have a right to receive speech on matters of public concern.” (Internal quotations omitted) It also considered defendant's engagement in US patent litigation.
The court granted default judgment to EFF. It determined that EFF's SPEECH Act claim was supported, in part because the Australian order constituted a prior restraint in violation of US First Amendment law. The court also noted EFF"s likely protection under California's anti-SLAPP law, which seeks to limit "strategic litigation against public participation," and found that defendant's defamation claims would be unlikely to succeed under US law. Finally, it concluded that Australia likely lacked jurisdiction over the case -- another basis for unenforceability under the SPEECH Act.