A federal district court in California has declared that an Australian injunction censoring an American advocacy organization—Electronic Frontier Foundation (EFF)—is repugnant to U.S. law and public policy and is, therefore, unenforceable.

The court's precedential, 27-page opinion in Electronic Frontier Foundation v. Global Equity Management (SA) Pty, Ltd. is a full-throated enforcement of the Securing the Protection of our Enduring and Established Constitutional Heritage Act (the SPEECH Act), a federal statute enacted in 2010 to combat "libel tourism"—the practice of libel plaintiffs suing in foreign jurisdictions where protections are weaker than in the United States.

The dispute began when EFF, the world's leading digital rights-advocacy organization, named a patent owned by an Australian company, Global Equity Management SA Pty, Ltd. (GEMSA), as the "Stupid Patent of the Month" for June 2016. EFF advocates for improvement of the U.S. patent system, including patent litigation, and the "Stupid Patent of the Month" series on its website is part of that effort. In the article, which described GEMSA as a "patent troll," EFF supported its dim view of GEMSA's patent and associated litigation with detailed descriptions of both.

GEMSA sued EFF in Australia for what GEMSA described as EFF's "misleading and deceptive conduct" as well as for "negligent misstatement of fact." The Supreme Court of South Australia issued a preliminary injunction in the case, ordering EFF to immediately remove the article from its website and prohibiting EFF from discussing any of GEMSA's intellectual property. When GEMSA sent a letter to EFF threatening, among other things, to have EFF's article de-indexed from the web, EFF filed a declaratory judgment action in California under the SPEECH Act.

After a hearing, the district court rejected a magistrate judge's recommendation to dismiss EFF's case for lack of personal jurisdiction over GEMSA. The court held that it had personal jurisdiction because GEMSA expressly aimed at California when it obtained a foreign injunction that required EFF to take significant steps in that state and it knew the harm from those acts would be felt there.

In ruling in favor of EFF on its SPEECH Act claim, the court held that federal constitutional and California state law provide substantially more protection for speech than did the Australian court; that EFF would not have been found liable for defamation under U.S. and California law; and that the Australian court lacked jurisdiction over EFF because GEMSA failed to properly serve process on EFF under the Hague Convention governing the international service of process.

This decision means GEMSA cannot successfully enforce the injunction in the United States. In addition, EFF could use it to counter any attempt to have the article de-indexed.

Courts have applied the SPEECH Act in only two other published cases. This case, therefore, provides much-needed precedent in this important area of defamation law.

(Note: Ballard Spahr attorneys Ashley I. Kissinger, Matthew E. Kelley, Maxwell S. Mishkin, and Michael Berry represented EFF in this matter.)

The attorneys in Ballard Spahr's Media and Entertainment Law Group are dedicated to supporting the free press and the First Amendment rights of groups and individuals. The Group helps clients navigate challenging media law issues across all platforms and industries.

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