Fall 2011 – 6th Circuit Copyright Litigation Update

Statute of Limitations

Dassault Systemes, SA v. Childress, No. 10-1987, 2011 U.S. App. LEXIS 24582 (6th Cir. Dec. 13, 2011)

The district court entered default judgment against a defendant on copyright infringement and related claims.  The Court of Appeals reversed on the grounds that the defendant had raised affirmative defenses that had enough potential merit to justify setting aside the default.  Specifically, the plaintiff had made inconsistent statements about when it learned of the alleged infringement.  One interpretation of those statements would make the claim time-barred.

 

Personal Jurisdiction; Statute of Limitations; Territoriality & Subject Matter Jurisdiction

Stolle Mach. Co., LLC v. Ram Precision Indus., 2011 U.S. Dist. LEXIS 144662 (S.D. Ohio Dec. 14, 2011)

The court held that the alleged infringement supported the exercise of personal jurisdiction in Ohio over a foreign company, because, among other things, the defendant was alleged to have intentionally infringed, and therefore intended to injure the plaintiff in Ohio.

The court rejected a statute of limitations defense to a copyright infringement claim, reasoning that, even if some of the infringing activity occurred more than three years before the complaint was filed, the infringement continued, and “each new infringing act causes a new three year statutory period to begin.”

The court also rejected the argument that the infringement was not actionable because it occurred outside the US.  The initial infringement was alleged to have occurred in the US, rendering subsequent distribution abroad actionable.

 

Registration as Prerequisite for Lawsuit

Strozewski v. Rod’s Western Place, 2011 U.S. Dist. LEXIS 143469 (S.D. Ohio Dec. 13, 2011)

The court granted a motion to amend a copyright infringement complaint to reflect a federal copyright registration that the plaintiff did not have at the time it filed the prior complaint.  The court reasoned that this was in the interest of judicial economy, since the plaintiff’s alternative would be to simply file a new lawsuit.

 

 

DMCA Takedowns – Section 512(f) Liability for Improper Notices

Smith v. Summit Entm’t LLC, 2011 U.S. Dist. LEXIS 60246 (N.D. Ohio June 6, 2011)

Smith posted his own song on YouTube and elsewhere.  He received a DMCA takedown notice from Summit.  The notice was premised on Smith’s use of the word “Twilight” in the material advertising the song.  Hence, the issue was one of trademark, not copyright.  Smith brought several claims that the court dismissed, including fraud and infliction of distress.  But the court declined to dismiss Smith’s 512(f) claim, finding that Smith stated a claim that Summit made a knowingly false representation when sending the notice.

 

Ownership; Preliminary Injunction

Kessler v. Hrivnak, 2011 U.S. Dist. LEXIS 57689 (S.D. Ohio May 31, 2011)

Plaintiff moved for summary judgment and a preliminary injunction prohibiting the defendant, his former employer, from using a firmware program that he authored.  The court found a disputed issue of fact, however, as to whether the firmware was a work made for hire and thus the property of defendant.  Because plaintiff could not even prove that he owned the work, the court could not grant his motions.  Plaintiff’s 5-month delay in moving for an injunction also weighed against irreparable injury, and the public interest favored defendant being able to continue to service its customers using the firmware.

 

Co-Ownership; Fraudulent Registration; Subject Matter Jurisdiction

McCants v. Tolliver, 2011 U.S. Dist. LEXIS 77841 (N.D. Ohio July 14, 2011)

Plaintiff claimed that he co-authored the Black Eyed Peas song “My Humps,” and sued for his portion of the royalties.  The court found that this was a contract claim that did not arise under the Copyright Act.  Even if the allegations were true, the defendant co-author would be free to license the work, so there was no infringement.  Plaintiff alleged that the failure to list him as a co-author was a fraud that invalidated the registration.  The court refused to hear that argument, however, because if true, it would invalidate the court’s own subject matter jurisdiction over the case.

 

Personal Jurisdiction

Brown v. Way, 2011 U.S. Dist. LEXIS 87362 ( E.D. Mich. Aug. 5, 2011)

Regardless of whether defendants purposefully availed themselves of the state’s benefits and protections through the use of their website, the court granted  defendants’ motion to dismiss for lack of personal jurisdiction because the second prong of the due process test, that the cause of action must arise from defendants’ activities in Michigan, was not satisfied as defendants’ websites were not the cause of, and did not relate in any way to, the alleged copyright infringement.

 

Personal Jurisdiction; Venue; Insurance

Capitol Specialty Ins. Corp. v. Splash Dogs, LLC, 2011 U.S. Dist. LEXIS 76309 (S.D. Ohio July 14, 2011)

Defendant’s insurance company filed a declaratory action to determine coverage in Ohio.  The underlying case was a copyright dispute in Ohio.  Defendants resided in California and Indiana. The copyright case stemmed in part from an event that defendants sponsored in Ohio. This was sufficient to establish personal jurisdiction and venue in Ohio for the declaratory action.  A request to transfer venue to California was denied because that is where the underlying case is located.  Ohio’s connection to the events in the complaint were substantial, even if that was not the jurisdiction with the most substantial connections.

 

Preemption

N. Am. Software, Inc. v. James I. Black & Co., 2011 Ohio 3376 (Ohio Ct. App., Hamilton County July 8, 2011)

Plaintiffs sued in state court to enforce the terms of a “click-wrap” software license agreement.  The Ohio Appeals Court raised sua sponte the issue of whether this claim was preempted by the Copyright Act.  It determined that it was not preempted, because plaintiff’s attempt to enforce a “promise to pay” added an “extra element” to the claim beyond copyright rights.

 

Preemption

Slep-Tone Entm’t Corp. v. Arrowood, 2011 U.S. Dist. LEXIS 109905 (S.D. Ohio Sept. 26, 2011)

State-law claims of trade secret misappropriation and trademark infringement are not preempted by the Copyright Act.  The subject matter of the claims was the parties’ respective trademarks for karaoke services.  Just because the marks are used in connection with copyrighted music does not make the claims equivalent to a copyright infringement claim.

 

Preemption; Removal; Remand

Johnson v. Armitage, 2011 U.S. Dist. LEXIS 51367 (N.D. Ohio May 13, 2011)

Plaintiff’s Complaint in state court alleged misuse of unspecified “intellectual property.”  Defendants removed on multiple grounds, including that the complaint actually alleges copyright infringement and is therefore subject to complete preemption.  The federal court disagreed and remanded.  “This is nothing more than a breach of contract claim,” it held, “the resolution of which will involve analysis of both the terms of the contract and state law. There is no issue of copyright and no issue of preemption. Therefore this matter is not governed by federal law.”

 

Common-Law Copyright

Tong Da Auto Serv. v. Abucar’s Universal Designs, 2011 Ohio Misc. LEXIS 236 (Ohio C.P. June 22, 2011)

Plaintiff architect alleged, inter alia, infringement of his common-law copyright in his architectural plans for an auto body shop.  The court acknowledged the existence of such a right, and declined to dismiss the claim, finding that the complaint stated a valid cause of action.

 

Reproductions; Declaratory Judgment

Severe Records, LLC v. Rich, 658 F.3d 571 (6th Cir. 2011)

Infringement dispute between joint creators of two songs.  Plaintiff’s infringement claim was dismissed on the grounds that it alleged only that the Defendant transferred an ownership interest in the copyrights, which is not actionable and distinct from making an unauthorized copy.

Dismissal of Plaintiff’s claim for a declaration of non-infringement was reversed.  Defendant did claim authorship in the work, and federal jurisdiction over matters of authorship is exclusive.  “Where Defendants persisted in accusing Sevier of copyright infringement despite his assertions of authorship, they can hardly be heard to complain, ’But we didn’t really mean it,’ when they are haled into federal court on a claim for declaration of non-infringement.”

Declaratory Judgment

Carson Real Estate Cos. v. CoStar Group, Inc., 2011 U.S. Dist. LEXIS 105686 ( E.D. Mich. Sept. 16, 2011)

The court upheld removal of a declaratory judgment action.  Plaintiff claimed that it had not alleged any claim arising under federal law.  The court “rejected this argument, noting that Plaintiff had requested declaratory relief that it had violated no property rights of Defendants, which necessarily included a request for a ruling that it had not violated Defendants’ rights under federal copyright law.”

 

Rule 60(b) Relief from Judgment

Bridgeport Music, Inc. v. Smith, 2011 U.S. Dist. LEXIS 109703 ( E.D. Mich. Sept. 27, 2011)

Non-party claimant in copyright interests did not have standing to file Rule 60(b) challenge to default judgment against another party claiming interest in the same copyright.  The default judgment did not prevent this plaintiff from asserting and adjudicating her own claimed rights.

 

Rule 60(b) Relief from Judgment

RDI of Mich., LLC v. Mich. Coin-Op Vending, Inc., 2011 U.S. Dist. LEXIS 98426 ( E.D. Mich. Sept. 1, 2011)

Defendant could not undue judgment under Rule 60(b) because it could not prove that Plaintiff made willfully false and fraudulent statements in the course of obtaining the judgment.

 

Pleading Standards

Microsoft Corp. v. Lutian, 2011 U.S. Dist. LEXIS 109918 (N.D. Ohio Sept. 27, 2011).

The court struck Defendant’s affirmative defense of copyright misuse under the Twombly/Iqbal heightened pleading standard, because the pleading gave no factual support for the defense.

 

Pleading Standards

General Sci. Corp. v. SheerVision, Inc., 2011 U.S. Dist. LEXIS 100216 ( E.D. Mich. Sept. 2, 2011)

Plaintiff failed to adequately plead copyright registration in its complaint, but a proposed amended complaint remedied that defect.


Standing; Subject Matter Jurisdiction

Sony/ATV Music Publ’g LLC v. D.J. Miller Music Distribs., 2011 U.S. Dist. LEXIS 110354 (M.D. Sept. 26, 2011)

Plaintiff’s first complaint was dismissed because the plaintiffs hadn’t received copyright registrations in their works.  Plaintiffs got registrations and filed and an amended complaint.  Defendant moved to dismiss it for lack of standing, jurisdiction, and based on the law of the case doctrine.  The court denied the motion.  Lack of a registration is not a jurisdictional bar; it was an error that has now been fixed, and therefore should be ignored pursuant to FRCP 61.


Substantial Similarity

Pollick v. Kimberly-Clark Corp., 2011 U.S. Dist. LEXIS 108801 ( E.D. Mich. Sept. 23, 2011)

Plaintiff alleges that defendant infringed his design for “diaper jeans.”  After an extensive abstraction-filtration-comparison test, the court found that the diapers were not substantially similar.  (Notably, the court did not hold that the subject matter was functional and therefore not copyrightable.)  “Perhaps frivolous, Plaintiff’s complaint was plainly objectively unreasonable.”  The court therefore also awarded costs and fees to defendant.

 

Substantial Similarity

Remark LLC v. Adell Broad., 2011 U.S. Dist. LEXIS 106877 ( E.D. Mich. Sept. 20, 2011)

Court refused to dismiss claims that defendant’s television commercial for a radio station was substantially similar to plaintiff’s “Remarkable Mouth” commercials.  Plaintiff was allowed to assert claims in the registered work and its registered derivatives, but not subsequent, unregistered derivatives.

 

Discovery; Fair Use

Ashley Furniture Indus. v. Am. Signature, Inc., 2011 U.S. Dist. LEXIS 106703 (S.D. Ohio Sept. 19, 2011)

The court denied a motion to stay discovery pending a motion for summary judgment, and granted a motion to permit discovery before deciding the summary motion.  Defendant’s primary argument was fair use, and fair use is a fact-intensive issue that requires discovery.


Discovery; Statute of Limitations

HCA-Info. Tech. & Servs. v. Informatica Corp., 2011 U.S. Dist. LEXIS 123240 (M.D. Tenn. Oct. 25, 2011)

The Court granted a Rule 56(d) motion to allow defendant more time to conduct discovery on the statute of limitations issue before deciding Plaintiff’s summary judgment motion.


Authority/License

Chambers v. Ingram Book Co., 2011 U.S. Dist. LEXIS 104175 ( E.D. Mich. Sept. 14, 2011)

Court dismissed copyright infringement claims, where both the record and plaintiff’s admissions established that the lead defendant was an agent of plaintiff with authority to copy the work at the time that she authorized the remaining defendants to copy it.

 

Authority/License

ABKCO Music, Inc. v. Washington, 2011 U.S. Dist. LEXIS 120081 ( E.D. Mich. Oct. 18, 2011)

The court refused to dismiss infringement claims alleging that defendant performed several of plaintiff’s copyrighted musical works during defendant’s stage play.  Defendant argued that the songs were used in a non-dramatic medley before the show and were therefore non-infringing.  The court disagreed, and noted that the defendants did not have a license to perform the songs.

 

Statutory Damages

Zuffa, LLC v. Black Diamond, Inc., 2011 U.S. Dist. LEXIS 144279 (W.D. Tenn. Dec. 14, 2011)

Awarding $1,100 in statutory damages for one unauthorized interception of encrypted satellite transmissions under §605(e)(3), rejecting a request for the maximum of $10,000.  This amount was enhanced by $7,500 for willfulness.

 

Statutory Damages

Sony/ATV Music Publ. LLC v. D.J. Miller Music Distribs., 2011 U.S. Dist. LEXIS 115304 (M.D. Tenn. Sept. 29, 2011); later opinion at 2011 U.S. Dist. LEXIS 139335 (M.D. Tenn. Dec. 2, 2011)

The court rejected plaintiff’s attempt to calculate statutory damages on a per-infringement, rather than per-work, basis.

 

Statutory Damages

Broad. Music, Inc. v. Pub Dayton, LLC, 2011 U.S. Dist. LEXIS 57211 (S.D. Ohio May 27, 2011)

In an otherwise-typical BMI enforcement case, the court gave particular attention to the calculation of statutory damages.  It echoed the prevailing trend of awarding an amount equal to 3-5 times what the defendant establishment would have paid in licensing fees, and found it particularly relevant that plaintiff had contacted defendants over 90 times before filing suit to attempt to secure a license.  This indicated that the infringements were willful.