Opinion
Case No.: CV 20-2852-CBM-(JEMx)
2021-08-23
EVOX PRODUCTIONS, LLC, Plaintiff, v. VERIZON MEDIA INC. et al., Defendants.
Kent Brian Goss, Laura Schwartz, Mariam Sarwar, Raija J. Horstman, Valerie M. Goo, Crowell Moring LLP, Los Angeles, CA, for Plaintiff. Shaun Akhil Mathur, Ilissa Stacy Samplin, Perlette Michele Jura, Scott A. Edelman, Gibson Dunn and Crutcher LLP, Los Angeles, CA, for Defendants Verizon Media Inc., Yahoo! Inc., Oath, Inc.
Kent Brian Goss, Laura Schwartz, Mariam Sarwar, Raija J. Horstman, Valerie M. Goo, Crowell Moring LLP, Los Angeles, CA, for Plaintiff.
Shaun Akhil Mathur, Ilissa Stacy Samplin, Perlette Michele Jura, Scott A. Edelman, Gibson Dunn and Crutcher LLP, Los Angeles, CA, for Defendants Verizon Media Inc., Yahoo! Inc., Oath, Inc.
ORDER RE: DEFENDANTS’ MOTION TO DISMISS THE FIRST AMENDED COMPLAINT [57]
CONSUELO B. MARSHALL, UNITED STATES DISTRICT JUDGE The matter before the Court is Defendants Verizon Media, Inc. ("Verizon"), Yahoo! Inc. ("Yahoo"), and Oath Inc.’s ("Oath") (collectively, "Defendants’ ") Motion to Dismiss the First Amended Complaint (the "Motion") pursuant to Federal Rules of Civil Procedure 12(b)(6). (Dkt. No. 57.)
I. BACKGROUND
This action arises from Defendants’ alleged unauthorized use of Plaintiff Evox Productions, LLC's ("Plaintiff's" or "Evox's") copyrighted digital images and photographs and Plaintiff's trademarks included on the digital images after Defendant Yahoo! Inc. cancelled the licensing agreement with Plaintiff in 2016. Plaintiff filed a complaint on March 27, 2020 asserting two causes of action against Defendants: (1) copyright infringement; and (2) federal trademark infringement. On August 19, 2020, the Court granted Defendants’ Motion to Dismiss Plaintiff's trademark infringement claim without leave to amend. (Dkt. No. 35.) On May 5, 2021, the Court granted Defendants’ Motion for Judgment on the Pleadings on Plaintiff's copyright infringement claim and dismissed the copyright claim with leave to amend. (Dkt. No. 51 (the "Order").) The Court found Plaintiff's copyright infringement claim was premised on a "making available" theory which failed as a matter of law based on the Ninth Circuit's decision in VHT, Inc. v. Zillow Group, Inc. , 918 F.3d 723 (9th Cir. 2019). (Id. ) The Court granted Plaintiff leave to amend to allege additional facts regarding Defendants’ actual display and distribution of the copyrighted photographs and stated "[a]ny amended complaint filed by Plaintiff cannot assert a claim for copyright infringement based on the "making available’ theory foreclosed by VHT, Inc. v. Zillow Group, Inc. , 918 F.3d 723 (9th Cir. 2019)." (Id. ) On May 21, 2021, Plaintiff filed the First Amended Complaint ("FAC") which asserts a single cause of action for copyright infringement under 17 U.S.C. §§ 501 et seq. Defendants move to dismiss the FAC on the ground Plaintiff's copyright infringement claim fails as a matter of law because it is still based on a "making available" theory.
II. LEGAL STANDARD
A court may dismiss a complaint for "failure to state a claim upon which relief can be granted" pursuant to Federal Rule of Civil Procedure 12(b)(6). To survive a motion to dismiss pursuant to Rule 12(b)(6), the Complaint "must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 663, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim is facially plausible when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Salameh v. Tarsadia Hotel , 726 F.3d 1124, 1129 (9th Cir. 2013). The plausibility standard requires more than the sheer possibility or conceivability that a defendant has acted unlawfully. Id. A formulaic recitation of the elements of a cause of action will not suffice. Twombly , 550 U.S. at 555, 127 S.Ct. 1955.
III. DISCUSSION
The Copyright Act grants the owner of a copyright the exclusive right "to display the copyrighted work publicly ." 17 U.S.C. § 106(5) (emphasis added). The Copyright Act also provides that the owner of a copyright has the exclusive right "to distribute copies or phonorecords 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) (emphasis added). "[I]n the electronic context, copies may be distributed electronically." Perfect 10, Inc. v. Amazon.com, Inc. , 508 F.3d 1146, 1162 (9th Cir. 2007) (citing N.Y. Times Co. v. Tasini , 533 U.S. 483, 498, 121 S.Ct. 2381, 150 L.Ed.2d 500 (2001) ).
Under the Copyright Act, "[t]o ‘display’ a work means to show a copy of [a work], either directly or by means of a film, slide, television image, or any other device or process." 17 U.S.C. § 101.
Here, the FAC alleges:
1. After Defendants’ right to reproduce, distribute and display the copyrighted photographs pursuant to the parties’ licensing agreement terminated on May 4, 2016, "Yahoo! recklessly or intentionally failed to remove the Copyrighted Photographs from public display or take any steps to prevent the possibility of further reproduction, distribution or display of the Copyrighted Photographs. Instead, Yahoo! continued to reproduce, distribute and display the Copyrighted Photographs after August 2, 2016 without permission or authorization, including, but not limited to, on Yahoo!’s Auto website and Yahoo!’s Tumblr website." (FAC ¶ 24);
2. "Any internet user could visit Yahoo!’s blog and access, reproduce, and display all of the Copyrighted Photographs (sometimes through a free registered account). Internet users could also interact with the Copyrighted Photographs on Tumblr or other social media.... users could download and copy the Copyrighted Photographs to their own computers; users could create their own Tumblr blog and "re-blog" the Copyrighted Photographs (that would be reproduced, displayed and distributed by Yahoo!); users could link the Copyrighted Photographs to other social media websites via shortcuts that Yahoo! supplied; users could "like" or "unlike" the Copyrighted Photographs on either Yahoo!’s Tumblr blog or on any blog where the Copyrighted Photographs had been "reblogged." (Id. ¶ 29);
3. "After August 2, 2016, Yahoo! continued to reproduce, display and distribute the Copyrighted Photographs from Yahoo!’s servers via Yahoo!’s Tumblr blog. The Copyrighted Photographs were reproduced, distributed and displayed on Yahoo!’s Tumblr blog to any member of the public who visited Yahoo!’s ‘evox on Yahoo’ Tumblr blog or any other Tumblr blog that had reblogged the Copyrighted Photograph(s). The Copyrighted Photographs were actually reproduced, distributed and displayed by Yahoo! after August 2, 2016, including, by way of example, in October 2016." (Id. ¶ 30);
4. After Plaintiff first discovered Yahoo's continued reproduction, distribution and display of Plaintiff's copyrighted photographs on Yahoo's Tumblr page in October 2016, Plaintiff conducted an investigation through a third-party investigator who "created a browsable copy of all of Yahoo!’s Tumblr posts and a complete log of its transactions with Yahoo!’s servers, which show that the Copyrighted Photographs were reproduced, distributed and displayed
by Yahoo! to the third party investigator in or around October 2016." (Id. ¶ 32); and
5. "Yahoo! also maintained a separate Yahoo! Autos website. The main landing page of the website reproduced, distributed and displayed [Plaintiff's] Copyrighted Photographs. Additional Copyrighted Photographs were reproduced, distributed and displayed on subpages of the website. The Yahoo! Autos webpages that reproduced, distributed and displayed [Plaintiff's] Copyrighted Photographs were available and accessible to any internet user through at least October 2016. After August 2, 2016, certain of the Copyrighted Photographs were reproduced, distributed and displayed from Yahoo!’s servers via the Yahoo! Autos webpages. At a minimum, the Copyrighted Photographs were reproduced, distributed and displayed in October 2016 as part of EVOX's investigation." (Id. ¶¶ 37-38).
Defendants argue the FAC's allegations demonstrate Plaintiff's copyright infringement claim is still based on Defendants allegedly making Plaintiff's photographs available on Tumblr and Yahoo's Autos website, which is foreclosed by this Court's Order and Ninth Circuit authority.
Plaintiff argues the FAC has sufficiently alleged facts satisfying the "publicly" and "to the public" requirement by alleging that Yahoo's Tumblr page and Yahoo's Autos website were "open to the public" (citing FAC ¶¶ 25, 27, 29) and Yahoo did not restrict access to Tumblr and anyone could browse Tumblr (FAC ¶¶ 27, 29) and therefore it has satisfied the "publicly" and "to the public" requirements to state a claim for violation of its display and distribution rights under the Copyright Act. Plaintiff thus contends the fact that Yahoo displayed the copyrighted photographs on its Tumblr page and Auto website "by their very nature" shows that they were "open to the public." Plaintiff relies on the Copyright Act's definition "[t]o perform or display a work ‘publicly’ " as "to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered." 17 U.S.C. § 101.
While Plaintiff attempts to reframe its theory of liability as "open to the public," Plaintiff's theory for copyright infringement is still premised on Defendants allegedly making the copyrighted photographs available to the public on Tumblr and the Auto website which has been expressly rejected by the Ninth Circuit. See VHT , 918 F.3d at 736 (rejecting the plaintiff's contention that the defendant violated the Copyright Act based on a making available theory, reasoning "[t]his theory presumes that the Copyright Act's display right encompasses an exclusive right to ‘make available for display," a position neither supported by the statute nor embraced by this court"); Perfect 10, Inc. v. Amazon.com, Inc. , 508 F.3d 1146, 1162 (9th Cir. 2007) (reviewing the plain language of the Copyright Act and rejecting the contention that "merely making images ‘available’ violates the copyright owner's distribution right); see also SA Music, LLC v. Amazon.com, Inc. , 2020 WL 3128534, at *2-*3 (W.D. Wash. June 12, 2020) ; Zuffa, LLC v. Latham , 2020 WL 4458920, at *2 (N.D. Cal. Feb. 26, 2020). Defendants also argue the FAC's remaining allegations pertain to display or distribution to Plaintiff itself or its investigator (see FAC ¶¶ 31, 32), who are not members of the public. Defendants thus contend because there are no allegations in the FAC that Defendants actually displayed or actually distributed the copyrighted photographs to members of the public, Plaintiff fails to state a claim for copyright infringement. As the Supreme Court has recognized, "public" for purposes of the Copyright Act means a "large group of people outside of a family and friends." Am. Broad. Companies, Inc. v. Aereo, Inc. , 573 U.S. 431, 448, 134 S.Ct. 2498, 189 L.Ed.2d 476 (2014). Thus, Plaintiff fails to allege Defendants displayed or distributed the photographs to members of the public as required for Plaintiff's copyright claim.
The majority of the cases relied on by Plaintiff are out of circuit decisions, were decided prior to the Ninth Circuit's VHT decision, and/or do not concern a work that was stored electronically, and are therefore inapposite or not binding on this Court. See Columbia Pictures Indus., Inc. v. Redd Horne, Inc. , 749 F.2d 154 (3d Cir. 1984) ; Columbia Pictures Indus., Inc. v. Aveco, Inc. , 800 F.2d 59 (3d Cir. 1986) ; Hotaling v. Church of Jesus Christ of Latter-Day Saints , 118 F.3d 199 (4th Cir. 1997) ; Elohim EPF USA, Inc. v. Total Music Connection, Inc. , 2015 WL 12655556 (C.D. Cal. Oct. 1, 2015) ; Playboy Enterprises, Inc. v. Frena , 839 F. Supp. 1552 (M.D. Fl. 1993) ; Beom Su Lee v. Karaoke City , 2019 WL 2451430 (S.D.N.Y. Apr. 22, 2019).
Plaintiff contends it has sufficiently alleged facts which give rise to a reasonable inference that Defendants displayed and distributed the copyrighted photographs to a large group of persons other than Plaintiff and its investigator by alleging the photographs were liked, unliked and/or reblogged from Yahoo's Tumblr page after the parties’ licensing agreement expired (FAC ¶ 34), Tumblr was open and available to the public (id. ¶¶ 25, 29), all of Plaintiff's Copyrighted Photographs remained readily displayed on Tumblr for years (id. ¶¶ 30, 33), Tumblr had over 500 million monthly visitors in 2016 and over 472 million registered accounts in 2019 (id. ¶ 27), Yahoo's CEO attested to Tumblr's core purpose as a "distribution network" and the average Tumblr post is re-blogged 14 times (id. ¶¶ 26, 30, 33), Yahoo encouraged webcrawlers to visit its blog and display it in Google search results (id. ¶ 41), and billions of users searched for automotive-related content during the year Yahoo's license expired (id. ¶ 40). However, these allegations pertain to conduct by third parties—not volitional conduct by Defendants. In VHT , the Ninth Circuit found "to demonstrate volitional conduct" as required for a copyright infringement claim, the plaintiff "must provide some ‘evidence showing [the alleged infringer] exercised control (other than by general operation of [its website]); selected any material for upload, download, transmission, or storage; or instigated any copying, storage, or distribution’ of its photos," and therefore held Zillow was not liable for violating the plaintiff's reproduction right where photos in Zillow's "Listing Platform" were copied to another section of its website "based on user actions, not the conduct of Zillow or its moderators." 918 F.3d at 732, 737. Moreover, in Fox Broadcasting Co., Inc. v. Dish Network LLC , the Ninth Circuit held "[i]nfringement of the reproduction right requires copying by the defendant"; thus, that Dish Network "operat[ed] a system used to make copies at the user's command" was not enough for the plaintiff to establish likelihood of success on its infringement claim. 747 F.3d 1060, 1067 (9th Cir. 2014) (noting "Dish's program create[d] the copy only in response to the user's command" and "[t]he user, then, and not Dish [wa]s the most significant and important cause of the copy."). Therefore, Plaintiff fails to allege facts regarding volitional conduct by Defendant (as opposed to conduct by third parties) as required for Plaintiff's copyright infringement claim.
Plaintiff also contends Defendant's Motion to Dismiss must be denied because it has alleged Defendants’ spoliation of evidence of infringement (see FAC ¶ 36 (alleging Defendants failed to keep or maintain records including server logs of the exact number of times Plaintiff's copyrighted photographs were reproduced, displayed or distributed via Tumblr or its website)) which entitles Plaintiff to a presumption of infringement. Plaintiff, however, cites to no authority wherein a court has relied on the presumption of infringement arising from alleged spoliation in determining whether the plaintiff stated a claim for copyright infringement in ruling on a motion to dismiss. Therefore, Plaintiff fails to plead sufficient facts to state a claim for copyright infringement.
Dallas Buyers, LLC v. Integrity Computer Servs. , 2016 WL 3085907 (D. Or. Apr. 29, 2016), report and recommendation adopted , 2016 WL 3085899 (D. Or. May 31, 2016), relied on by Plaintiff, is not binding on this Court and is inapposite because it concerned whether granting leave to amend would be futile where the plaintiff alleged spoliation.
IV. CONCLUSION
Accordingly, the Court GRANTS Defendants’ Motion to Dismiss the First Amended Complaint and dismisses the First Amended Complaint with prejudice .
The Court previously gave Plaintiff leave to amend to state a claim for copyright infringement that was not based on a "making available theory" and to allege additional facts regarding Defendants’ actual display and distribution of Plaintiff's copyrighted photographs.