Opinion
23 Civ. 4125 (LAK) (GWG)
03-19-2024
NEU PRODUCTIONS INC. et al., Plaintiffs, v. OUTSIDE INTERACTIVE, INC., Defendant.
REPORT & RECOMMENDATION
GABRIEL W. GORENSTEIN, UNITED STATES MAGISTRATE JUDGE
Plaintiffs Neu Productions Inc. (“Neu Productions”), John Robert Roderick, and Patrick Parnell have brought claims against defendant Outside Interactive, Inc. (“Outside”), arising under the Copyright Act, 17 U.S.C. §§ 101 et seq., the Declaratory Judgment Act, 28 U.S.C. §§ 2201, 2202, and state law. See First Amended Complaint, filed Aug. 17, 2023 (Docket # 19) (“FAC”). Defendant has moved to dismiss the complaint for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the below reasons, the motion should be granted in part and denied in part.
See Notice of Motion, filed Sept. 26, 2023 (Docket # 22) (“Mot.”); Memorandum of Law in Support, filed Sept. 26, 2023 (Docket # 23) (“Mem.”); Declaration of Thomas B. Sullivan, filed Sept. 26, 2023 (Docket # 24) (“First Sullivan Decl.”); Plaintiffs' Memorandum of Law in Opposition, filed Oct. 26, 2023 (Docket # 25) (“Opp.”); Reply in Support of Defendant's Motion to Dismiss, filed Nov. 8, 2023 (Docket # 26) (“Reply”); Reply Declaration of Thomas B. Sullivan, filed Nov. 8, 2023 (Docket # 27) (“Second Sullivan Decl.”); Letter, filed Dec. 19, 2023 (Docket # 30) (“Pl. Supp. Letter”); Letter, filed Dec. 22, 2023 (Docket # 31) (“Def. Supp. Letter”).
I. BACKGROUND
The following facts are taken from plaintiffs' complaint and are assumed to be true for the purpose of deciding the motion to dismiss.
Defendant Outside operates “Outside Television,” which is “a division of Defendant Outside.” FAC ¶ 13. Outside also operates “Outside+,” which “includes on demand, cable and resort programming as well as online channels of distribution on scores of third-party platforms and streaming services.” Id. ¶ 1.
Neu Productions “is a full-service film production company that produces character driven stories and imagery through commercials, branded content and television” and is wholly owned by Roderick. FAC ¶¶ 10-11. Roderick “produced and licensed the content at issue through Neu Productions.” Id. ¶ 11. Roderick collaborated on “dozens of projects licensed to Outside Television” with Parnell, who is “a celebrity television host, producer and sports commentator.” Id. ¶¶ 8, 12-13.
Plaintiffs have created or released several series of programs relevant to this litigation.
A. Outlook: Icons Revealed & Dispatches
“Outlook: Icons Revealed” is a series that “profiles athletes, musicians, journalists and others who excel in the outdoors.” FAC ¶ 15. This series premiered on Outside Television in 2014. Id. ¶ 16. In 2015, Parnell and Roderick began working on the series, and “Parnell has hosted and produced every subsequent episode of Outlook: Icons Revealed - twenty-seven (27) in all.” Id. ¶ 17. Each of the plaintiffs had various agreements, written and unwritten, with Outside related to the show. Parnell “never” had a written contract with Outside, but “it was mutually understood and agreed that his appearances would be limited to Outside Television and the financial arrangement for his services was premised upon that understanding.” Id. ¶ 18.
Roderick “edited and produced sixteen (16) episodes,” and “licensed these episodes to Outside for use for a limited time on Outside Television through his production company, Neu Productions.” Id. ¶ 19. Of the sixteen episodes related to Roderick and Neu Productions, “three . . . are subject to a written contract signed on June 17, 2014.” Id. ¶ 21; see Production Contract, annexed as Ex. 1 to FAC (Docket # 19-1) (“Outlook Contract”). This contract states that Neu Productions “offers to create the PROJECT for [Outside Television] for consideration,” and that “[n]o other use of the project is anticipated, nor have terms of consideration been agreed upon for any but the use specified.” Outlook Contract; see FAC ¶ 21. Plaintiffs allege that “[a]lthough payments varied, the other Neu Productions Outlook Episodes were created by Roderick for Outside Television pursuant to the same contractual terms ....” FAC ¶ 24. In addition to the terms contained in the Outlook Contract, “the parties orally discussed a ‘shelflife' on Outside Television of approximately three years for each episode.” Id. ¶ 23.
“Dispatches” “is a television series that takes viewers on a journey around the globe.” FAC ¶ 25. Roderick “filmed, edited and produced fourteen (14) episodes,” and “licensed them to Defendant through Neu Productions.” Id. Parnell hosted five “Dispatches” episodes. Id. ¶ 26. As was true for “Outlook: Icons Revealed,” the parties had various written and unwritten agreements regarding Outside's use of the episodes. As to Parnell, there was no “written contract for Parnell's appearances and other services,” but it was “understood and agreed that the series would be used only on Outside Television.” Id. ¶ 27. Neu Productions and Roderick had written contracts for seven of the episodes. Id. ¶ 29; see Production Contract, annexed as Ex. 2 to FAC (Docket # 19-2) (“First Dispatches Contract”); Production Contract, annexed as Ex. 3 to FAC (Docket # 19-3) (“Second Dispatches Contract”); Exhibit Agreement (Marigold), annexed as Ex. 4 to FAC (Docket # 19-4) (“Marigold Contract”). The First Dispatches Contract, between Roderick and Outside Television, is dated January 27, 2013, and stated that Roderick “offers to create the PROJECT for [Outside Television] in exchange for consideration” and that “[n]o other use of the project is anticipated, nor have terms of consideration been agreed upon for any but the use specified.” First Dispatches Contract; see FAC ¶ 30; First Dispatches Contract. The Second Dispatches Contract, dated June 25, 2013, “is based on the same form agreement as the first,” FAC ¶ 31, but relates only to a single episode, see Second Dispatches Contract. The final contract, the Marigold Contract, was signed in 2021 “after Outside Television was acquired by Pocket Outdoor Media and renamed Outside, Inc.” FAC ¶ 32. The Marigold Contract states that Neu Productions “offers to create the PROJECT for [Outside Television] in exchange for consideration.” Marigold Contract at 3. Additionally, “for the first and only time,” FAC ¶ 32, the Marigold Contract stated that Outside Television has the “exclusive right, in perpetuity to exhibit, distribute, transmit, perform, sublicense, and otherwise exploit the Project an unlimited number of times via all means and media whether now known or hereafter discovered, without limitation, broadcast, cable, satellite, internet, mobile, SVOD, TVOD, and AVOD,” Marigold Contract at 3. Plaintiffs allege that, with the exception of the Marigold Contract, “the parties orally agreed to a term of three years” for the non-exclusive licenses to distribute the content. Id. ¶ 38.
Plaintiffs allege that “[d]efendant . . . repeatedly and falsely asserted that it ‘owns' all Outlook: Icons Revealed and Dispatches content produced by Roderick/Neu Productions,” with Outside arguing that it “either owns these episodes as ‘work for hire' or jointly owns the copyrights in Roderick's footage.” FAC ¶¶ 33-35. Despite this assertion, on December 9, 2021, Rob Faris of Outside Television “admitted . . . during a telephone call” that “Roderick owns the copyrights in the footage he shot.” Id. ¶ 34. Additionally, “[d]efendant attempted to pressure Parnell to sign an agreement seeking retroactively to cover all of his appearances and work on all the episodes he has appeared in over the years,” but Parnell refused. Id. ¶¶ 33-35.
The complaint asserts as to these programs and all other programs that “[w]ithout the Plaintiffs' consent, without compensation and in violation of applicable contracts and other rights, Defendants expanded their use of Plaintiffs' content [from Outside Television] to Outside+, which also includes on demand, cable and resort programming as well as online channels of distribution on scores of third-party platforms and streaming services.” FAC ¶ 1.
B. Expedition Series
“Expedition Series” is a series that “was conceived by Parnell and Roderick and filmed and produced by Roderick for licensing through Neu Productions without any input from Outside Television.” FAC ¶ 42. Plaintiffs “licensed the Expedition Series to Outside Television with the understanding that it would be used only on Outside Television and only for a limited time.” Id. ¶ 44. Plaintiffs allege that “the time frame was three years.” Id. Notwithstanding the alleged agreement to use the series only on Outside Television, id., the “Expedition Series” can be accessed on Outside+, id. ¶ 45.
C. Image Quest
“Image Quest” is a series on Outside Television featuring “daring directors who follow athletes up mountains, through waves and down slopes to get the perfect shots.” FAC ¶ 48 (quotation marks omitted). Roderick produced two episodes for the series, and “neither project was memorialized in writing by Outside Television.” Id. ¶ 49. Similar to the previous programs, Plaintiffs allege that “the parties understood that the content would be used only for a limited time (three years) and only on Outside Television.” Id. ¶ 50. However, “Image Quest” “can now be accessed through Outside+ and scores of third-party platforms and streaming services.” Id. ¶ 51.
D. Copyright Registrations
Between the four series, there are thirty-six episodes at issue. See Opp. at 5; Mem. at 2. In their original complaint, plaintiffs attached eight copyright registrations. See Exhibit 7 (Copyright Reg Certificates), annexed as Ex. 7 to Complaint (Docket # 4-7) (“Original Complaint Registration Certificates”). In their amended complaint, plaintiffs attached three additional registrations along with the initial eight copyright registrations. See Expedition Copyright Registrations, annexed as Exs. 8-11 to FAC (Docket ## 19-8 to 19-11) (“FAC Registration Certificates”). The three new registrations bear an effective date of May 22, 2023, which is four days after the original complaint was filed. See id. The plaintiffs' brief in opposition to the motion to dismiss attaches an additional twenty-two copyright registrations, which, along with the eleven attached to the amended complaint, represent copyright registrations for “all but one of the television episodes at issue in this case.” Opp. at 6; see Exhibit Copyright Registration Certificates, annexed as Ex. 1 to Opp. (Docket # 25-1) (“Opp. Copyright Registrations”). The registrations attached to plaintiffs' opposition papers all bear an effective date of August 3, 2023. See id.
While there are four registrations attached, one of the registrations, for a work entitled “Namibia,” was included in the eight registrations attached to the original complaint. Compare Exhibit Registration (Expedition Namibia), annexed as Ex. 10 to FAC (Docket # 19-10) with Original Complaint Registration Certificates at *4. (“*” refers to the page assigned by the ECF system.)
The Court notes that plaintiffs seemingly have thirty-three registrations, which would mean they are missing three registrations, not one. See Opp. at 5 (indicating that there are thirty-six episodes at issue).
II. GOVERNING LAW
A party may move to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) when the opposing party's complaint “fail[s] to state a claim upon which relief can be granted.” While a court must accept as true all of the factual allegations contained in a complaint, that principle does not apply to legal conclusions. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (“[A] plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”) (punctuation and alterations omitted). In other words, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice,” Iqbal, 556 U.S. at 678, and a court's first task is to disregard any conclusory statements in a complaint, id. at 679.
Next, a court must determine if the complaint contains “sufficient factual matter” which, if accepted as true, states a claim that is “plausible on its face.” Id. at 678 (punctuation omitted). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged....The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (punctuation omitted). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct,” a complaint is insufficient under Fed.R.Civ.P. 8(a) because it has merely “alleged” but not “‘show[n]' . . . ‘that the pleader is entitled to relief.'” Id. at 679 (quoting Fed.R.Civ.P. 8(a)(2)). III. DISCUSSION
Plaintiffs assert several claims against Outside. In Count I, Roderick seeks a declaratory judgment as to the copyright ownership of the content at issue. FAC ¶¶ 53-58. In Count II, Roderick asserts a claim of copyright infringement against Outside related to Outside's use of “Outlook: Icons Revealed,” “Dispatches,” “Expedition Series,” and “Image Quest.” See Id. ¶¶ 59-70. In Count III, Parnell asserts claims arising out of California statutory and common law for “misappropriation of the right of publicity.” See id. at 12-13. In Count IV, Neu Productions asserts a claim for breach of contract in the alternative to the claim in Count II. See id. at 13-14. In Count V, pleaded “in the alternative to the claims in Counts II, III and IV,” all three plaintiffs assert claims of unjust enrichment. See id. at 15-16.
There are numerous paragraphs in the amended complaint that repeat paragraph numbers. For example, there are four paragraphs labeled as “71,” appearing on pages 12, 13, 15 and 16. Thus, in some instances we cite to page numbers of the amended complaint rather than paragraph numbers.
Outside moves to dismiss all of these claims. See Mot. In addition to opposing the motion to dismiss, plaintiffs request that they be allowed to file a second amended complaint, attaching the additional twenty-two registrations they obtained following the filing of the amended complaint. See Opp. at 5-8.
We next discuss each of these claims.
A. Copyright Infringement
Outside argues that Roderick's copyright infringement claim should be dismissed because Outside's use of the content was consistent with the relevant licenses. See Mem. at 611. In the alternative, Outside argues that the Court should only allow Roderick to pursue claims on the eight episodes Roderick had registered with the Copyright Office at the time of filing the original complaint. See Mem. at 11-12. In response, Roderick argues that Outside exceeded the scope of the licenses “when it expanded distribution of the television episodes . . . to Outside+ and third-party streaming services,” Opp. at 8, and that plaintiffs should be allowed to amend their complaint to include the additional copyright registrations obtained following the filing of the original complaint, see Id. at 5-7. We deal with the merits of the claims and the request to amend separately.
1. Merits
“To establish a claim of copyright infringement, ‘two elements must be proven: (1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.'” Abdin v. CBS Broad. Inc., 971 F.3d 57, 66 (2d Cir. 2020) (quoting Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991)). The “authorization to copy copyrighted material . . . is generally viewed as an affirmative defense to a claim of copyright infringement, and is a defense that the alleged infringer must plead and prove.” Yamashita v. Scholastic Inc., 936 F.3d 98, 104 (2d Cir. 2019). However, “when the existence of a license is not in question, a copyright holder must plausibly allege that the defendant exceeded particular terms of the license.” Id. at 105 (emphasis omitted). “Copyright disputes involving only the scope of the alleged infringer's license present the court with a question that essentially is one of contract.” Bourne v. Walt Disney Co., 68 F.3d 621, 631 (2d Cir. 1995); accord Yamashita, 936 F.3d at 105.
Here, both sides' made arguments as if written licenses for all the programs appeared somewhere in the record. See, e.g., Mem. at 8 (“The contractual terms of all the licenses are properly before this Court.”). Thus, the parties requested that the Court apply cannons of contract interpretation to each of the contracts attached to the amended complaint. See id. at 7; Opp. at 8 (“There can be little doubt that the plain language of the contract limits use to Outside Television.”). The problem, however, is that none of the three written contracts for which scope is at issue actually contain licensing language. See Outlook Contract; First Dispatches Contract; Second Dispatches Contract. Instead, the contracts are simply labeled as contracts for the “production” of certain content.
The Court requested that the parties provide supplemental briefing to address this issue. In response, both parties argued - for the first time - that the licenses were in fact “implied” licenses. See Pl. Supp. Letter; Def. Supp. Letter. Plaintiffs describe the licenses as being “implied non-exclusive license[s],” Pl. Supp. Letter at 1, and defendant cites to case law involving implied non-exclusive licenses, see Def. Supp. Letter at 1 (citing ABKCO Music, Inc. v. Sagan, 50 F.4th 309, 320 (2d Cir. 2022)). Plaintiffs state that “the parties intended that Outside Television was granted a non-exclusive license to broadcast Plaintiffs' works on Outside Television,” Pl. Supp. Letter at 1, though they of course argue that the implied license was to permit broadcast only on “Outside Television” and not Outside+. The plaintiffs' concession that there was an implied license is consistent with the allegation in the complaint that “Roderick produced and licensed the content at issue through Neu Productions.” FAC ¶ 11 (emphasis added).
Case law confirms that “nonexclusive licenses may be granted orally, or may even be implied from conduct.” Graham v. James, 144 F.3d 229, 235 (2d Cir. 1998) (citation and alterations omitted). The Second Circuit has recently considered the circumstances under which an implied non-exclusive license will be formed, finding that at a minimum there must be “a ‘meeting of the minds between the parties to permit the particular usage at issue.'” ABKCO Music, Inc., 50 F.4th at 320 (quoting Psihoyos v. Pearson Educ., Inc., 855 F.Supp.2d 103, 124 (S.D.N.Y. 2012)). While the parties assert that the licenses would be governed by either Connecticut or Colorado law, see Mem. at 7; Opp. at 9 n.2, the formation of the implied nonexclusive license is not at issue in this case given the plaintiffs' acceptance that there was such a license, see FAC ¶ 11 (“Roderick produced and licensed the content at issue . . . .”). Instead, the only issue is whether defendant exceeded the scope of the license. And “when the contested issue is the scope of a license, rather than the existence of one, the copyright owner bears the burden of proving that the defendant's copying was unauthorized under the license.” Graham, 144 F.3d at 236; accord Bayoh v. Afropunk Fest 2015 LLC, 2020 WL 229978, at *5 (S.D.N.Y. Jan. 15, 2020).
Here, plaintiffs allege that it was the parties' intent or understanding that the material for each of the series would be used only on Outside Television. See FAC ¶ 19 (“Roderick filmed, edited and produced sixteen (16) episodes of Outlook: Icons Revealed . . . and licensed these episodes to Outside for use for a limited time on Outside Television . . . .”); id. ¶ 27 (“As with Outlook: Icons Revealed, Outside Television did not secure a written contract for Parnell's appearances and other services on the Dispatches series but it was understood and agreed that the series would be used only on Outside Television.”); id. ¶ 44 (“Roderick/Neu and Parnell licensed the Expedition Series to Outside Television with the understanding that it would be used only on Outside Television and only for a limited time.”); id. ¶ 50 (“As with the Outlook, Dispatches and Expedition content outlined above, the parties understood that the content would be used only for a limited time (three years) and only on Outside Television.”); see also id. ¶ 1 (defendant exceeded the scope of the implied licenses when it “expanded their use of Plaintiffs' content to Outside+, . . . as well as online channels of distribution on scores of third-party platforms and streaming services.”). Given the absence of any written licensing agreement and the fact that plaintiffs' allegations at this stage must be taken as true, defendant is not entitled to dismissal of the copyright infringement claims on the basis that the licenses authorized use of the material on Outside+ channels. See Walker v. Carter, 2014 WL 4363956, at *2 (S.D.N.Y. Sept. 3, 2014) (“Taking the facts as Plaintiff alleged them to be true, even if an implied license existed, there certainly is a question as to the scope of Plaintiff's intent. Defendant's argument may preclude recovery at a later date, but at this stage, Plaintiff's copyright infringement claim stands.”); see also Bayoh, 2020 WL 229978, at *5 (finding a genuine dispute of material fact and denying summary judgment where “Defendants say [plaintiff] gave them an unlimited license, while [plaintiff] says he licensed certain photographs to be used on Afropunk's 2015 festival website and Instagram page only”).
Defendant cites to Boosey & Hawkes Music Publishers, Ltd. v. Walt Disney Co., 145 F.3d 481 (2d Cir. 1998), and Bartsch v. Metro-Goldwyn-Mayer, Inc., 391 F.2d 150 (2d Cir. 1968), to argue even if the implied licenses only allowed use of the content on “television,” their use “‘may reasonably be said to fall within the medium as described in the license.'” Mem. at 10 (quoting Bartsch, 391 F.2d 150, 155 (2d Cir. 1968)). However, Boosey and Bartsch involved express licenses containing ambiguous terms. See Boosey & Hawkes Music Publishers, Ltd., 145 F.3d at 486 (finding “the right ‘to record [the composition] in any manner, medium or form' for use ‘in [a] motion picture'” “broad enough to include distribution of the motion picture in video format”) (alterations in the original); Bartsch, 391 F.2d at 155 (“If the words are broad enough to cover the new use, it seems fairer that the burden of framing and negotiating an exception should fall on the grantor.”). No such written licensing language exists in the instant case and thus the scope of the license must be taken to be in the form that plaintiffs allege in their complaint.
Accordingly, at this stage of the case, the implied licenses do not preclude plaintiffs' copyright infringement claims.
2. Lack of Registration and Leave to Amend
Defendant argues that any copyright infringement claims that involve works “not registered with the Copyright [O]ffice prior to initiating this action” must be dismissed. Mem. at 11. It appears that there were only eight copyrights registered before May 18, 2023, the date this action was filed. See Original Complaint Registration Certificates. Thus, defendant seeks to dismiss claims as to all works not encompassed by these eight registrations.
Section 411(a) of the Copyright Act provides that “no civil action for infringement of the copyright in any United States work shall be instituted until . . . registration of the copyright claim has been made in accordance with this title.” 17 U.S.C. § 411(a). In Fourth Estate Public Benefit Corporation v. Wall-Street.com, LLC, 139 S.Ct. 881 (2019), the Supreme Court held that “registration occurs, and a copyright claimant may commence an infringement suit, when the Copyright Office registers a copyright.” Id. at 886. In light of the mandatory language of section 411(a), Fourth Estate held that a potential claimant “must simply apply for registration and receive the Copyright Office's decision on her application before instituting suit.” Id. at 891. It also noted that “registration is akin to an administrative exhaustion requirement that the owner must satisfy before suing to enforce ownership rights.” Id. at 887. Following Fourth Estate, courts typically dismiss copyright cases filed before registration had occurred without leave to amend even where a copyright registration was ultimately obtained. See, e.g., Zonis v. Grubman, 2022 WL 597447, at *1 (S.D.N.Y. Feb. 28, 2022) (“[T]he failure to register a copyright in advance of filing a lawsuit cannot be cured through amendment and thus requires dismissal.”); Greene v. Pete, 2023 WL 2393873, at *4 (S.D.N.Y. Jan. 3, 2023) (“Because copyright registration is a statutory prerequisite to the filing of an infringement action, no amendment can cure the deficiency in Plaintiff's complaint.”), adopted by 2023 WL 2043951 (S.D.N.Y. Feb. 16, 2023). Dismissal in such a situation is without prejudice. See Malibu Media, LLC v. Doe, 2019 WL 1454317, at *4 (S.D.N.Y. Apr. 2, 2019).
Plaintiffs concede that numerous works described in the complaint were not registered at the time the lawsuit was filed and offer no argument that these claims could proceed based on the first amended complaint. Instead, they propose that they be allowed to file a second amended complaint that includes all works for which registrations have been obtained. See Opp. at 5-6. Defendants oppose this request, pointing to the cases that have barred leave to amend where registrations were made after the complaint was filed, including the three cases cited in the previous paragraph. See Reply at 3 & n.4.
Certainly, a copyright claim cannot proceed on a pleading that was filed before registration. The cases cited by defendant to support their position, see Reply at 3 n.4, vindicate this principle by declining leave to amend following dismissal. However, in all the cases cited by defendant, including the three cases cited above, nothing remained to be done on the case at the time the request to amend was denied. Here, by contrast, there remain viable copyright actions as to at least eight works. Thus, unlike the cases cited by defendant, the effect of a dismissal here would be to permit two parallel cases to proceed raising the same issues. This is because even with denial of leave to amend, plaintiffs are free to file a new case against the same defendant as to the newly-obtained registrations that raise the same allegations that defendant exceeded the scope of the implied licenses. See Malibu Media, LLC, 2019 WL 1454317, at *4.
As just noted, the denial of leave to amend typically occurs where the plaintiffs' claims are being dismissed in their entirety due to the late registrations because there are no viable claims left in the complaint. See, e.g., Nwosuocha v. Glover, 2023 WL 2632158, at * 6 (S.D.N.Y. Mar. 24, 2023); Malibu Media, 2019 WL 1454317, at *4. This was the situation in all but two cases cited by defendant. See Reply at 3 n.4. As to the other two cases, defendant correctly points out that in each case, “the plaintiff was bringing claims for infringement of multiple works and some works were timely registered and others were not.” Reply at 3. In both cases, however, all claims were disposed of in some fashion at the time of the denial of leave to amend, meaning that there was no danger of two separate cases proceeding that would raise identical issues. Thus, in Malibu Media, LLC v. Baker, 2020 WL 3978302 (S.D.N.Y. June 18, 2020), the court granted a motion for default judgment as to the timely-registered copyright infringement claims at the same time it denied plaintiff's request to amend the complaint to include later-obtained registrations. Id. at 5. In Lee v. Black Entertainment Television, LLC, 2020 WL 1140795 (S.D.N.Y. Mar. 6, 2020), the entire complaint was dismissed even though some claims satisfied section 411(a). Id. at *2. Thus, Baker and Lee fully disposed of all claims at the time they denied leave to amend.
In other words, none of the cases cited by defendant that barred leave to amend, see Reply at 3 n.4, involved a situation similar to what exists here: a complaint that contains claims for both works with timely-obtained registrations and works with untimely-obtained registrations, where the case was going to proceed with discovery, summary judgment and/or trial as to the timely-obtained registrations. Indeed, the Court is aware of no case that has denied leave to amend in the situation here: that is, where the practical effect of a dismissal would be to cause plaintiffs to file a case against the same defendant that raised the same claims as to the new registrations that this Court will already be considering in the earlier-filed case. Were plaintiffs to file the second case, the central dispute in both cases - the scope of the implied licenses - would be the same. While presumably the second-filed case could be consolidated with the instant case, the Court agrees with plaintiffs that the more efficient approach is to permit an amended pleading to be filed attaching the new registrations so that all claims may proceed in a single lawsuit. Indeed, this approach was taken in the case of VHT, Inc. v. Zillow Group, Inc., 461 F.Supp.3d 1025, 1031 (W.D. Wash. 2020), opinion clarified, 2021 WL 913034 (W.D. Wash. Mar. 10, 2021), affd, 69 F.4th 983 (9th Cir. 2023), which granted leave to amend to allege late-filed registrations. While VHT, Inc. was further advanced than the present case and rested on alternative grounds, VHT, Inc. noted that dismissal without leave to amend would not serve the principle of efficiency underlying the “exhaustion” requirement motivating Fourth Estate. See id. at 1039-040. That principle of efficiency justifies the same outcome here. See also Schmidt v. Baldy, 2019 WL 8219486, at *1 (C.D. Ca. June 11, 2019) (Fourth Estate “did not state that dismissal was the only remedy” and “it might be permissible for the copyright owner merely to amend the complaint if registration was obtained”); see generally IMAPizza, LLC v. At Pizza Limited, 2021 WL 2410713, at *4 (D.D.C. June 8, 2021) (discussing Fourth Estate and noting that “had Plaintiff voluntarily dismissed its copyright claim without prejudice, and then filed another complaint, litigation . . . would have lasted even longer”).
We certainly share the concern expressed in cases such as Baker, Lee, and Malibu Media that routinely permitting the filing of an amended complaint to allege a late registration “would make a meaningless formality out of Fourth Estate's requirement that an application be approved prior to filing suit [since] a plaintiff could file suit at any time, notwithstanding Section 411(a)'s precondition, and simply update the complaint when registration finally occurred.” Baker, 2020 WL 3978302, at *4 (quoting Malibu Media, 2019 WL 1454317, at *2); Lee, 2020 WL 1140795, at *1 (same). But the entire case was being dismissed in Baker, Lee, and Malibu Media, and thus there was no expectation, as is true here, that a second action would be filed that would have to be consolidated and coordinated with the first action. Accordingly, in light of the efficiencies to be obtained by permitting the filing of an amended complaint, plaintiffs should be granted leave to file a second amended complaint alleging infringement as to any programs described in the first amended complaint for which registrations have been obtained.
B. Other Claims
In the alternative to the copyright infringement claims brought by Roderick, Neu Productions brings a claim for breach of contract, all three plaintiffs bring claims for unjust enrichment, and Parnell brings a claim for “misappropriation of the right of publicity.” See FAC at 12-16. Outside argues that all these claims are preempted by the Copyright Act or otherwise fail on the merits. See Mem. at 20-21.
Defendant argues that Roderick's declaratory judgment claim should be dismissed on the ground that “each of his other claims should be dismissed.” Reply at 10. Because some of Roderick's copyright claims will proceed, defendant has not provided a reason to dismiss the request for a declaratory judgment as to those claims.
We begin by considering whether the claims are preempted. Because we conclude they are all preempted, we do not address defendant's arguments that each claim fails on the merits. We conclude by addressing defendant's argument that plaintiffs' request for certain forms of relief should be dismissed.
1. Preemption
“The Copyright Act exclusively governs a claim when (1) the particular work to which the claim is being applied falls within the type of works protected by the Copyright Act . . ., and (2) the claim seeks to vindicate legal or equitable rights that are equivalent to one of the bundle of exclusive rights already protected by copyright law under 17 U.S.C. § 106.” Universal Instruments Corporation v. Micro Systems Engineering, Inc., 924 F.3d 32, 48 (2d Cir. 2019) (citation omitted).
The first prong of this doctrine, called the “subject matter requirement,” requires courts to consider “the gravamen of the claim and the allegations supporting it,” and whether the works at issue “come within the subject matter of copyright as specified by sections 102 and 103.” ML Genius Holdings LLC v. Google LLC, 2022 WL 710744, at *2 (2d Cir. 2022) (citations and quotation marks omitted). As to the second prong, called the “general scope requirement,” the inquiry centers on the elements of the claim; if “‘an extra element is required instead of or in addition to the acts of reproduction, performance, distribution or display, in order to constitute a state-created cause of action,' there is no preemption.” Forest Park Pictures v. Universal Television Network, Inc., 683 F.3d 424, 430 (2d Cir. 2012) (quoting Computer Assocs. Int'l, Inc. v. Altai, Inc., 982 F.2d 693, 716 (2d Cir. 1992)). In essence, courts must consider whether the “extra element” makes the claim “qualitatively different from a copyright infringement claim.” Briarpatch Ltd., L.P v. Phoenix Pictures, Inc., 373 F.3d 296, 305 (2d Cir. 2004) (citations omitted).
a. Breach of Contract
The contracts at issue are a “series of written and oral contracts with Defendant that obligated Plaintiffs to create television programs specifically for use on Outside Television in exchange for payment.” FAC at 14.
The only basis for the breach of contract claim is that “[b]y expanding their use of the projects beyond Outside Television before negotiating terms for additional consideration, Defendant breached their agreement and longstanding business relationship with Neu Productions.” FAC at 14. As to the first prong of the preemption analysis, the content at issue, a series of television episodes, falls squarely within the subject matter of the Copyright Act. See 17 U.S.C. § 102(a)(6) (“motion pictures and other audiovisual works”). As to the second prong, the Second Circuit has held that a breach of contract claim is not preempted where a plaintiff alleges defendant reneged on a promise to pay. See Universal Instruments Corporation, 924 F.3d at 49 (“[W]e held the contract at issue not to be preempted because it included an ‘extra element' of a promise to pay, and plaintiff sought contract damages when defendant used plaintiff's copyrighted work without paying for the privilege.”) (citing Forest Park Pictures, 683 F.3d at 428). In the instant case, however, plaintiffs do not allege that Outside failed to pay the contractual amount but instead assert that Outside exceeded the scope of the licenses. The complaint recognizes this by alleging that Outside failed to pay for “other uses” of the copyrighted works. FAC ¶¶ 21, 30. The phrase “other uses” refers to language in the production agreements that says that “[n]o other use of the project is anticipated” and that no “terms of consideration [have] been agreed upon for any but the use specified.” Id.; Outlook Contract;
First Dispatches Contract; Second Dispatches Contract. But these allegations are merely a recasting of plaintiffs' claim that Outside's distribution of plaintiffs' programs exceeded the scope of the licensing agreements and thus infringed the copyrights. This is demonstrated by the fact that if Outside had not exceeded the scope, plaintiff would have no claim to additional payment. Thus, the breach of contract claim “does not include an ‘extra element' that is different from those of its copyright infringement claim,” Universal Instruments Corporation, 924 F.3d at 49, and is therefore preempted. See, e.g., IBM Corp. v. Micro Focus (US), Inc., 2023 WL 3902955, at *9-10 (S.D.N.Y. June 8, 2023) (breach of contract claim preempted where plaintiff alleged defendant “breached the parties' agreements by exceeding its license to use [plaintiff]'s software”); Fahey v. Breakthrough Films & Television Inc., 2022 WL 6244313, at *25 (S.D.N.Y. July 7, 2022) (breach of contract claim preempted that was “based on allegations that the Defendants did something that the copyright laws reserve exclusively to Plaintiffs, i.e., reproduction of the Series”) (citation, alterations and quotation marks omitted), adopted by 2022 WL 4547438 (S.D.N.Y. Sept. 29, 2022); Genius Media Group Inc. v. Google LLC, 2020 WL 5553639, at *9 (E.D.N.Y. Aug. 10, 2020) (breach of contract claim preempted where it was premised on defendants' having made “unauthorized reproductions” of copyrighted material), affd, 2022 WL 710744 (2d Cir. Mar. 10, 2022).
Accordingly, Neu Productions' breach of contract claims should be dismissed.
b. Unjust Enrichment
For purposes of addressing the unjust enrichment claims, we examine separately the claims brought by Neu Productions and Roderick and the claim brought by Parnell. See FAC at 15-16.
While the parties do not address which state's law of unjust enrichment should apply, they do not suggest that any differences in state law are relevant to the preemption issue. Thus we cite to copyright cases that address unjust enrichment without regard to which state's law governed.
i. Neu Productions and Roderick
As was true of the breach of contract claim, it is undisputed that the first prong of the preemption analysis - the subject matter requirement - is met as to Neu Productions and Roderick's unjust enrichment claim. Thus, the only issue is whether Neu Productions' and Roderick's unjust enrichment claims are “qualitatively different from a copyright infringement claim.” Briarpatch Ltd., L.P, 373 F.3d at 305 (citations omitted). The Second Circuit has noted that “[w]hile enrichment is not required for copyright infringement, we do not believe that it goes far enough to make the unjust enrichment claim qualitatively different from a copyright infringement claim.” Id. at 306. Here, plaintiffs indicate that “Neu and Roderick conferred a benefit upon Defendant by providing Defendant with the Outlook, Dispatches, Expedition and Image Quest Series episodes for broadcast on Outside Television” and that “Defendant has profited and continues to profit from this expanded use of the episodes.” FAC at 15 (emphasis added). Like the breach of contract claims, the core of the claim is that Outside was unjustly enriched by exceeding the scope of the copyright license: i.e., their “expanded use of the episodes.” Id.
Case law instructs that where, as here, “the gravamen of an unjust enrichment claim is that defendants ‘unjustly benefitted from unauthorized use' of a work within the scope of the Copyright Act . . . the claim is preempted.” Stanacard, LLC v. Rubard, LLC, 2016 WL 462508, at *22 (S.D.N.Y. Feb. 3, 2016) (quoting Einiger v. Citigroup, Inc., 2014 WL 4494139, at *6 (S.D.N.Y. Sept. 12, 2014); see Genius Media Group Inc., 2020 WL 5553639, at *11 (collecting cases finding unjust enrichment claims preempted by the Copyright Act).
Plaintiffs allege that “[i]t is customary in the film and television production industry for producers of motion picture footage and the talent appearing on screen to receive a payment or royalty for the distribution of their works,” FAC at 15, and argue that the parties left this amount open to “future negotiation.” Opp. at 15. However, as just noted, the “enrichment” element has routinely been found to not “go[] far enough to make the unjust enrichment claim qualitatively different from a copyright infringement claim.” Briarpatch Ltd., L.P, 373 F.3d at 306.
In a similar vein, plaintiffs argue that “[i]f the Court finds . . . that distribution on Outside+ and third-party streaming services was an ‘other use' then Defendant has a contractual obligation to pay something for it.” Opp. at 15. But this is simply another way of saying that any potential payment under the license would turn on the authorized use afforded to Outside, which is the core of the copyright infringement claim. See Atrium Grp. de Ediciones y Publicaciones, S.L. v. Harry N. Abrams, Inc., 565 F.Supp.2d 505, 509 (S.D.N.Y. 2008) (“The allegation that Plaintiffs failed to receive any advance payment, royalties, or remuneration of any kind whatsoever from Defendants does not transform their copyright infringement claim into an unjust enrichment claim.”) (internal citation and quotation marks omitted).
Accordingly, the unjust enrichment claims brought by Neu Productions and Roderick should be dismissed.
ii. Parnell
Plaintiffs argue that Parnell's unjust enrichment claim is distinct from those brought by Neu Productions and Roderick in that he “is not seeking to control distribution of the television programs,” but rather “seeks payment from Outside for its unauthorized exploitation of his celebrity status, name, voice and image on Outside+ and dozens of third-party streaming services well beyond the scope of his quasi-contractual arrangement.” Opp. at 15. Plaintiffs further assert that “[l]ooking holistically at Parnell's claims, they are qualitatively different specifically because of his separate quasi-contractual relationship with Outside Television.” Id. at 16. It is unclear how this “separate quasi-contractual arrangement” factors into the analysis and plaintiffs do not elaborate. Ultimately, Parnell's “unjust enrichment claim seeks to vindicate his right to control the copying, distribution, and public performance” of the works at issue. Roberts v. BroadwayHD LLC, 518 F.Supp.3d 719, 734 (S.D.N.Y. 2021). This dooms Parnell's unjust enrichment claim because, as one case has noted, “[t]he allegation that Plaintiffs failed to receive any advance payment, royalties, or remuneration of any kind whatsoever from Defendants does not transform their copyright infringement claim into an unjust enrichment claim. If the law were otherwise, every time [a] copyright infringer obtained any profit from his infringing activity, the copyright owner would be able to assert a state claim for unjust enrichment.” Atrium Grp. de Ediciones y Publicaciones, S.L., 565 F.Supp.2d at 509 (internal citation and quotation marks omitted). Parnell's claim of unjust enrichment falls in the purview of the Copyright Act and is thus preempted.
c. Right of Publicity
Parnell brings a claim of “misappropriation of the right of publicity” pursuant to California statutory and common law. See FAC at 12-13 (¶¶ 71-78). Under California common law, a claim for misappropriation of the right of publicity requires the plaintiff to show: “(1) the defendant's use of the plaintiff's identity; (2) the appropriation of plaintiff's name or likeness to defendant's advantage, commercially or otherwise; (3) lack of consent; and (4) resulting injury.” Gionfriddo v. Major League Baseball, 114 Cal.Rptr.2d 307, 313 (Ct. App. 2001); accord Melendez v. Sirius XM Radio, Inc., 50 F.4th 294, 299 (2d Cir. 2022). Under Cal. Civ. Code § 3344(a), “a plaintiff must prove not only the elements of a common law claim, but also must demonstrate: (1) ‘knowing use by the defendant' and (2) ‘a direct connection between the alleged use and the commercial purpose.'” Melendez, 50 F.4th at 300 (quoting Stewart v. Rolling Stone LLC, 105 Cal.Rptr.3d 98, 111 (Ct. App. 2010)).
The Second Circuit in Melendez recently considered whether the California statutory and common law causes of action were preempted by the Copyright Act. See Melendez, 50 F.4th at 300. In analyzing the “subject matter requirement,” the Second Circuit, relying on its decision in In re Jackson, 972 F.3d 25 (2d Cir. 2020), held that the outcome centers on the nature of defendant's authorization, Melendez, 50 F.4th at 302-03; “the more the defendant has used a copyrighted work for its own value, as opposed to using it to exploit the depicted plaintiff's identity, the more the right of publicity claim brought by someone depicted in the work can be considered a disguised effort to control the dissemination of the work,” id. at 303 (quoting Jackson, 972 F.3d at 50). The Second Circuit highlighted that the plaintiff in Melendez had not alleged defendant “used his name or likeness in any way separate from, or beyond, airing excerpts of existing archival episodes in which he appeared,” nor that “his name or likeness was extracted in any way to appear independently from how it originally appeared in the archival episodes.” Id. at 304. As a result, Melendez concluded that the defendant was disseminating “portions of the actual copyrightable works,” and that it was not using plaintiff's name or likeness “independent of the excerpts.” Id. As to the “general scope requirement,” the Second Circuit held that the “commercial purpose” element under the California statute did not constitute an “extra element” that was sufficient to make the “state law action ‘[ ] qualitatively different from a copyright infringement claim.'” Id. at 308 (quoting Jackson, 972 F.3d at 53).
As to the first prong, Parnell's claim is based on the distribution of the content rather than “Parnell's well recognized name, voice and image.” FAC at 13 (¶ 73). Similar to Melendez, Parnell does not allege that Outside “used his name or likeness in any way separate from, or beyond, airing excerpts of existing archival episodes in which he appeared.” Melendez, 50 F.4th at 304. Nor does he allege that his “name or likeness was extracted in any way to appear independently from how it originally appeared in the archival episodes, or that the excerpts were manipulated in some manner to bring his identity into focus.” Id. Essentially, the only allegation is that Parnell appeared in programs that Outside unlawfully distributed on Outside+. Parnell's claim is thus “a disguised effort to control the dissemination of the work.” Jackson, 972 F.3d at 50. As a result, the subject matter requirement is satisfied.
As to the general scope requirement, plaintiffs do not present any arguments outside of those made in the unjust enrichment context, except to point to several vague allegations that Parnell expected that the works would be used only on Outside Television. See Opp. 16-17 (citing FAC ¶¶ 18, 27, 39). Therefore, the California causes of action do not present an “extra element” sufficient to make the claim qualitatively different from a copyright infringement claim. See Melendez, 50 F.4th at 308; Jackson, 972 F.3d at 50 (“[T]he more the defendant has used a copyrighted work for its own value, as opposed to using it to exploit the depicted plaintiff's identity, the more the right of publicity claim brought by someone depicted in the work can be considered a disguised effort to control the dissemination of the work.”).
Accordingly, Parnell's misappropriation of the right of publicity claim should be dismissed.
C. Forms of Relief
Defendant seeks dismissal of plaintiffs' request for statutory damages, attorney's fees, and costs under 28 U.S.C. § 1927. See Def. Mem. at 13. “Motions to dismiss aimed at prayers for relief are premature except when such relief is categorically barred.” Glob. Art Exhibitions, Inc. v. Kuhn & Bulow Italia Versicherungsmakler GmbH, 607 F.Supp.3d 421, 428 n.3 (S.D.N.Y. 2022). We thus examine whether any of these forms of relief are categorically barred.
As to the claim for costs under 28 U.S.C. § 1927, the statute is not aimed at pre-litigation conduct and thus the complaint, which does not describe any conduct during litigation, cannot seek such relief. See Carr v. Tillery, 591 F.3d 909, 919 (7th Cir. 2010) (Section 1927 “is inapplicable to misconduct that occurs before the case appears on the federal court's docket, or in other words to improper conduct in the run up to litigation.”) (citation and quotation marks omitted); Rates Tech., Inc. v. Mediatrix Telecom, Inc., 2012 WL 948661, at *2 (E.D.N.Y. Mar. 19, 2012) (Section 1927 is “not aimed at a plaintiff's pre-filing conduct”). Thus, plaintiffs' request for relief under section 1927 should be dismissed.
As to the request for statutory damages and attorney's fees, defendant argues that plaintiffs cannot recover such damages because they are unavailable where “the infringement alleged in a complaint is said to have commenced before the effective date of the registration and that registration was not made within three months of first publication.” Mem. at 13. Here, however, the dates of the infringement are not specified in the complaint. See FAC ¶ 75 (stating that there was infringing use of the copyrighted material “beginning” in 2021). Given that at least one of the registrations bears an effective date of December 1, 2021, see Original Complaint Registration Certificates at *5, and the dates for each infringement are not specified, we cannot say at this stage that all requests for statutory damages and attorney's fees are “categorically barred,” see Glob. Art Exhibitions, Inc., 607 F.Supp.3d at 428 n.3. Thus, the request for statutory damages and attorney's fees should not be dismissed.
Like defendant, we assume that the year “2021” was intended even though the complaint actually states “2001.” See Def. Mem. at 13.
Conclusion
For the foregoing reasons, defendant's motion to dismiss (Docket # 22) should be granted in part and denied in part. The following claims should be dismissed: (1) all claims for copyright other than content described in the 8 copyrights registered before May 18, 2023; (2) all claims of breach of contract; (3) all claims of unjust enrichment; (4) claims under California law relating to the right of publicity; and (5) claims for costs under 28 U.S.C. § 1927. Plaintiffs should be permitted to file a second amended complaint alleging infringement as to any programs described in the first amended complaint for which registrations have been obtained.
PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file any objections. See also Fed.R.Civ.P. 6(a), 6(b), 6(d). A party may respond to any objections within 14 days after being served. Any objections and responses shall be filed with the Clerk of the Court. Any request for an extension of time to file objections or responses must be directed to Judge Kaplan. If a party fails to file timely objections, that party will not be permitted to raise any objections to this Report and Recommendation on appeal. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72; Fed.R.Civ.P. 6(a), 6(b), 6(d); Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).