Intercom Ventures, LLC v. FasTV, Inc. et al
Filing
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MEMORANDUM Opinion and Order Signed by the Honorable Virginia M. Kendall on 5/28/2013.Mailed notice(tsa, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
INTERCOM VENTURES, LLC, d/b/a
BOSNA TV,
Plaintiff,
v.
FASTV, INC., d/b/a BALKANIA TV, FTA
MARKET, INC., SETPLEX, LLC, DREN
DEVA, LIONEL DRESHAJ, BENJAMIN
DRESHAJ, MILOMIR MILJANOVIC and
SNEZANA MILJANOVIC, d/b/a
NOSTALGIA MUSIC SHOP,
Defendants.
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No. 13 C 232
Judge Virginia M. Kendall
MEMORANDUM OPINION AND ORDER
Plaintiff Intercom Ventures, LLC (“Intercom”), doing business as Bosna TV, commenced
this action against various individuals and entities alleging direct and contributory copyright
infringement in violation of the Copyright Act, 17 U.S.C. § 101, et seq, and violations of the
Federal Communications Act of 1934, as amended, 47 U.S.C. §§ 605, et seq. Defendants FasTV,
Inc. (“FasTV”), FTA Market, Inc. (“FTA”), Setplex, LLC (“Setplex”), Dren Deva, Lionel Dreshaj,
and Benjamin Dreshaj (collectively “Defendants”) move pursuant to Federal Rules of Civil
Procedure 12(b)(6) and 10(b) to dismiss Counts I and II of Intercom’s Complaint. For the reasons
stated below, the Court denies the Defendants’ motion.
STATEMENT OF FACTS
The following facts are taken from Intercom Complaint and are assumed to be true for
purposes of this Motion to Dismiss. See Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir.
2008). All reasonable inferences are drawn in favor of Intercom, the non-moving party. See
Killingsworth v. HSBC Bank, 507 F.3d 614, 618 (7th Cir. 2007) (citing Savory v. Lyons, 469 F.3d
667, 670 (7th Cir. 2006)).
Plaintiff Intercom Ventures, LLC is a limited liability company that does business under
the registered name Bosna TV. (Complaint, ¶ 5.) Bosna TV is engaged in the business of
providing Internet Protocol Television (“IPTV”) to a Bosnian language speaking consumer base in
the United States. (Id. ¶ 13.) IPTV is a digital television service which distributes television
programming by sending coded digital transmissions over the Internet in a form capable of
translation by home devices in conjunction with standard television receivers. (Id. ¶ 14.)
Bosna TV is the owner of exclusive rights to distribute certain television programs and
episodes of those programs (the “Programming”) in the United States and worldwide. (Id. ¶ 15.)
Specifically, Bosna TV holds exclusive rights for distribution in the United States all of the
programming produced and distributed by the following television channels and contract periods:
(1) BHT, commencing October 11, 2011 for an initial term of five years with an option for an
additional three years; (2) Federaina TV, commencing January 6, 2011 for a term of three years;
(3) RTV Novi Pazar, commencing December 1, 2008 for a term of five years; (4) OTV Valentino,
commencing November 6, 2011 for a term of five years; (5) Alfa TV, commencing November 7,
2011 for a term of five years; (6) TV1, commencing December 16, 2010 for a term of five years;
and (7) Hayat Folk, commencing August 8, 2011 for a term of five years (the “Channels”). (Id.
¶ 16.) Bosna TV receives these rights from originators who create, develop, and produce the
programming outside of the United States. Bosna TV then airs the Programming either outside of
the United States exclusively or outside and within the United States simultaneously. (Id. ¶ 15.)
Bosna TV obtained and held exclusive rights to distribute the Programming produced by the
Channels continuously and remains the sole owner of those rights. (Id. ¶ 17.)
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FasTV is a New York corporation that streams content and programming over the Internet
to subscribers by downloads from its website, located at www.FasTV.com, directly to television
receiving equipment provided to its subscribers. (Id. ¶ 6.) FasTV competes with Bosna TV for
subscribers to IPTV services by offering, distributing, or arranging the distribution of Bosnian
language television programming to which Bosna TV holds exclusive rights pursuant to licenses
issued by the originators of the programming. (Id. ¶ 18.) Since August 8, 2011, FasTV does not
and has not ever had authorization from Intercom or the originators of the content to offer or
distribute the Programming. (Id. ¶ 19.)
Intercom alleges that FasTV directly infringed the copyrights to which Bosna TV has
exclusive rights by distributing, without authorization, the Programming of the channels after
Bosna TV obtained exclusive rights. (Id. ¶ 21.) According to Intercom, FasTV continues to
broadcast BHT, Federaina TV, OTV Valentino, and Hayat Folk – all channels to which Bosna TV
holds the exclusive rights. (Id. ¶ 22.) Intercom further alleges that the following defendants
materially contributed to FasTV’s violation of copyright laws by facilitating, managing, or
directing the unauthorized distribution of Bosnian language television programming to which it
holds exclusive rights: Dren Deva, the President of FasTV; FTA, an entity that purports to hold
trademark rights to the name “FasTV”; Setplex, an entity that provides the equipment and services
necessary for FasTV to deliver content and programming to subscribers; and Lionel Dreshaj and
Benjamin Dreshaj, officers of FTA and managers of Setplex. (Id. ¶¶ 7–11, 28–32.) Specifically,
Intercom alleges that Defendants Deva and FTA entered into contracts with subscribers for the
Programming and caused the copyrighted programming to be delivered to subscribers through
FasTV’s website. (Id. ¶ 28–29.)
Intercom also alleges that Setplex contributed to the
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infringement by maintaining FasTV’s website, platform, and delivery systems for the solicitation
of subscribers and the delivery of programming to which Intercom holds exclusive rights.
According to Intercom, Lionel and Benjamin Dreshaj managed and directed the activities of FTA
and Setplex. (Id. ¶¶ 31–32.) Both FTA and Setplex share office space with FasTV. (Id. ¶¶ 9–10.)
Count III of Intercom’s Complaint alleges that the Defendants engaged in the unauthorized
publication or use of communications in violation of the Federal Communications Act of 1934, 47
U.S.C. § 605(e)(4). Specifically, Intercom alleges that each of the Defendants has and continues
to intentionally pirate, retransmit, and publish to its own subscribers programming exclusively
licensed to Bosna TV without Bosna TV’s permission. (Id. ¶ 38.) Intercom alleges that in
conjunction with these acts, each of the Defendants has manufactured, imported, modified,
exported, sold, or distributed electronic devices or equipment for use by their customers to display
programming to which Bosna TV holds exclusive rights.
STANDARD OF REVIEW
When considering a motion to dismiss under Rule 12(b)(6), the Court accepts as true all
facts alleged in the complaint and construes all reasonable inferences in favor of the plaintiff.
Killingsworth, 507 F.3d at 618 (citing Savory, 469 F.3d at 670); accord Murphy, 51 F.3d at 717.
To state a claim upon which relief can be granted, a compliant must contain a “short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2).
“Detailed factual allegations” are not required, but the plaintiff must allege facts that when
“accepted as true . . . ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). To
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determine whether a complaint meets this standard, the “reviewing court [must] draw on its
judicial experience and common sense.” Iqbal, 556 U.S. at 678.
Federal Rule of Civil Procedure 8(a)(2) imposes “two easy-to-clear hurdles” that a
complaint must satisfy in order to survive a motion to dismiss pursuant to Federal Rule of
Procedure 12(b)(6). Tamayo, 526 F.3d at 1084 (quoting EEOC v. Concentra Health Svcs., Inc.,
496 F.3d 773, 776 (7th Cir. 2007). First, a complaint must describe the plaintiff’s claims and the
grounds supporting them in “sufficient detail to give the defendants fair notice” of the claims
alleged against them. This requires more than mere “labels and conclusions” or a “formulaic
recitation of the elements of a cause of action.” Concentra, 496 F.3d at 776.
Second, to survive a motion to dismiss, the court determines whether the well-pleaded
allegations, if true, “plausibly suggest a right to relief, raising that possibility above a speculative
level.” See Iqbal 556 U.S. at 679; Concentra, 496 F.3d at 776. A claim has facial plausibility
when the pleaded factual content allows the Court to draw a reasonable inference that the
defendant is liable for the misconduct alleged. See Iqbal, 556 U.S. at 678. “The plausibility
standard … asks for more than a sheer possibility that a defendant acted unlawfully. Where a
complaint pleads facts that are merely consistent with a defendant’s liability, it stops short of the
line between possibility and plausibility of entitlement to relief.” Iqbal, 556 U.S. at 678 (internal
quotation marks omitted). “ ‘Plausibility’ in this context does not imply that the district court
should decide whose version to believe, or which version is more likely than not.” Swanson v.
Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010). Rather, Twombly and Iqbal require “the
plaintiff to ‘provide some specific facts’ to support the legal claims asserted in the complaint.”
McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011) (quoting Brooks v. Ross, 578 F.3d
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574, 581 (7th Cir. 2009)). Though the “degree of specificity required is not easily quantified, …
‘the plaintiff must give enough details about the subject-matter of the case to present a story that
holds together.’ ” Id. (quoting Swanson, 614 F.3d at 404). If a complaint does not satisfy these
two criteria, “the plaintiff pleads itself out of court.” Concentra, 496 F.3d at 776. Accordingly, a
motion to dismiss may be properly granted where the plaintiff does not allege a plausible
entitlement to relief either by (1) failing to provide the defendant with notice of plausible claims
against it or (2) asserting only speculative or conclusory allegations in the complaint.
DISCUSSION
I.
Defendants’ Motion to Dismiss Pursuant to Rule 12(b)(6)
In order to state a claim for direct copyright infringement, a plaintiff must allege facts
setting forth (1) ownership of a valid copyright in a work and (2) the copying of elements of the
work that are original. Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991);
Harbor Motor Co. v. Arnell Chevrolet-Geo, Inc., 265 F.3d 638, 644 (7th Cir. 2001). The
allegations set forth in Intercom’s Complaint satisfy both requirements. First, Intercom alleges
that it is the owner of exclusive rights to distribute the Programming “pursuant to licenses issued
by the originators” of that programming (Complaint, ¶¶ 15, 17.) Intercom also alleges these
rights extend to “all of the programming produced and distributed” by the seven channels
identified in its Complaint. (Id. ¶ 16.) Intercom further alleges that it holds these rights pursuant
to contracts it entered into with the providers of the Channels. (Id. ¶ 16.) The Complaint goes on
to list the commencement date and duration of each contract Bosna TV entered into with the
Channels. (Id.) Finally, Intercom sets forth the method of infringement – distribution of content
and programming over the Internet to subscribers via downloads from FasTV’s website,
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www.FasTV.com, to equipment provided by the Defendants. (Id. ¶ 6.) The Court finds these
allegations sufficient to state a claim for direct copyright infringement. At this stage in the
proceedings, Intercom must simply allege, not prove, ownership and infringement of a valid
copyrighted work. Furthermore, claims for copyright infringement must satisfy the pleading
requirements under Rule 8 and need not be pleaded with heightened specificity. See Mid America
Title Co. v. Kirk, 991 F.2d 417, 421 (7th Cir. 1993); see, e.g., Goden v. Nadler Pritikin &
Mirabelli, No. 05 C 283, 2010 WL 5373876, at *1 (N.D. Ill. Dec. 21, 2010) (“Indeed, the Seventh
Circuit has declined to require any type of heightened pleading standard for copyright cases.”).
Intercom’s allegation that it owns rights to “all” programming produced and distributed by the
seven channels is broad, but it is not ambiguous. See Merriam-Webster Dictionary Online,
available at http://www.merriam-webster.com/dictionary/all (last visited May 15, 2013) (defining
“all” as “every member or individual component of”). The Defendants correctly point out that it
“is possible that some of the programming was not produced by the channels themselves or not
distributed under the exclusive license.” (Def. Mot. ¶ 7.) That, however, is an issue to be
addressed by the parties at a later stage in the proceedings; it need not be resolved in order for
Intercom to state a claim. At this stage in the proceedings, the Court finds that the allegations in
the Complaint sufficiently “present a story that holds together.” McCauley, 671 F.3d at 616
(quoting Swanson, 614 F.3d at 404).
Having decided that Intercom has properly stated a claim for direct copyright infringement,
the Court now turns to whether the allegations set forth in the Complaint are sufficient to state a
claim for contributory copyright infringement against Defendants Deva, FTA, Setplex, Lionel
Dreshaj and Benjamin Dreshaj. Contributory copyright infringement occurs where a defendant
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“with knowledge of the infringing activity, induces, causes, or materially contributes to the
infringing conduct of another.” In re Aimster Copyright Litig., 252 F.Supp.2d 634, 654 (N.D. Ill.
2002), aff’d, 334 F.3d 643 (7th Cir. 2003); see also Gershwin Publ’g Corp. v. Columbia Artists
Mgmt., 443 F.2d 1159, 1162 (2d Cir. 1971). Accordingly, to state a claim for contributory
copyright infringement, a plaintiff must plead “(1) direct infringement by a primary infringer, (2)
the defendant’s knowledge of the infringement, and (3) the defendant’s material contribution to
the infringement.” Monotype Imaging, Inc. v. Bitstream, Inc., 376 F.Supp.2d 877, 883 (N.D. Ill.
2005) (citing Marobie-Fl, Inc. v. National Ass’n of Fire Equip. Distrib. & Northwest Nexus, Inc.,
983 F.Supp. 1167, 1178 (N.D. Ill. 1997)).
For the reasons stated above, Intercom’s Complaint satisfies the first element by
sufficiently alleging direct infringement by a primary infringer, FasTV. With respect to the
second and third elements, Intercom alleges a basis for each defendant’s knowledge of the alleged
infringing activity and describes the nature of each defendant’s contribution to the alleged
infringement. Specifically, Intercom alleges: (1) Deva, as the President of FasTV, entered into
contracts with subscribers for the copyrighted programming and caused that programming to be
delivered to those subscribers; (2) FTA shared office space with FasTV and entered into contracts
with subscribers for copyrighted programming; (3) Setplex shared office space with FasTV and
maintained the website, platform, and delivery system for the solicitation of subscribers and the
delivery of programming with knowledge that FasTV lacked the required authorization for
programming to which Intercom holds exclusive rights; and (4) Lionel and Benjamin Dreshaj, as
members and managers of FTA and Setplex, engaged in both the entering of contracts and
maintenance of the website used to carry out the infringement. While these are not “detailed
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factual allegations,” they are allegations that, when accepted as true, state claims for contributory
copyright infringement that are plausible on their face. See Iqbal, 556 U.S. at 678.
II.
Defendants’ Motion to Dismiss Pursuant to Rule 10(b)
Defendants also argue that Intercom’s Complaint fails to comply with Federal Rule of
Civil Procedure 10(b) because it “commingles” separate occurrences and claims stemming from
different purported licenses. Rule 10(b) requires that a party limit its claims and defenses “as
practicable to a single set of circumstances” and that “each claim founded on a separate transaction
or occurrence … must be stated in a separate count or defense.” Fed.R.Civ.P. 10(b); see
Frederisksen v. City of Lockport, 384 F.3d 437, 438 (7th Cir. 2004). The purpose of Rule 10(b),
in conjunction with Rule 8, is to “give defendants fair notice of the claims against them and the
grounds supporting the claims.” Stanard v. Nygren, 658 F.3d 792, 797 (7th Cir. 2011) (citations
omitted). Accordingly, dismissal is appropriate where a complaint is so unintelligible that the
defendant cannot reasonably be expected to be on notice of the plaintiff’s claims. Id. at 798 (“[T]he
issue is notice; where the lack of organization and basic coherence renders a complaint too
confusing to determine the facts that constitute the alleged wrongful act, dismissal is an
appropriate remedy.”); see also Second Amendment Arms v. City of Chi, No. 10-cv-4257, 2012
WL 4464900, at *9 (N.D. Ill. Sept. 25, 2012) (“The lodestar of Rule 10 is intelligibility, good
organization, and basic coherence.”) (alterations and quotations marks omitted); 5C Charles Alan
Wright & Arthur R. Miller, Federal Practice & Procedure § 1376 (3d ed. 1998) (“Rule 10(b) is
designed to improve the intelligibility of pleadings.”).
Intercom’s Complaint, though not ideally structured, is not unintelligible or incoherent.
The substantive portion of the Complaint begins with a section setting forth allegations that are
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“common to all claims.” That portion of the Complaint is followed by three separate sections
setting forth the facts pertinent to each of Intercom’s claims. Defendants suggestion—that
Intercom allege separate counts for each claim against each defendant and each purported
license—would result in a Complaint comprising dozens of counts, most of them repetitive, and
ultimately result in confusion, not clarity. Accordingly, dismissal pursuant to Rule 10(b) is not
necessary and would only serve to further delay this case. Defendants’ Motion to Dismiss
pursuant to Rule 10(b) is denied.
III.
Defendants’ Motion to Extend Time to Respond to Count III
Count III of Intercom’s Complaint alleges that the Defendants violated certain provisions
of the Federal Communications Act of 1934. Defendants have not challenged the sufficiency of
the pleadings with respect to Count III and state explicitly that their motion is directed toward
Counts I and II. The Defendants have also not responded to Count III of Intercom’s Complaint in
the form of an Answer. Accordingly, the Defendants request that in the event the Court denies
their Rule 10(b) motion, any response to Count III be deferred until after this Court has ruled on
the pending Motion to Dismiss Counts I and II.
After setting forth deadlines for filing responsive pleadings, Federal Rule of Civil
Procedure 12(a) provides that “[u]nless the court sets a different time, serving a motion under this
rule alters these periods as follows: (A) If the court denies the motion or postpones its disposition
until the trial, the responsive pleading must be served within 14 days after notice of the court’s
action ….” Fed.R.Civ.P. 12(a)(4)(A). While “[i]t is unclear from the language of Rule 12(a)
whether service of a Rule 12(b) motion directed at only parts of a pleading enlarges the period of
time for answering the remaining portion of the pleading[,] …. the weight of the limited authority
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on this point is to the effect that the filing of a motion that only addresses part of a complaint
suspends the time to respond to the entire complaint, not just to the claims that are the subject of
the motion.” 5B Wright & Miller, Fed. Prac. & Proc. Civ. § 1346 (3d ed.); see, e.g., Oil Express
Nat., Inc. v. D’Alessandro, 173 F.R.D. 219 (N.D. Ill. 1997) (extending time to answer counts not
addressed in motion to dismiss for 10 days after the court’s ruling on the counts challenged in the
12(b)(6) motion); Compton v. City of Harrodsburg, Ky., 287 F.R.D. 401, 402 (E.D. Ky. 2012)
(granting motion to extend time to file answer granted where defendants filed partial motion to
dismiss, finding that “requiring parties to file responsive pleadings in a piecemeal fashion would
undoubtedly create duplicative sets of pleadings … and would cause confusion”) (quotations
omitted); Talbot v. Sentinel Ins. Co., Ltd., No. 2:11-cv-01766-KJD-CWH, 2012 WL 1068763, at
*4 (D. Nev. Mar. 29, 2012) (collecting cases and agreeing with the “majority of courts that have
held that a pending motion to dismiss, although it may only address some of the claims alleged,
tolls the time to respond to all claims under Rule 12(a)(4)”).
Accordingly, because the Defendants here filed a timely Rule 12(b)(6) motion that does
not challenge all of Intercom’s claims, Defendants are not required to file an answer to Count III
until 14 days after the Court has issued this Order. This ruling is limited to the filing of an answer
and should not be interpreted as a grant of permission to file a belated motion to dismiss Count III,
which the Defendants had the opportunity to file with the instant motion. See Fed.R.Civ.P.
12(g)(2) (“Except as provided in Rule 12(h)(2) or (3), a party that makes a motion under this rule
must not make another motion under this rule raising a defense or objection that was available to
the party but omitted from its earlier motion.”).
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CONCLUSION AND ORDER
For the reasons stated, the Defendant’ Motion to Dismiss is denied. Defendants are
granted 14 days to after the entry of this Order to answer the allegations set forth in Count III.
________________________________________
Virginia M. Kendall
United States District Court Judge
Northern District of Illinois
Date: May 28, 2013
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