Ivymedia Corporation v. Ilikebus, Inc. et al

Filing 122

Judge Nathaniel M. Gorton: ENDORSED ORDER entered. MEMORANDUM AND ORDERIn accordance with the foregoing, defendants motion for summary judgment is, with respect to 1) the claim that defendants infringed the 2005 copyright and 2) plaintiffs request for statutory damages and attorneys fees, ALLOWED but is otherwise DENIED. So ordered.(Caruso, Stephanie)

United States District Court
District of Massachusetts

IVYMEDIA CORPORATION,
Plaintiff,
v.
ILIKEBUS, INC., ALAN ZOU, TONG
WEI AND JOHN DOE,
Defendants.

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Civil Action No.
15-11918-NMG

MEMORANDUM & ORDER
GORTON, J.
This case involves a copyright infringement dispute between
two competing businesses that provide online ticketing and
reservation services for bus companies.

Plaintiff IvyMedia

Corporation (“IvyMedia” or “plaintiff”) alleges that defendants
iLIKEBUS, Inc. (“iLIKEBUS”), Tong Wei and Alan Zou
(collectively, “defendants”) unlawfully copied its website’s
characteristics.

Defendants’ motion for summary judgment is

pending before the Court.

For the reasons that follow, that

motion will be allowed, in part, and denied, in part.
I.

Background:
A. The Parties and Their Websites
IvyMedia, a Massachusetts corporation, offers a web-based

platform for customers to make reservations and purchase bus
tickets.

Its original website, www.IvyMedia.com, has been
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operating since March, 2002.

It also owns and operates the

website www.GotoBus.com which was launched in 2006.

IvyMedia

acts as an independent contractor for bus companies and receives
a commission based on each ticket sale made through its website.
Defendant iLIKEBUS is a Delaware corporation with its
principal place of business in Virginia.

Wei, the Chief

Executive Officer of iLIKEBUS, resides in Virginia.

Zou is an

information technology consultant at iLIKEBUS and resides in
Maryland.

Collectively, defendants operate the website

www.iLIKEBUS.com which was launched in March, 2015 and
redesigned in June, 2015.
B. Plaintiff’s Copyrights
IvyMedia holds two copyrights that protect its websites.
Its first copyright (“the 2005 copyright”), Registration Number
TX 6-211-055, became effective on December 13, 2005.

The 2005

copyright states that the title of the work is “IvyMedia
Website” and that the nature of the authorship is a
Portion of the text; revision of pre-existing text;
selection, coordination and arrangement of text, graphic
art [and] photograph[s.]
Attached to the copyright registration are 70 pages reproduced
from IvyMedia’s website in 2005.
IvyMedia’s second copyright (“the 2015 copyright”),
Registration Number TXu 1-954-672, became effective on July 24,
2015.

That copyright is titled “GotoBus.com” and protects the
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“text and original artwork” on the GotoBus website.

Although

IvyMedia asserts that the copyright extends to GotoBus webpages
that were submitted along with the application for copyright
registration, it did not submit those specific pages as an
exhibit.

Therefore, the Court has referred to the pages of the

GotoBus website that were submitted along with the original
complaint to evaluate the purported copyright infringement.
C. Procedural Background
After iLIKEBUS launched its website in March, 2015 IvyMedia
filed suit against defendants in May, 2015 claiming, inter alia,
infringement of its 2005 copyright under 17 U.S.C.

§ 501,

unfair competition in violation of the Lanham Act, 15 U.S.C. §
1125(a), and unjust enrichment.

Defendants moved to dismiss

IvyMedia’s claims in June, 2015 and plaintiff opposed that
motion.

This Court dismissed plaintiff’s claims, with the

exception of the copyright infringement claim, in July, 2015.
That same month, defendants filed an answer addressing the
remaining claim.

The Court held a scheduling conference in

September, 2015 and issued a scheduling order.

In January,

2016, IvyMedia filed a motion to amend the complaint which the
Court denied.

In April, 2016, the parties filed a joint motion

to extend the discovery deadlines which the Court allowed.
In September, 2016, the parties attempted to arbitrate
their dispute.

After arbitration failed, plaintiff moved to
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amend its complaint to add a claim that defendants infringed its
2015 copyright.

Later that same month, defendants filed a

motion for summary judgment.

In January, 2017, this Court

allowed the motion to amend the complaint to add allegations
concerning the 2015 copyright.

Plaintiff’s amended complaint

alleges that defendants have infringed both the 2005 and the
2015 copyrights under the federal Copyright Act, 17 U.S.C. §
501, and seeks a permanent injunction, actual monetary damages
and attorneys’ fees and any other relief that this Court deems
fit.
Both parties submitted supplemental briefing with respect
to defendants’ motion for summary judgment to reflect the
amended complaint.

This memorandum and order addresses the

motion for summary judgment.
II.

Motion for Summary Judgment
A. Legal Standard

The role of summary judgment is “to pierce the pleadings
and to assess the proof in order to see whether there is a
genuine need for trial.” Mesnick v. Gen. Elec. Co., 950 F.2d
816, 822 (1st Cir. 1991).

The burden is on the moving party to

show, through the pleadings, discovery and affidavits, “that
there is no genuine dispute as to any material fact and that the
movant is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a).

A fact is material if it “might affect the outcome of
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the suit under the governing law.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986).

A genuine issue of material

fact exists where the evidence with respect to the material fact
in dispute “is such that a reasonable jury could return a
verdict for the nonmoving party.” Id.
If the moving party has satisfied its burden, the burden
shifts to the non-moving party to set forth specific facts
showing that there is a genuine, triable issue. Celotex Corp. v.
Catrett, 477 U.S. 317, 324 (1986).

The Court must view the

entire record in the light most favorable to the non-moving
party and indulge all reasonable inferences in that party’s
favor. O’Connor v. Steeves, 994 F.2d 905, 907 (1st Cir. 1993).
Summary judgment is appropriate if, after viewing the record in
the non-moving party’s favor, the Court determines that no
genuine issue of material fact exists and that the moving party
is entitled to judgment as a matter of law.
B. Analysis
Defendants move for summary judgment on the grounds that
1) the GotoBus website is not protectable as a derivative work
of the 2005 copyright, 2) a lack of substantial similarity
between the 2015 copyright and the iLIKEBUS website precludes a
finding of copyright infringement based upon that copyright,
3) plaintiff is not entitled to damages or injunctive relief and

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4) defendants Wei and Zou cannot be individually liable because
they redesigned the original iLIKEBUS website.
In support of their motion for summary judgment, defendants
submitted a statement of undisputed facts.

While plaintiff

asserted that there were many remaining factual disputes in its
memoranda opposing summary judgment, it did not submit a
response to defendants’ statement of undisputed facts.
Therefore, the Court will consider those facts undisputed.
1. Legal Standard for Copyright Infringement
“[R]egistration is not a condition of copyright protection”
but it is required before a plaintiff files a claim alleging
copyright infringement under the federal Copyright Act. Airframe
Sys., Inc. v. L-3 Commc'ns Corp., 658 F.3d 100, 105 (1st Cir.
2011) (quoting 17 U.S.C. § 408(a)).

To succeed on a copyright

infringement claim a plaintiff must demonstrate “(1) ownership
of a valid copyright, and (2) copying of constituent elements of
the work that are original.” Situation Mgmt. Sys., Inc. v. ASP.
Consulting LLC, 560 F.3d 53, 58 (1st Cir. 2009) (quoting Feist
Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361
(1991)).
With respect to the first requirement, a certificate of
copyright registration carries with it a presumption of validity
that must be rebutted by a defendant. Lotus Dev. Corp. v.

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Borland Int'l, Inc., 49 F.3d 807, 813 (1st Cir. 1995), aff'd,
516 U.S. 233 (1996).
The second requirement has two subparts.

“First, the

plaintiff must show that copying actually occurred.” Johnson v.
Gordon, 409 F.3d 12, 18 (1st Cir. 2005).

Second, he must

demonstrate
that the copying of the copyrighted material was so
extensive that it rendered the infringing and copyrighted
works substantially similar.
Id. (internal quotation marks omitted).

Substantial similarity

is measured with an “ordinary observer test” which examines
whether an ordinary person would find “that the defendant
unlawfully appropriated the plaintiff’s protectable expression.”
Id.
The federal Copyright Act also protects derivative works
which are “based upon one or more preexisting works” that have
been “recast, transformed, or adapted.” 17 U.S.C. §§ 101,
106(2).

Derivative works include “editorial revisions,

annotations, elaborations, or other modifications . . . .” 17
U.S.C. § 101.

A copyright holder may

bring a suit for unauthorized distribution of an
unregistered derivative work as long as the suit is based
on elements “borrowed” from a registered underlying work
and not on elements original to the derivative work.
Gordon, 409 F.3d at 20.

In other words, elements that only

appear in an unregistered derivative work are not protected by

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the underlying copyright. Id.; see also Greene v. Ablon, 794
F.3d 133, 152 (1st Cir. 2015).
2. Plaintiff’s Claim that the iLIKEBUS Website
Infringes the 2005 Copyright
Defendants contend that summary judgment is warranted with
respect to plaintiff’s claim that they infringed the 2005
copyright, which protects the IvyMedia website, because the
dissimilarity between the IvyMedia and iLIKEBUS websites is
readily apparent.

Plaintiff responds that its GotoBus website

is a derivative work that is protected by the 2005 copyright and
defendants have infringed that website.
Plaintiff’s contention that the GotoBus website is a
derivative work that is protected by the 2005 IvyMedia copyright
is unavailing.

There is no genuine dispute of material fact

concerning the content of the GotoBus and IvyMedia websites and
the differences between them significantly outnumber the few
similarities.

The most notable difference is that the websites

advertise and sell different products.

The IvyMedia website

“offers bus tours . . . to [various] popular travel
destinations” ranging from the Boston Freedom Trail to a tour of
Los Angeles that includes stops at movie stars’ homes.

In

contrast, the GotoBus website advertises and sells bus tickets
that allow passengers to travel to and from different cities.
Accordingly, the GotoBus website is a separate work that

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addresses a separate topic, not a “recast, transformed, or
adapted” version of the IvyMedia website. 17 U.S.C. § 101.
Moreover, the differences between the websites extend
beyond the product that each sells.

Almost every aspect of the

two websites differs: the name and logo, the order and specific
words used in the navigation menus, the format, the text and the
available search options are all distinct.
To the extent that there are similar elements between the
IvyMedia and GotoBus websites, they are not entitled to
copyright protection.

Both websites allow users to “sign-in” or

“login” and have a shopping cart icon.

Both websites also have

navigation menus that contain links used to operate the website
and search functions that enable users to find tickets.

As

defendants point out, however, such common elements of websites
are precluded from copyright protection as 1) methods of
operation and 2) under the doctrine of scènes à faire.
Section 102 of the Copyright Act excludes any “method of
operation” from copyright protection. 17 U.S.C. § 102(b).
Therefore, while original expression in a website is protected,
the underlying methods used to operate it are not. Lotus, 49
F.3d at 815.

For instance, the First Circuit Court of Appeals

has determined that the menu command hierarchy of a computer
program, which included commands such as “print”, “save” and
“quit”, involves methods of operations and cannot be protected
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by a copyright. Id.

Because the option to login to a website,

the use of a shopping cart, the use of links to navigate a
website and a search function on a website all involve methods
of operation, they cannot be protected by copyright. See id.
The doctrine of scènes à faire also precludes the elements
that appear in both the IvyMedia and the iLIKEBUS website from
copyright protection.

That doctrine

denies copyright protection to elements of a work that are
for all practical purposes indispensable, or at least
customary, in the treatment of a given subject matter.
Coquico, Inc. v. Rodriguez-Miranda, 562 F.3d 62, 68 (1st Cir.
2009).

In a computer program context, the scènes à faire

doctrine renders “design standards, target industry practices,
and computer industry programming practices” unprotectable. Real
View, LLC v. 20-20 Techs., Inc., 683 F. Supp. 2d 147, 152 (D.
Mass. 2010).

The elements that appear on both the IvyMedia and

GotoBus websites, such as the shopping cart and links to operate
the website, are standard programming and thus precluded from
copyright protection under the scènes à faire doctrine.
Because a derivative work is only protectable to the extent
it includes protectable elements from the copyrighted work, and
the GotoBus website does not contain copyrightable elements from
the IvyMedia website, the GotoBus website is not protected by
the 2005 copyright. Gordon, 409 F.3d at 20.

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Accordingly,

defendants are entitled to judgment as a matter of law on
plaintiff’s claim that they infringed the 2005 copyright.
3. Plaintiff’s Claim that the iLIKEBUS Website
Infringes the 2015 Copyright
Defendants assert that they are entitled to summary
judgment with respect to plaintiff’s claim that the iLIKEBUS
website infringes upon the 2015 copyright on grounds that there
is no substantial similarity between the protectable elements of
the copyrighted work, the GotoBus website, and their iLIKEBUS
website.

Plaintiff responds that its copyright registration

protects the text, original artwork and the webpages as a whole
and that the substantial similarity requirement is met.
The only remaining claim in this case is that defendants
infringed plaintiff’s copyright in violation of the federal
Copyright Act.

Because registration is a prerequisite for a

copyright infringement claim pursuant to that statute, and
plaintiff did not register its copyright until after the first
iLIKEBUS website had been taken down, the Court will consider
only the second version of the iLIKEBUS website in determining
whether infringement of the 2015 copyright occurred. Airframe
Sys., Inc., 658 F.3d at 105.
Comparing plaintiff’s GotoBus website and the second
version of the iLIKEBUS website, sufficient similarities between
protectable elements exist to create a genuine dispute of

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material fact as to whether copyright infringement has occurred.
For instance, on the left side of GotoBus’s website, there is a
box entitled “Schedule Features” that contains the following
headings: “Roundtrip Discount”, “Buy N Get 1 Free”, “Wireless
Internet”, “Wireless Internet with Power Plug”, “Power Plug
Available” and “Dynamic Price”.

Four of those six headings

appear in a box entitled “Bus Features” on the left side of
iLIKEBUS’s website.

The placement of the box on the website and

the apparent verbatim copying of the headings suffices to
preserve a genuine issue of material fact as to whether the
websites are substantially similar. See Gordon, 409 F.3d at 18.
Furthermore, defendants’ contention that there is no
copyright infringement because the similar elements, in any,
involve methods of operation or scènes à faire is unavailing
with respect to the 2015 copyright.

None of the headings in the

box is a link or provides a means to operate the website and all
of the concepts behind the headings can be expressed in a
variety of ways that do not include verbatim copying.
Therefore, defendants are not entitled to summary judgment on
the grounds that there is no substantial similarity between the
iLIKEBUS and GotoBus websites.
4. Remedies
Defendants contend that summary judgment should be granted
because 1) there is no evidence of actual damage, 2) plaintiff
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is not entitled to statutory damages or attorneys’ fees and
3) there is no evidence that would support permanently enjoining
defendants.

Plaintiff responds that it is either entitled to

actual or statutory damages and that the ongoing harm caused by
the purportedly infringing website warrants injunctive relief.
First, the only evidence that supports actual damages
appears to be plaintiff’s speculative assertion that the alleged
infringement caused the difference between their projected and
actual sales in 2015.

As defendants point out, and plaintiff

does not dispute, plaintiff has
produced no financial reports, statements, records, or
. . . documents that would support its damages claims.
Moreover, this Court recently allowed defendants’ motion to
compel plaintiff to produce the information underlying its
damages calculation.

Because the motion to compel was recently

allowed and discovery concerning actual damages is ongoing, the
Court will not allow summary judgment in defendants’ favor on
actual damages.

If plaintiff refuses to comply with the motion

to compel, however, defendants will be entitled to summary
judgment on plaintiff’s claim for actual damages because there
is thus far a dearth of evidence in support of such a claim.
Second, defendants correctly contend that statutory damages
and attorneys’ fees are precluded under 17 U.S.C. § 412 because
the supposedly infringing activity began before the 2015

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copyright was registered.

The original iLIKEBUS website went

live on March 19, 2015 and the revised version on June 7, 2015.
The registration of the copyright to protect the GotoBus website
became effective on July 24, 2015.
The Copyright Act does not permit statutory damages or
attorneys’ fees if the allegedly infringing activity begins
before the copyright was registered. See Gordon, 409 F.3d at 20
(“[Registration] is also a condition precedent for obtaining
certain remedies, such as statutory damages and attorneys'
fees.”); Derek Andrew, Inc. v. Poof Apparel Corp., 528 F.3d 696,
701, n.4 (9th Cir. 2008) (collecting cases).

Accordingly,

because the undisputed facts show that the 2015 copyright was
registered after the alleged infringement began, defendants are
entitled to summary judgment on plaintiff’s claim for statutory
damages and attorneys’ fees as a matter of law.
Third, because there is a genuine issue of material fact
with respect to whether defendants’ website infringes the 2015
copyright, there remains such an issue with respect to whether
permanent injunctive relief is warranted.

Thus, summary

judgment denying injunctive relief is unwarranted.
Therefore, as to defendants’ contention that plaintiff is
not entitled to statutory damages and attorneys’ fees, their
motion for summary judgment will be allowed but, as to

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defendants’ contention that summary judgment is warranted on
actual damages and injunctive relief, the motion will be denied.
5. Individual Liability of Zou and Wei
Defendants submit that summary judgment of dismissal of the
claims against the individual defendants should be allowed
because Wei and Zou attempted to stop the supposed infringement
by ordering the website to be redesigned.

Defendants’ argument

that Wei and Zou cannot be liable is unpersuasive given this
Court’s conclusion that genuine issues of material fact persist
with respect to whether the redesigned website infringes the
2015 copyright. See Metro-Goldwyn-Mayer Studios Inc. v.
Grokster, Ltd., 545 U.S. 913, 930 (2005).

Thus, the Court will

deny defendants’ motion for summary judgment on the claims
against Wei and Zou.

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ORDER
In accordance with the foregoing, defendants’ motion for
summary judgment is, with respect to 1) the claim that
defendants’ infringed the 2005 copyright and 2) plaintiff’s
request for statutory damages and attorneys’ fees, ALLOWED but
is otherwise DENIED.

So ordered.

/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated May 15, 2017

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