MALIBU MEDIA, LLC. v. JOHN DOES 1-40
Filing
70
OPINION. Signed by Judge Michael A. Shipp on 11/30/13. (FH)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
______________________________________
:
MALIBU MEDIA, LLC,
:
:
:
Plaintiff,
:
:
Civil Action No. 12-3899 (MAS)(LHG)
v.
:
:
MAKSYM TSANKO and JOHN DOES
:
MEMORANDUM OPINION
1-5, 7-12, 14-35, 37, 38 and 40,
:
:
:
Defendants.
:
:
SHIPP, District Judge
This matter comes before the Court on Defendant John Doe #1’s (“Defendant”) Motion to
Dismiss pursuant to Federal Rules of Civil Procedure (“Rule”) 12(b)(1), (b)(6), and (b)(7). (Def.’s
Br., ECF No. 65.) Plaintiff Malibu Media, LLC (“Plaintiff” or “Malibu Media”) filed Opposition.
(Pl.’s Opp’n, ECF No. 66.) Defendant filed a Reply. (Def.’s Reply, ECF No. 67.) The Court has
carefully considered the Parties’ submissions and decided the matter without oral argument pursuant
to Local Civil Rule 78.1. For the reasons set forth below, and other good cause shown, Defendant’s
Motion to Dismiss is DENIED in part.
I.
Introduction
This litigation stems from Malibu Media’s recent crackdown on the alleged infringement of
its pornographic films. Since 2012, Malibu Media has filed hundreds of lawsuits nationwide,
including at least ten cases currently pending in this District, against “John Doe” defendants alleging
copyright infringement of its movies.
Because of the series of lawsuits brought by Plaintiff, its pattern of conduct has been easily
recognized by courts and typically includes the following chain of events: Malibu Media files suit
against multiple (usually ranging from ten to fifty) John Doe defendants, known only by their
Internet Protocol (“IP”) addresses. Simultaneously or shortly thereafter, Plaintiff files a motion for
early discovery seeking leave to serve subpoenas on Internet Service Providers (“ISPs”) to obtain the
identity of each defendant using their respective IP addresses. After obtaining the defendants’
identities, Plaintiff contacts them seeking settlement. Under the threat of being exposed as alleged
infringers of pornography coupled with the high costs of litigation and potential statutory damages,
Malibu Media is able to extract settlements from most, if not all, of the defendants. The remaining
defendants, if any, are usually voluntarily dismissed or severed, usually leaving one (or very few)
named defendants in the litigation.
Malibu Media’s legal tactics have been frowned upon by some courts and commentators
alike resulting in Plaintiff being stigmatized as a “copyright troll.”1 At least one district has placed
restrictions on Plaintiff’s settlement tactics. See Malibu Media, LLC v. Doe 1, No. PJM 12-1195,
2013 WL 5603275, at *4 (D. Md. Oct. 10, 2013) (concerned by reports of “abusive settlement
negotiations with Doe Defendants . . . . Judges of this District have determined to impose certain
restrictions with respect to settlement negotiations in these cases”). Plaintiff vehemently denies being
a copyright troll and continues to exercise its right to file lawsuits across the nation purportedly in an
effort to stop the alleged infringement of its works. This action is the result of Malibu Media’s
continuing efforts.
II.
Background
From 2009 to 2011, Brigham Field created over eighty erotic movies, sixteen of which are at
issue in this litigation (the “Works”). (Am. Compl., ECF No. 37, Ex. B.) On February 8, 2011, Mr.
Field and his wife Collette Pelissier Field (collectively, “the Fields”) founded Malibu Media, a
1
See, e.g., Luke S. Curran, Comment, Copyright Trolls, Defining the Line Between Legal Ransom
Letters & Defending Digital Rights, 13 J. Marshall Rev. Intell. Prop. L. 170, 171 (Fall 2013)
(including Malibu Media as one of several businesses “publicly branded as ‘copyright trolls’”).
2
limited liability company organized and existing under the laws of the State of California. (Id. ¶ 1.)
Plaintiff owns the copyrights for the Works, “each of which contains an original work of authorship.”
(Id. ¶¶ 48, 55, Ex. B.)
According to Plaintiff, Defendant used a BitTorrent peer-to-peer file sharing protocol to
infringe on Plaintiff’s copyrights. (Id. ¶¶ 5-6, 14, 30, 41, 49, 57.)
“BitTorrent” is a common peer-to-peer file sharing protocol used for distributing
large amounts of data. “Torrent sites” are websites that index torrent files currently
available for copying and distribution via the BitTorrent protocol. A torrent file
contains a file that has been broken into hundreds or thousands of pieces. With
BitTorrent “Client” software, a user can upload and download data using the
BitTorrent protocol.
As a demonstration of how this process works, someone (an “initial seeder”) can
upload a copyrighted movie that has been broken down into a torrent to a torrent site.
When another person (a “peer”) seeks to download that movie, the BitTorrent
protocol causes the initial seeder’s computer to send certain pieces of the movie to
the peer’s computer. Once the peer receives a piece of the movie, her computer starts
transmitting that piece to others. The recipient peers then automatically begin
delivering the piece they just received to other peers in what is called a “swarm.”
The BitTorrent Client then reassembles the pieces on each peer’s computer until the
movie may be viewed in its entirety.
Malibu Media, LLC v. Lee, No. 12-03900, 2013 WL 2252650, at *1 (D.N.J. May 22, 2013) (internal
citations omitted).
After realizing that its movies were being uploaded and downloaded on torrent sites, Plaintiff
hired IPP, Limited (“IPP”) to investigate the alleged infringement of its Works. (Am. Compl. ¶ 38.)
Specifically, IPP was retained to identify the IP addresses of the alleged infringers using the
“BitTorrent protocol and the internet to reproduce, distribute, display or perform Plaintiffs’ [sic]
copyrighted works.” (Id.) To investigate the alleged infringers, IPP used INTERNATIONAL
IPTRACKER v1.2.1 forensic software and related technology to scan peer-to-peer networks “for the
presence of infringing transactions.” (Id. ¶ 39.) The file for Plaintiff’s Works was assigned a SHA-1
3
hash value, referred to as a Unique Hash Number, and IPP used this Unique Hash Number to isolate
the transactions and the IP addresses allegedly infringing Plaintiff’s Works. (Id. ¶ 40.)2
The fruits of Plaintiff’s investigation resulted in this lawsuit against Defendant, a corporation
that, for obvious reasons, wishes to remain anonymous throughout this litigation. (Op. & Order
Denying Mot. to Quash, ECF. No. 64, at 2.) Plaintiff alleges that Defendant is liable for direct and
contributory copyright infringement for illegally copying and distributing a website containing
Plaintiff’s copyrighted movies. (Am. Compl. ¶¶ 3, 5-6, 50.)
Plaintiff particularly alleges that: (1) Plaintiff’s Works, identified by a Unique Hash Number,
were on a website in the form of “a single torrent file” (the “Torrent File”) (id. ¶ 13); (2) Defendant
installed a BitTorrent Client on its computer and went to the torrent site to upload and download
Plaintiff’s copyrighted Works (id. ¶¶ 18, 30); (3) using the BitTorrent protocol, Defendant copied
and distributed the Torrent File without Plaintiff’s consent (id. ¶¶ 10, 14, 41, 50, 58); (4) Defendant’s
computer connected to IPP’s investigative server and transmitted a full copy, or a portion thereof, of
the Torrent File (id. ¶¶ 42, 49, 56); and (5) these transmissions occurred on May 10, 2012 at
6:18 p.m. from Defendant’s IP address (24.0.139.41) located in Trenton, New Jersey (id., Exs. A, C).
During its investigation, IPP compared the Works with the Torrent File and determined that “they
were identical, strikingly similar or substantially similar.” (Id. ¶ 44.)
Plaintiff further alleges that Defendant was a “peer member” that participated in a swarm and
thus, “induced, caused or materially contributed to the infringing conduct of [other swarm
members].” (Id. ¶¶ 35, 57, 61.) In addition, Defendant “knew or should have known that other
BitTorrent users . . . would become members of the swarm with Defendant” and that they “were
The Unique Hash Number is “a string of alphanumeric characters in the torrent file that the
[BitTorrent Client software] uses to verify the data that is being transferred.” (Am. Compl., Ex. D.)
The
Unique
Hash
Number
associated
with
Plaintiff’s
Works
was
121AC0B46088E7C235A23D4379BE65A1840E9B77. (Id. ¶ 40.)
2
4
directly infringing Plaintiff’s original copyrighted Works by copying constituent elements of
[them].” (Id. ¶¶ 59-60; see also id. ¶¶ 49, 56.)
According to Plaintiff, Defendant’s willful infringement of the Works (id. ¶ 52) violated
Plaintiff’s exclusive right to reproduce, redistribute, perform, and display the Works in accordance
with 17 U.S.C. §§ 106 and 501 (id. ¶ 51). As a result, Plaintiff has suffered actual damages including
lost sales, price erosion and a diminution of the value of its copyrights. (Id. ¶ 53, 63.)
III.
Procedural History
In light of the foregoing alleged conduct, on June 26, 2012, Plaintiff filed its initial complaint
against forty unnamed individuals and/or entities alleging direct copyright infringement in violation
of the Copyright Act of 1976, 17 U.S.C §§ 106 and 501, and contributory copyright infringement,
seeking both monetary and injunctive relief. (Compl., ECF No. 1.)3 Seven days later, Plaintiff filed an
unopposed motion to serve third-party subpoenas on defendants’ ISPs seeking personal identifying
information for the unnamed defendants. (ECF No. 4.) This motion was granted on August 8, 2012.
(ECF No. 7.) In September and October 2012, several individual defendants, including Defendant
John Doe #1, filed motions to quash and to sever. (ECF Nos. 8-12, 17, 18, 27.)
Shortly thereafter, Plaintiff began voluntarily dismissing various defendants. On December 5,
2012, Plaintiff filed its Amended Complaint against the remaining defendants at that time – Maksym
Tsanko, John Does 1-5, 7-12, 14-35, 38 and 40. (Am. Compl.) Several months later, this Court issued
an Order to Show Cause as to why the Court should not dismiss without prejudice all claims against
all John Does, except John Doe #1. (ECF No. 59.) Four days later, Plaintiff voluntarily dismissed all
3
In particular, Plaintiff asks the Court to permanently enjoin Defendant from continuing to infringe
Plaintiff’s Works and order Defendant to permanently remove the Torrent File and copies of
Plaintiff’s Works from its computer. In addition, Plaintiff seeks the greater of $150,000 in statutory
damages, per infringed Work, and its actual damages. (Am. Compl.)
5
remaining defendants except John Doe #1. (ECF No. 60.)4 Accordingly, John Doe #1 is the only
remaining defendant.
On April 18, 2013, Defendant’s Motion to Quash was denied by the Honorable Lois H.
Goodman, U.S.M.J. (ECF No. 64.)5 And now, for the following reasons, Defendant’s Motion to
Dismiss is DENIED in part.
IV.
Analysis
Defendant moves to dismiss Plaintiff’s claims on several grounds: (1) lack of standing
pursuant to Rule 12(b)(1); (2) failure to join indispensible parties pursuant to Rules 12(b)(7) and
19(a) and (b); and (3) failure to state a claim for which relief can be granted pursuant to Rule
12(b)(6). Each of these grounds requires a different standard of review. The Court will address each
of them, in turn.
A.
Plaintiff Has Standing to Bring Claims for Copyright Infringement
1) Legal Standard
Before proceeding to review the merits of a case, the Court has a duty to assure itself that
Plaintiff has Article III standing. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). “A
motion to dismiss for want of standing is . . . properly brought pursuant to Rule 12(b)(1), because
standing is a jurisdictional matter.” Ballentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007)
(alteration in original).
A defendant may challenge the court’s subject-matter jurisdiction with either a facial or
factual attack. Gould Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000), modified by
Simon v. United States, 341 F.3d 193 (3d Cir. 2003). In a facial attack, the defendant contests the
Due to Plaintiff’s subsequent dismissal of all defendants, except John Doe #1, the Order to Show
Cause hearing was dismissed as moot. (ECF No. 62.) In total, Plaintiff settled with nine defendants
and dismissed seven defendants because it was unable to serve them after receiving identifying
information from the ISPs. (ECF No. 43.).
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5
The issue of severance was deemed moot because all other defendants had been dismissed.
6
sufficiency of the well-pleaded allegations insofar as they provide a basis for the court’s exercise of
subject-matter jurisdiction. NE Hub Partners, L.P. v. CNG Transmission Corp., 239 F.3d 333, 341
(3d Cir. 2001). A facial attack takes the facts in the pleadings as true, construed in the light most
favorable to the plaintiff, and determines therefrom whether jurisdiction exists. Gould Elecs., 220
F.3d at 176; Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977); see Lujan,
504 U.S. at 561.
In a factual attack, on the other hand, the defendant challenges the factual basis underlying
the court’s subject-matter jurisdiction with extrinsic evidence, essentially making the argument that
the allegations supportive of jurisdiction are not true. Cunningham v. Lenape Reg’l High Dist. Bd. of
Educ., 492 F. Supp. 2d 439, 447 (D.N.J. 2007). A factual attack allows the district court to consider
evidence outside the pleadings, to which “no presumptive truthfulness attaches,” weigh evidence, and
shift the burden of proving jurisdiction onto the plaintiff. Mortensen, 549 F.2d at 891.
Here, the Defendant’s Rule 12(b)(1) motion is a factual attack because Defendant relies on
documents extrinsic to the Amended Complaint to challenge subject-matter jurisdiction.
(See Def.’s Br., Exs. A-D.) As such, the Court will consider additional extrinsic facts specific to this
motion.
2) Additional Relevant Facts
The Fields founded Malibu Media on February 8, 2011 and are the sole owners. (Id., Ex. B.)
Upon founding Malibu Media, Mr. Field orally agreed to transfer all the copyrighted Works to his
company. (Id., Exs. B, D.) In an affidavit, Mrs. Field attests that “[the Fields] intended for the
transfer of rights to cover every single right associated with a copyright; including the exclusive right
to sue for past, present, and future infringement.” (Id., Ex. B.) Between November 2011 and March
2012, Plaintiff registered the Works for copyright protection. (Am. Compl., Ex. B.) However, on the
registration applications, Plaintiff did not state that the Works were authored by Mr. Field and then
7
transferred to Malibu Media. Rather, Plaintiff mistakenly told its attorney to list the author as
“Malibu Media, employer for hire.” (Am. Compl., Ex. B; Def.’s Br., Ex. B.)
This mistake caused a district court in the Eastern District of Michigan to question the
validity of its copyrights, prompting Plaintiff to file a Form CA with the U.S. Copyright Office on
September 13, 2012, to “correct and amplify” its copyright registrations. (Def.’s Br., Exs. A-B.)
Attached to its Form CA, Plaintiff also filed a “Copyright Assignment Agreement” memorializing
the prior oral agreement; the agreement assigns Plaintiff “all . . . title, right, and interest in and to the
copyrights for the [Works] . . . including all registrations and applications covering the Works.”
(Id., Exs. B, D.) Then, on December 5, 2012, Plaintiff and Mr. Field executed a “Clarification of
Assignment Agreement” affirming that Mr. Field is the sole author of the Works and that he intended
to transfer “all of [his] right, title and interest in and to the copyright[ed] [Works] exclusively to
[Plaintiff]” including the “exclusive rights set forth in 17 U.S.C. § 106.” (Id., Ex. C.) After filing the
Form CA, the Copyright Office issued corrected copyright registrations reflecting that Mr. Field
authored each Work and then transferred them to Plaintiff after the company was formed.
(ECF No. 68.)
3) Parties’ Positions
Defendant mainly contends that Plaintiff was not the legal or beneficial owner of fifteen of
the Works at the time this lawsuit was filed and, therefore, lacks standing to bring this lawsuit.6
(Def.’s Br. 1, 9-10, 16; Def.’s Reply 4.) To support its argument, Defendant asserts that Mr. Field’s
alleged February 8 oral assignment to Plaintiff lacked consideration and neither assigned Plaintiff
exclusive rights to the Works nor the right to sue for past infringement. (Id.) Moreover, the
subsequent written agreements and supplemental forms do not cure these defects because:
(1) Plaintiff’s Form CA attempts to correct false representations of material fact in violation of 17
Defendant does not dispute that Plaintiff owned “Just the Two of Us” at the time it filed this
lawsuit. (Def.’s Br. 2.)
6
8
U.S.C. 409(5);7 (2) the September 13 Copyright Assignment Agreement did not explicitly assign
Plaintiff any exclusive rights under 17 U.S.C. § 106 or the right to sue for past infringement; and
(3) even if the December 5 Clarification of Assignment is valid, any exclusive rights stemming from
the oral assignment cannot be retroactively conferred on Plaintiff to give it standing. (Def.’s Br. 3-5,
11-13; Def.’s Reply 3.)
In response, Plaintiff makes two main assertions: (1) its inadvertent error on its copyright
registration forms does not invalidate its copyrights or standing to sue (Pl.’s Opp’n 11-12, 18-19);
and (2) that Plaintiff became owner of—and in possession of any and all exclusive rights to—the
Works on February 8, 2011 as subsequently memorialized in the written agreements (id. at 15). As a
counterattack, Plaintiff also challenges Defendant’s own standing, as an alleged third-party infringer,
to challenge Plaintiff’s assignment. (Id. at 16.)
4) Discussion
Plaintiff has met its burden to show that it has standing—and that this Court has subjectmatter jurisdiction—to bring this copyright infringement lawsuit against Defendant.
As an initial matter, the Court finds that Plaintiff has shown that it has valid copyright
registrations for the Works and that Plaintiff is the owner of those works. Namely,
the background context of Malibu’s formation, the Affidavit of Collette Field, the
text of the Written Assignment of September 13, 2012, and the text of the
Clarification Agreement from December 5, 2012, all demonstrate that [Mr.] Field
intended to transfer and did transfer complete and exclusive rights in his copyrighted
works to Malibu when the company was formed on February 8, 2011. Malibu was the
‘exclusive’ owner of the Brigham Field copyrights as of that time, and it has standing
to sue for infringement of those works presently.
Malibu Media, LLC v. John Does 1, 6, 13, 14, and 16, No. 12-2078, 2013 WL 30648, at *6 (E.D. Pa.
Jan. 3, 2013); see also Malibu Media v. John Does 1–13, No. 12–12586 (E.D. Mich. Feb. 22, 2013)
(concluding that Malibu Media had standing because the registration was corrected through the Form
7
Section 409 lists the information required on a copyright application, including how a copyright
claimant obtained ownership of the work, if it is not the author.
9
CA filed with the Copyright Office on September 13, 2012); Malibu Media, LLC v. John Does 7, 911, 15-31, 33-36, and 39, No. 12-01953, 2013 WL 3753435, at *4-6 (D. Colo. July 15, 2013) (finding
that Malibu Media owned copyrights for the works, was properly assigned exclusive rights to the
works, and had the right to sue for past infringement); Malibu Media, LLC v. Reynolds, No. 12 C
6672, 2013 WL 870618, at *4 (N.D. Ill. Mar. 7, 2013) (“The error in Malibu Media’s registration
with the United States Copyright Office does not deprive it of standing to enforce its copyrights”).
Even more compelling, Plaintiff submitted its corrected copyright registrations for the Works
reflecting that Mr. Field created the Works but transferred his rights to Malibu Media after the
company was formed, but before the original registration certificates were issued (ECF No. 68). See
17 U.S.C. § 408(d) (“The information contained in a supplementary registration augments but does
not supersede that contained in the earlier registration”); see also Arista Records, Inc. v. Flea World,
Inc., No. 03-2670 (JBS), 2006 WL 842883, at *8 (D.N.J. Mar. 31, 2006) (Simandle, J.) (“[T]he
existence of a copyright registration certificate issued from the United States Copyright Office is
prima facie evidence of the validity of the party’s copyright and of the facts stated in the certificates,
including ownership of the copyright”). As such, the Court concludes that Plaintiff has the requisite
standing to bring the claims in this action.
Furthermore, the Court agrees that, as an alleged third-party infringer, Defendant does not
have standing to challenge Mr. Field’s assignment to Plaintiff. Section 204 of Title 17 governs the
execution of transfers of copyrights between copyright owners and transferees. The court, in BillyBob Teeth v. Novelty, Inc., held that a third-party infringer does not have standing to challenge a
transfer of copyright ownership “where there is no dispute between the copyright owner and the
transferee about the status of the copyright.” 329 F.3d 586, 592-93 (7th Cir. 2003) (citing Eden Toys,
Inc. v. Florelee Undergarment Co., 697 F.2d 27, 36 (2d Cir. 1982)). Under those circumstances, a
third-party infringer cannot use § 204 to dodge a copyright infringement lawsuit. Id. Here, Defendant
was not a party to the transfer and it is clear that there is no dispute between Mr. Field and Plaintiff
10
regarding the copyright status of the Works. Indeed, Plaintiff and Mr. Field have alleged and
executed numerous agreements and affidavits to prove that Mr. Field created the Works and
subsequently transferred all rights to Plaintiff. Therefore, Defendant does not have standing to
challenge the validity of the transfer to try to avoid suit for copyright infringement. See Malibu
Media, 2013 WL 30648, at *9.
Accordingly, Defendant’s motion to dismiss pursuant to Rule 12(b)(1) is denied.
B.
Plaintiff Has Not Failed to Join Indispensible Parties
1) Legal Standard
Rule 12(b)(7) provides that a party may move to dismiss for failure to join a party under Rule
19. The moving party must demonstrate that a non-moving party is both necessary and indispensable
under Rule 19 and, as such, must be joined in the action. Am. Home Mortg. Corp. v. First Am. Title
Ins. Co., No. 07-1257 (JLL), 2007 WL 3349320, at *3 (D.N.J. Nov. 9, 2007). If the party is
necessary and indispensible to the action and joinder would deprive the court of subject matter
jurisdiction, the court must dismiss the complaint. Janney Montgomery Scott, Inc. v. Shepard Niles,
Inc., 11 F.3d 399, 404 (3d Cir. 1993). In reviewing a Rule 12(b)(7) motion to dismiss, the court must
accept all factual allegations in the complaint as true and draw all reasonable inferences therefrom in
favor of the non-moving party. Jurimex Kommerz Transit G.M.B.H. v. Case Corp., 65 F. App’x 803,
805 (3d Cir. 2003).
In its analysis, the court must initially determine whether the non-joined party should be
joined according to the Rule 19(a) standard. Gen. Refractories Co. v. First Sale Ins. Co., 500 F.3d
306, 312 (3d Cir. 2007). Rule 19(a)(1) provides the following factors to determine whether a person
is a required party:
(A) in that person’s absence, the court cannot accord complete relief among existing
parties; or
(B) that person claims an interest relating to the subject of the action and is so
situated that disposing of the action in the person's absence may:
11
(i) as a practical matter impair or impede the person’s ability to protect the interest;
or
(ii) leave an existing party subject to a substantial risk of incurring double, multiple,
or otherwise inconsistent obligations because of the interest.
If a party does not qualify as necessary under Rule 19(a), then the court need not decide whether its
absence warrants dismissal under Rule 19(b), which addresses when an action should be dismissed
because joinder of the necessary party would destroy subject-matter jurisdiction or otherwise be
infeasible. Janney, 11 F.3d at 402.
2) Parties’ Positions
Defendant asserts that this action should be dismissed because Plaintiff failed to join the
BitTorrent Operators, who have been found to induce “this type of infringement,” and initial seeders,
who offer the entire movie for upload by others. (Def.’s Br. 14-15; Def.’s Reply 5-6.) Essentially,
Defendant doubts that Plaintiff can prove its “swarm” theory of liability with only one defendant.
(Def.’s Br. 14-15.) Plaintiff disagrees and asserts that it has not failed to join indispensible parties
because all joint tortfeasors do not have to be joined for the Court to accord complete relief to
Plaintiff and no other party can claim an interest in this lawsuit.8 (Id. at 20-23.)
3) Discussion
Defendant’s argument is untenable. The Court sees no reason why it could not accord
complete relief among the existing parties. Copyright infringement is a tort and it is well-settled that
joint tortfeasors—even under a theory of joint and several liability—“are neither necessary parties
under Rule 19(a) nor indispensable parties under Rule 19(b).”9 Malibu Media, 2013 WL 30648, at
8
Defendant also asserts that Mr. Field is an indispensable party. Because the Court has already
concluded that Plaintiff is the owner of the copyrighted Works and has standing to sue, the Court will
not address Defendant’s argument that Mr. Field must be joined to prevent dismissal of the lawsuit.
The Fields are the sole owners of Malibu Media, so no one else can claim an interest relating to the
Works at issue in this action.
9
The Court must note that Plaintiff has made a de facto change in its position regarding joinder. In
its Amended Complaint, Plaintiff alleges that joinder of defendants was proper pursuant to Rule
20(a)(2) because, inter alia, defendants were a part of the same series of infringing transactions,
12
*10 (citing Temple v. Synthes Corp., Ltd., 498 U.S. 5, 6 (1990)). To prevail on its claims of direct
and contributory copyright infringement, Plaintiff must ultimately prove that Defendant downloaded
Plaintiff’s copyrighted Works without its consent and that Defendant induced, caused or materially
contributed to the infringing activity of another. The fact that the initial seeder, BitTorrent Operator,
or other swarm members might also be liable for the same causes of action from the same underlying
facts does not affect the relief that Plaintiff can obtain from Defendant. In other words, the relief that
Defendant would owe Plaintiff if it did infringe upon Plaintiff’s copyrighted Works should not be
affected by the inclusion or exclusion of the initial seeder, BitTorrent Operator, or other swarm
members in this action. Moreover, any “questions surrounding the initial seeders [, BitTorrent
Operators, or swarm members] can be explored during discovery and at trial—there is no necessity to
join them as defendants under Rule 19.” Id.
Accordingly, Defendant’s motion to dismiss pursuant to Rule 12(b)(7) is denied.
C.
Claims for Copyright Infringement
1) Legal Standard
Rule 8(a)(2) “requires only ‘a short and plain statement of the claim showing that the pleader
is entitled to relief,’ in order to ‘give the defendant fair notice of what the . . . claim is and the
grounds upon which it rests.’” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley
v. Gibson, 355 U.S. 41, 47 (1957)). On a motion to dismiss for failure to state a claim, a “defendant
bears the burden of showing that no claim has been presented.” Hedges v. United States, 404 F.3d
744, 750 (3d Cir. 2005).
A district court conducts a three-part analysis when considering a Rule 12(b)(6) motion.
Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011). “First, the court must ‘take note of the
making them jointly and severally liable for the infringement of the other
defendants. (Am. Compl. ¶ 10.) Plaintiff has since dropped all defendants, except John Doe #1, and
is proceeding against Defendant for both direct and contributory copyright infringement.
13
elements a plaintiff must plead to state a claim.’” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 675
(2009)). Second, the court must accept as true all of a plaintiff’s well-pleaded factual allegations and
construe the complaint in the light most favorable to the plaintiff. Fowler v. UPMC Shadyside, 578
F.3d 203, 210-11 (3d Cir. 2009). The court, however, must disregard any conclusory allegations
proffered in the complaint. Id. Finally, once the well-pleaded facts have been identified and the
conclusory allegations ignored, a court must next determine whether the “facts alleged in the
complaint are sufficient to show that the plaintiff has a ‘plausible claim for relief.’” Fowler, 578 F.3d
at 211 (quoting Iqbal, 556 U.S. at 679).
Determining plausibility is a “context-specific task that requires the reviewing court to draw
on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. Plausibility, however, “is not
akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has
acted unlawfully.” Id. at 678 (quoting Twombly, 550 U.S. at 545). In the end, facts which only
suggest the “mere possibility of misconduct” fail to show that the plaintiff is entitled to relief.
Fowler, 578 F.3d at 211 (quoting Iqbal, 556 U.S. at 679).
2) Parties’ Positions
Plaintiff asserts that it has alleged a prima face case of copyright infringement: “By using the
BitTorrent protocol and a BitTorrent Client. . . Defendant copied the constituent elements of the
registered work[s] that are original [without Plaintiff’s authorization].” (Pl.’s Opp’n 20.) Defendant
did not specifically address Plaintiff’s allegation of copyright infringement. Instead, Defendant
presumed that Plaintiff could not state a claim due to its lack of standing. (Def.’s Br. 10.)
3) Discussion
The Court cannot, at this time, conclude that Plaintiff has made a prima facie claim for
copyright infringement. To establish a claim of copyright infringement, Plaintiff must show: (1) that
it owns a valid copyright; and (2) original elements of its work were copied without authorization.
Dun & Bradstreet Software Servs., Inc. v. Grace Consulting, Inc., 307 F.3d 197, 206 (3d Cir. 2002)
14
(citations omitted). After establishing direct copyright infringement of a third-party, a party is liable
for contributory infringement only if, “with knowledge of the infringing activity,” it “induces, causes
or materially contributes to the infringing activity of another.” Columbia Pictures Indus., Inc. v. Redd
Horne, Inc., 749 F.2d 154, 160 (3d Cir. 1984) (quoting Gershwin Publ’g Corp. v. Columbia Artists
Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971) (internal quotation marks omitted)).
Plaintiff has identified the sixteen original Works that are the subject of this action and that
Plaintiff owns the copyrights for these Works. (Am. Compl. ¶¶ 48, 55, Ex. B.) To support its
allegations, Plaintiff attached to its Amended Complaint a list of the Works that Defendant allegedly
infringed and evidence of ownership and registration of the copyrights. (Id., Ex. B.)
The second element, however, is less clear. Some courts have questioned whether a plaintiff
can sufficiently allege a claim for copyright infringement where a defendant has only been identified
by its IP address. The same question lingers in this case where Defendant’s connection to the alleged
infringement is based solely on its IP address. The concerns stem from “doubts that the subscribers of
IP addresses are actually the individuals who carried out the complained of acts.” Patrick Collins,
Inc. v. John Doe 1, No. 12-1154, 2013 WL 2177787, at *8 (E.D.N.Y. May 18, 2013); see also Third
Degree Films, Inc. v. John Does 1-110, No. 12-5817 (WJM), 2013 U.S. Dist. LEXIS 27273, at *5
(D.N.J. Jan. 17, 2013) (“Indeed the infringer might be someone other than the subscriber; for
instance, someone in the subscriber’s household, a visitor to the subscriber’s home or even someone
in the vicinity that gains access to the network”). These concerns are illuminated, in this case, where
Defendant has identified itself as a corporation, rather than an individual living in a household.
Here, Plaintiff’s allegations all hinge on Defendant’s—a corporation—alleged subscription to
the IP address listed in Plaintiff’s exhibits. The Court questions whether these allegations are
sufficient to allege copyright infringement stemming from the use of peer-to-peer file sharing
systems where the Defendant-corporation is connected to the infringement solely based on its IP
address. It may be possible that Defendant is the alleged infringer that subscribed to this IP address,
15
but plausibility is still the touchstone of Iqbal and Twombly. Iqbal, 556 U.S. at 678; Twombly, 550
U.S. at 545.
Because of the very concerns this Court has, the Court in AF Holdings v. Rogers, deferred its
ruling on plaintiff’s copyright infringement claims pending receipt of a more definitive statement:
Due to the risk of “false positives,” an allegation that an IP address is registered to an
individual is not sufficient in and of itself to support a claim that the individual is
guilty of infringement. In AF Holdings LLC v. Doe, 2013 WL 97755, at *8 (N.D. Cal.
Jan. 7, 2013), one of the reasons the court denied plaintiff leave to file an amended
complaint alleging that a particular individual, Hatfield, infringed plaintiff's
copyrighted material, was that the amended complaint alleged “no facts showing that
Hatfield infringed AF Holdings’ copyrighted material, apart from the facts that were
previously alleged and that have been known to AF Holdings for more than a year—
in particular, that the IP connection through which the material was downloaded is
registered to Hatfield.”
As mentioned above, Plaintiff alleges that Defendant, using IP address 68.8.137.53,
participated in the swarm that downloaded and distributed the Video on May 7, 2012.
Under Rule 11(b)(3), Plaintiff’s counsel certified that to the best of his knowledge,
this factual contention has evidentiary support. However, due to the potential for
abuse in these types of cases, the Court wants to make sure that Plaintiff's
contention is supported by evidence that goes beyond the identity of the subscriber
to the IP address. Therefore, the Court orders Plaintiff to provide a more definite
statement setting forth the factual basis for its allegation that Defendant used IP
address 68.8.137.53 to infringe its copyright.
No. 12-1519, 2013 WL 358292, at *3 (S.D. Cal. Jan. 29, 2013) (emphasis added).
Neither party has sufficiently briefed the issue, so the Court will give each party an
opportunity to do so. The Court, therefore, defers its ruling on Defendant’s motion to dismiss
pursuant to Rule 12(b)(6) pending further briefing addressing the following issue: whether Plaintiff
can plausibly allege a prima facie claim of copyright infringement stemming from the use of peer-topeer file sharing systems where Defendant-corporation is connected to the alleged infringement
solely based on an IP address.
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V.
Conclusion
For the reasons set forth above, and other good cause shown, it is hereby ordered that
Defendant’s Motion to Dismiss is DENIED in part. The Court hereby defers its ruling on
Defendant’s Motion to Dismiss pursuant to Rule 12(b)(6) pending further briefing by the parties. An
Order will be entered consistent with this Opinion.
s/ Michael A. Shipp
MICHAEL A. SHIPP
UNITED STATES DISTRICT JUDGE
DATED: November 30, 2013
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