Energy Intelligence Group, Inc. et al v. Canaccord Genuity Inc. et al

Filing 32

MEMORANDUM OPINION AND ORDER re: 28 MOTION to Dismiss the Complaint. filed by Canaccord Genuity Inc., Canaccord Genuity Corp. The Court has considered all of the arguments of the parties. To the extent not specifically addressed, the arguments are either moot or without merit. For the reasons explained above, the defendants motion to dismiss is denied in part as moot and granted in part. The Clerk is directed to close ECF No. 28. (As further set forth in this Order.) (Signed by Judge John G. Koeltl on 5/10/2017) (cf)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
────────────────────────────────────
ENERGY INTELLIGENCE GROUP, INC. ET
AL.,
Plaintiffs,

16-cv-8298 (JGK)
MEMORANDUM OPINION
AND ORDER

- against CANACCORD GENUITY, INC., ET AL.,
Defendants.
────────────────────────────────────
JOHN G. KOELTL, District Judge:
The plaintiffs Energy Intelligence Group, Inc. (“EIG”) and
Energy Intelligence Group (UK) Limited (“EIG UK”) (collectively,
“Energy Intelligence” or “the plaintiffs”) sued Canaccord
Genuity, Inc. and Canaccord Genuity Corp. (“Canaccord”) for
copyright infringement under the Copyright Act of 1976, 17
U.S.C. §§ 101 et seq. The plaintiffs are the publishers of daily
and weekly newsletters covering developments and trends in the
global energy industry. They claim that the defendants violated
the plaintiffs’ copyrights by auto-forwarding the publications
from a sole subscriber in Canada to employees in offices located
in New York, Houston, Canada, and the United Kingdom. The
defendants now move to dismiss certain of the claims in the
complaint pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure for failure to state a claim. In particular,
they ask the Court to dismiss (1) any claims for infringement
prior to July 2012 and (2) any claims based on copying and
1

distribution that occurred outside the United States. The Court
has jurisdiction under 28 U.S.C. § 1332(a). For the reasons
explained below, the motion to dismiss is granted in part and
denied in part.
I.
In deciding a motion to dismiss pursuant to Rule 12(b)(6),
the allegations in the complaint are accepted as true, and all
reasonable inferences must be drawn in the plaintiff’s favor.
McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir.
2007). The Court’s function on a motion to dismiss is “not to
weigh the evidence that might be presented at a trial but merely
to determine whether the complaint itself is legally
sufficient.”

Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir.

1985). The Court should not dismiss the complaint if the
plaintiff has stated “enough facts to state a claim to relief
that is plausible on its face.”

Bell Atl. Corp. v. Twombly, 550

U.S. 544, 570 (2007). “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.”

Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009). While the Court should construe the factual allegations
in the light most favorable to the plaintiff, “the tenet that a
court must accept as true all of the allegations contained in
the complaint is inapplicable to legal conclusions.” Id.; see
2

also Springer v. U.S. Bank Nat’l Ass’n, No. 15-cv-1107 (JGK),
2015 WL 9462083, at *1 (S.D.N.Y. Dec. 23, 2015).
When presented with a motion to dismiss pursuant to Rule
12(b)(6), the Court may consider documents that are referenced
in the complaint, documents that the plaintiff relied on in
bringing suit and that are either in the plaintiff’s possession
or that the plaintiff knew of when bringing suit, or matters of
which judicial notice may be taken. See Chambers v. Time Warner,
Inc., 282 F.3d 147, 153 (2d Cir. 2002); see also Plumbers &
Pipefitters Nat’l Pension Fund v. Orthofix Int’l N.V., 89 F.
Supp. 3d 602, 607-08 (S.D.N.Y. 2015).
II.
The following facts alleged in the complaint are accepted
as true for the purposes of this motion to dismiss.
The plaintiffs publish newsletters that provide “news and
analysis covering the key developments and trends in the North
American energy industry, as well as the global oil and gas
industries.” Complaint (“Compl.”) ¶¶ 10, 11. Those publications
include, as relevant here, Oil Daily, Petroleum Intelligence
Weekly, and Natural Gas Week. Id. ¶ 10. Subscribers to the
plaintiffs’ publications are individuals and organizations with
an interest in the oil and gas markets, including consultants,
bankers, investors, traders, commodity analysts, and others who
sell goods or services to participants in the oil and gas
3

markets. Id. ¶ 12. The plaintiffs make the relevant publications
available through various subscriptions or licensing agreements
tailored to the needs of the consumer. Id. ¶¶ 18-19. Those with
a subscription may receive the publications either by email or
by password-protected access to the plaintiffs’ website. Id.
¶ 19. Those who do not maintain a subscription or license
agreement may purchase individual articles from the relevant
newsletters on a pay-per-article basis for between $9 and $24
per article, and may purchase individual issues of the
publications on a pay-per-issue basis for between $95 and $395.
Id. ¶¶ 20-21.
The plaintiffs are owners of U.S. Copyright Registrations
(or have applications pending) for volumes of Oil Daily,
Petroleum Intelligence Weekly, and Natural Gas Week published
between July 2012 and September 2016. Id. ¶¶ 24-28. The
plaintiffs include a variety of copyright notices on their
website, in emails, and in publications informing readers that
the works of authorship are copyrighted and that “[u]nauthorized
access or electronic forwarding, even for internal use, is
prohibited.” Id. ¶¶ 30-31. Beginning around June 2003, the
defendants purchased either one or two single-copy subscriptions
to Oil Daily, Petroleum Intelligence Weekly, and Natural Gas
Week. See id. ¶¶ 35-53. The subscription agreements entered into
by the defendants included a notification that the unauthorized
4

reproduction or dissemination of the publications would
constitute willful infringement of the plaintiffs’ copyrights.
Id. ¶¶ 46, 51.
The gist of the plaintiffs’ allegations is that the
defendants willfully infringed those copyrights by purchasing
one or two individual subscriptions to the relevant publications
and then auto-forwarding those publications from an employee in
Canada to the defendants’ employees in other offices. See id.
¶ 61. In particular, the plaintiffs allege that, beginning in
July 2012, copies of the publications for which the defendants
had single-copy subscriptions were sent by email to Christy
Valette, an employee in the defendants’ Calgary office. Id.
¶¶ 43, 49, 56. They further allege that, upon receipt of the
publications, Ms. Valette used auto forwarding to distribute the
publications by email to employees in the defendants’ offices in
New York, Houston, Canada, and the United Kingdom. Id. ¶ 61.
The complaint asserts three counts of copyright
infringement in violation of 17 U.S.C. § 501(a) –- one each for
each of the three publications. See id. ¶¶ 66-95. The plaintiffs
seek actual and statutory damages, fees, and injunctive relief.
Id. pp. 27-28. The defendants now move to dismiss all three
claims insofar as they seek to impose liability (1) for
infringement predating July 2012 or (2) based on copying and
distribution which occurred entirely outside the United States.
5

III.
A.
In asserting that the Court has personal jurisdiction over
defendant Canaccord Genuity Corp, the complaint alleges that the
defendants have “sent numerous email communications” to the
plaintiffs in New York in order to “manage, update and renew its
subscriptions to the publications [the] [d]efendants are alleged
to have infringed in this lawsuit over a period of thirteen (13)
years.” Compl. ¶ 8. The defendants read this as equivalent to an
allegation that the defendants’ infringement has lasted for a
period of thirteen years. Although inartfully worded, it is
clear to the Court that the sentence is best read as a
description of the period of time over which defendant Cannacord
Genuity Corp. communicated with the plaintiffs over email.
In any event, the defendants move to dismiss any claim for
infringement prior to July 2012 because the complaint does not
allege any works infringed prior to July 2012; does not allege
any copyright registrations for works predating July 2012; and
does not allege any acts of infringement occurring prior to July
2012. The plaintiffs agree with that characterization of the
complaint, and maintain that the complaint does not plead
infringement prior to July 2012 in any event. See Mem. in Opp.
to Mot. p. 4. Because the plaintiffs disclaim any allegation of

6

infringement prior to July 2012, the motion to dismiss any such
claims is denied as moot.
B.
The defendants also move to dismiss any claims “based on
alleged acts that took place entirely outside of the United
States.” Mem. in Supp. of Mot. p. 8. “The U.S. Copyright Act
does not have extraterrorial application, and district courts do
not have subject matter jurisdiction over infringement occurring
outside of the United States.” Levitin v. Sony Music Entm’t, 101
F. Supp. 3d 376, 384 (S.D.N.Y. 2015); see also Update Art, Inc.
v. Modin Publ’g, Ltd., 843 F.2d 67, 73 (2d Cir. 1988) (“It is
well established that copyright laws generally do not have
extraterritorial application.”). “A narrow exception to this
rule exists where an individual commits an infringing act in the
United States that permits further infringement abroad.” Cooley
v. Penguin Grp. (USA) Inc., 31 F. Supp. 3d 599, 610 n.66
(S.D.N.Y. 2014); see Update Art, 843 F.2d at 73. In order for
the exception to apply, “the copyright infringement plaintiff
must first demonstrate that the domestic predicate act was
itself an act of infringement in violation of the copyright
laws.” Levitin, 101 F. Supp. 3d at 385 (quotation marks
omitted).
The defendants argue that any claim of infringement based
on the transmission of the plaintiffs’ publications from an
7

employee in Canada to employees in defendants’ offices outside
of the United States must be dismissed because, as to those
claims, no domestic predicate act of infringement is alleged.
The plaintiffs respond that the defendants’ motion “does not
provide any evidence that any acts of infringement occurred
exclusively outside the U.S.” Mem. in Opp. to Mot. p. 7. But the
defendants rely on the complaint itself, which alleges that (1)
the defendants received the plaintiffs’ copyrighted works by
email delivery to Ms. Christy Valette in the defendants’ Calgary
office; and (2) that the defendants infringed the plaintiffs’
copyrights by auto forwarding those copyrighted works to other
of defendants’ employees, including those in offices “located in
New York, Houston, Canada and the United Kingdom.” Compl. ¶ 61.
To the extent the plaintiffs allege infringement based on the
delivery of the copyrighted works to the defendants’ employee in
Canada and the unauthorized copying and forwarding of those
works to the defendants’ employees in Canada or the United
Kingdom, or anywhere else outside the United States, those
claims must be dismissed, because such allegations do not
include any conduct whatsoever in the United States, let alone a
“domestic predicate act” of infringement. Levitin, 101 F. Supp.
3d at 385; see also Hutson v. Notorious B.I.G., LLC, 2015 WL
9450623, at *6 (S.D.N.Y. Dec. 22, 2015) (dismissing claim for
copyright infringement based on an allegation that the
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defendants reproduced and distributed the relevant sound
recording outside the United States); Roberts v. Keith, 2009 WL
3572962, at *4 (S.D.N.Y. Oct. 23, 2009) (dismissing copyright
claim against defendants who distributed the allegedly
infringing album only in the United Kingdom and Europe). 1 Any
such claims are therefore dismissed.
CONCLUSION
The Court has considered all of the arguments of the
parties. To the extent not specifically addressed, the arguments
are either moot or without merit.
For the reasons explained above, the defendants’ motion to
dismiss is denied in part as moot and granted in part. The Clerk
is directed to close ECF No. 28.
SO ORDERED.
Dated:

New York, New York
May 10, 2017
____/s/_____________________
John G. Koeltl
United States District Judge

1

The defendants specify that they are not moving to dismiss
“claims that allege acts of infringement of the U.S. Copyright
Act by virtue of the alleged auto-forwarding of [the plaintiffs’
works] into the United States.” Mem. in Supp. of Mot. p. 10 n.1.
9