Cobbler Nevada LLC v. Gonzales, 082718 FED9, 17-35041

Docket Nº:17-35041
Opinion Judge:McKEOWN JUDGE.
Party Name:Cobbler Nevada, LLC, Plaintiff-Appellant, v. Thomas Gonzales, Defendant-Appellee.
Attorney:John Mansfield (argued), Harris Bricken, Portland, Oregon; Carl D. Crowell, Crowell Law, Salem, Oregon; for Plaintiff-Appellant. David Hamlin Madden (argued), Mersenne Law, Tigard, Oregon, for Defendant-Appellee.
Judge Panel:Before: M. Margaret McKeown and Richard A. Paez, Circuit Judges, and Robert S. Lasnik, District Judge.
Case Date:August 27, 2018
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Cobbler Nevada, LLC, Plaintiff-Appellant,

v.

Thomas Gonzales, Defendant-Appellee.

No. 17-35041

United States Court of Appeals, Ninth Circuit

August 27, 2018

Argued and Submitted May 18, 2018 Portland, Oregon

Appeal from the United States District Court for the District of Oregon Michael H. Simon, District Judge, Presiding D.C. No. 3:15-cv-00866-SB.

John Mansfield (argued), Harris Bricken, Portland, Oregon; Carl D. Crowell, Crowell Law, Salem, Oregon; for Plaintiff-Appellant.

David Hamlin Madden (argued), Mersenne Law, Tigard, Oregon, for Defendant-Appellee.

Before: M. Margaret McKeown and Richard A. Paez, Circuit Judges, and Robert S. Lasnik, [*] District Judge.

SUMMARY[**]

Copyright

The panel affirmed the district court's dismissal of an action under the Copyright Act, alleging direct and contributory infringement of plaintiff's copyrights in a film.

Plaintiff alleged unauthorized downloading and distribution of the film through peer-to-peer BitTorrent networks. The panel held that the bare allegation that the defendant was the registered subscriber of an Internet Protocol address associated with infringing activity was insufficient to state a claim for direct or contributory infringement. The panel also held that the district court did not abuse its discretion in awarding attorney's fees to the defendant under 17 U.S.C. § 505.

OPINION

McKEOWN JUDGE.

In this copyright action, we consider whether a bare allegation that a defendant is the registered subscriber of an Internet Protocol ("IP") address associated with infringing activity is sufficient to state a claim for direct or contributory infringement. We conclude that it is not.

After tracing infringement of its copyrights to a particular IP address, Cobbler Nevada, LLC filed suit against the John Doe IP address for direct and contributory copyright infringement. Cobbler Nevada soon discovered that the IP address was registered to Thomas Gonzales, who operated an adult foster care home. Cobbler Nevada then amended its complaint to name Gonzales as the sole defendant, alleging that he directly infringed by copying and distributing copyrighted works himself or, in the alternative, contributed to another's infringement by failing to secure his internet connection.

The district court properly dismissed Cobbler Nevada's claims. The direct infringement claim fails because Gonzales's status as the registered subscriber of an infringing IP address, standing alone, does not create a reasonable inference that he is also the infringer. Because multiple devices and individuals may be able to connect via an IP address, simply identifying the IP subscriber solves only part of the puzzle. A plaintiff must allege something more to create a reasonable inference that a subscriber is also an infringer. Nor can Cobbler Nevada succeed on a contributory infringement theory because, without allegations of intentional encouragement or inducement of infringement, an individual's failure to take affirmative steps to police his internet connection is insufficient to state a claim.

BACKGROUND

Cobbler Nevada holds copyrights in the film The Cobbler, a magic realism film that features "[a] cobbler, bored of his everyday life, [who] stumbles upon a magical heirloom that allows him to become other people . . . ." The Cobbler, IMDB, https://www.imdb.com/title/tt3203616/ (last visited July 26, 2018). Like a number of major motion pictures scheduled for theatrical release, The Cobbler has been the subject of unauthorized downloading and distribution (i.e., pirating) through BitTorrent networks. See generally Glacier Films (USA), Inc. v. Turchin, 896 F.3d 1033, 1035-36 (9th Cir. 2018) (providing background on piracy via peer-to-peer BitTorrent networks). According to Cobbler Nevada, there have been over 10, 000 instances of infringing activity of The Cobbler traced to Oregon alone.

Cobbler Nevada identified an IP address located in Portland, Oregon, that had downloaded and distributed The Cobbler multiple times without authorization. Cobbler Nevada filed suit against the unknown holder of the IP address-named in the complaint as Doe-24.21.136.125- for direct and contributory copyright infringement. Records subpoenaed from Comcast identified Thomas Gonzales as the subscriber of the internet service associated with the IP address.

After several attempts to reach Gonzales, Cobbler Nevada's counsel finally connected with Gonzales via telephone. Once counsel learned that the internet service was accessible to both residents and visitors at an adult care home, he concluded that "it does not appear that [Gonzales] is a regular occupant of the residence or the likely infringer." Due to confidentiality concerns, Gonzales refused to share the names or work schedules of the individuals living and working in the home without a court order. Although the district court granted leave to depose Gonzales, the deposition revealed no new information regarding the identity of the actual infringer.[1]

Nevertheless, Cobbler Nevada filed a First Amended Complaint and named Gonzales as...

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