Emmerich Newspapers, Inc. v. Particle Media, Inc.

• Decision Date: 21 March 2022
• Docket Number: Civil Action 3:21-CV-32-KHJ-MTP
• Court: U.S. District Court — Southern District of Mississippi
• Parties: EMMERICH NEWSPAPERS, INCORPORATED PLAINTIFF v. PARTICLE MEDIA, INC. D/B/A NEWS BREAK and JOHN DOES 1-10 DEFENDANTS

EMMERICH NEWSPAPERS, INCORPORATED PLAINTIFF
v.
PARTICLE MEDIA, INC. D/B/A NEWS BREAK and JOHN DOES 1-10 DEFENDANTS

Civil Action No. 3:21-CV-32-KHJ-MTP

United States District Court, S.D. Mississippi, Northern Division

March 21, 2022

ORDER

KRISTI H. JOHNSON UNITED STATES DISTRICT JUDGE

This action is before the Court on Defendant Particle Media, Inc.'s Motion to Dismiss [29] copyright infringement claims for unregistered works and state law claims from Plaintiff Emmerich Newspapers, Inc.'s Amended Complaint [23]. For the reasons below, the Court grants the motion.

I. Facts and Procedural History

Plaintiff Emmerich Newspapers, Incorporated is “the largest privately owned newspaper chain in Mississippi, with additional newspapers in Louisiana and Arkansas.” [23] at 3. Emmerich asserts that it is “the only source of local news” for most of the markets it serves. Id. at 5. To serve the online market, “[e]very single newspaper published by Emmerich [] has a corresponding website which enables it to update stories in real time and receive feedback from local readers in the comments section.” Id.

Defendant Particle Media developed “NewsBreak, ” a web application that compiles “a personalized news feed including local, national, and international

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news, and provides a forum for [] users to engage with such news stories.” Mem. in Support of Mot. to Dismiss [30] at 3. “After downloading the [NewsBreak] app[, ] new users are prompted to provide their location information” so the app's algorithm can gather local news stories. [23] at 6. Emmerich alleges the stories that appear for the user are compiled from local news publishers' websites within the user's specified geographic areas. Id. at 6-7. After, Emmerich claims NewsBreak delivers “regular alerts on the user's smartphone or tablet device.” Id. at 7. “When the reader clicks on the alert[, ] he is directed to the [NewsBreak] app which contains scores, if not hundreds, of locally produced news stories.” Id. “As the user scrolls down he is presented (along with portions of the local news stories) with a steady stream of paid ads or sponsored content.” Id. Emmerich alleges that these ads are how NewsBreak makes its money. Id.

According to Emmerich, Particle Media republished Emmerich's news stories and articles on its NewsBreak application. [30] at 3 (citing [23]). Because readers consume the entirety of stories on the NewsBreak app, they allegedly have no reason to visit the original publisher's website and thereby deprive the original creators of their ad revenue. [23] at 7-8.

Emmerich brought claims against Particle Media for copyright infringement of both registered and unregistered copyrights under 17 U.S.C. § 101, and for various state law claims including tortious interference with business relationship, civil conspiracy, and unjust enrichment. Id. at 10, 12-15. Emmerich also seeks punitive damages. Id. at 15. Particle Media moves to dismiss Emmerich's copyright

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infringement claims-to the extent that they are based on unregistered works-as well as Emmerich's state law claims, claiming that the Copyright Act preempts them. [29] at 1.

II. Standard

In reviewing a motion under Rule 12(b)(6), the court must consider whether the complaint states a valid claim for relief, viewing all evidence in the light most favorable to the plaintiff. Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir. 2008). A valid claim for relief contains “sufficient factual matter, accepted as true, ” giving the claim “facial plausibility” and allowing “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) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). The court may consider documents incorporated into the complaint by reference. Funk v. Stryker Corp., 631 F.3d 777, 783 (5th Cir. 2011) (citations omitted).

III. Analysis

A. Copyright Claims

Under 17 U.S.C. § 411(a), “no civil action for infringement of the copyright in any United States work shall be instituted until . . . registration of the copyright claims has been made.” While authors gain exclusive rights to their works upon creation, § 411 acts as “an administrative exhaustion requirement that the owner must satisfy before suing to enforce ownership rights.”

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Fourth Est. Pub. Ben. Corp. v. Wall-Street.com, LLC, 139 S.Ct. 881, 887 (2019). Registration occurs when the Copyright Office registers the copyright, not when the owner applies. Id. at 890-92.

Emmerich asserts claims of infringement based on both registered and unregistered copyrights. [23] ¶¶ 30-31. Emmerich's unregistered copyrights cannot support independent copyright infringement claims. See Fourth Est. Pub. Ben. Corp., 139 S.Ct. at 892 (§ 411 “requires owners to await action by the Register before filing suit for infringement”). Accordingly, the Court dismisses all claims seeking relief based solely on infringement of unregistered copyrights.

This does not foreclose Emmerich's request for injunctive relief prospectively restraining infringement of unregistered and future copyrights. See Id. at 15. While unregistered copyrights may not be the basis of an infringement claim before registration, nothing precludes the Court from issuing an injunction to prevent their infringement in a suitable circumstance. See 17 U.S.C. § 502 (a). District courts have the power to issue injunctions preventing the infringement of all copyrights “not necessarily the registered copyright that gave rise to the infringement action.” Pac. & S. Co. v. Duncan, 744 F.2d 1490, 1499 n.17 (11th Cir. 1984); see also Olan Mills Inc. v. Linn Photo Co., 23 F.3d 1345, 1349 (8th Cir. 1994) (observing that injunctions can protect both non-existent and unregistered copyrights). The statute broadly contemplates that the Court may grant final injunctions “on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.” 17 U.S.C. § 502 (a) (emphasis added). And registration itself “is not a condition of copyright protection, ” 17 U.S.C. § 408 (a), it is a

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requirement necessary to instigate suit to enforce specific ownership rights, Fourth Est. Pub. Ben. Corp., 139 S.Ct. at 887.

“Where . . . liability has been determined adversely to the infringer, there has been a history of continuing infringement and a significant threat of future infringement remains, [Courts...