FurnitureDealer.net v. Amazon.com

Decision Date25 March 2022
Docket NumberCIVIL 18-232 (JRT/HB)
PartiesFURNITUREDEALER.NET, INC, Plaintiff, v. AMAZON.COM, INC, and COA, INC. d/b/a COASTER COMPANY OF AMERICA Defendant.
CourtU.S. District Court — District of Minnesota

FURNITUREDEALER.NET, INC, Plaintiff,
v.

AMAZON.COM, INC, and COA, INC. d/b/a COASTER COMPANY OF AMERICA Defendant.

CIVIL No. 18-232 (JRT/HB)

United States District Court, D. Minnesota

March 25, 2022


Christopher K. Larus, Ellen Levish, Francois Ecclesiaste, Jessica Lee Gutierrez, & John K. Harting, ROBINS KAPLAN LLP, 800 LaSalle Avenue, Suite 2800, Minneapolis MN 55402, for plaintiff;

Adam R. Steinert, Laura L. Myers, & Nirmani Chethana Perera, FREDRICKSON & BYRON, PA, 200 South Sixth Street, Suite 4000, Minneapolis, MN 55402; Allyson R. Bennett, Joseph C. Gratz, & Vera Ranieri, DURIE TANGRI LLP, 217 Leidesdorff Street, San Francisco, CA 94111, for Defendant Amazon.Com, Inc;

Anna Tobin & Holley C. M. Horrell, GREENE ESPEL PLLP, 222 South Ninth Street, Suite 2200, Minneapolis, MN 55402; Daniel M. Cislo, Kelly W. Cunningham, Mark D. Nielsen, Peter S. Veregge, & Rebecca Makitalo, CISLO & THOMAS LLP, 12100 Wilshire Boulevard, Suite 1700, Los Angeles, CA 90028; Robert J. Gilbertson, FORSGREN FISHER MCCALMONT DEMAREA TYSVER LLP, 225 South Sixth Street, Suite 1750, Minneapolis, MN 55402, for Defendant COA, Inc.

MEMORANDUM OPINION AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT

JOHN R. TUNHEIM UNITED STATES DISTRICT JUDGE

Plaintiff, Funituredealer.net (“FDN”), commenced this lawsuit against Defendants Amazon.com (“Amazon”) and COA, Inc. d/b/a/ Coaster Company of America (“Coaster”) asserting copyright infringement and violations of the Digital Millennium Copyright Act (“DMCA”) against both Defendants and a breach of contract claim against Coaster. The

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claims arise from a dispute over the use of product descriptions FDN wrote for Coaster (the “FDN Descriptions”) on Amazon product detail pages. The parties have filed cross motions for summary judgment.

The Court will deny, at least in part, all Motions filed by the parties. First, genuine disputes of material fact remain as to whether FDN has a valid copyright in the FDN Descriptions. Second, as to statutory damages on the copyright infringement claims, the question of whether the FDN Descriptions have standalone value is a factual question better left for the jury. Third, genuine disputes of material fact remain as to whether the removal of the Nothing on this Page copyright notice constituted a violation under 17 U.S.C. § 1202(b)(1). Fourth, a jury must determine the number of statutory violations of 17 U.S.C. § 1202(b)(1) committed by Defendants, if any. Lastly, because Defendants have represented that they are withdrawing their affirmative defenses, the Court will deny FDN's motion for summary judgment on the affirmative defenses as moot.

The Court will also grant, in part, Defendants' motion. As distribution under § 1202(b)(3) does not encompass mere public display of the work, the Court will grant Defendants' motion for summary judgment and dismiss this claim.

The Court will, however, make several further determinations that narrow the case as it proceeds towards trial. First, 17 U.S.C. § 411(b) codified the affirmative defense of fraud on the Copyright Office and requires a showing of intent-to-defraud. Defendants have failed to show, on summary judgment, that FDN intended to defraud the Copyright

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Office. Second, as to statutory damages on the copyright infringement claim, the Court finds that the independent economic value test is the most appropriate test to employ when evaluating whether something constitutes “one work.” Third, the Website Copyright Notice does not fall under the definition of copyright management information (“CMI”) and therefore its removal cannot sustain a claim under the DMCA. Fourth, FDN has shown that it is an injured party under the DMCA.

As for Coaster's motion for summary judgment, the Court will grant in part its motion for summary judgment as the Court finds that, based on the factual record, Amazon did not act as Coaster's agent. As such, the Court will dismiss the direct copyright infringement, vicarious copyright infringement, and the DMCA claims. The Court will deny in part Coaster's motion on the contributory copyright infringement claim as genuine disputes of material fact remain. On the breach of contract claim, the Court finds that the Referral Provision is not preempted by the Copyright Act and genuine disputes remain as to breach and damages. The Court will, however, grant Coaster's motion on the covenant of good faith and fair dealing claim as no evidence has been submitted to show Coaster acted dishonestly, maliciously, or otherwise in subjective bad faith.

BACKGROUND

I. FACTUAL BACKGROUND

FDN is a Minnesota-based company that provides marketing and website services to the home furnishing industry. (Decl. John K. Harting Supp. FDN's Mot. Partial Summ. J.

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(“1st Harting Decl.”), Ex. 2, May 14, 2021, Docket No. 512.) Coaster is a furniture wholesaler that reports annual revenues in the hundreds of millions of dollars. (1stHarting Decl., Ex. 66 at 10.) Amazon is the world's largest e-commerce retailer. (Decl. John K. Harting Opp. Mot. Summ. J. Copyright Claim, (“2nd Harting Decl.”), Ex. 20 at 21, June 25, 2021, Docket No. 545.)

A. FDN's Relationship with Coaster

One of FDN's primary services is to create, manage, and market websites for its clients. (1st Harting Decl., Ex. 2 at 1.) The websites FDN creates display product information of the client's furniture, including narrative product descriptions and product photos. (1st Harting Decl., Ex. 3 at 2.) FDN's clients will send the furniture product information to FDN, and FDN will either write or enrich both the product description and images. (Decl. Samuel J. Zeitlin Supp. Defs.' Mot. Summ. J. Copyright Claim, Ex. 13 at 26:9- 22, 28:2-29:8, May 14, 2021, Docket No. 494.)

FDN maintains all its original content, including product descriptions, in its Content Library. (1st Harting Decl., Ex. 9 at 18:23-20:20.) FDN's Content Library is housed on two separate automated databases. The first database is the Content Management System (“CMS”), which is used for editing and adding data. (Zeitlin Decl., Ex 15 at 57:19-25; Zeitlin Decl., Ex. 16 at ¶ 30.) The second database is called “FDealer” and is used as the primary vehicle that delivers product information onto the FDN managed websites. (Zeitlin Decl., Ex. 16 at ¶ 30.) Product information is reformatted for consumption

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optimization and then transferred from CMS into FDealer, but the underlying data between the two is identical. (Id.) FDN has entered into agreements with other third-parties through which it licenses the product information in its Content Library for use and publication on the third-party's websites. (Zeiltin Decl., Exs. 7-10.) The contractual language in the license agreements prohibits the third-party licensees to sell, license, share, copy, give away or allow the distribution of the Content Library. (Id.)

Coaster and FDN entered into a TailorYourSite Web Catalog Services and Licensing Agreement (the “2010 Agreement”) on February 29, 2010. (1st Harting Decl., Ex. 3 at 1.) In the 2010 Agreement, Coaster contracted FDN to build and host a website for Coaster featuring a product catalog and integrated dealer locator. (Id.) FDN agreed to create and enhance content for Coaster's website, including keyword enriching product descriptions. (Id.) The 2010 Agreement stated that Coaster was provided a significantly discounted rate on FDN's services in exchange for Coaster facilitating new business for FDN. (Id. at 9.) Specifically, Coaster agreed to refer its authorized dealers to FDN so FDN could then execute a website license agreement with them. (Id.) The Agreement set forth that FDN retained all rights, title, and interest in the content, intellectual property, and design elements FDN used to provide services to Coaster and that Coaster was “not authorized to sell, license, share, copy or give away . . . any [FDN] . . . content . . . to any third party.” (Id. at 1-2.)

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Coaster provided its product information and FDN then created or enriched the product descriptions at issue in this case and published the enhanced product descriptions, the FDN Descriptions, on Coaster's website, which was hosted by FDN. (2ndHarting Decl., Ex. 15 at 55:3-56:10; Zeitlin Decl., Ex. 13 at 26:9-27:5; Zeitlin Decl., Ex. 14 at 37:3-44:9.)

As a part of FDN's relationship with Coaster, Coaster permitted FDN to set up a booth in Coaster's showrooms at major furniture trade shows throughout the year. (Decl. Daniel M. Cislo Opp. FDN's Mot. Partial Summ. J., Ex. A at 77:13-80:13, June 25, 2021, Docket No. 567.) Coaster's customers and retailers would visit these showrooms where FDN had a booth and would view furniture, place orders, and socialize. (Id., Ex. B at 66:4- 10; id., Ex. D at 49:4-15.) Amazon would also attend these furniture shows as well and would visit Coaster's showroom. (Id., Ex. D at 49:4-15; id., Ex. E at 96:2-23, 198:23- 199:8.)

B. FDN's Copyright

On September 22, 2015, FDN submitted an application for a copyright registration in the CMS database under the title of “Automated database of furniture catalogs and collections (photographs and text).” (Zeitlin Decl., Ex. 27.) FDN classified the work as an unpublished database. (Id. (the “u” in the registration number stands for

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“unpublished”).)[1] The copyright registration application sought to copyright the “[c]ompilation, arrangement, original text, original photographs and revisions to certain prior photographs.” (Id.) Following confirmation by the Copyright Office, FDN submitted a deposit copy of the CMS database along with its application. (Zeitlin Decl., Ex. 28 at 5, 6-8; Zeitlin Decl., Ex. 15 at 106:17-109:19.)

After almost two years and no movement on its application, FDN inquired into the status of its copyright registration. (Zeitlin Decl., Ex. 28 at 9-10.) On April 5, 2017, the Copyright Office notified FDN that it had misfiled its original deposit material. (Id.)...

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