Michael Grecco Prods., Inc. v. Alamy, Inc.

• Decision Date: 12 March 2019
• Docket Number: 18-CV-3260 (PKC) (SMG)
• Citation: 372 F.Supp.3d 131
• Parties: MICHAEL GRECCO PRODUCTIONS, INC., Plaintiff, v. ALAMY, INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

372 F.Supp.3d 131

MICHAEL GRECCO PRODUCTIONS, INC., Plaintiff,

v.ALAMY, INC., Defendant.

18-CV-3260 (PKC) (SMG)

United States District Court, E.D. New York.

Signed March 12, 2019

Steven M. Cowley, Pro Hac Vice, Duane Morris LLP, Boston, MA, Jovalin Dedaj, Duane Morris LLP, New York, NY, for Plaintiff.

Nancy Evelyn Wolff, Brittany Laine Kaplan, Lindsay Warren Bowen, Jr., Marissa B. Lewis, Cowan DeBaets Abrahams & Sheppard LLP, New York, NY, for Defendant.

MEMORANDUM & ORDER

Pamela K. Chen, United States District Judge

On June 4, 2018, Plaintiff Michael Grecco Productions, Inc. ("Plaintiff" or "Grecco Productions") commenced this action for copyright infringement and violations of Section 1202(a) of the Digital Millennium Copyright Act ("DMCA") with respect to 27 copyrighted photographic images ("the Copyrighted Works"). (Complaint ("Compl."), Dkt. 1.) On September 27, 2018, Defendant Alamy, Inc. ("Defendant" or "Alamy") filed a motion to dismiss the complaint for failure to state a claim, arguing, inter alia , that Alamy was an improper defendant in this action and that the complaint failed to plausibly allege any copyright infringement or violation of the DMCA. (Defendant's Motion to Dismiss, Dkt. 25; Defendant's Brief ("Def.'s Br."), Dkt. 26.) For the reasons stated herein, Defendant's motion is denied in its entirety.

BACKGROUND

Plaintiff Grecco Productions is a California-based photography studio owned and operated by Michael Grecco, a commercial photographer and film director. (Compl. ¶¶ 5, 7.) In its complaint, Plaintiff alleges that Defendant Alamy is a Brooklyn-based company that owns and operates the website, http://www.alamy.com ("the Alamy website"). (Id. ¶ 6, 8.) Through the Alamy website, Defendant allegedly "reproduces, displays, distributes, and purports to offer license rights to photographic images and other content[,] the copyrights in which are owned by others." (Id. ¶ 8.) Defendant receives at least some portion of the fees paid by Alamy website customers to acquire license rights through the website. (Id. )

In 2012, Grecco Productions entered into two agreements, an Exclusive Contributor Agreement and a Non-Exclusive Contributor Agreement (collectively, "the Agreements") with a Florida-based company, RGB Ventures LLC d/b/a Superstock ("Superstock"). (Id. ¶ 10.) The terms of the Agreements granted Superstock limited licenses to certain materials in Grecco Productions' portfolio, including 1,700 copyrighted images. (Id. ¶¶ 10–11.) Among the materials licensed to Superstock were the 27 Copyrighted Works at issue in this case. (Id. ¶¶ 10–11, 17.)

The Agreements, in turn, authorized Superstock to sublicense Grecco Productions' images through specified agents, called "Third Party Distributors." (Id. ¶ 10.) Alamy is identified in the Agreements as a Third Party Distributor for Superstock. (Id. ) According to Plaintiff, Superstock maintains a distribution agreement with Alamy, whereby Alamy obtains photographic images and other content licensed to Superstock for the purpose of reproducing, promoting, distributing, and sublicensing that content. (Id. ¶ 9.) Through this distribution agreement, Alamy obtained the Copyrighted Works. (Id. ¶ 15.)

On or about December 2, 2013, the Agreements were terminated. (Id. ¶ 13.) The terms of the agreement provided for an 18-month "Survival Term," which allowed Superstock and its Third Party Distributors, including Alamy, to continue exercising licensing rights in Plaintiff's materials for 18 months after the termination date. (Id. ¶ 14.) Through its status as a Third Party Distributor for Superstock, Alamy also retained the right to reproduce, display, distribute, and license the materials subject to the Agreements for this 18-month period. (Id. ¶ 15.) Based on the alleged termination date, the Survival Term would have expired on June 2, 2015. Nevertheless, Plaintiff discovered that Alamy was reproducing, displaying, distributing, and offering to license the Copyrighted Works through the Alamy website as late as 2016. (Id. ¶ 20.)

As its first cause of action, Plaintiff Grecco Productions alleges that Defendant Alamy's continued display and offer to license the Copyrighted Works beyond the Survival Term constitutes infringement of a copyright in violation of 17 U.S.C. § 501. (Id. ¶¶ 20, 27.) In its second cause of action, Plaintiff alleges that Defendant placed visible watermarks, such as "Alamy," "alamy," and "a," on the Copyrighted Works in order to conceal its infringement and induce potential customers to believe that Defendant, not Plaintiff, held exclusive rights in them. (Id. ¶¶ 21–22, 35.) According to Plaintiff, this runs afoul of 17 U.S.C. § 1202(a), which prohibits, inter alia , the provision of false copyright management information ("CMI"). 17 U.S.C. § 1202(a)(1). As a remedy, Plaintiff seeks damages and a permanent injunction against Defendant and its agents further infringing on its rights in the Copyrighted Works. (Id. ¶¶ (a)–(k).)

STANDARD OF REVIEW

To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (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." Id. (quoting Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). The "plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (citation omitted). Determining whether a complaint states a plausible claim for relief is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679, 129 S.Ct. 1937 (citation omitted); Rothstein v. UBS AG , 708 F.3d 82, 94 (2d Cir. 2013).

In addressing the sufficiency of a complaint, courts are required to accept the well-pleaded factual allegations contained within the complaint as true, Grandon v. Merrill Lynch & Co., 147 F.3d 184, 188 (2d Cir. 1998), but "need not credit conclusory statements unsupported by assertions of facts[,] or legal conclusions ... presented as factual allegations," In reLivent, Inc. Noteholders Sec. Litig. , 151 F. Supp. 2d 371, 404 (S.D.N.Y. 2001) (citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986) ). At the pleadings stage, the Court must limit its inquiry to the facts alleged in the complaint, the documents attached to the complaint or incorporated therein by reference, and "documents that, while not explicitly incorporated into the complaint, are ‘integral’ to plaintiff's claims and were relied upon in drafting the complaint." Id. (citing Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 44 (2d Cir. 1991) ).

DISCUSSION

Defendant Alamy moves to dismiss this action pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, arguing that Plaintiff Grecco Productions has incorrectly named Alamy as the defendant in this lawsuit. In the alternative, Defendant argues that, even if it is a proper defendant in this action, Plaintiff's claims under 17 U.S.C. § 1202(a) must be dismissed because watermarks are not CMI within the meaning of the DMCA. Defendant further asserts that it is an Internet service provider under 17 U.S.C. § 512(c) and is thus immune from liability for the display of one of the Copyrighted Works, which it asserts to be user-generated content hosted on the Alamy website. The Court addresses these arguments in turn.

I. Identity of the Proper Defendant

As its principal argument, Defendant contends that the complaint must be dismissed in its entirety for failure to state a claim because Plaintiff has sued the wrong entity. (Def.'s Br., at 7.) According to Defendant, it is merely a subsidiary of Alamy Ltd. ("UK Alamy"), an English corporation for which Defendant operates as a sales office that interfaces with U.S.-based customers. (Id. ) Defendant maintains that it played no role in the copyright violations alleged in the complaint, as the Alamy website, on which the Copyrighted Works were allegedly displayed and marketed, is owned and operated by UK Alamy. (Id. ) Defendant further argues that any amendment to name the proper party would be futile, as the Court would lack personal jurisdiction over UK Alamy. (Id. , at 8–10.) These arguments are without merit.

"[O]n a motion to dismiss, the [C]ourt must ask whether any set of facts consistent with [the] complaint would give the plaintiff a right to recover...." United States ex rel. Lang v. Northwestern University , No. 04-C-3290, 2005 WL 670612, at *3 (N.D. Ill. Mar. 22, 2005). The answer to this question cannot be, to paraphrase Defendant's submissions, "No, because the allegations are false." To dismiss the complaint based on Defendant's motion, the Court would need to credit facts asserted by Defendant that are directly contradicted by the complaint. These disputed facts include Defendant's alleged role in the operation of the Alamy website and the copyright infringements alleged in the complaint. (Compare Compl. ¶¶ 8, 15, 20–23, with Def.'s Br., at 4, 7–8.) In other words, Alamy's argument boils down to simple denial of the complaint's factual contentions and any wrongdoing. While this argument may ultimately succeed at a later point in the litigation,¹ e.g. , after some discovery has occurred, it is not an appropriate ground on which to dismiss the complaint at the pleadings stage. See Survivor Productions, LLC v. Daimler , No. 3:15-cv-01482-AA, 2016 WL 3032688, at *1 (D. Or. May 25, 2016) (finding a defendant's assertion in a motion to dismiss that a third-party was responsible for the acts alleged in the complaint was "a...