Nat'l Acad. of Television Arts & Scis., Inc. v. Multimedia Sys. Design, Inc.

• Decision Date: 30 July 2021
• Docket Number: 20-CV-7269 (VEC)
• Citation: 551 F.Supp.3d 408
• Parties: The NATIONAL ACADEMY OF TELEVISION ARTS AND SCIENCES, INC. and Academy of Television Arts & Sciences, Plaintiffs, v. MULTIMEDIA SYSTEM DESIGN, INC. d/b/a "Crowdsource the Truth", Defendant. Multimedia System Design, Inc. d/b/a "Crowdsource the Truth", and Jason Goodman, Counterclaim Plaintiffs, v. The National Academy of Television Arts and Sciences, Inc. and Academy of Television Arts & Sciences, Counterclaim Defendants
• Court: U.S. District Court — Southern District of New York

551 F.Supp.3d 408

The NATIONAL ACADEMY OF TELEVISION ARTS AND SCIENCES, INC. and Academy of Television Arts & Sciences, Plaintiffs,

v.MULTIMEDIA SYSTEM DESIGN, INC. d/b/a "Crowdsource the Truth", Defendant.

Multimedia System Design, Inc. d/b/a "Crowdsource the Truth", and Jason Goodman, Counterclaim Plaintiffs,

v.The National Academy of Television Arts and Sciences, Inc. and Academy of Television Arts & Sciences, Counterclaim Defendants

20-CV-7269 (VEC)

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

Signed July 30, 2021

B. Brett Heavner, Margaret A. Esquenet, Samuel Van Eichner, Finnegan, Henderson, Farabow, Garrett & Dunner LLP, Washington, DC, for Plaintiffs/Counterclaim Defendants.

John Hoover Snyder, John H. Snyder PLLC, New York, NY, for Defendant/Counterclaim Plaintiffs.

OPINION AND ORDER

VALERIE CAPRONI, United States District Judge:

Multimedia System Design, Inc. d/b/a "Crowdsource the Truth" ("MSDI") produces video content that, inter alia , traffics in wild conspiracy theories. In June 2020, MSDI used an image of the Emmy Award Statuette holding a model of the COVID-19 virus as part of a video honoring countries that downplayed the seriousness of the COVID-19 pandemic. Plaintiffs, The National Academy of Television Arts and Sciences, Inc. ("NATAS") and Academy of Television Arts & Sciences ("ATAS") (collectively, the "Television Academies"), owners of the Emmy Statuette design, took exception and sued. Am. Compl., Dkt. 62 ("Am. Compl."). MSDI and its owner, Counterclaimant Jason Goodman ("Mr. Goodman") (collectively, "Counterclaimants"), apparently believing the best defense is a poorly thought out offense, asserted counterclaims for declaratory relief, violation of New York's anti-SLAPP law, and abuse of the Digital Millennium Copyright Act ("DMCA"). Am. Answer, Dkt. 45. ("Am. Answer"). The parties have filed cross-motions to dismiss. Dkts. 24, 38. For the following reasons, Defendant's partial motion to dismiss the Amended Complaint is DENIED.¹ Plaintiffs' motion to dismiss the counterclaims is GRANTED.

BACKGROUND²

Since 1949, the Television Academies have presented the Emmy Award to members of television casts, crews, and executives at annual award shows in recognition of excellence and achievement in television programming. Am. Compl. ¶¶ 2, 10. The Emmy Award is a gold statuette molded in the shape of a winged figure holding an atom (the "Emmy Statuette"). Id. ¶ 11. The Television Academies co-own valid and subsisting trademarks and registered copyrights for the Emmy Statuette. Id. ¶¶ 18, 22.

MSDI is a corporation owned by Mr. Goodman. Id. ¶¶ 7, 26. MSDI produces and disseminates social and political commentary through its video series "Crowdsource the Truth," as well as through various social media accounts. Id. ¶ 25. MSDI syndicates paid content through Patreon.com and SubscribeStar.com, and advertises, markets, and promotes that content through its social media accounts. Id. ¶ 27.

On June 12, 2020, Defendant posted a nine-minute-long video (the "Video") on YouTube and other platforms as part of its so-called "Crony Awards," an award show that honored countries that downplayed the COVID-19 pandemic. Id. ¶ 29. As shown in the image below, the Video displays an image of the Emmy Statuette holding an illustration of the COVID-19 virus (the "Crony Graphic"). Id. ¶ 30. The Crony Graphic appears for the opening ten seconds of the Video, and it is used as the Video's YouTube thumbnail image. See Video at 00:00 to 00:10. Defendant also used the Crony Graphic in social media posts promoting its Crony Awards. Am. Compl. ¶ 30; Pls.' Motion for Judicial Notice, Dkt. 37-1, Ex. 1.

On July 28, 2020, someone reported Defendant's Video to the Television Academies. Am. Compl. ¶ 33. Plaintiffs promptly submitted a DMCA takedown notice to YouTube, and YouTube removed the video. Id. ¶¶ 34-35. Upon learning of the takedown notice, Mr. Goodman contacted Adam Sharp ("Mr. Sharp"), President and CEO of NATAS, to object to the takedown notice. Id. ¶¶ 36-38. On August 25, 2020, Defendant submitted a DMCA counter notice challenging the removal of its video and asserting that its use of the Emmy Statuette was fair use. Id. ¶ 40. Defendant also tweeted and posted a YouTube video accusing Mr. Sharp of being a "political operative" and declaring that Mr. Sharp and his father's careers were the products of "nepotism, corruption, and CIA-led propaganda campaigns."³ Id. ¶¶ 41-43.

Plaintiffs assert claims for: (1) copyright infringement under 17 U.S.C. § 101 et seq. ; (2) trademark dilution under Section 43(c) of the Federal Trademark Dilution Act, 15 U.S.C. § 1125(c) ; (3) trademark infringement under Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1) ; (4) trademark infringement, false designation of origin, passing off, and unfair competition under Section 43(a)(1)(A) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A) ; (5) trademark infringement under New York common law; (6) trademark dilution under N.Y. Gen. Bus. Law § 360-l ; and (7) libel per se and/or libel per quod under New York common law. Am. Compl. ¶¶ 51-80. Defendant MSDI and Counterclaimant Mr. Goodman assert counterclaims for declaratory relief, violation of New York's anti-SLAPP law, and abuse of DMCA under 17 U.S.C. § 512(f).⁴ Am. Answer at 41–48 ¶¶ 74-98, 104-107.

DISCUSSION

To survive a motion to dismiss for failure to state a claim upon which relief can be granted, "a complaint must allege sufficient facts, taken as true, to state a plausible claim for relief." Johnson v. Priceline.com, Inc. , 711 F.3d 271, 275 (2d Cir. 2013) (citing Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A complaint need not "contain detailed or elaborate factual allegations, but only allegations sufficient to raise an entitlement to relief above the speculative level." Keiler v. Harlequin Enters. Ltd. , 751 F.3d 64, 70 (2d Cir. 2014). On a motion to dismiss, the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the light most favorable to the plaintiffs. Gibbons v. Malone , 703 F.3d 595, 599 (2d Cir. 2013). The Court is not, however, "bound to accept as true a legal conclusion couched as a factual allegation." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ).

I. Defendant's Partial Motion to Dismiss is Denied⁵

A. Copyright Infringement Claim

To prevail on a claim of copyright infringement, "a plaintiff with a valid copyright must demonstrate that: (1) the defendant has actually copied the plaintiff's work; and (2) the copying is illegal because a substantial similarity exists between the defendant's work and the protectible elements of [the] plaintiff's." Peter F. Gaito Architecture, LLC v. Simone Dev. Corp. , 602 F.3d 57, 63 (2d Cir. 2010) (citation omitted). To establish substantial similarity, a plaintiff must show, inter alia , that the copying is "more than de minimis. " Tufenkian Imp./Exp. Ventures, Inc. v. Einstein Moomjy, Inc. , 338 F.3d 127, 131 (2d Cir. 2003).

Defendant does not dispute that the Television Academies have valid copyrights for the Emmy Statuette or that Defendant copied the Emmy Statuette. Def. Opp., Dkt. 50 at 2. Instead, Defendant argues that its use of the Emmy Statuette is not actionable because the use was either de minimis or fair use. The Court disagrees.

1. Defendant's Infringement Was Not De Minimis

To establish that the infringement of a copyright is de minimis , a defendant must show that its copying of protected material is "so trivial" as to "fall below the quantitative threshold of substantial similarity." Ringgold v. Black Ent. Television, Inc. , 126 F.3d 70, 74 (2d Cir. 1997). In cases involving visual works, such as the instant case, whether the defendant's copying is de minimis depends on the "observability" of the copied work, including "the length of time the copied work is observable in the allegedly infringing work and such factors as focus, lighting, camera angles, and prominence." Id. at 75. The assessment is to be made from the viewpoint of an "average lay observer." Sandoval v. New Line Cinema Corp. , 147 F.3d 215, 218 (2d Cir. 1998).

Here, the Crony Graphic appears prominently for the opening ten seconds of Defendant's Video. The Crony Graphic is in clear focus in the foreground of the Video and occupies much of the screen. See Video at 00:00 to 00:10. The Crony Graphic is also used as the thumbnail image for the Video, making the Crony Graphic perpetually visible even before a user plays the video. See Video at 00:00; Am. Answer at 3 ¶ 4. Accordingly, Defendant's infringement was not de minimis. See On Davis v. The Gap, Inc. , 246 F.3d 152, 173 (2d Cir. 2001) (holding that defendant's infringement was not de minimis because the infringing item was "highly noticeable" and appeared "at the center" of the advertisement); Hirsch v. CBS Broad. Inc. , No. 17-CV-1860, 2017 WL 3393845, at *5 (S.D.N.Y. Aug. 4, 2017) (holding that defendant's infringement was not de minimis because defendant "display[ed] a substantial proportion" of the allegedly infringing photo, "occup[ying] much, although not all, of the screen"); Dyer v. V.P. Recs. Retail Outlet, Inc. , No. 05-CV-6583, 2008 WL 2876494, at *4 (S.D.N.Y. July 24, 2008) (holding that defendant's infringement was not de minimis because the offending images "[took] up most of the screen" for "almost three seconds of the one-minute video"); Twentieth Century Fox Film Corp. v. Marvel Enters., Inc. , 155 F. Supp. 2d 1, 46 (S.D.N.Y. 2001), remanded on other grounds , 277 F.3d 253 (2d Cir. 2002) (rejecting defendant's argument that its use was de minimis because the copied clips "appear[ed] prominently and [were] plainly observable to the lay viewer").⁶

2. Defendant's Use of the Emmy Statuette Is Not Fair Use

Fair use is a statutory exception to copyright infringement. Bill Graham Archives v. Dorling Kindersley Ltd. , 448 F.3d 605,...