Nat'l Photo Grp., LLC v. Allvoices, Inc.

• Decision Date: 24 January 2014
• Docket Number: Case No.: C-13-03627 JSC
• Court: U.S. District Court — Northern District of California
• Parties: NATIONAL PHOTO GROUP, LLC, Plaintiff, v. ALLVOICES, INC., Defendant.

NATIONAL PHOTO GROUP, LLC, Plaintiff, v. ALLVOICES, INC., Defendant.

Case No.: C-13-03627 JSC

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

Dated: January 24, 2014

ORDER GRANTING IN PART AND

DENYING IN PART DEFENDANT'S

MOTION TO DISMISS

In this copyright infringement case, Defendant Allvoices, Inc. brings a motion to dismiss Plaintiff National Photo Group, LLC's ("NPG") First Amended Complaint ("FAC"). (Dkt. No. 21.) Defendant contends that Plaintiff lacks standing to pursue this case and, even if Plaintiff has standing, the FAC fails to state a claim for relief. After carefully considering the parties' submissions, and having had the benefit of oral argument on January 23, 2014, the Court GRANTS in part and DENIES in part Defendant's motion to dismiss.

BACKGROUND

Plaintiff alleges that Defendant, which operates the website allvoices.com, without permission or authorization from Plaintiff, "infring[ed] on Plaintiff's Copyrights" by displaying three photos of the singer Cindy Lauper on its website. (Dkt. No. 19 ¶¶ 13-14.) An exhibit attached to the FACshows that two of three photographs are unregistered with the United States Copyright Office. (Dkt. No. 20.) The date of registration for the one registered photo is March 17, 2011.

Plaintiff alleges the following six causes of action against Defendant: 1) direct copyright infringement; 2) contributory copyright infringement; 3) vicarious copyright infringement; 4) inducement of copyright infringement; 5) injunction pursuant to 17 U.S.C. § 502; 6) attorney's fees and costs pursuant to 17 U.S.C. § 505.

LEGAL STANDARD

Federal courts are courts of limited jurisdiction; thus, the court presumes lack of jurisdiction, and the party seeking to invoke the court's jurisdiction bears the burden of proving that jurisdiction exists. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994). Federal Rule of Civil Procedure 12(b)(1) allows a party to challenge a federal court's jurisdiction over the subject matter of the complaint. See Fed. R. Civ. P. 12(b) (1).

A complaint will be dismissed if, looking at the complaint as a whole, it appears to lack federal jurisdiction either "facially" or "factually." Thornhill Pub'g Co., Inc. v. Gen. Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979). When the complaint is challenged for lack of subject mattei jurisdiction on its face, all material allegations in the complaint will be taken as true and construed in the light most favorable to the plaintiff. NL Indus. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). A Rule 12(b)(1) motion can also "attack the substance of a complaint's jurisdictional allegations despite their formal sufficiency, and in so doing rely on affidavits or any other evidence properly before the court." St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989). "It then becomes necessary for the party opposing the motion to present affidavits or any other evidence necessary to satisfy its burden of establishing that the court, in fact, possesses subject matter jurisdiction." Id. "In resolving a factual attack on jurisdiction, the district court may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment." Safe Air v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004); see also McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988) ("[W]hen considering a motion to dismiss pursuant to Rule 12(b)(1) the district court is not restricted to the face of the pleadings, but may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction.").

Even if the Court has jurisdiction over the case, a complaint may still be dismissed under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. A complaint fails to state a claim upon which relief may be granted if the plaintiff fails to allege the "grounds" of his "entitlement to relief." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A plaintiff must plead "factual content that allows 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). Additionally, a court should dismiss a complaint for failure to state a claim if, taking all factual allegations as true, it does not contain "enough facts to state a claim to relief that is plausible on its face." Id. at 662; see also Coto Settlement v. Eisenberg, 593 F.3d 1031, 1034 (9th Cir. 2010). "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." Caviness v. Horizon Cmty. Learning Ctr., Inc., 590 F.3d 806, 812 (9th Cir. 2010) (internal quotation marks omitted).

DISCUSSION

A. Standing

Under the Copyright Act, only the 'legal or beneficial owner of an exclusive right under a copyright' has standing to sue for infringement of that right." Righthaven LLC v. Hoehn, 716 F.3d 1166, 1169 (9th Cir. 2013) (quoting 17 U.S.C. § 501(b)); see also Silvers v. Sony Pictures Entm't, Inc., 402 F.3d 881, 890 (9th Cir. 2005) (en banc) (holding that, under Section 501, only a party with an ownership interest has standing to sue).

Defendant moves to dismiss the FAC for lack of subject matter jurisdiction; specifically, lack of standing. Defendant challenges Plaintiff's allegations that it is the owner of the registered copyright at issue, asserting in its motion that publicly available records show that Ben Evenstad (purportedly NPG's owner) is the registered owner of the photo. (See Dkt. No. 22-1.) In its opposition, Plaintiff contends that Mr. Evestad (NPG's president) assigned "the entire right, title and interest in the copyright to NPG." (Dkt. No. 31 at 5.)

The Assignment Agreement, which was executed on April 5, 2012, states that NPG applied for copyright protection for several dozen photographs, including the one registered photograph at issue here, but "due to a clerical error, each of the Works was inadvertently registered to Evenstadpersonally, instead of NPG." (Dkt. No. 32-1.) "[I]n order to correct this error," Evenstad and NPG entered into the Assignment Agreement, which purports to assign the full, worldwide copyright and all other rights in the Works from Evenstad to NPG.

By executing this Assignment, the entire right, title, and interest in and to the copyright in the Works is hereby irrevocably assigned by Evenstad to NPG. NPG shall have sole rights of distribution or publication of the Works in all forms and media, or by any means, now known or later developed.

(Id.) The Assignment Agreement further states: "For clarification, while this Assignment is dated April 5, 2012, the Assignment is effective, and all transfers reference in this Agreement were made for each of the Works as of the date each was registered with the United States Copyright Office, as indicated in Exhibit A." (Id.)

Defendant maintains that the Assignment Agreement is insufficient to establish Defendant's standing to pursue this action because "the assignment contains no express agreement of causes of action that accrued before April 5, 2012." (Dkt. No. 37 at 1 (citing ABKCO Music, Inc. v. Harrisongs Music, Ltd., 944 F.2d 971, 980 (2d Cir. 1991).) Defendant asserts that this omission is significant because it "qualified for immunity from liability for copyright infringement under Section 512(c) of the Digital Millennium Copyright Act ('DMCA') no later than March 31, 2011, the date on which its 'designation of agent' filing was received by the Copyright Office." (Id.) Thus, according to Defendant, without an express assignment of accrued causes of action, the April 5, 2012 assignment does not cover Defendant's alleged infringing activity that predates the March 31, 2011 DMCA filing. The Court is not persuaded.

Transferring copyright ownership requires a writing. 17 U.S.C. § 204(a) ("A transfer of copyright ownership . . . is not valid unless . . . in writing."). "No magic words must be included in the document," which "doesn't have to be the Magna Carta; a one-line pro forma statement will do." Radio Television Espanola S.A. v. New World Entm't Ltd., 183 F.3d 922, 927 (9th Cir. 1999) (citations omitted); see also Craigslist Inc. v. 3Taps Inc., 942 F. Supp. 2d 962, 973 (N.D. Cal. 2013). "Rather, the parties' intent as evidenced by the writing must demonstrate a transfer of the copyright." Radio Television, 183 F.3d at 927. Further, a written memorandum of a previous oral or written conveyance satisfies Section 204(a). See Jules Jordan Video, Inc. v. 144942 Canada Inc., 617 F.3d1146, 1156 (9th Cir. 2010) (explaining that "an earlier oral assignment can be confirmed later in a writing"); Magnuson v. Video Yesteryear, 85 F.3d 1424, 1428-29 (9th Cir. 1996) (holding that a writing dated more than fourteen years after the oral transfer was sufficient to establish transfer of copyright ownership).

Defendant's argument ignores the intention of the parties as evidenced in the Assignment Agreement. Given that the Ninth Circuit has directed that "[n]o magic words" need to be used in the assignment and that the parties' intent as evidenced in the writing should control, Radio Television, 183 F.3d at 927, the Court is not persuaded that the assignment's failure to use such words as "accrued causes of action" is dispositive. Rather, a review of the Assignment Agreement reveals that the parties likely intended to transfer accrued causes of action, as well as ownership of the copyright. As Evenstad and NPG plainly state in the agreement, Evenstad—NPG's President—was never supposed to be the registered owner of the copyright; thus, the April 5, 2012 assignment was intended to correct the clerical error that resulted in Evenstad, rather than his company, as the registered owner. It makes little sense for Evenstad to withhold from NPG accrued causes of action that he states should have been in NPG's name...